Article 58, Child and Article 58. Torts.

- Parents and guardians are responsible for the

Youth Welfare Code damage caused by the child under their parental authority in
accordance with the Civil Code.
Section 33, Rule on
Juveniles in Conflict with
the Law, A.M. NO. 02-1-18-
SC, February 28, 2002

Articles 211, 218, Art. 211. The father and the mother shall jointly exercise parental
219, 221, 236, Family authority over the persons of their common children. In case of
Code disagreement, the father's decision shall prevail, unless there is a
judicial order to the contrary.
Art. 218. The school, its administrators and teachers, or the
individual, entity or institution engaged in child are shall have
special parental authority and responsibility over the minor child
while under their supervision, instruction or custody.
Authority and responsibility shall apply to all authorized activities
whether inside or outside the premises of the school, entity or
institution. (349a)
Art. 219. Those given the authority and responsibility under the
preceding Article shall be principally and solidarily liable for
damages caused by the acts or omissions of the unemancipated
minor. The parents, judicial guardians or the persons exercising
substitute parental authority over said minor shall be subsidiarily
liable.
The respective liabilities of those referred to in the preceding
paragraph shall not apply if it is proved that they exercised the
proper diligence required under the particular circumstances.
All other cases not covered by this and the preceding articles
shall be governed by the provisions of the Civil Code on quasi-
delicts. (n)
Art. 221. Parents and other persons exercising parental authority
shall be civilly liable for the injuries and damages caused by the
acts or omissions of their unemancipated children living in their
company and under their parental authority subject to the
appropriate defenses provided by law. (2180(2)a and (4)a )
Art. 236. Emancipation for any cause shall terminate parental
authority over the person and property of the child who shall then
be qualified and responsible for all acts of civil life. (412a)
Article 101, Revised Article 101. Rules regarding civil liability in certain cases. - The
Penal Code exemption from criminal liability established in subdivisions 1, 2,
3, 5 and 6 of Article 12 and in subdivision 4 of Article 11 of this
Code does not include exemption from civil liability, which shall
be enforced subject to the following rules:
First. In cases of subdivisions 1, 2, and 3 of Article 12, the civil
liability for acts committed by an imbecile or insane person, and
by a person under nine years of age, or by one over nine but
under fifteen years of age, who has acted without discernment,
shall devolve upon those having such person under their legal
authority or control, unless it appears that there was no fault or
negligence on their part.
Should there be no person having such insane, imbecile or minor
under his authority, legal guardianship or control, or if such
person be insolvent, said insane, imbecile, or minor shall
respond with their own property, excepting property exempt from
execution, in accordance with the civil law.
Second. In cases falling within subdivision 4 of Article 11, the
persons for whose benefit the harm has been prevented shall be
civilly liable in proportion to the benefit which they may have
received.
The courts shall determine, in sound discretion, the proportionate
amount for which each one shall be liable.
When the respective shares cannot be equitably determined,
even approximately, or when the liability also attaches to the
Government, or to the majority of the inhabitants of the town,
and, in all events, whenever the damages have been caused
with the consent of the authorities or their agents, indemnification
shall be made in the manner prescribed by special laws or
regulations.
Third. In cases falling within subdivisions 5 and 6 of Article 12,
the persons using violence or causing the fears shall be primarily
liable and secondarily, or, if there be no such persons, those
doing the act shall be liable, saving always to the latter that part
of their property exempt from execution.
G.R. No. 85044 June 3, 1992

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,

vs.
HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan,
Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents.

FELICIANO, J.:

On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with
an air rifle causing injuries which resulted in her death. Accordingly, a civil complaint for damages
was filed with the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil Case No.
3457-V, by petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and
Aurelia Tamargo, Jennifer's natural parents against respondent spouses Victor and Clara Bundoc,
Adelberto's natural parents with whom he was living at the time of the tragic incident. In addition to
this case for damages, a criminal information or Homicide through Reckless Imprudence was filed
[Criminal Case No. 1722-V] against Adelberto Bundoc. Adelberto, however, was acquitted and
exempted from criminal liability on the ground that he bad acted without discernment.

Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a
petition to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then
Court of First Instance of Ilocos Sur. This petition for adoption was grunted on, 18 November 1982,
that is, after Adelberto had shot and killed Jennifer.

In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of the
foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely the
spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition for adoption
was filed.

Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with his
natural parents, parental authority had not ceased nor been relinquished by the mere filing and
granting of a petition for adoption.

The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent natural
parents of Adelberto indeed were not indispensable parties to the action.

Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day
reglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration followed
by a supplemental motion for reconsideration on 15 January 1988. It appearing, however, that the
motions failed to comply with Sections 4 and 5 of Rule 15 of the Revised Rules of Court that
notice of the motion shall be given to all parties concerned at least three (3) days before the hearing
of said motion; and that said notice shall state the time and place of hearing both motions were
denied by the trial court in an Order dated 18 April 1988. On 28 April 1988, petitioners filed a notice
of appeal. In its Order dated 6 June 1988, the trial court dismissed the notice at appeal, this time
ruling that the notice had been filed beyond the 15-day reglementary period ending 22 December
1987.
Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the
trial court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988,
The Court of Appeals dismissed the petition, ruling that petitioners had lost their right to appeal.

In the present Petition for Review, petitioners once again contend that respondent spouses Bundoc
are the indispensable parties to the action for damages caused by the acts of their minor child,
Adelberto Bundoc. Resolution of this Petition hinges on the following issues: (1) whether or not
petitioners, notwithstanding loss of their right to appeal, may still file the instant Petition; conversely,
whether the Court may still take cognizance of the case even through petitioners' appeal had been
filed out of time; and (2) whether or not the effects of adoption, insofar as parental authority is
concerned may be given retroactive effect so as to make the adopting parents the indispensable
parties in a damage case filed against their adopted child, for acts committed by the latter, when
actual custody was yet lodged with the biological parents.

1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration filed
before the trial court, not having complied with the requirements of Section 13, Rule 41, and Section
4, Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not interrupt
and suspend the reglementary period to appeal: the trial court held that the motions, not having
contained a notice of time and place of hearing, had become useless pieces of paper which did not
interrupt the reglementary period. 1 As in fact repeatedly held by this Court, what is mandatory is the
service of the motion on the opposing counsel indicating the time and place of hearing. 2

In view, however, of the nature of the issue raised in the instant. Petition, and in order that
substantial justice may be served, the Court, invoking its right to suspend the application of technical
rules to prevent manifest injustice, elects to treat the notice of appeal as having been seasonably
filed before the trial court, and the motion (and supplemental motion) for reconsideration filed by
petitioner in the trial court as having interrupted the reglementary period for appeal. As the Court
held in Gregorio v. Court of Appeals: 3

Dismissal of appeal; purely on technical grounds is frowned upon where the policy of
the courts is to encourage hearings of appeal on their merits. The rules of procedure
ought not be applied in a very rigid technical sense, rules of procedure are used only
to help secure not override, substantial justice. if d technical and rigid enforcement of
the rules is made their aim would be defeated. 4

2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air
rifle gave rise to a cause of action on quasi-delict against him. As 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 . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his death or
incapacity, the mother, for any damages that may be caused by a minor child who lives with them.
Article 2180 of the Civil Code reads:

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.
 The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company.

xxx xxx xxx

The responsibility treated of in this Article shall cease when the person herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage. (Emphasis supplied)

This principle of parental liability is a species of what is frequently designated as vicarious liability, or
the doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable
for torts committed by himself, but also for torts committed by others with whom he has a certain
relationship and for whom he is responsible. Thus, parental liability is made a natural or logical
consequence of the duties and responsibilities of parents their parental authority which
includes the instructing, controlling and disciplining of the child. 5 The basis for the doctrine of vicarious
liability was explained by the Court in Cangco v. Manila Railroad Co. 6 in the following terms:

With respect to extra-contractual obligation arising from negligence, whether of act or

omission, it is competent for the legislature to elect and our Legislature has so
elected to limit such liability to cases in which the person upon whom such an
obligation is imposed is morally culpable or, on the contrary, for reasons of public
policy. to extend that liability, without regard to the lack of moral culpability, so as to
include responsibility for the negligence of those persons whose acts or omissions
are imputable, by a legal fiction, to others who are in a position to exercise an
absolute or limited control over them. The legislature which adopted our Civil Code
has elected to limit extra-contractual liability with certain well-defined exceptions
to cases in which moral culpability can be directly imputed to the persons to be
charged. This moral responsibility may consist in having failed to exercise due care
in one's own acts, or in having failed to exercise due care in the selection and control
of one's agent or servants, or in the control of persons who, by reasons of their
status, occupy a position of dependency with respect to the person made liable for
their conduct. 7(Emphasis Supplied)

The civil liability imposed upon parents for the torts of their minor children living with them,
may be seen to be based upon the parental authority vested by the Civil Code upon such
parents. The civil law assumes that when an unemancipated child living with its parents
commits a tortious acts, the parents were negligent in the performance of their legal and
natural duty closely to supervise the child who is in their custody and control. Parental
liability is, in other words, anchored upon parental authority coupled with presumed parental
dereliction in the discharge of the duties accompanying such authority. The parental
dereliction is, of course, only presumed and the presumption can be overtuned under Article
2180 of the Civil Code by proof that the parents had exercised all the diligence of a good
father of a family to prevent the damage.

In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental
authority was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto.
It would thus follow that the natural parents who had then actual custody of the minor Adelberto, are
the indispensable parties to the suit for damages.
The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption was
issued by the adoption court in favor of the Rapisura spouses, parental authority was vested in the
latter as adopting parents as of the time of the filing of the petition for adoption that
is, before Adelberto had shot Jennifer which an air rifle. The Bundoc spouses contend that they were
therefore free of any parental responsibility for Adelberto's allegedly tortious conduct.

Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which reads as
follows:

Art. 36. Decree of Adoption. If, after considering the report of the Department of
Social Welfare or duly licensed child placement agency and the evidence submitted
before it, the court is satisfied that the petitioner is qualified to maintain, care for, and
educate the child, that the trial custody period has been completed, and that the best
interests of the child will be promoted by the adoption, a decree of adoption shall be
entered, which shall be effective he date the original petition was filed. The decree
shall state the name by which the child is thenceforth to be known. (Emphasis
supplied)

The Bundoc spouses further argue that the above Article 36 should be read in relation to
Article 39 of the same Code:

Art. 39. Effect of Adoption. The adoption shall:

xxx xxx xxx

(2) Dissolve the authority vested in the natural parents, except where the adopter is
the spouse of the surviving natural parent;

xxx xxx xxx

(Emphasis supplied)

and urge that their Parental authority must be deemed to have been dissolved as of the time the
Petition for adoption was filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability for
the torts of a minor child is the relationship existing between the parents and the minor child living
with them and over whom, the law presumes, the parents exercise supervision and control. Article
58 of the Child and Youth Welfare Code, re-enacted this rule:

Article 58 Torts Parents and guardians are responsible for the damage caused by
the child under their parental authority in accordance with the civil Code. (Emphasis
supplied)

Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the
child, doer of the tortious act, shall have beer in the actual custody of the parents sought to be held liable
for the ensuing damage:
 Art. 221. Parents and other persons exercising parental authority shall be civilly liable
for the injuries and damages caused by the acts or omissions of their unemancipated
children living in their company and under their parental authority subject to the
appropriate defenses provided by law. (Emphasis supplied)

We do not believe that parental authority is properly regarded as having been retroactively
transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle
shooting happened. We do not consider that retroactive effect may be giver to the decree of
adoption so as to impose a liability upon the adopting parents accruing at a time when adopting
parents had no actual or physically custody over the adopted child. Retroactive affect may perhaps
be given to the granting of the petition for adoption where such is essential to permit the accrual of
some benefit or advantage in favor of the adopted child. In the instant case, however, to hold that
parental authority had been retroactively lodged in the Rapisura spouses so as to burden them with
liability for a tortious act that they could not have foreseen and which they could not have prevented
(since they were at the time in the United States and had no physical custody over the child
Adelberto) would be unfair and unconscionable. Such a result, moreover, would be inconsistent with
the philosophical and policy basis underlying the doctrine of vicarious liability. Put a little differently,
no presumption of parental dereliction on the part of the adopting parents, the Rapisura spouses,
could have arisen since Adelberto was not in fact subject to their control at the time the tort was
committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35
provides as follows:

Art. 35. Trial Custody. No petition for adoption shall be finally granted unless and
until the adopting parents are given by the courts a supervised trial custody period of
at least six months to assess their adjustment and emotional readiness for the legal
union. During the period of trial custody, parental authority shall be vested in the
adopting parents. (Emphasis supplied)

Under the above Article 35, parental authority is provisionally vested in the adopting parents during
the period of trial custody, i.e., before the issuance of a decree of adoption, precisely because the
adopting parents are given actual custody of the child during such trial period. In the instant case,
the trial custody period either had not yet begun or bad already been completed at the time of the air
rifle shooting; in any case, actual custody of Adelberto was then with his natural parents, not the
adopting parents.

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were
indispensable parties to the suit for damages brought by petitioners, and that the dismissal by the
trial court of petitioners' complaint, the indispensable parties being already before the court,
constituted grave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE
and the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is
hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the trial court is hereby
REINSTATED and this case is REMANDED to that court for further proceedings consistent with this
Decision. Costs against respondent Bundoc spouses. This Decision is immediately executory.

SO ORDERED.
G.R. No. 162447 December 27, 2006

ANABELLE MUAJE-TUAZON and ALMER R. ABING, petitioners,

vs.
WENPHIL CORPORATION, ELIZABETH P. ORBITA*, and THE COURT OF
APPEALS, respondents.

DECISION

QUISUMBING, J.:

Before us is a petition for review under Rule 45 assailing the Decision 1 dated August 27, 2003 of the
Court of Appeals in CA-G.R. SP No. 75419 and its Resolution dated February 23, 2004 denying
reconsideration. The Court of Appeals reversed the National Labor Relations Commission's finding
of illegal dismissal.

The pertinent facts of the case are as follows:

Petitioners Annabelle M. Tuazon and Almer R. Abing worked as branch managers of the Wendy's
food chains in MCU Caloocan and Meycauayan, respectively, of respondent Wenphil Corporation.
From September 14 to November 8, 1998, Wendy's had a "Biggie Size It! Crew Challenge"
promotion contest. The branch with the highest sales of "Biggie Size It" wins. The Meycauayan and
MCU Caloocan branches won first and second places, respectively. Because of its success,
respondent had a second run of the contest from April 26 to July 4, 1999. The Meycauayan branch
won again. The MCU Caloocan branch failed to make it among the winners. 2

Before the start of the third round from October 18, 1999 to January 16, 2000, Abing was assigned
to the SM North Edsa Annex branch while Tuazon was assigned to the Meycauayan branch. Before
the announcement of the third round winners, management received reports that as early as the first
round of the contest, the Meycauayan, MCU Caloocan, Tandang Sora and Fairview branches
cheated. An internal investigation ensued.3

On February 3, 2000, petitioners were summoned to the main office regarding the reported anomaly.
Petitioners denied there was cheating. Immediately thereafter, petitioners were notified, in writing, of
hearings scheduled on February 4 and 7, 2000 and of their immediate suspension. 4 Thereafter, on
February 29, 2000, petitioners were dismissed.

Petitioners filed, with the Regional Arbitration Branch, a complaint for illegal suspension and
dismissal against respondent Wenphil Corporation and its General Manager, Elizabeth P. Orbita.
Petitioners insisted that they were innocent of the accusations and were dismissed without cause.
They claimed that the real reason for their termination was their persistent demands for overtime and
holiday pay. They aver that (a) they were not notified beforehand why they were called to the main
office; (b) their right to due process was denied; and (c) they were not afforded counsel despite their
request for one.
In their defense, respondents maintained that petitioners were terminated for dishonesty amounting
to serious misconduct and willful breach of trust. They presented affidavits of witnesses, receipts and
other documents to support the charges against petitioners. Respondents posited that since
petitioners occupied managerial positions, loss of trust and confidence by the employer was
sufficient cause for their termination. Moreover, respondents insisted that petitioners were afforded
due process, with two required notices, and the opportunity to defend themselves. Lastly,
respondents asserted that the preventive suspension was necessary for the protection of the
company's property and possible destruction of evidence pending investigation.

During the hearings, the Labor Arbiter disregarded the affidavits of respondents' witnesses for being
executed only after the company investigation and held that respondents' evidence insufficiently
proved the alleged cheating of the petitioners. The Labor Arbiter ruled in favor of the petitioners as
follows:

WHEREFORE, judgment is hereby rendered finding the suspension and dismissal of

complainants Almer R. Abing and Annabelle M. Tuazon illegal. Respondent WENPHIL
CORPORATION is hereby ordered to:

1. immediately reinstate complainants to their former or equivalent position, actual or

in payroll at, their option, without loss of seniority rights and benefits.

2. to pay them backwages from the time they were illegally dismissed on 03 February
2000 until their reinstatement, computed as of the date of this decision, as follows:

([P15,000] + 3,000 + 2,000 + 1,000) x 10 months = P210,000.00 for each

complainant.

3. to pay them ten (10%) percent attorney's fees.

All other claims are dismissed for lack of merit.

SO ORDERED.5

Respondents appealed to the National Labor Relations Commission (NLRC), which affirmed with
modification the decision of the Labor Arbiter in this wise:

WHEREFORE, the appealed Decision is hereby AFFIRMED but with the following
modifications:

1. Declaring the preventive suspension of the complainants to be legal. Accordingly, the

period from February 3-28, 2000, during which they were preventively suspended, shall be
excluded in the computation of their backwages; and

2. Ordering respondent company to pay complainants separation pay, in lieu of

reinstatement, at the rate of one (1) month salary for every year of service to be computed
from the date of employment up to the actual payment thereof.

SO ORDERED.6

Denied reconsideration, respondents elevated the case to the Court of Appeals, which found
substantial proof of petitioners' misconduct. The appellate court held that although the affidavits were
executed after the company investigation, the facts and issues therein were discussed during the
investigation and submitted to the management before the decision to dismiss the petitioners was
made. It also ruled that respondent Wenphil sufficiently complied with the due process requirement.
The appellate court ruled as follows:

WHEREFORE, premises considered, the instant petition for certiorari is hereby GRANTED.
The assailed resolutions of the National Labor Relations Commission dated January 30,
2002 and September 24, 2002 are hereby SET ASIDE. In lieu thereof, judgment is hereby
rendered REVERSING and SETTING ASIDE the decision of the Labor Arbiter, dated
December 8, 2000 rendered in NLRC NCR Cases Nos. 30-03-00993-00 and 30-03-01020-
00. The private respondents' complaints filed in the aforementioned cases are hereby
DISMISSED.

SO ORDERED.7

Petitioners moved for reconsideration but the same was denied. Petitioners now come before us
assigning the following errors:

I. THE FACTUAL BASES USED BY THE COURT OF APPEALS IN REVERSING THE

RULING OF THE NLRC IS (sic) ACTUALLY UNFOUNDED;

II. THE COURT OF APPEALS HAD DELIBERATELY OVERLOOKED THE FACT THAT THE
INTERROGATION PROCESS CONDUCTED BY THE EMPLOYER IS VOID AB INITIO,
HENCE, CANNOT BE USED AS A SUBSTITUTE FOR LAWFUL INVESTIGATION FOR
PURPOSES OF DUE PROCESS;

III. THE COURT OF APPEALS HAD WHIMSICALLY GIVE[N] TOO MUCH WEIGHT TO THE
AFFIDAVITS WHICH ASIDE FROM BEING SELF-SERVING, ARE NON-EXISTEN[T] AT
THE TIME THEY WERE USED AS A GROUND FOR THE DISMISSAL OF THE
PETITIONERS;

IV. IN REVERSING THE FACTUAL FINDINGS OF THE LABOR TRIBUNALS, THE COURT
OF APPEALS WENT TO THE EXTENT OF OVER-EXPANDING ITS CERTIORARI
JURISDICTION, IN VIOLATION OF LAW AND ESTABLISHED JURISPRUDENCE ON THE
MATTER;

V. THE LABOR ARBITER, BEING THE ONE WHO ACTUALLY CONDUCTED THE
HEARING IN THE ARBITRATION STATE AND HAD PERSONALLY OBSERVED THE
DEMEANOR OF [THE] PARTIES DURING THE HEARING, HIS FACTUAL FINDINGS (sic)
CARRY HEAVIER WEIGHT THAN THE EVALUATION OF [THE] COURT OF APPEALS'
JUSTICES WHO MERELY RELY (sic) THEIR FINDINGS SOLELY FROM THE RECORD OF
THE CASE (sic).8

Essentially, we are asked to resolve the following issues: (1) Did the appellate court act in excess of
its jurisdiction when it reviewed factual findings of the Labor Arbiter and NLRC? (2) Was there
compliance with the due process requirement? (3) Were petitioners illegally dismissed?

On the threshold procedural issue, petitioners contend that the appellate court went beyond its
jurisdiction when it re-evaluated the findings of facts of the Labor Arbiter also affirmed by the NLRC.
Respondents counter that the appellate court correctly exercised its power of certiorari since the
Labor Arbiter and the NLRC gravely abused their discretion when it failed to consider the affidavits of
the witnesses against the petitioners. They also point out that the present petition raises questions of
fact which are not proper in a petition for review under Rule 45.

The rule is that a petition for certiorari is available when any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction. 9 Generally, factual issues are
not proper subjects for certiorari which is limited to the issue of jurisdiction and grave abuse of
discretion.10 Grave abuse of discretion is committed when the board, tribunal or officer exercising
judicial function fails to consider evidence adduced by the parties.11 In the present case, the Labor
Arbiter and the NLRC disregarded the affidavits of the witnesses against the petitioners.

Moreover, where the party's contention appears to be clearly tenable, or where the broader interest
of justice and public policy so require, the court may, in a certiorari proceeding, correct the error
committed.12 Hence, in our view, the Court of Appeals correctly exercised its power of certiorari when
it re-evaluated the findings of fact by the Labor Arbiter and the NLRC.

The general rule is that the jurisdiction of this Court in a petition for review under Rule 45 is confined
to a review of questions of law. Further, the findings of fact of the Court of Appeals, when supported
by substantial evidence, are conclusive and binding on the parties, and are not reviewed by this
Court, except when the findings are contrary with those of the lower court or quasi-judicial
bodies.13 The contradictory findings of the NLRC and the Court of Appeals provide sufficient
justification for our review of the facts.

On the second issue. Did Wenphil comply with the due process requirement before dismissing the
petitioners?

Petitioners aver that their right to due process was violated. They were not notified of the accusation
against them before they were summoned to the main office of Wenphil on February 3, 2000 for
investigation. Further, they assert that the company investigation was irregular or void since they
were not allowed to seek the assistance of counsel, and that they were not present when the
testimonies of the witnesses were taken, and they were not given the opportunity to confront the
witnesses against them.

First, the law requires that the employee be given two written notices before terminating his
employment, namely: (1) a notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the
employer's decision to dismiss him.14

The records show that the petitioners were given written notices informing them that they were
charged with serious misconduct and dishonesty in relation to the "Biggie Size It! Crew Challenge"
program, and notifying them of the scheduled hearings on February 4 and 7, 2000. 15 Although
notices were given to them only on February 3, 2000, it will be noted that there were other
investigations or hearings set after February 4 and 7 where they had the opportunity to explain their
side after they were apprised of their alleged infractions. We note likewise that petitioners, thinking
that their verbal explanations were sufficient, opted to forego a written explanation, and did not
appear during the set hearing. These actions were choices that petitioners voluntarily made.

On record are the written notices dated February 29, 2000, 16 whereby petitioners were notified of
respondents' decision to terminate them. Petitioner Tuazon acknowledged receipt of her notice as
evidenced by her signature on the company's copy. Petitioner Abing's refusal to sign the company's
copy, despite his own copy having been tendered to him, does not invalidate the notice of his
termination.

Petitioners contend that they were not given the opportunity to confront the witnesses against them.
Petitioners must be reminded, however, that confrontation of witnesses is required only in
adversarial criminal prosecutions, and not in company investigations for the administrative liability of
the employee.17 Additionally, actual adversarial proceedings become necessary only for clarification,
or when there is a need to propound searching questions to witnesses who give vague testimonies.
This is not an inherent right, and in company investigations, summary proceedings may be
conducted.18

Finally, on the last issue. Petitioners contend that respondents did not sufficiently prove the
existence of a just cause for their termination, hence they were illegally dismissed.

There is no denying that petitioners were managerial employees. They executed management
policies, they had the power to hire personnel and assign them tasks; and discipline the employees
in their branch. They recommended actions on employees to the head office. 19 Pertinent is Article
212 (m) of the Labor Code defining a managerial employee as one who is vested with powers or
prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Consequently, as managerial employees, in the
case of petitioners, the mere existence of grounds for the loss of trust and confidence justify their
dismissal.20 Pursuant to our ruling in Caoile v. National Labor Relations Commission,21 as long as the
employer has a reasonable ground to believe that the managerial employee concerned is
responsible for the purported misconduct, or the nature of his participation renders him unworthy of
the trust and confidence demanded by his position, the managerial employee can be dismissed.

In the present case, the tape receipts presented by respondents showed that there were anomalies
committed in the branches managed by the petitioners. On the principle of respondeat superior or
command responsibility alone, petitioners may be held liable for negligence in the performance of
their managerial duties, unless petitioners can positively show that they were not involved. Their
position requires a high degree of responsibility that necessarily includes unearthing of fraudulent
and irregular activities.22 Their bare, unsubstantiated and uncorroborated denial of any participation
in the cheating does not prove their innocence nor disprove their alleged guilt. 23 Additionally, some
employees declared in their affidavits24 that the cheating was actually the idea of the petitioners.

Petitioners make much of the fact that the affidavits were executed only after the investigation. This
is of no moment. For even without the affidavits, sufficient basis exists for respondents' loss of trust
and confidence on the petitioners as managerial officers.

WHEREFORE, the petition is DENIED. The Decision dated August 27, 2003 and Resolution dated
February 23, 2004 of the Court of Appeals in CA-G.R. SP No. 75419 are hereby AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA

PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA A.
AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A. AMADORA and
MARIA TISCALINA A. AMADORA, petitioners
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH
SERGIO P. DLMASO JR., CELESTINO DICON, ANIANO ABELLANA, PABLITO DAFFON thru
his parents and natural guardians, MR. and MRS. NICANOR GUMBAN, and ROLANDO
VALENCIA, thru his guardian, A. FRANCISCO ALONSO, respondents.

Jose S. Amadora & Associates for petitioners.

Padilla Law Office for respondents.

CRUZ, J.:

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement
exercises where he would ascend the stage and in the presence of his relatives and friends receive
his high school diploma. These ceremonies were scheduled on April 16, 1972. As it turned out,
though, fate would intervene and deny him that awaited experience. On April 13, 1972, while they
were in the auditorium of their school, the Colegio de San Jose-Recoletos, a classmate, Pablito
Damon, fired a gun that mortally hit Alfredo, ending all his expectations and his life as well. The
victim was only seventeen years old. 1

Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein petitioners, as
the victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the
Colegio de San Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics
teacher, together with Daffon and two other students, through their respective parents. The complaint
against the students was later dropped. After trial, the Court of First Instance of Cebu held the remaining
defendants liable to the plaintiffs in the sum of P294,984.00, representing death compensation, loss of
earning capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and
attorney's fees . 3 On appeal to the respondent court, however, the decision was reversed and all the
defendants were completely absolved . 4

In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of
Court, the respondent court found that Article 2180 was not applicable as the Colegio de San Jose-
Recoletos was not a school of arts and trades but an academic institution of learning. It also held
that the students were not in the custody of the school at the time of the incident as the semester
had already ended, that there was no clear identification of the fatal gun and that in any event the
defendant, had exercised the necessary diligence in preventing the injury. 5

The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13,
1972, and while in its auditorium was shot to death by Pablito Daffon, a classmate. On the
implications and consequences of these facts, the parties sharply disagree.
The petitioners contend that their son was in the school to show his physics experiment as a
prerequisite to his graduation; hence, he was then under the custody of the private respondents. The
private respondents submit that Alfredo Amadora had gone to the school only for the purpose of
submitting his physics report and that he was no longer in their custody because the semester had
already ended.

There is also the question of the identity of the gun used which the petitioners consider important
because of an earlier incident which they claim underscores the negligence of the school and at
least one of the private respondents. It is not denied by the respondents that on April 7, 1972, Sergio
Damaso, Jr., the dean of boys, confiscated from Jose Gumban an unlicensed pistol but later
returned it to him without making a report to the principal or taking any further action . 6 As Gumban
was one of the companions of Daffon when the latter fired the gun that killed Alfredo, the petitioners
contend that this was the same pistol that had been confiscated from Gumban and that their son would
not have been killed if it had not been returned by Damaso. The respondents say, however, that there is
no proof that the gun was the same firearm that killed Alfredo.

Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it
happens, is invoked by both parties in support of their conflicting positions. The pertinent part of this
article reads as follows:

Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices so long as they remain
in their custody.

Three cases have so far been decided by the Court in connection with the above-quoted provision,
to wit: Exconde v. Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v. Brillantes. 9 These will be
briefly reviewed in this opinion for a better resolution of the case at bar.

In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy
Scout, attended a Rizal Day parade on instructions of the city school supervisor. After the parade,
the boy boarded a jeep, took over its wheel and drove it so recklessly that it turned turtle, resulting in
the death of two of its passengers. Dante was found guilty of double homicide with reckless
imprudence. In the separate civil action flied against them, his father was held solidarily liable with
him in damages under Article 1903 (now Article 2180) of the Civil Code for the tort committed by the
15-year old boy.

This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated the school
in an obiter dictum (as it was not a party to the case) on the ground that it was riot a school of arts
and trades. Justice J.B.L. Reyes, with whom Justices Sabino Padilla and Alex Reyes concurred,
dissented, arguing that it was the school authorities who should be held liable Liability under this
rule, he said, was imposed on (1) teachers in general; and (2) heads of schools of arts and trades in
particular. The modifying clause "of establishments of arts and trades" should apply only to "heads"
and not "teachers."

Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate
with a razor blade during recess time at the Lourdes Catholic School in Quezon City, and the parents
of the victim sued the culprits parents for damages. Through Justice Labrador, the Court declared in
another obiter (as the school itself had also not been sued that the school was not liable because it
was not an establishment of arts and trades. Moreover, the custody requirement had not been
proved as this "contemplates a situation where the student lives and boards with the teacher, such
that the control, direction and influences on the pupil supersede those of the parents." Justice J.B.L.
Reyes did not take part but the other members of the court concurred in this decision promulgated
on May 30, 1960.

In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a
classmate with fist blows in the laboratory of the Manila Technical Institute. Although the wrongdoer
who was already of age was not boarding in the school, the head thereof and the teacher in
charge were held solidarily liable with him. The Court declared through Justice Teehankee:

The phrase used in the cited article "so long as (the students) remain in their
custody" means the protective and supervisory custody that the school and its
heads and teachers exercise over the pupils and students for as long as they are at
attendance in the school, including recess time. There is nothing in the law that
requires that for such liability to attach, the pupil or student who commits the tortious
act must live and board in the school, as erroneously held by the lower court, and
the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed
to have been set aside by the present decision.

This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who stressed,
in answer to the dissenting opinion, that even students already of age were covered by the provision
since they were equally in the custody of the school and subject to its discipline. Dissenting with three
others, 11 Justice Makalintal was for retaining the custody interpretation in Mercado and submitted that the
rule should apply only to torts committed by students not yet of age as the school would be acting only
in loco parentis.

In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case
but added that "since the school involved at bar is a non-academic school, the question as to the
applicability of the cited codal provision to academic institutions will have to await another case
wherein it may properly be raised."

This is the case.

Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded
and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and
trades but an academic institution of learning. The parties herein have also directly raised the
question of whether or not Article 2180 covers even establishments which are technically not schools
of arts and trades, and, if so, when the offending student is supposed to be "in its custody."

After an exhaustive examination of the problem, the Court has come to the conclusion that the
provision in question should apply to all schools, academic as well as non-academic. Where the
school is academic rather than technical or vocational in nature, responsibility for the tort committed
by the student will attach to the teacher in charge of such student, following the first part of the
provision. This is the general rule. In the case of establishments of arts and trades, it is the head
thereof, and only he, who shall be held liable as an exception to the general rule. In other words,
teachers in general shall be liable for the acts of their students except where the school is technical
in nature, in which case it is the head thereof who shall be answerable. Following the canon
of reddendo singula singulis "teachers" should apply to the words "pupils and students" and "heads
of establishments of arts and trades" to the word "apprentices."
The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde
where he said in part:

I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of
arts and trades and not to academic ones. What substantial difference is there
between them insofar as concerns the proper supervision and vice over their pupils?
It cannot be seriously contended that an academic teacher is exempt from the duty of
watching that his pupils do not commit a tort to the detriment of third Persons, so
long as they are in a position to exercise authority and Supervision over the pupil. In
my opinion, in the phrase "teachers or heads of establishments of arts and trades"
used in Art. 1903 of the old Civil Code, the words "arts and trades" does not qualify
"teachers" but only "heads of establishments." The phrase is only an updated version
of the equivalent terms "preceptores y artesanos" used in the Italian and French Civil
Codes.

If, as conceded by all commentators, the basis of the presumption of negligence of

Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are supposed to
have incurred in the exercise of their authority, it would seem clear that where the
parent places the child under the effective authority of the teacher, the latter, and not
the parent, should be the one answerable for the torts committed while under his
custody, for the very reason/that the parent is not supposed to interfere with the
discipline of the school nor with the authority and supervision of the teacher while the
child is under instruction. And if there is no authority, there can be no responsibility.

There is really no substantial distinction between the academic and the non-academic schools
insofar as torts committed by their students are concerned. The same vigilance is expected from the
teacher over the students under his control and supervision, whatever the nature of the school
where he is teaching. The suggestion in the Exconde and Mercado Cases is that the provision would
make the teacher or even the head of the school of arts and trades liable for an injury caused by any
student in its custody but if that same tort were committed in an academic school, no liability would
attach to the teacher or the school head. All other circumstances being the same, the teacher or the
head of the academic school would be absolved whereas the teacher and the head of the non-
academic school would be held liable, and simply because the latter is a school of arts and trades.

The Court cannot see why different degrees of vigilance should be exercised by the school
authorities on the basis only of the nature of their respective schools. There does not seem to be any
plausible reason for relaxing that vigilance simply because the school is academic in nature and for
increasing such vigilance where the school is non-academic. Notably, the injury subject of liability is
caused by the student and not by the school itself nor is it a result of the operations of the school or
its equipment. The injury contemplated may be caused by any student regardless of the school
where he is registered. The teacher certainly should not be able to excuse himself by simply
showing that he is teaching in an academic school where, on the other hand, the head would be held
liable if the school were non-academic.

These questions, though, may be asked: If the teacher of the academic school is to be held
answerable for the torts committed by his students, why is it the head of the school only who is held
liable where the injury is caused in a school of arts and trades? And in the case of the academic or
non- technical school, why not apply the rule also to the head thereof instead of imposing the liability
only on the teacher?
The reason for the disparity can be traced to the fact that historically the head of the school of arts
and trades exercised a closer tutelage over his pupils than the head of the academic school. The old
schools of arts and trades were engaged in the training of artisans apprenticed to their master who
personally and directly instructed them on the technique and secrets of their craft. The head of the
school of arts and trades was such a master and so was personally involved in the task of teaching
his students, who usually even boarded with him and so came under his constant control,
supervision and influence. By contrast, the head of the academic school was not as involved with his
students and exercised only administrative duties over the teachers who were the persons directly
dealing with the students. The head of the academic school had then (as now) only a vicarious
relationship with the students. Consequently, while he could not be directly faulted for the acts of the
students, the head of the school of arts and trades, because of his closer ties with them, could be so
blamed.

It is conceded that the distinction no longer obtains at present in view of the expansion of the
schools of arts and trades, the consequent increase in their enrollment, and the corresponding
diminution of the direct and personal contract of their heads with the students. Article 2180, however,
remains unchanged. In its present state, the provision must be interpreted by the Court according to
its clear and original mandate until the legislature, taking into account the charges in the situation
subject to be regulated, sees fit to enact the necessary amendment.

The other matter to be resolved is the duration of the responsibility of the teacher or the head of the
school of arts and trades over the students. Is such responsibility co-extensive with the period when
the student is actually undergoing studies during the school term, as contended by the respondents
and impliedly admitted by the petitioners themselves?

From a reading of the provision under examination, it is clear that while the custody requirement, to
repeat Palisoc v. Brillantes, does not mean that the student must be boarding with the school
authorities, it does signify that the student should be within the control and under the influence of the
school authorities at the time of the occurrence of the injury. This does not necessarily mean that
such, custody be co-terminous with the semester, beginning with the start of classes and ending
upon the close thereof, and excluding the time before or after such period, such as the period of
registration, and in the case of graduating students, the period before the commencement exercises.
In the view of the Court, the student is in the custody of the school authorities as long as he is under
the control and influence of the school and within its premises, whether the semester has not yet
begun or has already ended.

It is too tenuous to argue that the student comes under the discipline of the school only upon the
start of classes notwithstanding that before that day he has already registered and thus placed
himself under its rules. Neither should such discipline be deemed ended upon the last day of classes
notwithstanding that there may still be certain requisites to be satisfied for completion of the course,
such as submission of reports, term papers, clearances and the like. During such periods, the
student is still subject to the disciplinary authority of the school and cannot consider himself released
altogether from observance of its rules.

As long as it can be shown that the student is in the school premises in pursuance of a legitimate
student objective, in the exercise of a legitimate student right, and even in the enjoyment of a
legitimate student right, and even in the enjoyment of a legitimate student privilege, the responsibility
of the school authorities over the student continues. Indeed, even if the student should be doing
nothing more than relaxing in the campus in the company of his classmates and friends and enjoying
the ambience and atmosphere of the school, he is still within the custody and subject to the
discipline of the school authorities under the provisions of Article 2180.

During all these occasions, it is obviously the teacher-in-charge who must answer for his students'
torts, in practically the same way that the parents are responsible for the child when he is in their
custody. The teacher-in-charge is the one designated by the dean, principal, or other administrative
superior to exercise supervision over the pupils in the specific classes or sections to which they are
assigned. It is not necessary that at the time of the injury, the teacher be physically present and in a
position to prevent it. Custody does not connote immediate and actual physical control but refers
more to the influence exerted on the child and the discipline instilled in him as a result of such
influence. Thus, for the injuries caused by the student, the teacher and not the parent shag be held
responsible if the tort was committed within the premises of the school at any time when its authority
could be validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall directly on
the teacher or the head of the school of arts and trades and not on the school itself. If at all, the
school, whatever its nature, may be held to answer for the acts of its teachers or even of the head
thereof under the general principle of respondeat superior, but then it may exculpate itself from
liability by proof that it had exercised the diligence of a bonus paterfamilias.

Such defense is, of course, also available to the teacher or the head of the school of arts and trades
directly held to answer for the tort committed by the student. As long as the defendant can show that
he had taken the necessary precautions to prevent the injury complained of, he can exonerate
himself from the liability imposed by Article 2180, which also states that:

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 damages.

In this connection, it should be observed that the teacher will be held liable not only when he is
acting in loco parentis for the law does not require that the offending student be of minority age.
Unlike the parent, who wig be liable only if his child is still a minor, the teacher is held answerable by
the law for the act of the student under him regardless of the student's age. Thus, in the Palisoc
Case, liability attached to the teacher and the head of the technical school although the wrongdoer
was already of age. In this sense, Article 2180 treats the parent more favorably than the teacher.

The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting
opinion in Palisoc that the school may be unduly exposed to liability under this article in view of the
increasing activism among the students that is likely to cause violence and resulting injuries in the
school premises. That is a valid fear, to be sure. Nevertheless, it should be repeated that, under the
present ruling, it is not the school that will be held directly liable. Moreover, the defense of due
diligence is available to it in case it is sought to be held answerable as principal for the acts or
omission of its head or the teacher in its employ.

The school can show that it exercised proper measures in selecting the head or its teachers and the
appropriate supervision over them in the custody and instruction of the pupils pursuant to its rules
and regulations for the maintenance of discipline among them. In almost all cases now, in fact, these
measures are effected through the assistance of an adequate security force to help the teacher
physically enforce those rules upon the students. Ms should bolster the claim of the school that it
has taken adequate steps to prevent any injury that may be committed by its students.

A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him
directly answerable for the damage caused by his students as long as they are in the school
premises and presumably under his influence. In this respect, the Court is disposed not to expect
from the teacher the same measure of responsibility imposed on the parent for their influence over
the child is not equal in degree. Obviously, the parent can expect more obedience from the child
because the latter's dependence on him is greater than on the teacher. It need not be stressed that
such dependence includes the child's support and sustenance whereas submission to the teacher's
influence, besides being coterminous with the period of custody is usually enforced only because of
the students' desire to pass the course. The parent can instill more las discipline on the child than
the teacher and so should be held to a greater accountability than the teacher for the tort committed
by the child.

And if it is also considered that under the article in question, the teacher or the head of the school of
arts and trades is responsible for the damage caused by the student or apprentice even if he is
already of age and therefore less tractable than the minor then there should all the more be
justification to require from the school authorities less accountability as long as they can prove
reasonable diligence in preventing the injury. After all, if the parent himself is no longer liable for the
student's acts because he has reached majority age and so is no longer under the former's control,
there is then all the more reason for leniency in assessing the teacher's responsibility for the acts of
the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of
Colegio de San Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It
was immaterial if he was in the school auditorium to finish his physics experiment or merely to
submit his physics report for what is important is that he was there for a legitimate purpose. As
previously observed, even the mere savoring of the company of his friends in the premises of the
school is a legitimate purpose that would have also brought him in the custody of the school
authorities.

2. The rector, the high school principal and the dean of boys cannot be held liable because none of
them was the teacher-in-charge as previously defined. Each of them was exercising only a general
authority over the student body and not the direct control and influence exerted by the teacher
placed in charge of particular classes or sections and thus immediately involved in its discipline. The
evidence of the parties does not disclose who the teacher-in-charge of the offending student was.
The mere fact that Alfredo Amadora had gone to school that day in connection with his physics
report did not necessarily make the physics teacher, respondent Celestino Dicon, the teacher-in-
charge of Alfredo's killer.

3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was
negligent in enforcing discipline upon Daffon or that he had waived observance of the rules and
regulations of the school or condoned their non-observance. His absence when the tragedy
happened cannot be considered against him because he was not supposed or required to report to
school on that day. And while it is true that the offending student was still in the custody of the
teacher-in-charge even if the latter was physically absent when the tort was committed, it has not
been established that it was caused by his laxness in enforcing discipline upon the student. On the
contrary, the private respondents have proved that they had exercised due diligence, through the
enforcement of the school regulations, in maintaining that discipline.

4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable
especially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from
one of the students and returned the same later to him without taking disciplinary action or reporting
the matter to higher authorities. While this was clearly negligence on his part, for which he deserves
sanctions from the school, it does not necessarily link him to the shooting of Amador as it has not
been shown that he confiscated and returned pistol was the gun that killed the petitioners' son.

5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable
under the article because only the teacher or the head of the school of arts and trades is made
responsible for the damage caused by the student or apprentice. Neither can it be held to answer for
the tort committed by any of the other private respondents for none of them has been found to have
been charged with the custody of the offending student or has been remiss in the discharge of his
duties in connection with such custody.

In sum, the Court finds under the facts as disclosed by the record and in the light of the principles
herein announced that none of the respondents is liable for the injury inflicted by Pablito Damon on
Alfredo Amadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-
Recoletos on April 13, 1972. While we deeply sympathize with the petitioners over the loss of their
son under the tragic circumstances here related, we nevertheless are unable to extend them the
material relief they seek, as a balm to their grief, under the law they have invoked.

WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered.

G.R. No. 138060 September 1, 2004

WILLIAM TIU, doing business under the name and style of "D Rough Riders," and VIRGILIO
TE LAS PIAS petitioners,
vs.
PEDRO A. ARRIESGADO, BENJAMIN CONDOR, SERGIO PEDRANO and PHILIPPINE
PHOENIX SURETY AND INSURANCE, INC., respondents.

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court from the Decision 1 of the
Court of Appeals in CA-G.R. CV No. 54354 affirming with modification the Decision 2 of the Regional
Trial Court, 7th Judicial Region, Cebu City, Branch 20, in Civil Case No. CEB-5963 for breach of
contract of carriage, damages and attorneys fees, and the Resolution dated February 26, 1999
denying the motion for reconsideration thereof.

The following facts are undisputed:

At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor Hollow Blocks and
General Merchandise" bearing plate number GBP-675 was loaded with firewood in Bogo,
Cebu and left for Cebu City. Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just
as the truck passed over a bridge, one of its rear tires exploded. The driver, Sergio Pedrano,
then parked along the right side of the national highway and removed the damaged tire to
have it vulcanized at a nearby shop, about 700 meters away.3Pedrano left his helper, Jose
Mitante, Jr. to keep watch over the stalled vehicle, and instructed the latter to place a spare
tire six fathoms away4 behind the stalled truck to serve as a warning for oncoming vehicles.
The trucks tail lights were also left on. It was about 12:00 a.m., March 16, 1987.

At about 4:45 a.m., D Rough Riders passenger bus with plate number PBP-724 driven by Virgilio Te
Laspias was cruising along the national highway of Sitio Aggies, Poblacion, Compostela, Cebu.
The passenger bus was also bound for Cebu City, and had come from Maya, Daanbantayan, Cebu.
Among its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who
were seated at the right side of the bus, about three (3) or four (4) places from the front seat.

As the bus was approaching the bridge, Laspias saw the stalled truck, which was then about 25
meters away.5He applied the breaks and tried to swerve to the left to avoid hitting the truck. But it
was too late; the bus rammed into the trucks left rear. The impact damaged the right side of the bus
and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in
his right colles.6 His wife, Felisa, was brought to the Danao City Hospital. She was later transferred
to the Southern Island Medical Center where she died shortly thereafter.7

Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages
and attorneys fees before the Regional Trial Court of Cebu City, Branch 20, against the petitioners,
D Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias on May 27, 1987. The
respondent alleged that the passenger bus in question was cruising at a fast and high speed along
the national road, and that petitioner Laspias did not take precautionary measures to avoid the
accident.8 Thus:
 6. That the accident resulted to the death of the plaintiffs wife, Felisa Pepito Arriesgado, as
evidenced by a Certificate of Death, a xerox copy of which is hereto attached as integral part
hereof and marked as ANNEX "A", and physical injuries to several of its passengers,
including plaintiff himself who suffered a "COLLES FRACTURE RIGHT," per Medical
Certificate, a xerox copy of which is hereto attached as integral part hereof and marked as
ANNEX "B" hereof.

7. That due to the reckless and imprudent driving by defendant Virgilio Te Laspias of the
said Rough Riders passenger bus, plaintiff and his wife, Felisa Pepito Arriesgado, failed to
safely reach their destination which was Cebu City, the proximate cause of which was
defendant-drivers failure to observe utmost diligence required of a very cautious person
under all circumstances.

8. That defendant William Tiu, being the owner and operator of the said Rough Riders
passenger bus which figured in the said accident, wherein plaintiff and his wife were riding at
the time of the accident, is therefore directly liable for the breach of contract of carriage for
his failure to transport plaintiff and his wife safely to their place of destination which was
Cebu City, and which failure in his obligation to transport safely his passengers was due to
and in consequence of his failure to exercise the diligence of a good father of the family in
the selection and supervision of his employees, particularly defendant-driver Virgilio Te
Laspias.9

The respondent prayed that judgment be rendered in his favor and that the petitioners be
condemned to pay the following damages:

1). To pay to plaintiff, jointly and severally, the amount of P30,000.00 for the death and
untimely demise of plaintiffs wife, Felisa Pepito Arriesgado;

2). To pay to plaintiff, jointly and severally, the amount of P38,441.50, representing actual
expenses incurred by the plaintiff in connection with the death/burial of plaintiffs wife;

3). To pay to plaintiff, jointly and severally, the amount of P1,113.80, representing
medical/hospitalization expenses incurred by plaintiff for the injuries sustained by him;

4). To pay to plaintiff, jointly and severally, the amount of P50,000.00 for moral damages;

5). To pay to plaintiff, jointly and severally, the amount of P50,000.00 by way of exemplary
damages;

6). To pay to plaintiff, jointly and severally, the amount of P20,000.00 for attorneys fees;

7). To pay to plaintiff, jointly and severally, the amount of P5,000.00 for litigation expenses.

PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND REMEDIES IN LAW
AND EQUITY.10

The petitioners, for their part, filed a Third-Party Complaint 11 on August 21, 1987 against the
following: respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tius insurer;
respondent Benjamin Condor, the registered owner of the cargo truck; and respondent Sergio
Pedrano, the driver of the truck. They alleged that petitioner Laspias was negotiating the uphill
climb along the national highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal
speed. It was further alleged that the truck was parked in a slanted manner, its rear portion almost in
the middle of the highway, and that no early warning device was displayed. Petitioner Laspias
promptly applied the brakes and swerved to the left to avoid hitting the truck head-on, but despite his
efforts to avoid damage to property and physical injuries on the passengers, the right side portion of
the bus hit the cargo trucks left rear. The petitioners further alleged, thus:

5. That the cargo truck mentioned in the aforequoted paragraph is owned and registered in
the name of the third-party defendant Benjamin Condor and was left unattended by its driver
Sergio Pedrano, one of the third-party defendants, at the time of the incident;

6. That third-party defendant Sergio Pedrano, as driver of the cargo truck with marked (sic)
"Condor Hollow Blocks & General Merchandise," with Plate No. GBP-675 which was
recklessly and imprudently parked along the national highway of Compostela, Cebu during
the vehicular accident in question, and third-party defendant Benjamin Condor, as the
registered owner of the cargo truck who failed to exercise due diligence in the selection and
supervision of third-party defendant Sergio Pedrano, are jointly and severally liable to the
third-party plaintiffs for whatever liability that may be adjudged against said third-party
plaintiffs or are directly liable of (sic) the alleged death of plaintiffs wife;

7. That in addition to all that are stated above and in the answer which are intended to show
reckless imprudence on the part of the third-party defendants, the third-party plaintiffs hereby
declare that during the vehicular accident in question, third-party defendant was clearly
violating Section 34, par. (g) of the Land Transportation and Traffic Code

10. That the aforesaid passenger bus, owned and operated by third-party plaintiff William
Tiu, is covered by a common carrier liability insurance with Certificate of Cover No. 054940
issued by Philippine Phoenix Surety and Insurance, Inc., Cebu City Branch, in favor of third-
party plaintiff William Tiu which covers the period from July 22, 1986 to July 22, 1987 and
that the said insurance coverage was valid, binding and subsisting during the time of the
aforementioned incident (Annex "A" as part hereof);

11. That after the aforesaid alleged incident, third-party plaintiff notified third-party defendant
Philippine Phoenix Surety and Insurance, Inc., of the alleged incident hereto mentioned, but
to no avail;

12. That granting, et arguendo et arguendi, if herein third-party plaintiffs will be adversely
adjudged, they stand to pay damages sought by the plaintiff and therefore could also look up
to the Philippine Phoenix Surety and Insurance, Inc., for contribution, indemnification and/or
reimbursement of any liability or obligation that they might [be] adjudged per insurance
coverage duly entered into by and between third-party plaintiff William Tiu and third-party
defendant Philippine Phoenix Surety and Insurance, Inc.;12

The respondent PPSII, for its part, admitted that it had an existing contract with petitioner Tiu, but
averred that it had already attended to and settled the claims of those who were injured during the
incident.13 It could not accede to the claim of respondent Arriesgado, as such claim was way beyond
the scheduled indemnity as contained in the contract of insurance.14

After the parties presented their respective evidence, the trial court ruled in favor of respondent
Arriesgado. The dispositive portion of the decision reads:
 WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff as
against defendant William Tiu ordering the latter to pay the plaintiff the following amounts:

1 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as moral damages;

2 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as exemplary damages;

3 - The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-ONE PESOS

(P38,441.00) as actual damages;

4 - The sum of TWENTY THOUSAND PESOS (P20,000.00) as attorneys fees;

5 - The sum of FIVE THOUSAND PESOS (P5,000.00) as costs of suit;

SO ORDERED.15

According to the trial court, there was no dispute that petitioner William Tiu was engaged in business
as a common carrier, in view of his admission that D Rough Rider passenger bus which figured in
the accident was owned by him; that he had been engaged in the transportation business for 25
years with a sole proprietorship; and that he owned 34 buses. The trial court ruled that if petitioner
Laspias had not been driving at a fast pace, he could have easily swerved to the left to avoid hitting
the truck, thus, averting the unfortunate incident. It then concluded that petitioner Laspias was
negligent.

The trial court also ruled that the absence of an early warning device near the place where the truck
was parked was not sufficient to impute negligence on the part of respondent Pedrano, since the tail
lights of the truck were fully on, and the vicinity was well lighted by street lamps. 16 It also found that
the testimony of petitioner Tiu, that he based the selection of his driver Laspias on efficiency and in-
service training, and that the latter had been so far an efficient and good driver for the past six years
of his employment, was insufficient to prove that he observed the diligence of a good father of a
family in the selection and supervision of his employees.

After the petitioners motion for reconsideration of the said decision was denied, the petitioners
elevated the case to the Court of Appeals on the following issues:

I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS RECKLESS AND

IMPRUDENT WHEN HE PARKED THE CARGO TRUCK IN AN OBLIQUE MANNER;

II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY AND SEVERALLY LIABLE
DIRECTLY TO PLAINTIFF-APPELLEE OR TO DEFENDANTS-APPELLANTS FOR
WHATEVER LIABILITY THAT MAY BE ADJUDGED TO THE SAID DEFENDANTS-
APPELLANTS;

III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIAS WAS GUILTY OF

GROSS NEGLIGENCE;

IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HAD EXERCISED THE DUE

DILIGENCE OF A GOOD FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION
OF HIS DRIVERS;
 V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT WILLIAM
TIU IS LIABLE TO PLAINTIFF-APPELLEE, WHETHER THERE IS LEGAL AND FACTUAL
BASIS IN AWARDING EXCESSIVE MORAL DAMAGES, EX[E]MPLARY DAMAGES,
ATTORNEYS FEES AND LITIGATION EXPENSES TO PLAINTIFF-APPELLEE;

VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIX SURETY AND

INSURANCE, INC. IS LIABLE TO DEFENDANT- APPELLANT WILLIAM TIU.17

The appellate court rendered judgment affirming the trial courts decision with the modification that
the awards for moral and exemplary damages were reduced to P25,000. The dispositive portion
reads:

WHEREFORE, the appealed Decision dated November 6, 1995 is hereby MODIFIED such
that the awards for moral and exemplary damages are each reduced to P25,000.00 or a total
of P50,000.00 for both. The judgment is AFFIRMED in all other respects.

SO ORDERED.18

According to the appellate court, the action of respondent Arriesgado was based not on quasi-delict
but on breach of contract of carriage. As a common carrier, it was incumbent upon petitioner Tiu to
prove that extraordinary diligence was observed in ensuring the safety of passengers during
transportation. Since the latter failed to do so, he should be held liable for respondent Arriesgados
claim. The CA also ruled that no evidence was presented against the respondent PPSII, and as
such, it could not be held liable for respondent Arriesgados claim, nor for contribution,
indemnification and/or reimbursement in case the petitioners were adjudged liable.

The petitioners now come to this Court and ascribe the following errors committed by the appellate
court:

I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING RESPONDENTS

BENJAMIN CONDOR AND SERGIO PEDRANO GUILTY OF NEGLIGENCE AND HENCE,
LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TO PETITIONERS FOR
WHATEVER LIABILITY THAT MAY BE ADJUDGED AGAINST THEM.

II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS GUILTY

OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT PEDRO A. ARRIESGADO.

III. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONER WILLIAM

TIU LIABLE FOR EXEMPLARY DAMAGES, ATTORNEYS FEES AND LITIGATION
EXPENSES.

IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING RESPONDENT

PHILIPPINE PHOENIX SURETY AND INSURANCE, INC. LIABLE TO RESPONDENT
PEDRO A. ARRIESGADO OR TO PETITIONER WILLIAM TIU. 19

According to the petitioners, the appellate court erred in failing to appreciate the absence of an early
warning device and/or built-in reflectors at the front and back of the cargo truck, in clear violation of
Section 34, par. (g) of the Land Transportation and Traffic Code. They aver that such violation is only
a proof of respondent Pedranos negligence, as provided under Article 2185 of the New Civil Code.
They also question the appellate courts failure to take into account that the truck was parked in an
oblique manner, its rear portion almost at the center of the road. As such, the proximate cause of the
incident was the gross recklessness and imprudence of respondent Pedrano, creating the
presumption of negligence on the part of respondent Condor in supervising his employees, which
presumption was not rebutted. The petitioners then contend that respondents Condor and Pedrano
should be held jointly and severally liable to respondent Arriesgado for the payment of the latters
claim.

The petitioners, likewise, aver that expert evidence should have been presented to prove that
petitioner Laspias was driving at a very fast speed, and that the CA could not reach such
conclusion by merely considering the damages on the cargo truck. It was also pointed out that
petitioner Tiu presented evidence that he had exercised the diligence of a good father of a family in
the selection and supervision of his drivers.

The petitioners further allege that there is no legal and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was presented to show that the latter acted in a fraudulent,
reckless and oppressive manner, or that he had an active participation in the negligent act of
petitioner Laspias.

Finally, the petitioners contend that respondent PPSII admitted in its answer that while it had
attended to and settled the claims of the other injured passengers, respondent Arriesgados claim
remained unsettled as it was beyond the scheduled indemnity under the insurance contract. The
petitioners argue that said respondent PPSII should have settled the said claim in accordance with
the scheduled indemnity instead of just denying the same.

On the other hand, respondent Arriesgado argues that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the Supreme Court: the finding of negligence on the
part of the petitioners and their liability to him; and the award of exemplary damages, attorneys fees
and litigation expenses in his favor. Invoking the principle of equity and justice, respondent
Arriesgado pointed out that if there was an error to be reviewed in the CA decision, it should be
geared towards the restoration of the moral and exemplary damages to P50,000 each, or a total
of P100,000 which was reduced by the Court of Appeals to P25,000 each, or a total of only P50,000.

Respondent Arriesgado also alleged that respondents Condor and Pedrano, and respondent
Phoenix Surety, are parties with whom he had no contract of carriage, and had no cause of action
against. It was pointed out that only the petitioners needed to be sued, as driver and operator of the
ill-fated bus, on account of their failure to bring the Arriesgado Spouses to their place of destination
as agreed upon in the contract of carriage, using the utmost diligence of very cautious persons with
due regard for all circumstances.

Respondents Condor and Pedrano point out that, as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was the fast speed at which petitioner Laspias was
driving the bus owned by petitioner Tiu. According to the respondents, the allegation that the truck
was not equipped with an early warning device could not in any way have prevented the incident
from happening. It was also pointed out that respondent Condor had always exercised the due
diligence required in the selection and supervision of his employees, and that he was not a party to
the contract of carriage between the petitioners and respondent Arriesgado.

Respondent PPSII, for its part, alleges that contrary to the allegation of petitioner Tiu, it settled all the
claims of those injured in accordance with the insurance contract. It further avers that it did not deny
respondent Arriesgados claim, and emphasizes that its liability should be within the scheduled limits
of indemnity under the said contract. The respondent concludes that while it is true that insurance
contracts are contracts of indemnity, the measure of the insurers liability is determined by the
insureds compliance with the terms thereof.
 The Courts Ruling

At the outset, it must be stressed that this Court is not a trier of facts.20 Factual findings of the Court
of Appeals are final and may not be reviewed on appeal by this Court, except when the lower court
and the CA arrived at diverse factual findings.21 The petitioners in this case assail the finding of both
the trial and the appellate courts that petitioner Laspias was driving at a very fast speed before the
bus owned by petitioner Tiu collided with respondent Condors stalled truck. This is clearly one of
fact, not reviewable by the Court in a petition for review under Rule 45. 22

On this ground alone, the petition is destined to fail.

However, considering that novel questions of law are likewise involved, the Court resolves to
examine and rule on the merits of the case.

Petitioner Laspias
Was negligent in driving
The Ill-fated bus

In his testimony before the trial court, petitioner Laspias claimed that he was traversing the two-
lane road at Compostela, Cebu at a speed of only forty (40) to fifty (50) kilometers per hour before
the incident occurred.23 He also admitted that he saw the truck which was parked in an "oblique
position" at about 25 meters before impact,24and tried to avoid hitting it by swerving to the left.
However, even in the absence of expert evidence, the damage sustained by the truck 25 itself
supports the finding of both the trial court and the appellate court, that the D Rough Rider bus driven
by petitioner Laspias was traveling at a fast pace. Since he saw the stalled truck at a distance of 25
meters, petitioner Laspias had more than enough time to swerve to his left to avoid hitting it; that is,
if the speed of the bus was only 40 to 50 kilometers per hour as he claimed. As found by the Court of
Appeals, it is easier to believe that petitioner Laspias was driving at a very fast speed, since at 4:45
a.m., the hour of the accident, there were no oncoming vehicles at the opposite direction. Petitioner
Laspias could have swerved to the left lane with proper clearance, and, thus, could have avoided
the truck.26 Instinct, at the very least, would have prompted him to apply the breaks to avert the
impending disaster which he must have foreseen when he caught sight of the stalled truck. As we
had occasion to reiterate:

A man must use common sense, and exercise due reflection in all his acts; it is his duty to be
cautious, careful and prudent, if not from instinct, then through fear of recurring punishment.
He is responsible for such results as anyone might foresee and for acts which no one would
have performed except through culpable abandon. Otherwise, his own person, rights and
property, and those of his fellow beings, would ever be exposed to all manner of danger and
injury.27

We agree with the following findings of the trial court, which were affirmed by the CA on appeal:

A close study and evaluation of the testimonies and the documentary proofs submitted by
the parties which have direct bearing on the issue of negligence, this Court as shown by
preponderance of evidence that defendant Virgilio Te Laspias failed to observe
extraordinary diligence as a driver of the common carrier in this case. It is quite hard to
accept his version of the incident that he did not see at a reasonable distance ahead the
cargo truck that was parked when the Rough Rider [Bus] just came out of the bridge which is
on an (sic) [more] elevated position than the place where the cargo truck was parked. With
its headlights fully on, defendant driver of the Rough Rider was in a vantage position to see
the cargo truck ahead which was parked and he could just easily have avoided hitting and
 bumping the same by maneuvering to the left without hitting the said cargo truck. Besides, it
is (sic) shown that there was still much room or space for the Rough Rider to pass at the left
lane of the said national highway even if the cargo truck had occupied the entire right lane
thereof. It is not true that if the Rough Rider would proceed to pass through the left lane it
would fall into a canal considering that there was much space for it to pass without hitting
and bumping the cargo truck at the left lane of said national highway. The records, further,
showed that there was no incoming vehicle at the opposite lane of the national highway
which would have prevented the Rough Rider from not swerving to its left in order to avoid
hitting and bumping the parked cargo truck. But the evidence showed that the Rough Rider
instead of swerving to the still spacious left lane of the national highway plowed directly into
the parked cargo truck hitting the latter at its rear portion; and thus, the (sic) causing
damages not only to herein plaintiff but to the cargo truck as well.28

Indeed, petitioner Laspias negligence in driving the bus is apparent in the records. By his own
admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a
speed of 40 to 50 kilometers per hour before the collision occurred. The maximum speed allowed by
law on a bridge is only 30 kilometers per hour.29 And, as correctly pointed out by the trial court,
petitioner Laspias also violated Section 35 of the Land Transportation and Traffic Code, Republic
Act No. 4136, as amended: 1avvphil.net

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 or any other condition
then and there existing; and no person shall drive any motor vehicle upon a highway at such
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. 30

Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time
of the mishap, he was violating any traffic regulation. 31

Petitioner Tiu failed to

Overcome the presumption
Of negligence against him as
One engaged in the business
Of common carriage

The rules which common carriers should observe as to the safety of their passengers are set forth in
the Civil Code, Articles 1733,32 175533 and 1756.34 In this case, respondent Arriesgado and his
deceased wife contracted with petitioner Tiu, as owner and operator of D Rough Riders bus service,
for transportation from Maya, Daanbantayan, Cebu, to Cebu City for the price of P18.00.35 It is
undisputed that the respondent and his wife were not safely transported to the destination agreed
upon. In actions for breach of contract, only the existence of such contract, and the fact that the
obligor, in this case the common carrier, failed to transport his passenger safely to his destination are
the matters that need to be proved.36 This is because under the said contract of carriage, the
petitioners assumed the express obligation to transport the respondent and his wife to their
destination safely and to observe extraordinary diligence with due regard for all circumstances. 37 Any
injury suffered by the passengers in the course thereof is immediately attributable to the negligence
of the carrier.38Upon the happening of the accident, the presumption of negligence at once arises,
and it becomes the duty of a common carrier to prove that he observed extraordinary diligence in the
care of his passengers.39 It must be stressed that in requiring the highest possible degree of
diligence from common carriers and in creating a presumption of negligence against them, the law
compels them to curb the recklessness of their drivers. 40
While evidence may be submitted to overcome such presumption of negligence, it must be shown
that the carrier observed the required extraordinary diligence, which means that the carrier must
show the utmost diligence of very cautious persons as far as human care and foresight can provide,
or that the accident was caused by fortuitous event. 41 As correctly found by the trial court, petitioner
Tiu failed to conclusively rebut such presumption. The negligence of petitioner Laspias as driver of
the passenger bus is, thus, binding against petitioner Tiu, as the owner of the passenger bus
engaged as a common carrier.42

The Doctrine of
Last Clear Chance
Is Inapplicable in the
Case at Bar

Contrary to the petitioners contention, the principle of last clear chance is inapplicable in the instant
case, as it only applies in a suit between the owners and drivers of 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 and its owner on the ground
that the other driver was likewise guilty of negligence.43 The common law notion of last clear chance
permitted courts to grant recovery to a plaintiff who has also been negligent provided that the
defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is
difficult to see what role, if any, the common law of last clear chance doctrine has to play in a
jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery
by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code. 44

Thus, petitioner Tiu cannot escape liability for the death of respondent Arriesgados wife due to the
negligence of petitioner Laspias, his employee, on this score.

Respondents Pedrano and

Condor were likewise
Negligent

In Phoenix Construction, Inc. v. Intermediate Appellate Court,45 where therein respondent Dionisio
sustained injuries when his vehicle rammed against a dump truck parked askew, the Court ruled that
the improper parking of a dump truck without any warning lights or reflector devices created an
unreasonable risk for anyone driving within the vicinity, and for having created such risk, the truck
driver must be held responsible. In ruling against the petitioner therein, the Court elucidated, thus:

In our view, Dionisios negligence, although later in point of time than the truck drivers
negligence, and therefore closer to the accident, was not an efficient intervening or
independent cause. What the petitioners describe as an "intervening cause" was no more
than a foreseeable consequence of the risk created by the negligent manner in which the
truck driver had parked the dump truck. In other words, the petitioner truck driver owed a
duty to private respondent Dionisio and others similarly situated not to impose upon them the
very risk the truck driver had created. Dionisios negligence was not that of an independent
and overpowering nature as to cut, as it were, the chain of causation in fact between the
improper parking of the dump truck and the accident, nor to sever the juris vinculum of
liability.

 We hold that private respondent Dionisios negligence was "only contributory," that the
"immediate and proximate cause" of the injury remained the truck drivers "lack of due
care."46

In this case, both the trial and the appellate courts failed to consider that respondent Pedrano was
also negligent in leaving the truck parked askew without any warning lights or reflector devices to
alert oncoming vehicles, and that such failure created the presumption of negligence on the part of
his employer, respondent Condor, in supervising his employees properly and adequately. As we
ruled in Poblete v. Fabros:47

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 employee.
The theory of presumed negligence, in contrast with the American doctrine of respondeat
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. 48

The petitioners were correct in invoking respondent Pedranos failure to observe Article IV, Section
34(g) of the Rep. Act No. 4136, which provides: 1avvphil.net

(g) Lights when parked or disabled. Appropriate parking lights or flares visible one hundred
meters away shall be displayed at a corner of the vehicle whenever such vehicle is parked
on highways or in places that are not well-lighted or is placed in such manner as to endanger
passing traffic.

The manner in which the truck was parked clearly endangered oncoming traffic on both sides,
considering that the tire blowout which stalled the truck in the first place occurred in the wee hours of
the morning. The Court can only now surmise that the unfortunate incident could have been averted
had respondent Condor, the owner of the truck, equipped the said vehicle with lights, flares, or, at
the very least, an early warning device.49 Hence, we cannot subscribe to respondents Condor and
Pedranos claim that they should be absolved from liability because, as found by the trial and
appellate courts, the proximate cause of the collision was the fast speed at which petitioner Laspias
drove the bus. To accept this proposition would be to come too close to wiping out the fundamental
principle of law that a man must respond for the foreseeable consequences of his own negligent act
or omission. Indeed, our law on quasi-delicts seeks to reduce the risks and burdens of living in
society and to allocate them among its members. To accept this proposition would be to weaken the
very bonds of society.50

The Liability of
Respondent PPSII
as Insurer

The trial court in this case did not rule on the liability of respondent PPSII, while the appellate court
ruled that, as no evidence was presented against it, the insurance company is not liable.

A perusal of the records will show that when the petitioners filed the Third-Party Complaint against
respondent PPSII, they failed to attach a copy of the terms of the insurance contract itself. Only
Certificate of Cover No. 05494051 issued in favor of "Mr. William Tiu, Lahug, Cebu City" signed by
Cosme H. Boniel was appended to the third-party complaint. The date of issuance, July 22, 1986,
the period of insurance, from July 22, 1986 to July 22, 1987, as well as the following items, were
also indicated therein:

SCHEDULED VEHICLE
MODEL MAKE TYPE OF COLOR BLT FILE NO.
Isuzu Forward BODY blue mixed
Bus
PLATE SERIAL/CHASSIS MOTOR NO. AUTHORIZED UNLADEN
NO. NO. 677836 CAPACITY WEIGHT
PBP-724 SER450-1584124 50 6 Cyls. Kgs.
SECTION 1/11 *LIMITS OF LIABILITY PREMIUMS PAID
A. THIRD PARTY LIABILITY P50,000.00 P540.0052
B. PASSENGER LIABILITY Per Person Per Accident
P12,000.00 P50,000

In its Answer53 to the Third-Party Complaint, the respondent PPSII admitted the existence of the
contract of insurance, in view of its failure to specifically deny the same as required under then
Section 8(a), Rule 8 of the Rules of Court,54 which reads:

Sec. 8. How to contest genuineness of such documents. When an action or defense is

founded upon a written instrument copied in or attached to the corresponding pleading as
provided in the preceding section, the genuineness and due execution of the instrument shall
be deemed admitted unless the adverse party, under oath, specifically denies them, and sets
forth what he claims to be the facts; but the requirement of an oath does not apply when the
adverse party does not appear to be a party to the instrument or when compliance with an
order for inspection of the original instrument is refused.

In fact, respondent PPSII did not dispute the existence of such contract, and admitted that it was
liable thereon. It claimed, however, that it had attended to and settled the claims of those injured
during the incident, and set up the following as special affirmative defenses:

Third party defendant Philippine Phoenix Surety and Insurance, Inc. hereby reiterates and
incorporates by way of reference the preceding paragraphs and further states THAT:-

8. It has attended to the claims of Vincent Canales, Asuncion Batiancila and Neptali
Palces who sustained injuries during the incident in question. In fact, it settled
financially their claims per vouchers duly signed by them and they duly executed
Affidavit[s] of Desistance to that effect, xerox copies of which are hereto attached as
Annexes 1, 2, 3, 4, 5, and 6 respectively;

9. With respect to the claim of plaintiff, herein answering third party defendant
through its authorized insurance adjuster attended to said claim. In fact, there were
negotiations to that effect. Only that it cannot accede to the demand of said claimant
considering that the claim was way beyond the scheduled indemnity as per contract
entered into with third party plaintiff William Tiu and third party defendant (Philippine
Phoenix Surety and Insurance, Inc.). Third party Plaintiff William Tiu knew all along
the limitation as earlier stated, he being an old hand in the transportation
business;55

Considering the admissions made by respondent PPSII, the existence of the insurance contract and
the salient terms thereof cannot be dispatched. It must be noted that after filing its answer,
respondent PPSII no longer objected to the presentation of evidence by respondent Arriesgado and
the insured petitioner Tiu. Even in its Memorandum56 before the Court, respondent PPSII admitted
the existence of the contract, but averred as follows:

Petitioner Tiu is insisting that PPSII is liable to him for contribution, indemnification and/or
reimbursement. This has no basis under the contract. Under the contract, PPSII will pay all
sums necessary to discharge liability of the insured subject to the limits of liability but not to
exceed the limits of liability as so stated in the contract. Also, it is stated in the contract that in
the event of accident involving indemnity to more than one person, the limits of liability shall
not exceed the aggregate amount so specified by law to all persons to be indemnified. 57

As can be gleaned from the Certificate of Cover, such insurance contract was issued pursuant to the
Compulsory Motor Vehicle Liability Insurance Law. It was expressly provided therein that the limit of
the insurers liability for each person was P12,000, while the limit per accident was pegged
at P50,000. 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.58 The respondent PPSII could not then just deny petitioner Tius claim; it should have
paid P12,000 for the death of Felisa Arriesgado,59 and respondent Arriesgados hospitalization
expenses of P1,113.80, which the trial court found to have been duly supported by receipts. The total
amount of the claims, even when added to that of the other injured passengers which the
respondent PPSII claimed to have settled,60 would not exceed the P50,000 limit under the insurance
agreement.

Indeed, the nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily
intended to provide compensation for the death or bodily injuries suffered by innocent third parties or
passengers as a result of the negligent operation and use of motor vehicles. The victims and/or their
dependents are assured of immediate financial assistance, regardless of the financial capacity of
motor vehicle owners.61 As the Court, speaking through Associate Justice Leonardo A. Quisumbing,
explained in Government Service Insurance System v. Court of Appeals:62

However, although the victim may proceed directly against the insurer for indemnity, the third
party liability is only up to the extent of the insurance policy and those required by law. While
it is true that where the insurance contract provides for indemnity against liability to third
persons, and such persons can directly sue the insurer, the direct liability of the insurer under
indemnity contracts against third party liability does not mean that the insurer can be held
liable in solidum with the insured and/or the other parties found at fault. For the liability of the
insurer is based on contract; that of the insured carrier or vehicle owner is based on tort.

Obviously, the insurer could be held liable only up to the extent of what was provided for by
the contract of insurance, in accordance with the CMVLI law. At the time of the incident, the
schedule of indemnities for death and bodily injuries, professional fees and other charges
payable under a CMVLI coverage was provided for under the Insurance Memorandum
Circular (IMC) No. 5-78 which was approved on November 10, 1978. As therein provided,
the maximum indemnity for death was twelve thousand (P12,000.00) pesos per victim. The
schedules for medical expenses were also provided by said IMC, specifically in paragraphs
(C) to (G).63

Damages to be
Awarded
The trial court correctly awarded moral damages in the amount of P50,000 in favor of respondent
Arriesgado. The award of exemplary damages by way of example or correction of the public
good,64 is likewise in order. As the Court ratiocinated in Kapalaran Bus Line v. Coronado: 65

While the immediate beneficiaries of the standard of extraordinary diligence are, of course,
the passengers and owners of cargo carried by a common carrier, they are not the only
persons that the law seeks to benefit. For if common carriers carefully observed the statutory
standard of extraordinary diligence in respect of their own passengers, they cannot help but
simultaneously benefit pedestrians and the passengers of other vehicles who are equally
entitled to the safe and convenient use of our roads and highways. The law seeks to stop
and prevent the slaughter and maiming of people (whether passengers or not) on our
highways and buses, the very size and power of which seem to inflame the minds of their
drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary
damages in cases of quasi-delicts "if the defendant acted with gross negligence." 66

The respondent Pedro A. Arriesgado, as the surviving spouse and heir of Felisa Arriesgado, is
entitled to indemnity in the amount of P50,000.00.67

The petitioners, as well as the respondents Benjamin Condor and Sergio Pedrano are jointly and
severally liable for said amount, conformably with the following pronouncement of the Court in
Fabre, Jr. vs. Court of Appeals:68

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 latters
heirs. The basis of this allocation of liability was explained in Viluan v. Court of Appeals, thus:

"Nor should it make 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. Some
members of the Court, though, are of the view that under the circumstances they are
liable on quasi-delict."69

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the
Court of Appeals is AFFIRMED with MODIFICATIONS:

(1) Respondent Philippine Phoenix Surety and Insurance, Inc. and petitioner William Tiu are
ORDERED to pay, jointly and severally, respondent Pedro A. Arriesgado the total amount
of P13,113.80;

(2) The petitioners and the respondents Benjamin Condor and Sergio Pedrano are
ORDERED to pay, jointly and severally, respondent Pedro A. Arriesgado P50,000.00 as
indemnity; P26,441.50 as actual damages; P50,000.00 as moral damages; P50,000.00 as
exemplary damages; and P20,000.00 as attorneys fees.

SO ORDERED.
G.R. No. L-12191 October 14, 1918

JOSE CANGCO, plaintiff-appellant,

vs.
MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.

Kincaid & Hartigan for appellee.

FISHER, J.:

At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the
employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He
lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the
defendant railroad company; and in coming daily by train to the company's office in the city of Manila
where he worked, he used a pass, supplied by the company, which entitled him to ride upon the
company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose
from his seat in the second class-car where he was riding and, making, his exit through the door,
took his position upon the steps of the coach, seizing the upright guardrail with his right hand for
support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform
which begins to rise with a moderate gradient some distance away from the company's office and
extends along in front of said office for a distance sufficient to cover the length of several coaches.
As the train slowed down another passenger, named Emilio Zuiga, also an employee of the railroad
company, got off the same car, alighting safely at the point where the platform begins to rise from the
level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco stepped
off also, but one or both of his feet came in contact with a sack of watermelons with the result that
his feet slipped from under him and he fell violently on the platform. His body at once rolled from the
platform and was drawn under the moving car, where his right arm was badly crushed and lacerated.
It appears that after the plaintiff alighted from the train the car moved forward possibly six meters
before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was
lighted dimly by a single light located some distance away, objects on the platform where the
accident occurred were difficult to discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is
found in the fact that it was the customary season for harvesting these melons and a large lot had
been brought to the station for the shipment to the market. They were contained in numerous sacks
which has been piled on the platform in a row one upon another. The testimony shows that this row
of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff
was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon
the platform. His statement that he failed to see these objects in the darkness is readily to be
credited.
The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the
injuries which he had received were very serious. He was therefore brought at once to a certain
hospital in the city of Manila where an examination was made and his arm was amputated. The
result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital
where a second operation was performed and the member was again amputated higher up near the
shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of
Manila to recover damages of the defendant company, founding his action upon the negligence of
the servants and employees of the defendant in placing the sacks of melons upon the platform and
leaving them so placed as to be a menace to the security of passenger alighting from the company's
trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts
substantially as above stated, and drew therefrom his conclusion to the effect that, although
negligence was attributable to the defendant by reason of the fact that the sacks of melons were so
placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself
had failed to use due caution in alighting from the coach and was therefore precluded form
recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff
appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling
these sacks on the platform in the manner above stated; that their presence caused the plaintiff to
fall as he alighted from the train; and that they therefore constituted an effective legal cause of the
injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the
damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence.
In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary
responsibility of the defendant company and the contributory negligence of the plaintiff should be
separately examined.

It is important to note that the foundation of the legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at
all, from the breach of that contract by reason of the failure of defendant to exercise due care in its
performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint
from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the
Civil Code, which can be rebutted by proof of the exercise of due care in their selection and
supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but
only to extra-contractual obligations or to use the technical form of expression, that article relates
only to culpa aquiliana and not to culpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly
points out this distinction, which was also recognized by this Court in its decision in the case of
Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa
clearly points out the difference between "culpa, substantive and independent, which of itself
constitutes the source of an obligation between persons not formerly connected by any legal tie"
and culpa considered as an accident in the performance of an obligation already existing . . . ."

In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition
that article 1903 of the Civil Code is not applicable to acts of negligence which constitute the breach
of a contract.
Upon this point the Court said:

The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are
understood to be those not growing out of pre-existing duties of the parties to one another.
But where relations already formed give rise to duties, whether springing from contract or
quasi-contract, then breaches of those duties are subject to article 1101, 1103, and 1104 of
the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain
cases imposed upon employers with respect to damages occasioned by the negligence of their
employees to persons to whom they are not bound by contract, is not based, as in the English
Common Law, upon the principle of respondeat superior if it were, the master would be liable in
every case and unconditionally but upon the principle announced in article 1902 of the Civil Code,
which imposes upon all persons who by their fault or negligence, do injury to another, the obligation
of making good the damage caused. One who places a powerful automobile in the hands of a
servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of
an act of negligence which makes him liable for all the consequences of his imprudence. The
obligation to make good the damage arises at the very instant that the unskillful servant, while acting
within the scope of his employment causes the injury. The liability of the master is personal and
direct. But, if the master has not been guilty of any negligence whatever in the selection and
direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of
his employment or not, if the damage done by the servant does not amount to a breach of the
contract between the master and the person injured.

It is not accurate to say that proof of diligence and care in the selection and control of the servant
relieves the master from liability for the latter's acts on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-
contractual culpa is always based upon a voluntary act or omission which, without willful intent, but
by mere negligence or inattention, has caused damage to another. A master who exercises all
possible care in the selection of his servant, taking into consideration the qualifications they should
possess for the discharge of the duties which it is his purpose to confide to them, and directs them
with equal diligence, thereby performs his duty to third persons to whom he is bound by no
contractual ties, and he incurs no liability whatever if, by reason of the negligence of his servants,
even within the scope of their employment, such third person suffer damage. True it is that under
article 1903 of the Civil Code the law creates a presumption that he has been negligent in the
selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care
and diligence in this respect.

The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico
Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)

This distinction was again made patent by this Court in its decision in the case of Bahia vs. Litonjua
and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory of the extra-
contractual liability of the defendant to respond for the damage caused by the carelessness of his
employee while acting within the scope of his employment. The Court, after citing the last paragraph
of article 1903 of the Civil Code, said:
 From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in selection of the servant or
employee, or in supervision over him after the selection, or both; and (2) that that
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in selection
and supervision he has exercised the care and diligence of a good father of a family, the
presumption is overcome and he is relieved from liability.

This theory bases the responsibility of the master ultimately on his own negligence and not
on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is, of
course, in striking contrast to the American doctrine that, in relations with strangers, the
negligence of the servant in conclusively the negligence of the master.

The opinion there expressed by this Court, to the effect that in case of extra-contractual culpa based
upon negligence, it is necessary that there shall have been some fault attributable to the defendant
personally, and that the last paragraph of article 1903 merely establishes a rebuttable presumption,
is in complete accord with the authoritative opinion of Manresa, who says (vol. 12, p. 611) that the
liability created by article 1903 is imposed by reason of the breach of the duties inherent in the
special relations of authority or superiority existing between the person called upon to repair the
damage and the one who, by his act or omission, was the cause of it.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their
servants or agents, when such acts or omissions cause damages which amount to the breach of a
contact, is not based upon a mere presumption of the master's negligence in their selection or
control, and proof of exercise of the utmost diligence and care in this regard does not relieve the
master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual

obligation has its source in the breach or omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations, other than contractual, of certain
members of society to others, generally embraced in the concept of status. The legal rights of each
member of society constitute the measure of the corresponding legal duties, mainly negative in
character, which the existence of those rights imposes upon all other members of society. The
breach of these general duties whether due to willful intent or to mere inattention, if productive of
injury, give rise to an obligation to indemnify the injured party. The fundamental distinction between
obligations of this character and those which arise from contract, rests upon the fact that in cases of
non-contractual obligation it is the wrongful or negligent act or omission itself which creates
the vinculum juris, whereas in contractual relations the vinculum exists independently of the breach
of the voluntary duty assumed by the parties when entering into the contractual relation.

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is
competent for the legislature to elect and our Legislature has so elected whom such an
obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to extend
that liability, without regard to the lack of moral culpability, so as to include responsibility for the
negligence of those person who acts or mission are imputable, by a legal fiction, to others who are in
a position to exercise an absolute or limited control over them. The legislature which adopted our
Civil Code has elected to limit extra-contractual liability with certain well-defined exceptions to
cases in which moral culpability can be directly imputed to the persons to be charged. This moral
responsibility may consist in having failed to exercise due care in the selection and control of one's
agents or servants, or in the control of persons who, by reason of their status, occupy a position of
dependency with respect to the person made liable for their conduct.

The position of a natural or juridical person who has undertaken by contract to render service to
another, is wholly different from that to which article 1903 relates. When the sources of the obligation
upon which plaintiff's cause of action depends is a negligent act or omission, the burden of proof
rests upon plaintiff to prove the negligence if he does not his action fails. But when the facts
averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that
plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his
pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the contract and of its nonperformance is
sufficient prima facie to warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor

should assume the burden of proof of its existence, as the only fact upon which his action is
based; while on the contrary, in a case of negligence which presupposes the existence of a
contractual obligation, if the creditor shows that it exists and that it has been broken, it is not
necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).

As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach
was due to the negligent conduct of defendant or of his servants, even though such be in fact the
actual cause of the breach, it is obvious that proof on the part of defendant that the negligence or
omission of his servants or agents caused the breach of the contract would not constitute a defense
to the action. If the negligence of servants or agents could be invoked as a means of discharging the
liability arising from contract, the anomalous result would be that person acting through the medium
of agents or servants in the performance of their contracts, would be in a better position than those
acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the
bailee, by a personal negligent act causes its destruction, he is unquestionably liable. Would it be
logical to free him from his liability for the breach of his contract, which involves the duty to exercise
due care in the preservation of the watch, if he shows that it was his servant whose negligence
caused the injury? If such a theory could be accepted, juridical persons would enjoy practically
complete immunity from damages arising from the breach of their contracts if caused by negligent
acts as such juridical persons can of necessity only act through agents or servants, and it would no
doubt be true in most instances that reasonable care had been taken in selection and direction of
such servants. If one delivers securities to a banking corporation as collateral, and they are lost by
reason of the negligence of some clerk employed by the bank, would it be just and reasonable to
permit the bank to relieve itself of liability for the breach of its contract to return the collateral upon
the payment of the debt by proving that due care had been exercised in the selection and direction
of the clerk?

This distinction between culpa aquiliana, as the source of an obligation, and culpa contractual as a
mere incident to the performance of a contract has frequently been recognized by the supreme court
of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December 13, 1896.) In the
decisions of November 20, 1896, it appeared that plaintiff's action arose ex contractu, but that
defendant sought to avail himself of the provisions of article 1902 of the Civil Code as a defense.
The Spanish Supreme Court rejected defendant's contention, saying:
 These are not cases of injury caused, without any pre-existing obligation, by fault or
negligence, such as those to which article 1902 of the Civil Code relates, but of damages
caused by the defendant's failure to carry out the undertakings imposed by the
contracts . . . .

A brief review of the earlier decision of this court involving the liability of employers for damage done
by the negligent acts of their servants will show that in no case has the court ever decided that the
negligence of the defendant's servants has been held to constitute a defense to an action for
damages for breach of contract.

In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage was
not liable for the damages caused by the negligence of his driver. In that case the court commented
on the fact that no evidence had been adduced in the trial court that the defendant had been
negligent in the employment of the driver, or that he had any knowledge of his lack of skill or
carefulness.

In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the plaintiff
sued the defendant for damages caused by the loss of a barge belonging to plaintiff which was
allowed to get adrift by the negligence of defendant's servants in the course of the performance of a
contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the
defendant grew out of a contract made between it and the plaintiff . . . we do not think that the
provisions of articles 1902 and 1903 are applicable to the case."

In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover
damages for the personal injuries caused by the negligence of defendant's chauffeur while driving
defendant's automobile in which defendant was riding at the time. The court found that the damages
were caused by the negligence of the driver of the automobile, but held that the master was not
liable, although he was present at the time, saying:

. . . unless the negligent acts of the driver are continued for a length of time as to give the
owner a reasonable opportunity to observe them and to direct the driver to desist therefrom. .
. . The act complained of must be continued in the presence of the owner for such length of
time that the owner by his acquiescence, makes the driver's acts his own.

In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep.,
8), it is true that the court rested its conclusion as to the liability of the defendant upon article 1903,
although the facts disclosed that the injury complaint of by plaintiff constituted a breach of the duty to
him arising out of the contract of transportation. The express ground of the decision in this case was
that article 1903, in dealing with the liability of a master for the negligent acts of his servants "makes
the distinction between private individuals and public enterprise;" that as to the latter the law creates
a rebuttable presumption of negligence in the selection or direction of servants; and that in the
particular case the presumption of negligence had not been overcome.

It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though
founded in tort rather than as based upon the breach of the contract of carriage, and an examination
of the pleadings and of the briefs shows that the questions of law were in fact discussed upon this
theory. Viewed from the standpoint of the defendant the practical result must have been the same in
any event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and
that his negligence was the proximate cause of plaintiff's injury. It also affirmatively appeared that
defendant had been guilty of negligence in its failure to exercise proper discretion in the direction of
the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of
the duty were to be regarded as constituting culpa aquiliana or culpa contractual. As Manresa points
out (vol. 8, pp. 29 and 69) whether negligence occurs an incident in the course of the performance of
a contractual undertaking or its itself the source of an extra-contractual undertaking obligation, its
essential characteristics are identical. There is always an act or omission productive of damage due
to carelessness or inattention on the part of the defendant. Consequently, when the court holds that
a defendant is liable in damages for having failed to exercise due care, either directly, or in failing to
exercise proper care in the selection and direction of his servants, the practical result is identical in
either case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada
case that defendant was liable for the damages negligently caused by its servants to a person to
whom it was bound by contract, and made reference to the fact that the defendant was negligent in
the selection and control of its servants, that in such a case the court would have held that it would
have been a good defense to the action, if presented squarely upon the theory of the breach of the
contract, for defendant to have proved that it did in fact exercise care in the selection and control of
the servant.

The true explanation of such cases is to be found by directing the attention to the relative spheres of
contractual and extra-contractual obligations. The field of non- contractual obligation is much more
broader than that of contractual obligations, comprising, as it does, the whole extent of juridical
human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that
a person is bound to another by contract does not relieve him from extra-contractual liability to such
person. When such a contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes the source of an extra-contractual obligation had no
contract existed between the parties.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in
safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That
duty, being contractual, was direct and immediate, and its non-performance could not be excused by
proof that the fault was morally imputable to defendant's servants.

The railroad company's defense involves the assumption that even granting that the negligent
conduct of its servants in placing an obstruction upon the platform was a breach of its contractual
obligation to maintain safe means of approaching and leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the
train had come to a complete stop before alighting. Under the doctrine of comparative negligence
announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no
liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his
injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in
fact guilty of negligence.

It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the
particular injury suffered by him could not have occurred. Defendant contends, and cites many
authorities in support of the contention, that it is negligence per se for a passenger to alight from a
moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the
opinion that this proposition is too badly stated and is at variance with the experience of every-day
life. In this particular instance, that the train was barely moving when plaintiff alighted is shown
conclusively by the fact that it came to stop within six meters from the place where he stepped from
it. Thousands of person alight from trains under these conditions every day of the year, and sustain
no injury where the company has kept its platform free from dangerous obstructions. There is no
reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it
not been for defendant's negligent failure to perform its duty to provide a safe alighting place.

We are of the opinion that the correct doctrine relating to this subject is that expressed in
Thompson's work on Negligence (vol. 3, sec. 3010) as follows:

The test by which to determine whether the passenger has been guilty of negligence in
attempting to alight from a moving railway train, is that of ordinary or reasonable care. It is to
be considered whether an ordinarily prudent person, of the age, sex and condition of the
passenger, would have acted as the passenger acted under the circumstances disclosed by
the evidence. This care has been defined to be, not the care which may or should be used
by the prudent man generally, but the care which a man of ordinary prudence would use
under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol.
3, sec. 3010.)

Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil. rep.,
809), we may say that the test is this; Was there anything in the circumstances surrounding the
plaintiff at the time he alighted from the train which would have admonished a person of average
prudence that to get off the train under the conditions then existing was dangerous? If so, the plaintiff
should have desisted from alighting; and his failure so to desist was contributory negligence. 1awph!l.net

As the case now before us presents itself, the only fact from which a conclusion can be drawn to the
effect that plaintiff was guilty of contributory negligence is that he stepped off the car without being
able to discern clearly the condition of the platform and while the train was yet slowly moving. In
considering the situation thus presented, it should not be overlooked that the plaintiff was, as we
find, ignorant of the fact that the obstruction which was caused by the sacks of melons piled on the
platform existed; and as the defendant was bound by reason of its duty as a public carrier to afford
to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the contrary, that the platform was clear. The place,
as we have already stated, was dark, or dimly lighted, and this also is proof of a failure upon the part
of the defendant in the performance of a duty owing by it to the plaintiff; for if it were by any
possibility concede that it had right to pile these sacks in the path of alighting passengers, the
placing of them adequately so that their presence would be revealed.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the
following circumstances are to be noted: The company's platform was constructed upon a level
higher than that of the roadbed and the surrounding ground. The distance from the steps of the car
to the spot where the alighting passenger would place his feet on the platform was thus reduced,
thereby decreasing the risk incident to stepping off. The nature of the platform, constructed as it was
of cement material, also assured to the passenger a stable and even surface on which to alight.
Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by no
means so risky for him to get off while the train was yet moving as the same act would have been in
an aged or feeble person. In determining the question of contributory negligence in performing such
act that is to say, whether the passenger acted prudently or recklessly the age, sex, and
physical condition of the passenger are circumstances necessarily affecting the safety of the
passenger, and should be considered. Women, it has been observed, as a general rule are less
capable than men of alighting with safety under such conditions, as the nature of their wearing
apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly
familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could,
therefore, be no uncertainty in his mind with regard either to the length of the step which he was
required to take or the character of the platform where he was alighting. Our conclusion is that the
conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not
characterized by imprudence and that therefore he was not guilty of contributory negligence.

The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a
copyist clerk, and that the injuries he has suffered have permanently disabled him from continuing
that employment. Defendant has not shown that any other gainful occupation is open to plaintiff. His
expectancy of life, according to the standard mortality tables, is approximately thirty-three years. We
are of the opinion that a fair compensation for the damage suffered by him for his permanent
disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional sum
of P790.25 for medical attention, hospital services, and other incidental expenditures connected with
the treatment of his injuries.

The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of
P3,290.25, and for the costs of both instances. So ordered.
G.R. No. 152033 March 16, 2011

FILIPINAS SYNTHETIC FIBER CORPORATION, Petitioner,

vs.
WILFREDO DE LOS SANTOS, BENITO JOSE DE LOS SANTOS, MARIA ELENA DE LOS
SANTOS and CARMINA VDA. DE LOS SANTOS, Respondents.

DECISION

PERALTA, J.:

This Petition for Review under Rule 45 of the 1997 Rules of Civil Procedure assails the Decision 1 of
the Court of Appeals (CA) dated August 15, 2001, affirming with modification, the Decision 2 dated
February 14, 1994 of the Regional Trial Court (RTC), and the Resolution dated January 29, 2002 of
the CA, denying petitioner's Motion for Reconsideration.

This all stems from a case for damages filed against the petitioner and one of its employees. The
facts, as found by the RTC and the CA, are as follows:

On the night of September 30, 1984, Teresa Elena Legarda-de los Santos (Teresa Elena), the wife of
respondent Wilfredo de los Santos (Wilfredo), performed at the Rizal Theater in Makati City, Metro
Manila as a member of the cast for the musical play, Woman of the Year.

On that same night, at the request of Wilfredo, his brother Armando de los Santos (Armando),
husband of respondent Carmina Vda. de los Santos, went to the Rizal Theater to fetch Teresa Elena
after the latter's performance. He drove a 1980 Mitsubishi Galant Sigma (Galant Sigma) with Plate
No. NSL 559, a company car assigned to Wilfredo.

Two other members of the cast of Woman of the Year, namely, Annabel Vilches (Annabel) and
Jerome Macuja, joined Teresa Elena in the Galant Sigma.

Around 11:30 p.m., while travelling along the Katipunan Road (White Plains), the Galant Sigma
collided with the shuttle bus owned by petitioner and driven by Alfredo S. Mejia (Mejia), an employee
of petitioner. The Galant Sigma was dragged about 12 meters from the point of impact, across the
White Plains Road landing near the perimeter fence of Camp Aguinaldo, where the Galant Sigma
burst into flames and burned to death beyond recognition all four occupants of the car.

A criminal charge for reckless imprudence resulting in damage to property with multiple homicide
was brought against Mejia, which was decided in favor of Mejia. The family of Annabel filed a civil
case against petitioner and Mejia docketed as Civil Case No. Q-51382, which was raffled to Branch
82 of the RTC of Quezon City. Wilfredo and Carmina, joined by their minor children, also filed
separate actions for damages against petitioner and Mejia. The said cases were eventually
consolidated.

After trial on the merits, the RTC decided in favor of herein respondents. The dispositive portion of
the decision reads:
WHEREFORE, in view of the foregoing, this Court finds the herein plaintiffs in Civil Case Nos. Q-
44498 and Q-45602, namely Wilfredo de los Santos, et al. and Carmina Vda. de los Santos, et al.,
respectively, to have duly proven their causes of action against Filipinas Synthetic Fiber Corporation
and Alfredo S. Mejia, defendants in both cases, thru preponderance of evidence, hence, Judgment is
hereby rendered ordering defendants, jointly and severally, to pay the herein plaintiffs in Civil Case
No. Q-44498, (1) for actual damages, P29,550.00, with interest thereon at the legal rate until paid;
(2) the amount of P4,769,525.00 as compensatory damages and unrealized income of Teresa Elena,
which is one-half of the amount of P9,539,050.00, taking into consideration her status in life, and that
during her lifetime she was not only spending for herself. The latter's average expenses would either
be more or less than one-half of her gross income for the year; (3) P100,000.00 as moral damages
to assuage the family of the deceased Teresa Elena for the loss of a love one who was charred
beyond recognition; and (4) attorney's fees of P150,000.00. As to exemplary damages, the same
cannot be granted for the reason that no one wanted this unfortunate accident to happen, which was
a costly one.

For Civil Case No. Q-45602, the herein defendants are hereby ordered, jointly and severally, to pay
the plaintiffs (1) P20,550.00 for actual damages, with interest thereon at the legal rate until the same
is paid; (2) P444,555.00 as compensatory damages and unrealized income of the deceased
Armando de los Santos, for the same reason as the deceased Teresa Elena, who during his lifetime,
Armando was not only spending for himself; (3) P100,000.00 as moral damages to assuage the loss
of a love one who was burnt beyond recognition; and (4) P100,000.00 as attorney's fees. As to
exemplary damages, the same could not be granted for the same reason as that in Civil Case No.
Q-44498.

SO ORDERED.

After the denial of the motion for reconsideration, petitioner appealed to the CA, and the latter ruled:

WHEREFORE, the assailed February 14, 1994 Decision of the Regional Trial Court of Quezon City,
Branch 100 is AFFIRMED, subject to modification that in Civil Case No. Q-44498 the compensatory
damages and unrealized income of deceased Teresa Elena shall be P3,120,300.00, and in Civil
Case No. Q-45602 the compensatory damages and unrealized income of deceased Armando shall
be P509,649.00.

SO ORDERED.

The subsequent motion for reconsideration was also denied. Hence, the present petition wherein the
petitioner assigned the following errors:

ASSIGNMENT OF ERRORS

I. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THE PETITIONER MEJIA

NEGLIGENT, SUCH NOT BEING SUPPORTED BY THE EVIDENCE ON RECORD.

II. THE HONORABLE COURT OF APPEALS' FINDING THAT PETITIONER FILSYN DID
NOT EXERCISE THE DUE DILIGENCE OF A GOOD FATHER OF A FAMILY IN THE
SELECTION AND SUPERVISION OF ITS EMPLOYEES IS NOT SUPPORTED BY THE
EVIDENCE ON RECORD.
 III. THE DAMAGES AWARDED BY THE HONORABLE COURT OF APPEALS IS NOT IN
ACCORD WITH THE EVIDENCE ON RECORD.

The respondents filed their Comment3 dated June 7, 2002, while the petitioner filed its Reply4 dated
January 29, 2003. Subsequently, their respective memoranda5 were filed.

The petition lacks merit.

Petitioner insists that the CA was not correct in ruling that Mejia was negligent. It argues that the said
conclusion was not derived from the evidence adduced during the trial, which, upon further analysis,
makes the nature of the issue presented to be factual.

Whether a person is negligent or not is a question of fact which this Court cannot pass upon in a
petition for review on certiorari, as its jurisdiction is limited to reviewing errors of law.6 As a rule,
factual findings of the trial court, affirmed by the CA, are final and conclusive and may not be
reviewed on appeal. The established exceptions are: (1) when the inference made is manifestly
mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings
are grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the CA is
based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the CA, in
making its findings, went beyond the issues of the case and the same is contrary to the admissions
of both appellant and appellee; (7) when the findings of fact are conclusions without citation of
specific evidence on which they are based; (8) when the CA manifestly overlooked certain relevant
facts not disputed by the parties and which, if properly considered, would justify a different
conclusion; and (9) when the findings of fact of the CA are premised on the absence of evidence and
are contradicted by the evidence on record.7

Not falling under any of the exceptions enumerated above, this Court must defer to the findings of
the RTC and the CA.

Petitioner argues that the RTC admitted that De los Santos made a turn along White Plains Road
without exercising the necessary care which could have prevented the accident from happening. It
quoted the following portion of the RTC's decision:

The Court is convinced that defendant Mejia was running real fast along EDSA when he saw a
vehicle on the opposite side suddenly turn left towards White Plains.

According to petitioner, the sudden turn of the vehicle used by the victims should also be considered
as negligence on the part of the driver of that same vehicle, thus, mitigating, if not absolving
petitioner's liability. However, the said argument deserves scant consideration.

It was well established that Mejia was driving at a speed beyond the rate of speed required by law,
specifically Section 35 of Republic Act No. (RA) 4136. 8 Given the circumstances, the allowed rate of
speed for Mejia's vehicle was 50 kilometers per hour, while the records show that he was driving at
the speed of 70 kilometers per hour. Under the New Civil Code, 9 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. Apparently, in the present case, Mejia's violation of the traffic
rules does not erase the presumption that he was the one negligent at the time of the collision. Even
apart from statutory regulations as to speed, a motorist is nevertheless expected to exercise ordinary
care and drive at a reasonable rate of speed commensurate with all the conditions
encountered10 which will enable him to keep the vehicle under control and, whenever necessary, to
put the vehicle to a full stop to avoid injury to others using the highway.11 To suggest that De los
Santos was equally negligent based on that sole statement of the RTC is erroneous. The entire
evidence presented must be considered as a whole. Incidentally, a close reading of the ruling of the
CA would clearly show the negligence of Mejia. A portion of the decision reads:

A closer study of the Police Accident Report, Investigation Report and the sketch of the accident
would reveal nothing but that the shuttle bus was traveling at such a reckless speed that it collided
with the car bearing the deceased. The impact was such that the bus landed astride the car, dragged
the car across the right lane of White Plains Road, across the concrete island/flower box in the
center of White Plains Road, destroying the lamp post in the island until both vehicles landed by the
petitioner fence of Camp Aguinaldo.

From those evidence, borne out by the records, there was proof more than preponderant to
conclude that Mejia was traveling at an unlawful speed, hence, the negligent driver. We, therefore,
cannot find any error on the part of the trial court in concluding that he (Mejia) was driving more than
his claim of 70 kilometers per hour. Significantly, the claimed speed of Mejia is still unlawful,
considering that Section 35 of RA 4136 states that the maximum allowable speed for trucks and
buses must not exceed 50 kilometers per hour. We are, therefore, unpersuaded by the defendants-
appellants claim that it was the driver of [the] Galant Sigma who was negligent by not observing
Sections 42(d) and 43(c) of RA 4136-A. Second sentence of Section 42 provides that the driver of
any vehicle traveling at any unlawful speed shall forfeit any right of way which he might otherwise
have. A person driving a vehicle is presumed negligent if at the time of the mishap, he was violating
a traffic regulation. The excessive speed employed by Mejia was the proximate cause of the collision
that led to the sudden death of Teresa Elena and Armando. If the defendants-appellants truly believe
that the accident was caused by the negligence of the driver of the Galant Sigma, they should have
presented Mejia to the witness stand. Being the driver, Mejia would have been in the best position to
establish their thesis that he was negligent when the mishap happened. Under the RULES OF
EVIDENCE (Section 3[e], Rule 131), such suppression gives rise to the presumption that his
testimony would have been adverse, if presented. It must be stressed further that Mejia left the
scene, not reporting the fatal accident to the authorities neither did he wait for the police to arrive. He
only resurfaced on the day after the incident. This is a clear transgression of Section 55 of RA 4136-
A which provides:

SEC. 55 Duty of driver in case of accident. - In the [event] that any accident should occur as a result
of the operation of a motor vehicle upon a highway, the driver shall stop immediately, and, if
requested by any person present, shall show his driver's license, give his true name and address
and also the true name and address of the owner of the motor vehicle.

No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident
without aiding the victim, except under any of the following circumstances:

1. If he is in imminent danger of being seriously harmed by any person or persons by reason

of the accident;

2. If he reports the accident to the nearest officer of the law; or

3. If he has to summon a physician or nurse to aid the victim.

 xxxx

Equally untenable is the defendants-appellants contention that it would be impossible for the shuttle
bus which was traveling at 70 kilometers per hour to stop. In view of this assertion, we quote with
favor the statement of Justice Feliciano in the Kapalaran case that the law seeks to stop and prevent
the slaughter and maiming of people (whether passenger or not) and the destruction of property
(whether freight or not) on our highways by buses, the very size and power of which seem often to
inflame the minds of the drivers. To our mind, if a vehicle was travelling in an allowable speed, its
driver would not have a difficulty in applying the brakes.

Anent the second issue raised, petitioner insists that it exercised the due diligence of a good father
of a family in the selection and supervision of its employees. The RTC and the CA find otherwise.

Under Article 218012 of the New Civil Code, when an injury is caused by the negligence of the
employee, there instantly arises a presumption of law that there was negligence on the part of the
master or employer either in the selection of the servant or employee, or in supervision over him
after selection or both. The liability of the employer under Article 2180 is direct and immediate; it is
not conditioned upon prior recourse against the negligent employee and a prior showing of the
insolvency of such employee. Therefore, it is incumbent upon the private respondents (in this case,
the petitioner) to prove that they exercised the diligence of a good father of a family in the selection
and supervision of their employee.13

Petitioner asserts that it had submitted and presented during trial, numerous documents in support
of its claim that it had exercised the proper diligence in both the selection and supervision of its
employees. Among those proofs are documents showing Mejia's proficiency and physical
examinations, as well as his NBI clearances. The Employee Staff Head of the Human Resource
Division of the petitioner also testified that Mejia was constantly under supervision and was given
daily operational briefings. Nevertheless, the RTC and the CA were correct in finding those pieces of
evidence presented by the petitioner insufficient.

In Manliclic v. Calaunan,14 this Court ruled that:

In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience and service records. In the supervision of employees, the employer must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for the breach thereof. To fend off vicarious liability, employers must submit concrete
proof, including documentary evidence, that they complied with everything that was incumbent on
them.

In Metro Manila Transit Corporation v. Court of Appeals, it was explained that:

Due diligence in the supervision of employees on the other hand, includes the formulation of suitable
rules and regulations for the guidance of employees and the issuance of proper instructions intended
for the protection of the public and persons with whom the employer has relations through his or its
employees and the imposition of necessary disciplinary measures upon employees in case of
breach or as may be warranted to ensure the performance of acts indispensable to the business of
and beneficial to their employer. To this, we add that actual implementation and monitoring of
consistent compliance with said rules should be the constant concern of the employer, acting
through dependable supervisors who should regularly report on their supervisory functions.
In order that the defense of due diligence in the selection and supervision of employees may be
deemed sufficient and plausible, it is not enough to emptily invoke the existence of said company
guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to
the presumption of negligence on the part of the employer, the latter has the burden of proving that it
has been diligent not only in the selection of employees but also in the actual supervision of their
work. The mere allegation of the existence of hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to overcome such presumption.

We emphatically reiterate our holding, as a warning to all employers, that "the formulation of various
company policies on safety without showing that they were being complied with is not sufficient to
exempt petitioner from liability arising from negligence of its employees. It is incumbent upon
petitioner to show that in recruiting and employing the erring driver the recruitment procedures and
company policies on efficiency and safety were followed." x x x.15

Applying the above ruling, the CA, therefore, committed no error in finding that the evidence
presented by petitioner is wanting. Thus, the CA ruled:

In the present case, Filsyn merely presented evidence on the alleged care it took in the selection or
hiring of Mejia way back in 1974 or ten years before the fatal accident. Neither did Filsyn present any
proof of the existence of the rules and regulations governing the conduct of its employees. It is
significant to note that in employing Mejia, who is not a high school graduate, Filsyn waived its long-
standing policy requirement of hiring only high school graduates. It insufficiently failed to explain the
reason for such waiver other than their allegation of Mejia's maturity and skill for the job.

As revealed by the testimony of Rolando Landicho, Filsyn admitted that their shuttle buses were
used to ferry Filsyn's employees for three shifts. It failed to show whether or not Mejia was on duty
driving buses for all three shifts. On the other hand, the trial court found that Mejia, by the different
shifts would have been on the job for more than eight hours. Fylsin did not even sufficiently prove
that it exercised the required supervision of Mejia by ensuring rest periods, particularly for its night
shift drivers who are working on a time when most of us are usually taking rest. As correctly argued
by the plaintiffs-appellees, this is significant because the accident happened at 11:30 p.m., when the
shuttle bus was under the control of a driver having no passenger at all. Despite, the lateness of the
hour and the darkness of the surrounding area, the bus was travelling at a speed of 70 kilometers
per hour.

In view of the absence of sufficient proof of its exercise of due diligence, Filsyn cannot escape its
solidary liability as the owner of the wayward bus and the employer of the negligent driver of the
wayward bus. x x x

As to the amount of the damages awarded by the CA, petitioner claims that it is not in accord with
the evidence on record. It explained that the amounts used in computing for compensatory damages
were based mainly on the assertions of the respondents as to the amount of salary being received
by the two deceased at the time of their deaths. 1awphil

This Court, in its ruling,16 expounded on the nature of compensatory damages, thus:

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:17

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).18

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.19

The records show that the CA did not err in awarding the said amounts, nor was there any mistake in
its computation. The respondents were able to establish their case by a preponderance of evidence.
However, the petitioner is correct when it stated that the award of P100,000.00 as moral damages is
excessive. Jurisprudence has set the amount to P50,000.00.20

WHEREFORE, the Petition for Review is hereby DENIED. Consequently, the Decision of the Court
of Appeals, dated August 15, 2001, is hereby AFFIRMED with the MODIFICATION that the moral
damages be reduced to P50,000.00.

SO ORDERED.
G.R. No. 193629 August 17, 2011

RCJ BUS LINES, INCORPORATED, Petitioner,

vs.
STANDARD INSURANCE COMPANY, INCORPORATED, Respondent.

DECISION

CARPIO, J.:

The Case

G.R. No. 193629 is a petition for review1 assailing the Decision2 promulgated on 11 March 2010 as
well as the Resolution3 promulgated on 3 September 2010 by the Court of Appeals (appellate court)
in CA-G.R. SP No. 105338. The appellate court affirmed with modification the 27 May 2008
Decision4 of Branch 37 of the Regional Trial Court of Manila (RTC) in Civil Case No. 00-99410. The
RTC dismissed RCJ Bus Lines appeal from the 12 July 2000 Decision5 of the Metropolitan Trial
Court of Manila (MeTC) in Civil Case No. 153566. The MeTC rendered judgment in favor of
Standard Insurance Company, Incorporated (Standard) and ordered Flor Bola Mangoba (Mangoba)
and RCJ Bus Lines, Incorporated (RCJ) to pay damages.

The Facts

The appellate court narrated the facts as follows:

On 01 December 2000, respondent Standard Insurance Co., Inc. (STANDARD) filed an

amended complaint against the petitioners Flor Bola Mangoba and RCJ Bus Lines, Inc.
(docketed as Civil Case No. 153566-CV before the Metropolitan Trial Court of Manila,
Branch 29). Said amended complaint alleged, among others:

"2. On June 19, 1994 along the National Highway at Brgy. Amlang, Rosario, La Union,
defendant Flor B. Mangoba while driving [sic] an RCJ HINO BLUE RIBBON PASSENGER
BUS bearing Plate No. NYG-363 in a reckless and imprudent manner, bumped and hit a
1991 Mitsubishi Lancer GLX bearing Plate No. TAJ-796, a photocopy of the police report is
attached hereto and made an integral part hereof as Annex A.

3. The subject Mitsubishi Lancer which is owned by Rodelene Valentino was insured for loss
and damage with plaintiff [Standard Insurance Co. Inc.] for P450,000.00, a photocopy of the
insurance policy is attached hereto and made an integral part hereof as Annex B.

4. Defendant RCJ Bus Lines, Inc. is the registered owner of the Passenger Bus bearing
Plate No. NYG-363 while defendant Flor Mangoba was the driver of the subject Passenger
Bus when the accident took place.

5. As a direct and proximate cause of the vehicular accident, the Mitsubishi Lancer was
extensively damaged, the costs of repairs of which were borne by the plaintiff [Standard
Insurance Co. Inc.] at a cost of P162,151.22.
 6. By virtue of the insurance contract, plaintiff [Standard Insurance Co. Inc.] paid Rodelene
Valentino the amount of P162,151.22 for the repair of the Mitsubishi Lancer car.

7. After plaintiff [Standard Insurance Co. Inc.] has complied with its obligation under the
policy mentioned above, plaintiffs assured executed in plaintiffs favor a Release of Claim
thereby subrogating the latter to all his rights of recovery on all claims, demands and rights
of action on account of loss, damage or injury as a consequence of the accident from any
person liable therefor.

8. Despite demands, defendants have failed and refused and still continue to fail and refuse
to reimburse plaintiff the sum of P162,151.22. A photocopy of the demand letter is attached
hereto and made an integral part hereof as Annex C.

9. As a consequence, plaintiff [Standard Insurance Co. Inc.] has been compelled to resort to
court action and thereby hire the services of counsel as well as incur expenses of litigation
for all of which it should be indemnified by the defendant in the amount of at
least P30,000.00.

10. In order that it may serve as a deterrent for others and by way of example for the public
good, defendants should be adjudged to pay plaintiff [Standard Insurance Co. Inc.]
exemplary damages in the amount of P20,000.00."

Thus, STANDARD prayed:

"WHEREFORE, plaintiff respectfully prays that after due trial on the issues, this court render
judgment against the defendants adjudging them jointly and severally liable to pay plaintiff the
following amounts:

1. The principal claim of P162,151.22 with interest at 12% per annum from September 1,
1995 until fully paid.

2. P30,000.00 as and by way of indemnification for attorneys fees.

3. P25,000.00 as exemplary damages.

Plaintiff prays for such further or other reliefs as may be deemed just and equitable under the
premises."

In its answer, RCJ Bus Lines, Inc. maintained:

"1. That the complaint states no cause of action against it;

2. That venue was improperly laid; and,

3. That the direct, immediate and proximate cause of the accident was the negligence of the
driver of the Mitsubishi Lancer when, for no reason at all, it made a sudden stop along the
National Highway, as if to initiate and/or create an accident."
Flor Bola Mangoba, in his own answer to the complaint, also pointed his finger at the driver of the
Mitsubishi Lancer as the one who caused the vehicular accident on the time, date and place in
question.

For his failure to appear at the pre-trial despite notice, Flor Bola Mangoba was declared in default on
14 November 1997. Accordingly, trial proceeded sans his participation.

At the trial, the evidence adduced by the parties established the following facts:

In the evening of 19 June 1994, at around 7:00 oclock, a Toyota Corolla with Plate No. PHU-185
driven by Rodel Chua, cruised along the National Highway at Barangay Amlang, Rosario, La Union,
heading towards the general direction of Bauan, La Union. The Toyota Corolla travelled at a speed of
50 kilometers per hour as it traversed the downward slope of the road, which curved towards the
right.

The Mitsubishi Lancer GLX with Plate No. TAJ-796, driven by Teodoro Goki, and owned by
Rodelene Valentino, was then following the Toyota Corolla along the said highway. Behind the
Mitsubishi Lancer GLX was the passenger bus with Plate No. NYG-363, driven by Flor Bola
Mangoba and owned by RCJ Bus Lines, Inc. The bus followed the Mitsubishi Lancer GLX at a
distance of ten (10) meters and traveled at the speed of 60 to 75 kilometers per hour.

Upon seeing a pile of gravel and sand on the road, the Toyota Corolla stopped on its tracks. The
Mitsubishi Lancer followed suit and also halted. At this point, the bus hit and bumped the rear portion
of the Mitsubishi Lancer causing it to move forward and hit the Toyota Corolla in front of it.

As a result of the incident, the Mitsubishi Lancer sustained damages amounting to P162,151.22,
representing the costs of its repairs. Under the comprehensive insurance policy secured by
Rodelene Valentino, owner of the Mitsubishi Lancer, STANDARD reimbursed to the former the
amount she expended for the repairs of her vehicle. Rodelene then executed a Release of Claim
and Subrogation Receipt, subrogating STANDARD to all rights, claims and actions she may have
against RCJ Bus Lines, Inc. and its driver, Flor Bola Mangoba. 6

The MeTCs Ruling

On 12 July 2000, the MeTC rendered its decision in favor of Standard, the dispositive portion of
which reads:

WHEREFORE, consistent with Section 1, Rule 131 and Section 1, Rule 133 of the Revised Rules on
Evidence, judgment is hereby rendered in favor of the plaintiff, ordering defendants Flor Bola
Mangoba and RCJ Bus Lines, Inc.:

1. To pay the principal sum of ONE HUNDRED SIXTY TWO THOUSAND ONE HUNDRED
FIFTY ONE PESOS and 22/100 (P162,151.22), with legal rate of interest at 12% per annum
from September 1, 1995 until full payment;

2. To pay the sum of TWENTY THOUSAND PESOS (P20,000.00) as exemplary damages;

 3. To pay the sum of TWENTY THOUSAND PESOS (P20,000.00) as reasonable attorneys
fees; and

4. To pay the costs of suit.

For want of merit, the separate Counterclaim is hereby DISMISSED. 7

In an Order8 dated 2 May 2002, the RTC dismissed Mangoba and RCJs appeal for filing their
pleading beyond the reglementary period. The appellate court, however, in a Decision 9 in CA-G.R.
SP No. 77598 dated 23 April 2004, granted RCJs petition and remanded the case to the RTC for
further proceedings.

The RTCs Ruling

In its Decision dated 27 May 2008, the RTC affirmed with modification the MeTCs Decision dated 12
July 2000. The RTC deleted the award for exemplary damages.

RCJ failed to convince the RTC that it observed the diligence of a good father of a family to prevent
damages sustained by the Mitsubishi Lancer. The RTC ruled that the testimony of Conrado Magno,
RCJs Operations Manager, who declared that all applicants for employment in RCJ were required to
submit clearances from the barangay, the courts and the National Bureau of Investigation, is
insufficient to show that RCJ exercised due diligence in the selection and supervision of its drivers.
The allegation of the conduct of seminars and training for RCJs drivers is not proof that RCJ
examined Mangobas qualifications, experience and driving history. Moreover, the testimony of Noel
Oalog, the bus conductor, confirmed that the bus was travelling at a speed of 60 to 75 kilometers per
hour, which was beyond the maximum allowable speed of 50 kilometers per hour for a bus on an
open country road. The RTC, however, deleted the award of exemplary damages because it found
no evidence that Mangoba acted with gross negligence.

In an Order10 dated 27 August 2008, the RTC partially reconsidered its 27 May 2008 Decision and
modified the MeTCs Decision to read as follows:

WHEREFORE, the Decision dated May 27, 2008 is partially reconsidered and the Decision of the
court a quo dated July 12, 2000 is MODIFIED. Appellant RCJ Bus Lines, Inc. and defendant Flor
Bola Mangoba are ordered to pay jointly and severally the appellee [Standard Insurance Co., Inc.]
the following:

1. ONE HUNDRED SIXTY TWO THOUSAND ONE FIFTY ONE PESOS and 22/100
(P162,151.22), with legal rate of interest at 6% per annum from September 1, 1995 until full
payment;

2. TWENTY THOUSAND PESOS (P20,000.00) as reasonable attorneys fees; and

3. Cost of suit.

SO ORDERED.11

The Appellate Courts Ruling

Mangoba and RCJ filed a petition for review before the appellate court. The appellate court found
that the RTC committed no reversible error in affirming RCJs liability as registered owner of the bus
and employer of Mangoba, as well as Mangobas negligence in driving the passenger bus. The
appellate court, however, deleted the award for attorneys fees and modified the legal interest
imposed by the MeTC.

The dispositive portion of the appellate courts decision reads:

WHEREFORE, the instant petition for review is DENIED. The assailed Decision of the Regional Trial
Court of Manila, Branch 37, in Civil Case No. 00-99410 is hereby AFFIRMED with MODIFICATION
that the legal interest that should be imposed on the actual damages awarded in favor of respondent
Standard Insurance, Co., Inc. should be at the rate of 6% per annum computed from the time of
extra judicial demand until the finality of the 12 July 2000 Decision of the MeTC and thereafter, the
legal interest shall be at the rate of 12% per annum until the full payment of the actual damages. The
award of attorneys fees is DELETED.

SO ORDERED.12

The appellate court denied RCJs Motion for Reconsideration13 for lack of merit.14

The Issues

RCJ assigns the following as errors of the appellate court:

1. The Court of Appeals erroneously awarded the amount of P162,151.22 representing

actual damages based merely on the proof of payment of policy/insurance claim and not on
an official receipt of payment of actual cost of repair;

2. The Court of Appeals erroneously disregarded the point that petitioner RCJs defense of
extraordinary diligence in the selection and supervision of its driver was made as an
alternative defense;

3. The Court of Appeals erroneously disregarded the legal principle that the supposed
violation of Sec. 35 of R.A. 4136 merely results in a disputable presumption; and

4. The Court of Appeals erroneously held that petitioner RCJ is vicariously liable for the claim
of supposed actual damages incurred by respondent Standard Insurance. 15

The Courts Ruling

The petition has no merit. We see no reason to overturn the findings of the lower courts. We affirm
the ruling of the appellate court.

RCJs Liability

RCJ argues that its defense of extraordinary diligence in the selection and supervision of its
employees is a mere alternative defense. RCJs initial claim was that Standards complaint failed to
state a cause of action against RCJ.
Standard may hold RCJ liable for two reasons, both of which rely upon facts uncontroverted by RCJ.
One, RCJ is the registered owner of the bus driven by Mangoba. Two, RCJ is Mangobas employer.

Standards allegation in its amended complaint that RCJ is the registered owner of the passenger
bus with plate number NYG 363 was sufficient to state a cause of action against RCJ. The registered
owner of a vehicle should be primarily responsible to the public for injuries caused while the vehicle
is in use.16 The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility
therefor can be fixed on a definite individual, the registered owner.17

Moreover, in its efforts to extricate itself from liability, RCJ proffered the defense of the exercise of
the diligence of a good father of a family. The MeTC characterized RCJs defense against
negligence in this manner:

To repel the idea of negligence, defendant [RCJ] bus companys operations manager at the Laoag
City Terminal was presented on the witness stand on January 5, 2000 in regard to the companys
seminars and dialogues with respect to its employees, and the absence of any record of a vehicular
accident involving the co-defendant driver [Mangoba] (TSN, January 5, 2000, pp. 2-17; TSN,
February 16, 2000, pp. 2-9). As the last witness of defendant [RCJ] bus company, Noel Oalog, bus
conductor who was allegedly seated to the right side of the bus driver during the incident, was
presented on March 22, 2000 (TSN, March 22, 2000, page 2). He confirmed on direct examination
and cross examination that it was defendants bus, then running at 60-75 [kph] and at a distance of
10 meters, which bumped a Mitsubishi Lancer without a tail light. According to him, the incident
occurred when the driver of the Toyota Corolla, which was ahead of the Lancer, stepped on the
brakes due to the pile of gravel and sand in sight (TSN, Vide at pp. 3-11). Subsequent to the proffer
of exhibits (TSN, Vide, at page 14), and in default of any rebuttal, the parties were directed to file the
Memoranda within thirty days from March 23, 2000. 18

RCJ, by presenting witnesses to testify on its exercise of diligence of a good father of a family in the
selection and supervision of its bus drivers, admitted that Mangoba is its employee. Article 2180 19 of
the Civil Code, in relation to Article 2176,20 makes the employer vicariously liable for the acts of its
employees. When the employee causes damage due to his own negligence while performing his
own duties, there arises the juris tantum presumption that the employer is negligent, rebuttable only
by proof of observance of the diligence of a good father of a family. For failure to rebut such legal
presumption of negligence in the selection and supervision of employees, the employer is likewise
responsible for damages, the basis of the liability being the relationship of pater familias or on the
employers own negligence.21 1avvphi1

Mangoba, per testimony of his conductor, was ten meters away from the Mitsubishi Lancer before
the collision and was driving 60 to 75 kilometers per hour when the speed limit was 50 kilometers
per hour.22 The presumption under Article 218523 of the Civil Code was thus proven true: Mangoba,
as driver of the bus which collided with the Mitsubishi Lancer, was negligent since he violated a
traffic regulation at the time of the mishap. We see no reason to depart from the findings of the
MeTC, RTC and appellate court that Mangoba was negligent. The appellate court stated:

To be sure, had not the passenger bus been speeding while traversing the downward sloping road, it
would not have hit and bumped the Mitsubishi Lancer in front of it, causing the latter vehicle to move
forward and hit and bump, in turn, the Toyota Corolla. Had the bus been moving at a reasonable
speed, it could have avoided hitting and bumping the Mitsubishi Lancer upon spotting the same,
taking into account that the distance between the two vehicles was ten (10) meters. As fittingly
opined by the MeTC, the driver of the passenger bus, being the rear vehicle, had full control of the
situation as he was in a position to observe the vehicle in front of him. Had he observed the diligence
required under the circumstances, the accident would not have occurred. 24

Subrogation

In the present case, it cannot be denied that the Mitsubishi Lancer sustained damages. Moreover, it
cannot also be denied that Standard paid Rodelene Valentino P162,151.22 for the repair of the
Mitsubishi Lancer pursuant to a Release of Claim and Subrogation Receipt. Neither RCJ nor
Mangoba cross-examined Standards claims evaluator when he testified on his duties, the insurance
contract between Rodelene Valentino and Standard, Standards payment of insurance proceeds,
and RCJ and Mangobas refusal to pay despite demands. After being lackadaisical during trial, RCJ
cannot escape liability now. Standards right of subrogation accrues simply upon its payment of the
insurance claim.25

Article 2207 of the Civil Code reads:

Art. 2207. If the plaintiffs property has been insured and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract complained
of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or
the person who has violated the contract. If the amount paid by the insurance company does not
fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss or injury.

Subrogation is the substitution of one person by another with reference to a lawful claim or right, so
that he who substitutes another succeeds to the rights of the other in relation to a debt or claim,
including its remedies or securities. The principle covers a situation wherein an insurer who has paid
a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured
against a third party with respect to any loss covered by the policy.26

WHEREFORE, we DENY the petition. We AFFIRM the Decision of the Court of Appeals in CA-G.R.
SP No. 105338 promulgated on 11 March 2010 as well as the Resolution promulgated on 3
September 2010.

SO ORDERED.
G.R. No. 179446 January 10, 2011

LOADMASTERS CUSTOMS SERVICES, INC., Petitioner,

vs.
GLODEL BROKERAGE CORPORATION and R&B INSURANCE CORPORATION, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the
August 24, 2007 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 82822, entitled "R&B
Insurance Corporation v. Glodel Brokerage Corporation and Loadmasters Customs Services, Inc.,"
which held petitioner Loadmasters Customs Services, Inc. (Loadmasters) liable to respondent
Glodel Brokerage Corporation (Glodel) in the amount of P1,896,789.62 representing the insurance
indemnity which R&B Insurance Corporation (R&B Insurance) paid to the insured-consignee,
Columbia Wire and Cable Corporation (Columbia).

THE FACTS:

On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia
to insure the shipment of 132 bundles of electric copper cathodes against All Risks. On August 28,
2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela, Leyte, to Pier 10,
North Harbor, Manila. They arrived on the same date.

Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier
and the subsequent delivery to its warehouses/plants. Glodel, in turn, engaged the services of
Loadmasters for the use of its delivery trucks to transport the cargoes to Columbias
warehouses/plants in Bulacan and Valenzuela City.

The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed
drivers and accompanied by its employed truck helpers. Six (6) truckloads of copper cathodes were
to be delivered to Balagtas, Bulacan, while the other six (6) truckloads were destined for Lawang
Bato, Valenzuela City. The cargoes in six truckloads for Lawang Bato were duly delivered in
Columbias warehouses there. Of the six (6) trucks en route to Balagtas, Bulacan, however, only five
(5) reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes,
failed to deliver its cargo.

Later on, the said truck, an Isuzu with Plate No. NSD-117, was recovered but without the copper
cathodes. Because of this incident, Columbia filed with R&B Insurance a claim for insurance
indemnity in the amount of P1,903,335.39. After the requisite investigation and adjustment, R&B
Insurance paid Columbia the amount of P1,896,789.62 as insurance indemnity.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel
before the Regional Trial Court, Branch 14, Manila (RTC), docketed as Civil Case No. 02-103040. It
sought reimbursement of the amount it had paid to Columbia for the loss of the subject cargo. It
claimed that it had been subrogated "to the right of the consignee to recover from the party/parties
who may be held legally liable for the loss."2
On November 19, 2003, the RTC rendered a decision3 holding Glodel liable for damages for the loss
of the subject cargo and dismissing Loadmasters counterclaim for damages and attorneys fees
against R&B Insurance. The dispositive portion of the decision reads:

WHEREFORE, all premises considered, the plaintiff having established by preponderance of

evidence its claims against defendant Glodel Brokerage Corporation, judgment is hereby rendered
ordering the latter:

1. To pay plaintiff R&B Insurance Corporation the sum of P1,896,789.62 as actual and
compensatory damages, with interest from the date of complaint until fully paid;

2. To pay plaintiff R&B Insurance Corporation the amount equivalent to 10% of the principal
amount recovered as and for attorneys fees plus P1,500.00 per appearance in Court;

3. To pay plaintiff R&B Insurance Corporation the sum of P22,427.18 as litigation expenses.

WHEREAS, the defendant Loadmasters Customs Services, Inc.s counterclaim for damages and
attorneys fees against plaintiff are hereby dismissed.

With costs against defendant Glodel Brokerage Corporation.

SO ORDERED.4

Both R&B Insurance and Glodel appealed the RTC decision to the CA.

On August 24, 2007, the CA rendered the assailed decision which reads in part:

Considering that appellee is an agent of appellant Glodel, whatever liability the latter owes to
appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be
paid by appellee Loadmasters.

WHEREFORE, the foregoing considered, the appeal is PARTLY GRANTED in that the appellee
Loadmasters is likewise held liable to appellant Glodel in the amount of P1,896,789.62 representing
the insurance indemnity appellant Glodel has been held liable to appellant R&B Insurance
Corporation.

Appellant Glodels appeal to absolve it from any liability is herein DISMISSED.

SO ORDERED.5

Hence, Loadmasters filed the present petition for review on certiorari before this Court presenting
the following

ISSUES

1. Can Petitioner Loadmasters be held liable to Respondent Glodel in spite of the fact
that the latter respondent Glodel did not file a cross-claim against it (Loadmasters)?
 2. Under the set of facts established and undisputed in the case, can petitioner
Loadmasters be legally considered as an Agent of respondent Glodel?6

To totally exculpate itself from responsibility for the lost goods, Loadmasters argues that it cannot be
considered an agent of Glodel because it never represented the latter in its dealings with the
consignee. At any rate, it further contends that Glodel has no recourse against it for its (Glodels)
failure to file a cross-claim pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure.

Glodel, in its Comment,7 counters that Loadmasters is liable to it under its cross-claim because the
latter was grossly negligent in the transportation of the subject cargo. With respect to Loadmasters
claim that it is already estopped from filing a cross-claim, Glodel insists that it can still do so even for
the first time on appeal because there is no rule that provides otherwise. Finally, Glodel argues that
its relationship with Loadmasters is that of Charter wherein the transporter (Loadmasters) is only
hired for the specific job of delivering the merchandise. Thus, the diligence required in this case is
merely ordinary diligence or that of a good father of the family, not the extraordinary diligence
required of common carriers.

R&B Insurance, for its part, claims that Glodel is deemed to have interposed a cross-claim against
Loadmasters because it was not prevented from presenting evidence to prove its position even
without amending its Answer. As to the relationship between Loadmasters and Glodel, it contends
that a contract of agency existed between the two corporations. 8

Subrogation is the substitution of one person in the place of another with reference to a lawful claim
or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim,
including its remedies or securities.9 Doubtless, R&B Insurance is subrogated to the rights of the
insured to the extent of the amount it paid the consignee under the marine insurance, as provided
under Article 2207 of the Civil Code, which reads:

ART. 2207. If the plaintiffs property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract complained
of, the insurance company shall be subrogated to the rights of the insured against the wrong-doer or
the person who has violated the contract. If the amount paid by the insurance company does not
fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss or injury.

As subrogee of the rights and interest of the consignee, R&B Insurance has the right to seek
reimbursement from either Loadmasters or Glodel or both for breach of contract and/or tort.

The issue now is who, between Glodel and Loadmasters, is liable to pay R&B Insurance for the
amount of the indemnity it paid Columbia.

At the outset, it is well to resolve the issue of whether Loadmasters and Glodel are common carriers
to determine their liability for the loss of the subject cargo. Under Article 1732 of the Civil Code,
common carriers are persons, corporations, firms, or associations engaged in the business of
carrying or transporting passenger or goods, or both by land, water or air for compensation, offering
their services to the public.

Based on the aforecited definition, Loadmasters is a common carrier because it is engaged in the
business of transporting goods by land, through its trucking service. It is a common carrier as
distinguished from a private carrier wherein the carriage is generally undertaken by special
agreement and it does not hold itself out to carry goods for the general public. 10 The distinction is
significant in the sense that "the rights and obligations of the parties to a contract of private carriage
are governed principally by their stipulations, not by the law on common carriers." 11

In the present case, there is no indication that the undertaking in the contract between Loadmasters
and Glodel was private in character. There is no showing that Loadmasters solely and exclusively
rendered services to Glodel.

In fact, Loadmasters admitted that it is a common carrier.12

In the same vein, Glodel is also considered a common carrier within the context of Article 1732. In its
Memorandum,13 it states that it "is a corporation duly organized and existing under the laws of the
Republic of the Philippines and is engaged in the business of customs brokering." It cannot be
considered otherwise because as held by this Court in Schmitz Transport & Brokerage Corporation
v. Transport Venture, Inc.,14 a customs broker is also regarded as a common carrier, the
transportation of goods being an integral part of its business.

Loadmasters and Glodel, being both common carriers, are mandated from the nature of their
business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over
the goods transported by them according to all the circumstances of such case, as required by
Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it is that extreme
measure of care and caution which persons of unusual prudence and circumspection observe for
securing and preserving their own property or rights.15 This exacting standard imposed on common
carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is
at the mercy of the common carrier once the goods have been lodged for shipment. 16 Thus, in case
of loss of the goods, the common carrier is presumed to have been at fault or to have acted
negligently.17This presumption of fault or negligence, however, may be rebutted by proof that the
common carrier has observed extraordinary diligence over the goods.

With respect to the time frame of this extraordinary responsibility, the Civil Code provides that the
exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the
possession of, and received by, the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them. 18

Premises considered, the Court is of the view that both Loadmasters and Glodel are jointly and
severally liable to R & B Insurance for the loss of the subject cargo. Under Article 2194 of the New
Civil Code, "the responsibility of two or more persons who are liable for a quasi-delict is solidary."

Loadmasters claim that it was never privy to the contract entered into by Glodel with the consignee
Columbia or R&B Insurance as subrogee, is not a valid defense. It may not have a direct contractual
relation with Columbia, but it is liable for tort under the provisions of Article 2176 of the Civil Code on
quasi-delicts which expressly provide:

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.
Pertinent is the ruling enunciated in the case of Mindanao Terminal and Brokerage Service, Inc. v.
Phoenix Assurance Company of New York,/McGee & Co., Inc.19 where this Court held that a tort may
arise despite the absence of a contractual relationship, to wit:

We agree with the Court of Appeals that the complaint filed by Phoenix and McGee against
Mindanao Terminal, from which the present case has arisen, states a cause of action. The present
action is based on quasi-delict, arising from the negligent and careless loading and stowing of the
cargoes belonging to Del Monte Produce. Even assuming that both Phoenix and McGee have only
been subrogated in the rights of Del Monte Produce, who is not a party to the contract of service
between Mindanao Terminal and Del Monte, still the insurance carriers may have a cause of action
in light of the Courts consistent ruling that the act that breaks the contract may be also a tort. In
fine, a liability for tort may arise even under a contract, where tort is that which breaches the
contract. In the present case, Phoenix and McGee are not suing for damages for injuries arising
from the breach of the contract of service but from the alleged negligent manner by which
Mindanao Terminal handled the cargoes belonging to Del Monte Produce. Despite the absence of
contractual relationship between Del Monte Produce and Mindanao Terminal, the allegation of
negligence on the part of the defendant should be sufficient to establish a cause of action arising
from quasi-delict. [Emphases supplied]

In connection therewith, Article 2180 provides:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.

xxxx

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.

It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose
employees (truck driver and helper) were instrumental in the hijacking or robbery of the shipment. As
employer, Loadmasters should be made answerable for the damages caused by its employees who
acted within the scope of their assigned task of delivering the goods safely to the warehouse.

Whenever an employees negligence causes damage or injury to another, there instantly arises a
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. 20 To avoid liability
for a quasi-delict committed by its employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a family in
the selection and supervision of his employee.21 In this regard, Loadmasters failed.

Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure that
Loadmasters would fully comply with the undertaking to safely transport the subject cargo to the
designated destination. It should have been more prudent in entrusting the goods to Loadmasters by
taking precautionary measures, such as providing escorts to accompany the trucks in delivering the
cargoes. Glodel should, therefore, be held liable with Loadmasters. Its defense of force majeure is
unavailing.
At this juncture, the Court clarifies that there exists no principal-agent relationship between Glodel
and Loadmasters, as erroneously found by the CA. Article 1868 of the Civil Code provides: "By the
contract of agency a person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter." The elements of a
contract of agency are: (1) consent, express or implied, of the parties to establish the relationship;
(2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts within the scope of his authority.22

Accordingly, there can be no contract of agency between the parties. Loadmasters never
represented Glodel. Neither was it ever authorized to make such representation. It is a settled rule
that the basis for agency is representation, that is, the agent acts for and on behalf of the principal
on matters within the scope of his authority and said acts have the same legal effect as if they were
personally executed by the principal. On the part of the principal, there must be an actual intention to
appoint or an intention naturally inferable from his words or actions, while on the part of the agent,
there must be an intention to accept the appointment and act on it.23 Such mutual intent is not
obtaining in this case.

What then is the extent of the respective liabilities of Loadmasters and Glodel? Each wrongdoer is
liable for the total damage suffered by R&B Insurance. Where there are several causes for the
resulting damages, a party is not relieved from liability, even partially. It is sufficient that the
negligence of a party is an efficient cause without which the damage would not have resulted. It is no
defense to one of the concurrent tortfeasors that the damage would not have resulted from his
negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor. As
stated in the case of Far Eastern Shipping v. Court of Appeals,24

X x x. Where several causes producing an injury are concurrent and each is an efficient cause
without which the injury would not have happened, the injury may be attributed to all or any of the
causes and recovery may be had against any or all of the responsible persons although under the
circumstances of the case, it may appear that one of them was more culpable, and that the duty
owed by them to the injured person was not the same. No actor's negligence ceases to be a
proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer
is responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination the direct and proximate cause of a
single injury to a third person, it is impossible to determine in what proportion each contributed to the
injury and either of them is responsible for the whole injury. Where their concurring negligence
resulted in injury or damage to a third party, they become joint tortfeasors and are solidarily liable for
the resulting damage under Article 2194 of the Civil Code. [Emphasis supplied]

The Court now resolves the issue of whether Glodel can collect from Loadmasters, it having failed to
file a cross-claim against the latter.
1avvphi1

Undoubtedly, Glodel has a definite cause of action against Loadmasters for breach of contract of
service as the latter is primarily liable for the loss of the subject cargo. In this case, however, it
cannot succeed in seeking judicial sanction against Loadmasters because the records disclose that
it did not properly interpose a cross-claim against the latter. Glodel did not even pray that
Loadmasters be liable for any and all claims that it may be adjudged liable in favor of R&B
Insurance. Under the Rules, a compulsory counterclaim, or a cross-claim, not set up shall be
barred.25 Thus, a cross-claim cannot be set up for the first time on appeal.

For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on
equitable grounds. "Equity, which has been aptly described as a justice outside legality, is applied
only in the absence of, and never against, statutory law or judicial rules of procedure." 26 The Court
cannot be a lawyer and take the cudgels for a party who has been at fault or negligent.

WHEREFORE, the petition is PARTIALLY GRANTED. The August 24, 2007 Decision of the Court of
Appeals is MODIFIED to read as follows:

WHEREFORE, judgment is rendered declaring petitioner Loadmasters Customs Services, Inc. and
respondent Glodel Brokerage Corporation jointly and severally liable to respondent R&B Insurance
Corporation for the insurance indemnity it paid to consignee Columbia Wire & Cable Corporation and
ordering both parties to pay, jointly and severally, R&B Insurance Corporation a] the amount
of P1,896,789.62 representing the insurance indemnity; b] the amount equivalent to ten (10%)
percent thereof for attorneys fees; and c] the amount of P22,427.18 for litigation expenses.

The cross-claim belatedly prayed for by respondent Glodel Brokerage Corporation against petitioner
Loadmasters Customs Services, Inc. is DENIED.

SO ORDERED.
G.R. No. 116121 July 18, 2011

THE HEIRS OF THE LATE RUBEN REINOSO, SR., represented by Ruben Reinoso
Jr., Petitioners,
vs.
COURT OF APPEALS, PONCIANO TAPALES, JOSE GUBALLA, and FILWRITERS GUARANTY
ASSURANCE CORPORATION,** Respondent.

DECISION

MENDOZA, J.:

Before the Court is a petition for review assailing the May 20, 1994 Decision1 and June 30, 1994
Resolution2 of the Court of Appeals (CA), in CA-G.R. CV No. 19395, which set aside the March 22,
1988 Decision of the Regional Trial Court, Branch 8, Manila (RTC) for non-payment of docket fees.
The dispositive portion of the CA decision reads:

IN VIEW OF ALL THE FOREGOING, the decision appealed from is SET ASIDE and REVERSED
and the complaint in this case is ordered DISMISSED.

No costs pronouncement.

SO ORDERED.

The complaint for damages arose from the collision of a passenger jeepney and a truck at around
7:00 oclock in the evening of June 14, 1979 along E. Rodriguez Avenue, Quezon City. As a result, a
passenger of the jeepney, Ruben Reinoso, Sr. (Reinoso), was killed. The passenger jeepney was
owned by Ponciano Tapales (Tapales) and driven by Alejandro Santos (Santos), while the truck was
owned by Jose Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for damages against
Tapales and Guballa. In turn, Guballa filed a third party complaint against Filwriters Guaranty
Assurance Corporation (FGAC) under Policy Number OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the petitioners and against Guballa. The
decision in part, reads:

In favor of herein plaintiffs and against defendant Jose Guballa:

1 For the death of Ruben Reinoso, Sr. P 30,000.00

.
2 Loss of earnings (monthly income at the time of 120,000.00
. death (P 2,000.00 Court used P 1,000.00 only per
month (or P 12,000.00 only per year) & victim then
being 55 at death had ten (10) years life
expectancy

3 Mortuary, Medical & funeral expenses and all 15,000.00
. incidental expenses in the wake in serving those
 who condoled
4 Moral damages .. 50,000.00
.
5 Exemplary damages 25,000.00
.
6 Litigation expenses . 15,000.00
.
7 Attorneys fees 25,000.00
.
Or a total of P 250,000.0
0

For damages to property:

In favor of defendant Ponciano Tapales and against defendant Jose Guballa:

1 Actual damages for repair is already awarded to

. defendant-cross-claimant Ponciano Tapales by Br.
9, RTC-Malolos, Bulacan (Vide: Exh. 1-G-Tapales);
hence, cannot recover twice.
2 Compensatory damages (earnings at P 150.00 per P 9,000.00
. day) and for two (2) months jeepney stayed at the
repair shop.
3 Moral damages ... 10,000.00
.
4 Exemplary damages . 10,000.00
.
5 Attorneys fees 15,000.00
.
or a total of P 44,000.0
0

Under the 3rd party complaint against 3rd party defendant Filwriters Guaranty Assurance
Corporation, the Court hereby renders judgment in favor of said 3rd party plaintiff by way of 3rd party
liability under policy No. OV-09527 in the amount of P 50,000.00 undertaking plus P 10,000.00 as
and for attorneys fees.

For all the foregoing, it is the well considered view of the Court that plaintiffs, defendant Ponciano
Tapales and 3rd Party plaintiff Jose Guballa established their claims as specified above, respectively.
Totality of evidence preponderance in their favor.

JUDGMENT

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

In favor of plaintiffs for the death of Ruben Reinoso,

Sr.P 250,000.00;

In favor of defendant Ponciano Tapales due to damage of his passenger jeepney

. P 44,000.00;
In favor of defendant Jose Guballa under Policy No. OV-
09527 P 60,000.00;

All the specified accounts with 6% legal rate of interest per annum from date of complaint until fully
paid (Reformina vs. Tomol, 139 SCRA 260; and finally;

Costs of suit.

SO ORDERED.3

On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the RTC decision
and dismissed the complaint on the ground of non-payment of docket fees pursuant to the doctrine
laid down in Manchester v. CA.4 In addition, the CA ruled that since prescription had set in,
petitioners could no longer pay the required docket fees.5

Petitioners filed a motion for reconsideration of the CA decision but it was denied in a resolution
dated June 30, 1994.6 Hence, this appeal, anchored on the following

GROUNDS:

A. The Court of Appeals MISAPPLIED THE RULING of the Supreme Court in the case
of Manchester Corporation vs. Court of Appeals to this case.

B. The issue on the specification of the damages appearing in the prayer of the Complaint
was NEVER PLACED IN ISSUE BY ANY OF THE PARTIES IN THE COURT OF ORIGIN
(REGIONAL TRIAL COURT) NOR IN THE COURT OF APPEALS.

C. The issues of the case revolve around the more substantial issue as to the negligence of
the private respondents and their culpability to petitioners."7

The petitioners argue that the ruling in Manchester should not have been applied retroactively in this
case, since it was filed prior to the promulgation of the Manchester decision in 1987. They plead that
though this Court stated that failure to state the correct amount of damages would lead to the
dismissal of the complaint, said doctrine should be applied prospectively.

Moreover, the petitioners assert that at the time of the filing of the complaint in 1979, they were not
certain of the amount of damages they were entitled to, because the amount of the lost income
would still be finally determined in the course of the trial of the case. They claim that the jurisdiction
of the trial court remains even if there was failure to pay the correct filing fee as long as the correct
amount would be paid subsequently.

Finally, the petitioners stress that the alleged defect was never put in issue either in the RTC or in
the CA.

The Court finds merit in the petition.

The rule is that payment in full of the docket fees within the prescribed period is
mandatory.8 In Manchester v. Court of Appeals,9 it was held that a court acquires jurisdiction over any
case only upon the payment of the prescribed docket fee. The strict application of this rule was,
however, relaxed two (2) years after in the case of Sun Insurance Office, Ltd. v. Asuncion,10 wherein
the Court decreed that where the initiatory pleading is not accompanied by the payment of the
docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case
beyond the applicable prescriptive or reglementary period. This ruling was made on the premise that
the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket
fees required.11 Thus, in the more recent case of United Overseas Bank v. Ros,12 the Court explained
that where the party does not deliberately intend to defraud the court in payment of docket fees, and
manifests its willingness to abide by the rules by paying additional docket fees when required by the
court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict regulations set
in Manchester, will apply. It has been on record that the Court, in several instances, allowed the
relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to
fully ventilate their cases on the merits. In the case of La Salette College v. Pilotin,13 the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we
also recognize that its strict application is qualified by the following: first, failure to pay those fees
within the reglementary period allows only discretionary, not automatic, dismissal; second, such
power should be used by the court in conjunction with its exercise of sound discretion in accordance
with the tenets of justice and fair play, as well as with a great deal of circumspection in consideration
of all attendant circumstances.14

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a
greater demand for resolving genuine disputes fairly and equitably,15 for it is far better to dispose of a
case on the merit which is a primordial end, rather than on a technicality that may result in injustice.

In this case, it cannot be denied that the case was litigated before the RTC and said trial court had
already rendered a decision. While it was at that level, the matter of non-payment of docket fees was
never an issue. It was only the CA which motu propio dismissed the case for said reason.

Considering the foregoing, there is a need to suspend the strict application of the rules so that the
petitioners would be able to fully and finally prosecute their claim on the merits at the appellate level
rather than fail to secure justice on a technicality, for, indeed, the general objective of procedure is to
facilitate the application of justice to the rival claims of contending parties, bearing always in mind
that procedure is not to hinder but to promote the administration of justice. 16

The Court also takes into account the fact that the case was filed before the Manchester ruling came
out. Even if said ruling could be applied retroactively, liberality should be accorded to the petitioners
in view of the recency then of the ruling. Leniency because of recency was applied to the cases
of Far Eastern Shipping Company v. Court of Appeals17 and Spouses Jimmy and Patri Chan v. RTC
of Zamboanga.18 In the case of Mactan Cebu International Airport Authority v. Mangubat (Mactan),19 it
was stated that the "intent of the Court is clear to afford litigants full opportunity to comply with the
new rules and to temper enforcement of sanctions in view of the recency of the changes introduced
by the new rules." In Mactan, the Office of the Solicitor General (OSG) also failed to pay the correct
docket fees on time.

We held in another case:

x x x It bears stressing that the rules of procedure are merely tools designed to facilitate the
attainment of justice. They were conceived and promulgated to effectively aid the court in the
dispensation of justice. Courts are not slaves to or robots of technical rules, shorn of judicial
discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided
by the norm that, on the balance, technicalities take a backseat against substantive rights, and not
the other way around. Thus, if the application of the Rules would tend to frustrate rather than
promote justice, it is always within the power of the Court to suspend the Rules, or except a
particular case from its operation.20
The petitioners, however, are liable for the difference between the actual fees paid and the correct
payable docket fees to be assessed by the clerk of court which shall constitute a lien on the
judgment pursuant to Section 2 of Rule 141 which provides:

SEC. 2. Fees in lien. Where the court in its final judgment awards a claim not alleged, or a relief
different from, or more than that claimed in the pleading, the party concerned shall pay the additional
fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall
assess and collect the corresponding fees.

As the Court has taken the position that it would be grossly unjust if petitioners claim would be
dismissed on a strict application of the Manchester doctrine, the appropriate action, under ordinary
circumstances, would be for the Court to remand the case to the CA. Considering, however, that the
case at bench has been pending for more than 30 years and the records thereof are already before
this Court, a remand of the case to the CA would only unnecessarily prolong its resolution. In the
higher interest of substantial justice and to spare the parties from further delay, the Court will resolve
the case on the merits.

The facts are beyond dispute. Reinoso, the jeepney passenger, died as a result of the collision of
a jeepney and a truck on June 14, 1979 at around 7:00 oclock in the evening along E. Rodriguez
Avenue, Quezon City. It was established that the primary cause of the injury or damage was the
negligence of the truck driver who was driving it at a very fast pace. Based on the sketch and spot
report of the police authorities and the narration of the jeepney driver and his passengers, the
collision was brought about because the truck driver suddenly swerved to, and encroached on, the
left side portion of the road in an attempt to avoid a wooden barricade, hitting the
passenger jeepney as a consequence. The analysis of the RTC appears in its decision as follows:

Perusal and careful analysis of evidence adduced as well as proper consideration of all the
circumstances and factors bearing on the issue as to who is responsible for the instant vehicular
mishap convince and persuade this Court that preponderance of proof is in favor of plaintiffs and
defendant Ponciano Tapales. The greater mass of evidence spread on the records and its influence
support plaintiffs plaint including that of defendant Tapales.

The Land Transportation and Traffic Rule (R.A. No. 4136), reads as follows:

"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 therewith, every person operating a motor vehicle or an animal drawn
vehicle on 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."

Having in mind the foregoing provision of law, this Court is convinced of the veracity of the version of
the passenger jeepney driver Alejandro Santos, (plaintiffs and Tapales witness) that while running
on lane No. 4 westward bound towards Ortigas Avenue at between 30-40 kms. per hour (63-64 tsn,
Jan. 6, 1984) the "sand & gravel" truck from the opposite direction driven by Mariano Geronimo, the
headlights of which the former had seen while still at a distance of about 30-40 meters from the
wooden barricade astride lanes 1 and 2, upon reaching said wooden block suddenly swerved to the
left into lanes 3 and 4 at high speed "napakabilis po ng dating ng truck." (29 tsn, Sept. 26, 1985) in
the process hitting them (Jeepney passenger) at the left side up to where the reserve tire was in an
oblique manner "pahilis" (57 tsn, Sept. 26, 1985). The jeepney after it was bumped by the truck due
to the strong impact was thrown "resting on its right side while the left side was on top of the
Bangketa (side walk)". The passengers of the jeepney and its driver were injured including two
passengers who died. The left side of the jeepney suffered considerable damage as seen in the
picture (Exhs. 4 & 5-Tapales, pages 331-332, records) taken while at the repair shop.

The Court is convinced of the narration of Santos to the effect that the "gravel & sand" truck was
running in high speed on the good portion of E. Rodriguez Avenue (lane 1 & 2) before the wooden
barricade and (having in mind that it had just delivered its load at the Corinthian Gardens) so that
when suddenly confronted with the wooden obstacle before it had to avoid the same in a manner of
a reflex reaction or knee-jerk response by forthwith swerving to his left into the right lanes (lanes 3 &
4). At the time of the bumping, the jeepney was running on its right lane No. 4 and even during the
moments before said bumping, moving at moderate speed thereon since lane No. 3 was then
somewhat rough because being repaired also according to Mondalia who has no reason to
prevaricate being herself one of those seriously injured. The narration of Santos and Mondalia are
convincing and consistent in depicting the true facts of the case untainted by vacillation and
therefore, worthy to be relied upon. Their story is forfeited and confirmed by the sketch drawn by the
investigating officer Pfc. F. Amaba, Traffic Division, NPD, Quezon City who rushed to the scene of
the mishap (Vide: Resolution of Asst fiscal Elizabeth B. Reyes marked as Exhs. 7, 7-A, 7-B-Tapales,
pp. 166-168, records; the Certified Copy found on pages 598-600, ibid, with the attached police
sketch of Pfc. Amaba, marked as Exh. 8-Tapales on page 169, ibid; certified copy of which is on
page 594, ibid) indicating the fact that the bumping indeed occurred at lane No. 4 and showing how
the gavel & sand truck is positioned in relation to the jeepney. The said police sketch having been
made right after the accident is a piece of evidence worthy to be relied upon showing the true facts
of the bumping-occurrence. The rule that official duty had been performed (Sec.5(m), R-131, and
also Sec. 38, R-a30, Rev. Rules of Court) there being no evidence adduced and made of record to
the contrary is that said circumstance involving the two vehicles had been the result of an official
investigation and must be taken as true by this Court. 211awphi1

While ending up on the opposite lane is not conclusive proof of fault in automobile collisions, 22 the
position of the two vehicles, as depicted in the sketch of the police officers, clearly shows that it was
the truck that hit the jeepney. The evidentiary records disclosed that the truck was speeding along E.
Rodriguez, heading towards Santolan Street, while the passenger jeepney was coming from the
opposite direction. When the truck reached a certain point near the Meralco Post No. J9-450, the
front portion of the truck hit the left middle side portion of the passenger jeepney, causing damage to
both vehicles and injuries to the driver and passengers of the jeepney. The truck driver should have
been more careful, because, at that time, a portion of E. Rodriguez Avenue was under repair and a
wooden barricade was placed in the middle thereof.

The Court likewise sustains the finding of the RTC that the truck owner, Guballa, failed to rebut the
presumption of negligence in the hiring and supervision of his employee. Article 2176, in relation to
Article 2180 of 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.

xxxx

Art. 2180. The obligation imposed by Art. 2176 is demandable not only for ones own acts or
omissions but also for those of persons for whom one is responsible.

xxxx
Employers shall be liable for the damage 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.

xxxx

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.

Whenever an employees negligence causes damage or injury to another, there instantly arises a
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection or supervision of his employee.23 Thus, in the selection of prospective employees,
employers are required to examine them as to their qualification, experience and service record.
With respect to the supervision of employees, employers must formulate standard operating
procedures, monitor their implementation, and impose disciplinary measures for breaches thereof.
These facts must be shown by concrete proof, including documentary evidence. 24 Thus, the RTC
committed no error in finding that the evidence presented by respondent Guballa was wanting. It
ruled:

x x x. As expected, defendant Jose Guballa, attempted to overthrow this presumption of negligence

by showing that he had exercised the due diligence required of him by seeing to it that the driver
must check the vital parts of the vehicle he is assigned to before he leaves the compound like the oil,
water, brakes, gasoline, horn (9 tsn, July 17, 1986); and that Geronimo had been driving for him
sometime in 1976 until the collision in litigation came about (5-6 tsn, ibid); that whenever his trucks
gets out of the compound to make deliveries, it is always accompanied with two (2) helpers (16-17
tsn, ibid). This was all which he considered as selection and supervision in compliance with the law
to free himself from any responsibility. This Court then cannot consider the foregoing as equivalent to
an exercise of all the care of a good father of a family in the selection and supervision of his driver
Mariano Geronimo."25

WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and June 30, 1994 Resolution
of the Court of Appeals are REVERSED and SET ASIDE and the March 22, 1988 Decision of the
Regional Trial Court, Branch 8, Manila, is REINSTATED.

SO ORDERED.
G.R. No. 161909 April 25, 2012

PHILTRANCO SERVICE ENTERPRISES, INC., Petitioner,

vs.
FELIX PARAS AND INLAND TRAILWAYS, INC., AND HON. COURT OF APPEALS, Respondents.

DECISION

BERSAMIN, J.:

In an action for breach of contract of carriage commenced by a passenger against his common
carrier, the plaintiff can recover damages from a third-party defendant brought into the suit by the
common carrier upon a claim based on tort or quasi-delict. The liability of the third-party defendant is
independent from the liability of the common carrier to the passenger.

Philtranco Service Enterprises, Inc. (Philtranco) appeals the affirmance with modifications by the
Court of Appeals (CA) of the decision of the Regional Trial Court (RTC) awarding moral, actual and
temperate damages, as well as attorneys fees and costs of suit, to respondent Felix Paras (Paras),
and temperate damages to respondent Inland Trailways, Inc. (Inland), respectively the plaintiff and
the defendant/third-party plaintiff in this action for breach of contract of carriage, upon a finding that
the negligence of the petitioner and its driver had caused the serious physical injuries Paras
sustained and the material damage Inlands bus suffered in a vehicular accident.

Antecedents

The antecedent facts, as summarized by the CA, are as follows:

Plaintiff-appellant [respondent] Felix Paras (Paras for brevity), who hails from Cainta, Rizal is
engaged in the buy and sell of fish products. Sometime on 08 February 1987, on his way home to
Manila from Bicol Region, he boarded a bus with Body No. 101 and Plate No. EVE 508, owned and
operated by Inland Trailways, Inc. (Inland for brevity) and driven by its driver Calvin Coner (Coner for
brevity).

At approximately 3:50 oclock in the morning of 09 February 1987, while the said bus was travelling
along Maharlika Highway, Tiaong, Quezon, it was bumped at the rear by another bus with Plate No.
EVB 259, owned and operated by Philtranco Service Enterprises, Inc. (Philtranco for brevity). As a
result of the strong and violent impact, the Inland bus was pushed forward and smashed into a cargo
truck parked along the outer right portion of the highway and the shoulder thereof. Consequently, the
said accident bought considerable damage to the vehicles involved and caused physical injuries to
the passengers and crew of the two buses, including the death of Coner who was the driver of the
Inland Bus at the time of the incident.

Paras was not spared from the pernicious effects of the accident. After an emergency treatment at
the San Pablo Medical Center, San Pablo City, Laguna, Paras was taken to the National Orthopedic
Hospital. At the latter hospital, he was found and diagnosed by Dr. Antonio Tanchuling, Jr. to be
affected with the following injuries: a) contusion/hematoma; b) dislocation of hip upon fracture of the
fibula on the right leg; c) fractured small bone on the right leg; and d) close fracture on the tibial
plateau of the left leg. (Exh. "A", p. 157, record)
On 04 March 1987 and 15 April 1987, Paras underwent two (2) operations affecting the fractured
portions of his body. (Exhs. "A-2" and "A-3", pp. 159 and 160 respectively, record)

Unable to obtain sufficient financial assistance from Inland for the costs of his operations,
hospitalization, doctors fees and other miscellaneous expenses, on 31 July 1989, Paras filed a
complaint for damages based on breach of contract of carriage against Inland.

In its answer, defendant Inland denied responsibility, by alleging, among others, that its driver Coner
had observed an utmost and extraordinary care and diligence to ensure the safety of its passengers.
In support of its disclaimer of responsibility, Inland invoked the Police Investigation Report which
established the fact that the Philtranco bus driver of [sic] Apolinar Miralles was the one which
violently bumped the rear portion of the Inland bus, and therefore, the direct and proximate cause of
Paras injuries.

On 02 March 1990, upon leave of court, Inland filed a third-party complaint against Philtranco and
Apolinar Miralles (Third Party defendants). In this third-party complaint, Inland, sought for
exoneration of its liabilities to Paras, asserting that the latters cause of action should be directed
against Philtranco considering that the accident was caused by Miralles lack of care, negligence and
reckless imprudence. (pp. 50 to 56, records).

After trial, the RTC (Branch 71) in Antipolo, Rizal rendered its judgment on July 18, 1997, 1 viz:

WHEREFORE, third-party defendant Philtranco and Apolinar Miralles are hereby ordered to pay
plaintiff jointly and severally, the following amounts:

1.P54,000.00 as actual damages;

2.P50,000.00 as moral damages;

3.P20,000.00 as attorneys fees and costs.

SO ORDERED.

All the parties appealed to the CA on different grounds.

On his part, Paras ascribed the following errors to the RTC, to wit:

I. THE TRIAL COURT ERRED IN HOLDING THAT ONLY THIRD-PARTY DEFENDANT-

APPELLANT PHILTRANCO IS LIABLE FOR THE DAMAGES SUFFERED BY APPELLANT
PARAS.

II. THE TRIAL COURT ERRED IN NOT HOLDING APPELLANT INLAND TRAILWAYS INC.
TO BE JOINTLY AND SEVERALLY LIABLE FOR THE DAMAGES SUFFERED BY PARAS.

III. THE TRIAL COURT ERRED IN NOT AWARDING UNEARNED INCOME AS

ADDITIONAL ACTUAL DAMAGES SUFFERED BY APPELLANT PARAS AS HIS PHYSICAL
DISABILITY IS PERMANENT IN NATURE.
 IV. THE TRIAL COURT ERRED IN NOT AWARDING EXEMPLARY DAMAGES IN FAVOR
OF APPELLANT PARAS.

On the other hand, Inland assigned the following errors to the RTC, namely:

THE TRIAL COURT ERRED WHEN IT FAILED TO AWARD DAMAGES UNTO THE THIRD PARTY
PLAINTIFF NOTWITHSTANDING CLEAR FINDING THAT:

It is clear from the evidence that the plaintiff sustained injuries because of the reckless, negligence,
and lack of precaution of third party defendant Apolinar Miralles, an employee of Philtranco.

AND, COMPLETELY DISREGARDED THE UNCONTROVERTED ORAL AND DOCUMENTARY

EVIDENCES ESTABLISHING THE EXTENT AND DEGREE OF DAMAGES SUSTAINED BY THE
THIRD PARTY PLAINTIFF.

Lastly, Philtranco stated that the RTC erred thuswise:

THE COURT A QUO MISERABLY ERRED IN AWARDING ACTUAL DAMAGES GREATER

THAN WHAT WAS ALLEGED IN THE COMPLAINT ITSELF, AND EVEN MUCH MORE
GREATER THAN WHAT WERE PROVED DURING THE TRIAL, HENCE, PERPETUATING
UNJUST ENRICHMENT.

II

THE COURT A QUO SERIOUSLY ERRED IN AWARDING MORAL DAMAGES TO A CAUSE

OF ACTION OF CULPA-CONTRACTUAL EVEN WITHOUT ANY EVIDENCE OF GROSS
BAD FAITH; HENCE, CONTRARY TO THE ESTABLISHED DOCTRINE IN THE CASES OF
PHIL. RABBIT BUS LINES VS. ESGUERRA; SOBERANO VS. BENGUET AUTO LINE AND
FLORES VS. MIRANDA.

III

THE COURT A QUO MISERABLY ERRED IN HOLDING THAT MIRALLES WAS THE ONE
AT FAULT MERELY ON THE STRENGHT OF THE TESTIMONY OF THE POLICE
INVESTIGATOR WHICH IS IN TURN BASED ON THE STATEMENTS OF ALLEGED
WITNESSES WHO WERE NEVER PRESENTED ON THE WITNESS STAND.

IV

THE COURT A QUO COMMITTED A GRIEVOUS ERROR IN DISREGARDING THE

TESTIMONY OF APPELLANTS WITNESSES WHO TESTIFIED AS TO THE DEFENSE OF
EXERCISE OF DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF
EMPLOYEES PURSUANT TO ART. 2180, LAST PARAGRAPH, NEW CIVIL CODE.

On September 25, 2002, the CA promulgated its decision, 2 disposing:

WHEREFORE, in consideration of the foregoing premises, the assailed decision dated 18 July
19(9)7 is perforce affirmed with the following modifications:

1. Third party defendants-appellants Philtranco and Apolinar Miralles are ordered to pay
plaintiff-appellant Felix Paras jointly and severally the following amounts:

a) P1,397.95 as actual damages;

b) P50,000.00 as temperate damages;

c) P50,000.00 as moral damages; and

d) P20,000.00 as attorneys fees and costs of suit.

2. On the third party plaintiff-appellant Inlands claims, the third party defendant-appellants
Philtranco and Apolinar Miralles are hereby ordered to pay the former (Inland) jointly and
severally the amount of P250,000.00 as and by way of temperate damages.

SO ORDERED.

The CA agreed with the RTCs finding that no trace of negligence at the time of the accident was
attributable to Inlands driver, rendering Inland not guilty of breach of contract of carriage; that faulty
brakes had caused Philtrancos bus to forcefully bump Inlands bus from behind, making it hit the
rear portion of a parked cargo truck; that the impact had resulted in considerable material damage to
the three vehicles; and that Paras and others had sustained various physical injuries.

Accordingly, the CA: (a) sustained the award of moral damages of P50,000.00 in favor of Paras
pursuant to Article 2219 of the Civil Code based on quasi-delict committed by Philtranco and its
driver; (b) reduced the actual damages to be paid by Philtranco to Paras from P54,000.00
to P1,397.95 because only the latter amount had been duly supported by receipts; (c) granted
temperate damages of P50,000.00 (in lieu of actual damages in view of the absence of competent
proof of actual damages for his hospitalization and therapy) to be paid by Philtranco to Paras; and
(d) awarded temperate damages of P250,000.00 under the same premise to be paid by Philtranco to
Inland for the material damage caused to Inlands bus.

Philtranco moved for reconsideration,3 but the CA denied its motion for reconsideration on January
21, 2004.4

Issues

Hence, this appeal, in which the petitioner submits that the CA committed grave abuse of discretion
amounting to lack of jurisdiction in awarding moral damages to Paras despite the fact that the
complaint had been anchored on breach of contract of carriage; and that the CA committed a
reversible error in substituting its own judgment by motu proprio awarding temperate damages
of P250,000.00 to Inland and P50,000.00 to Paras despite the clear fact that temperate damages
were not raised on appeal by Paras and Inland.

Ruling
The appeal lacks merit.

The Court does not disturb the unanimous findings by the CA and the RTC on the negligence of
Philtranco and its driver being the direct cause of the physical injuries of Paras and the material
damage of Inland.

Nonetheless, we feel bound to pass upon the disparate results the CA and the RTC reached on the
liabilities of Philtranco and its driver.

1.

Paras can recover moral damages

in this suit based on quasi-delict

Philtranco contends that Paras could not recover moral damages because his suit was based on
breach of contract of carriage, pursuant to which moral damages could be recovered only if he had
died, or if the common carrier had been guilty of fraud or bad faith. It argues that Paras had suffered
only physical injuries; that he had not adduced evidence of fraud or bad faith on the part of the
common carrier; and that, consequently, Paras could not recover moral damages directly from it
(Philtranco), considering that it was only being subrogated for Inland.

The Court cannot uphold the petitioners contention.

As a general rule, indeed, moral damages are not recoverable in an action predicated on a breach of
contract. This is because such action is not included in Article 2219 of the Civil Code 5 as one of the
actions in which moral damages may be recovered. By way of exception, moral damages are
recoverable in an action predicated on a breach of contract: (a) where the mishap results in the
death of a passenger, as provided in Article 1764,6 in relation to Article 2206, (3),7 of the Civil Code;
and (b) where the common carrier has been guilty of fraud or bad faith, 8 as provided in Article
22209 of the Civil Code.

Although this action does not fall under either of the exceptions, the award of moral damages to
Paras was nonetheless proper and valid. There is no question that Inland filed its third-party
complaint against Philtranco and its driver in order to establish in this action that they, instead of
Inland, should be directly liable to Paras for the physical injuries he had sustained because of their
negligence. To be precise, Philtranco and its driver were brought into the action on the theory of
liability that the proximate cause of the collision between Inlands bus and Philtrancos bus had been
"the negligent, reckless and imprudent manner defendant Apolinar Miralles drove and operated his
driven unit, the Philtranco Bus with Plate No. 259, owned and operated by third-party defendant
Philtranco Service Enterprises, Inc."10 The apparent objective of Inland was not to merely subrogate
the third-party defendants for itself, as Philtranco appears to suggest, 11 but, rather, to obtain a
different relief whereby the third-party defendants would be held directly, fully and solely liable to
Paras and Inland for whatever damages each had suffered from the negligence committed by
Philtranco and its driver. In other words, Philtranco and its driver were charged here as joint
tortfeasors who would be jointly and severally be liable to Paras and Inland.

Impleading Philtranco and its driver through the third-party complaint filed on March 2, 1990 was
correct. The device of the third-party action, also known as impleader, was in accord with Section 12,
Rule 6 of the Revised Rules of Court, the rule then applicable, viz:
Section 12. Third-party complaint. A third-party complaint is a claim that a defending party may,
with leave of court, file against a person not a party to the action, called the third-party defendant, for
contribution, indemnity, subrogation or any other relief, in respect of his opponents claim. 12

Explaining the application of Section 12, Rule 6, supra, the Court said in Balbastro v. Court of
Appeals,13 to wit:

Section 12 of Rule 6 of the Revised Rules of Court authorizes a defendant to bring into a lawsuit any
person "not a party to the action . . . for contribution, indemnity, subrogation or any other relief in
respect of his opponent's claim." From its explicit language it does not compel the defendant to bring
the third-parties into the litigation, rather it simply permits the inclusion of anyone who meets the
standard set forth in the rule. The secondary or derivative liability of the third-party is central
whether the basis is indemnity, subrogation, contribution, express or implied warranty or some other
theory. The impleader of new parties under this rule is proper only when a right to relief exists under
the applicable substantive law. This rule is merely a procedural mechanism, and cannot be utilized
unless there is some substantive basis under applicable law.

Apart from the requirement that the third-party complainant should assert a derivative or secondary
claim for relief from the third-party defendant there are other limitations on said partys ability to
implead. The rule requires that the third-party defendant is "not a party to the action" for otherwise
the proper procedure for asserting a claim against one who is already a party to the suit is by means
of counterclaim or cross-claim under sections 6 and 7 of Rule 6. In addition to the aforecited
requirement, the claim against the third-party defendant must be based upon plaintiff's claim against
the original defendant (third-party claimant). The crucial characteristic of a claim under section 12 of
Rule 6, is that the original "defendant is attempting to transfer to the third-party defendant the liability
asserted against him by the original plaintiff."

Accordingly, the requisites for a third-party action are, firstly, that the party to be impleaded must not
yet be a party to the action; secondly, that the claim against the third-party defendant must belong to
the original defendant; thirdly, the claim of the original defendant against the third-party defendant
must be based upon the plaintiffs claim against the original defendant; and, fourthly, the defendant is
attempting to transfer to the third-party defendant the liability asserted against him by the original
plaintiff.14

As the foregoing indicates, the claim that the third-party complaint asserts against the third-party
defendant must be predicated on substantive law. Here, the substantive law on which the right of
Inland to seek such other relief through its third-party complaint rested were Article 2176 and Article
2180 of the Civil Code, which read:

Article 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. (1902a)

Article 2180. The obligation imposed by article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.

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

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. (1903a)

Paras cause of action against Inland (breach of contract of carriage) did not need to be the same as
the cause of action of Inland against Philtranco and its driver (tort or quasi-delict) in the impleader. It
is settled that a defendant in a contract action may join as third-party defendants those who may be
liable to him in tort for the plaintiffs claim against him, or even directly to the plaintiff. 15 Indeed, Prof.
Wright, et al., commenting on the provision of the Federal Rules of Procedure of the United States
from which Section 12, supra, was derived, observed so, to wit: 16

The third-party claim need not be based on the same theory as the main claim. For example, there
are cases in which the third-party claim is based on an express indemnity contract and the original
complaint is framed in terms of negligence. Similarly, there need not be any legal relationship
between the third-party defendant and any of the other parties to the action. Impleader also is proper
even though the third partys liability is contingent, and technically does not come into existence until
the original defendants liability has been established. In addition, the words is or may be liable in
Rule 14(a) make it clear that impleader is proper even though the third-party defendants liability is
not automatically established once the third-party plaintiffs liability to the original plaintiff has been
determined.

Nor was it a pre-requisite for attachment of the liability to Philtranco and its driver that Inland be first
declared and found liable to Paras for the breach of its contract of carriage with him. 17 As the Court
has cogently discoursed in Samala v. Judge Victor:18

Appellants argue that since plaintiffs filed a complaint for damages against the defendants on a
breach of contract of carriage, they cannot recover from the third-party defendants on a cause of
action based on quasi-delict. The third party defendants, they allege, are never parties liable with
respect to plaintiff s claim although they are with respect to the defendants for indemnification,
subrogation, contribution or other reliefs. Consequently, they are not directly liable to the plaintiffs.
Their liability commences only when the defendants are adjudged liable and not when they are
absolved from liability as in the case at bar.

Quite apparent from these arguments is the misconception entertained by appellants with respect to
the nature and office of a third party complaint.

Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint as a "claim that a
defending party may, with leave of court, file against a person not a party to the action, called the
third-party defendant, for contribution, indemnification, subrogation, or any other relief, in respect of
his opponents claim." In the case of Viluan vs. Court of Appeals, et al., 16 SCRA 742 [1966], this
Court had occasion to elucidate on the subjects covered by this Rule, thus:

... As explained in the Atlantic Coast Line R. Co. vs. U.S. Fidelity & Guaranty Co., 52 F. Supp. 177
(1943:)
From the sources of Rule 14 and the decisions herein cited, it is clear that this rule, like the
admiralty rule, covers two distinct subjects, the addition of parties defendant to the main cause of
action, and the bringing in of a third party for a defendants remedy over. xxx

If the third party complaint alleges facts showing a third partys direct liability to plaintiff on the claim
set out in plaintiffs petition, then third party shall make his defenses as provided in Rule 12 and his
counterclaims against plaintiff as provided in Rule 13. In the case of alleged direct liability, no
amendment (to the complaint) is necessary or required. The subject-matter of the claim is contained
in plaintiff's complaint, the ground of third partys liability on that claim is alleged in third party
complaint, and third partys defense to set up in his answer to plaintiff's complaint. At that point and
without amendment, the plaintiff and third party are at issue as to their rights respecting the claim.

The provision in the rule that, The third-party defendant may assert any defense which the third-
party plaintiff may assert to the plaintiffs claim, applies to the other subject, namely, the alleged
liability of third party defendant. The next sentence in the rule, The third-party defendant is bound by
the adjudication of the third party plaintiffs liability to the plaintiff, as well as of his own to the plaintiff
or to the third-party plaintiff applies to both subjects. If third party is brought in as liable only to
defendant and judgment is rendered adjudicating plaintiff's right to recover against defendant and
defendants rights to recover against third party, he is bound by both adjudications.That part of the
sentence refers to the second subject. If third party is brought in as liable to plaintiff, then third party
is bound by the adjudication as between him and plaintiff. That refers to the first subject. If third party
is brought in as liable to plaintiff and also over to defendant, then third party is bound by both
adjudications. xxx

Under this Rule, a person not a party to an action may be impleaded by the defendant either (a) on
an allegation of liability to the latter; (b) on the ground of direct liability to the plaintiff-; or, (c) both (a)
and (b). The situation in (a) is covered by the phrase "for contribution, indemnity or subrogation;"
while (b) and (c) are subsumed under the catch all "or any other relief, in respect of his opponents
claim."

The case at bar is one in which the third party defendants are brought into the action as directly
liable to the plaintiffs upon the allegation that "the primary and immediate cause as shown by the
police investigation of said vehicular collision between (sic) the above-mentioned three vehicles was
the recklessness and negligence and lack of imprudence (sic) of the third-party defendant Virgilio
(should be Leonardo) Esguerra y Ledesma then driver of the passenger bus." The effects are that
"plaintiff and third party are at issue as to their rights respecting the claim" and "the third party is
bound by the adjudication as between him and plaintiff." It is not indispensable in the premises that
the defendant be first adjudged liable to plaintiff before the third-party defendant may be held liable
to the plaintiff, as precisely, the theory of defendant is that it is the third party defendant, and not he,
who is directly liable to plaintiff. The situation contemplated by appellants would properly pertain to
situation (a) above wherein the third party defendant is being sued for contribution, indemnity or
subrogation, or simply stated, for a defendant's "remedy over".19

It is worth adding that allowing the recovery of damages by Paras based on quasi-delict, despite his
complaint being upon contractual breach, served the judicial policy of avoiding multiplicity of suits
and circuity of actions by disposing of the entire subject matter in a single litigation. 20

2.
 Award of temperate damages was in order

Philtranco assails the award of temperate damages by the CA considering that, firstly, Paras and
Inland had not raised the matter in the trial court and in their respective appeals; secondly, the CA
could not substitute the temperate damages granted to Paras if Paras could not properly establish
his actual damages despite evidence of his actual expenses being easily available to him; and,
thirdly, the CA gravely abused its discretion in granting motu proprio the temperate damages
of P250,000.00 to Inland although Inland had not claimed temperate damages in its pleading or
during trial and even on appeal.

The Court cannot side with Philtranco.

Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved
with a reasonable degree of certainty. The reason is that the court "cannot simply rely on
speculation, conjecture or guesswork in determining the fact and amount of damages," but "there
must be competent proof of the actual amount of loss, credence can be given only to claims which
are duly supported by receipts."21

The receipts formally submitted and offered by Paras were limited to the costs of medicines
purchased on various times in the period from February 1987 to July 1989 (Exhibits E to E-35,
inclusive) totaling only P1,397.95.22 The receipts by no means included hospital and medical
expenses, or the costs of at least two surgeries as well as rehabilitative therapy. Consequently, the
CA fixed actual damages only at that small sum of P1,397.95. On its part, Inland offered no definite
proof on the repairs done on its vehicle, or the extent of the material damage except the testimony of
its witness, Emerlinda Maravilla, to the effect that the bus had been damaged beyond economic
repair.23 The CA rejected Inlands showing of unrealized income worth P3,945,858.50 for 30 months
(based on alleged average weekly income of P239,143.02 multiplied by its guaranteed revenue
amounting to 55% thereof, then spread over a period of 30 months, the equivalent to the remaining
40% of the vehicles un-depreciated or net book value), finding such showing arbitrary, uncertain and
speculative.24 As a result, the CA allowed no compensation to Inland for unrealized income.

Nonetheless, the CA was convinced that Paras should not suffer from the lack of definite proof of his
actual expenses for the surgeries and rehabilitative therapy; and that Inland should not be deprived
of recourse to recover its loss of the economic value of its damaged vehicle. As the records
indicated, Paras was first rushed for emergency treatment to the San Pablo Medical Center in San
Pablo City, Laguna, and was later brought to the National Orthopedic Hospital in Quezon City where
he was diagnosed to have suffered a dislocated hip, fracture of the fibula on the right leg, fracture of
the small bone of the right leg, and closed fracture on the tibial plateau of the left leg. He underwent
surgeries on March 4, 1987 and April 15, 1987 to repair the fractures.25 Thus, the CA awarded to him
temperate damages of P50,000.00 in the absence of definite proof of his actual expenses towards
that end. As to Inland, Maravillas testimony of the bus having been damaged beyond economic
repair showed a definitely substantial pecuniary loss, for which the CA fixed temperate damages
of P250,000.00. We cannot disturb the CAs determination, for we are in no position today to judge
its reasonableness on account of the lapse of a long time from when the accident occurred. 26

In awarding temperate damages in lieu of actual damages, the CA did not err, because Paras and
Inland were definitely shown to have sustained substantial pecuniary losses. It would really be a
travesty of justice were the CA now to be held bereft of the discretion to calculate moderate or
temperate damages, and thereby leave Paras and Inland without redress from the wrongful act of
Philtranco and its driver.27 We are satisfied that the CA exerted effort and practiced great care to
ensure that the causal link between the physical injuries of Paras and the material loss of Inland, on
the one hand, and the negligence of Philtranco and its driver, on the other hand, existed in fact. It
also rejected arbitrary or speculative proof of loss. Clearly, the costs of Paras surgeries and
consequential rehabilitation, as well as the fact that repairing Inlands vehicle would no longer be
economical justly warranted the CA to calculate temperate damages of P50,000.00 and P250,000.00
respectively for Paras and Inland.

There is no question that Article 2224 of the Civil Code expressly authorizes the courts to award
temperate damages despite the lack of certain proof of actual damages, to wit:

Article 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with certainty.

The rationale for Article 2224 has been stated in Premiere Development Bank v. Court of Appeals 28 in
the following manner:

Even if not recoverable as compensatory damages, Panacor may still be awarded damages in the
concept of temperate or moderate damages. When the court finds that some pecuniary loss has
been suffered but the amount cannot, from the nature of the case, be proved with certainty,
temperate damages may be recovered. Temperate damages may be allowed in cases where from
the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is
convinced that the aggrieved party suffered some pecuniary loss.

The Code Commission, in explaining the concept of temperate damages under Article 2224, makes
the following comment:

In some States of the American Union, temperate damages are allowed. There are cases where
from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is
convinced that there has been such loss. For instance, injury to ones commercial credit or to the
goodwill of a business firm is often hard to show with certainty in terms of money. Should damages
be denied for that reason? The judge should be empowered to calculate moderate damages in such
cases, rather than that the plaintiff should suffer, without redress from the defendants wrongful act.

3.

Paras loss of earning capacity

must be compensated

In the body of its decision, the CA concluded that considering that Paras had a minimum monthly
income of P8,000.00 as a trader he was entitled to recover compensation for unearned income
during the 3-month period of his hospital confinement and the 6-month period of his recovery and
rehabilitation; and aggregated his unearned income for those periods to P72,000.00.29 Yet, the CA
omitted the unearned income from the dispositive portion.

The omission should be rectified, for there was credible proof of Paras loss of income during his
disability. According to Article 2205, (1), of the Civil Code, damages may be recovered for loss or
impairment of earning capacity in cases of temporary or permanent personal injury. Indeed,
indemnification for damages comprehends not only the loss suffered (actual damages or damnum
emergens) but also the claimants lost profits (compensatory damages or lucrum cessans).30 Even
so, the formula that has gained acceptance over time has limited recovery to net earning capacity;
hence, the entire amount of P72,000.00 is not allowable. The premise is obviously that net earning
capacity is the persons capacity to acquire money, less the necessary expense for his own
living.31 To simplify the determination, therefore, the net earning capacity of Paras during the 9-month
period of his confinement, surgeries and consequential therapy is pegged at only half of his
unearned monthly gross income of P8,000.00 as a trader, or a total of P36,000.00 for the 9-month
period, the other half being treated as the necessary expense for his own living in that period.

It is relevant to clarify that awarding the temperate damages (for the substantial pecuniary losses
corresponding to Parass surgeries and rehabilitation and for the irreparability of Inlands damaged
bus) and the actual damages to compensate lost earnings and costs of medicines give rise to no
incompatibility. These damages cover distinct pecuniary losses suffered by Paras and Inland, 32 and
do not infringe the statutory prohibition against recovering damages twice for the same act or
omission.33

4.

Increase in award of attorneys fees

Although it is a sound policy not to set a premium on the right to litigate, 34 we consider the grant to
Paras and Inland of reasonable attorneys fees warranted. Their entitlement to attorneys fees was
by virtue of their having been compelled to litigate or to incur expenses to protect their interests, 35 as
well as by virtue of the Court now further deeming attorneys fees to be just and equitable. 36

In view of the lapse of a long time in the prosecution of the claim, 37 the Court considers it reasonable
and proper to grant attorneys fees to each of Paras and Inland equivalent to 10% of the total
amounts hereby awarded to them, in lieu of only P20,000.00 for that purpose granted to Paras.

5.

Legal interest on the amounts awarded

Pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals,38 legal interest at the rate of 6% per
annum accrues on the amounts adjudged reckoned from July 18, 1997, the date when the RTC
rendered its judgment; and legal interest at the rate of 12% per annum shall be imposed from the
finality of the judgment until its full satisfaction, the interim period being regarded as the equivalent of
a forbearance of credit.

WHEREFORE, the Court AFFIRMS WITH MODIFICATION the decision of the Court of Appeals
promulgated on September 25, 2002, by ordering PHILTRANCO SERVICE ENTERPRISES, INC.
and APOLINAR MIRALLES to pay, jointly and severally, as follows:

1. To Felix Paras:

(a) P1,397.95, as reimbursement for the costs of medicines purchased between

February 1987 and July 1989;
 (b) P50,000.00 as temperate damages;

(c) P50,000.00 as moral damages;

(d) P36,000.00 for lost earnings;

(e) 10% of the total of items (a) to (d) hereof as attorneys fees; and

(f) Interest of 6% per annum from July 18, 1997 on the total of items (a) to (d) hereof
until finality of this decision, and 12% per annum thereafter until full payment.

2. To Inland Trailways, Inc.:

(a) P250,000.00 as temperate damages;

(b) 10% of item (a) hereof; and

(c) Interest of 6% per annum on item (a) hereof from July 18, 1997 until finality of this
decision, and 12% per annum thereafter until full payment.

3. The petitioner shall pay the costs of suit.

SO ORDERED.
G.R. No. 184202 January 26, 2011

AQUINAS SCHOOL, Petitioner,

vs.
SPS. JOSE INTON and MA. VICTORIA S. INTON, on their behalf and on behalf of their minor
child, JOSE LUIS S. INTON, and SR. MARGARITA YAMYAMIN, OP, Respondents.

DECISION

ABAD, J.:

This case is about the private schools liability for the outside catechists act of shoving a student and
kicking him on the legs when he disobeyed her instruction to remain in his seat and not move around
the classroom.

The Facts and the Case

In 1998 respondent Jose Luis Inton (Jose Luis) was a grade three student at Aquinas School
(Aquinas). Respondent Sister Margarita Yamyamin (Yamyamin), a religion teacher who began
teaching at that school only in June of that year, taught Jose Luis grade three religion class.

On July 14, 1998, while Yamyamin was writing on the blackboard, Jose Luis left his assigned seat
and went over to a classmate to play a joke of surprising him. Yamyamin noticed this and sent Jose
Luis back to his seat. After a while, Jose Luis got up again and went over to the same classmate.
This time, unable to tolerate the childs behavior, Yamyamin approached Jose Luis and kicked him
on the legs several times. She also pulled and shoved his head on the classmates seat. Finally, she
told the child to stay where he was on that spot of the room and finish copying the notes on the
blackboard while seated on the floor.

As a result of the incident, respondents Jose and Victoria Inton (the Intons) filed an action for
damages on behalf of their son Jose Luis against Yamyamin and Aquinas before the Regional Trial
Court (RTC) of Pasig City in Civil Case 67427. The Intons also filed a criminal action against
Yamyamin for violation of Republic Act 7610 to which she pleaded guilty and was sentenced
accordingly.

With regard to the action for damages, the Intons sought to recover actual, moral, and exemplary
damages, as well as attorneys fees, for the hurt that Jose Luis and his mother Victoria suffered. The
RTC dismissed Victorias personal claims but ruled in Jose Luis favor, holding Yamyamin liable to
him for moral damages of P25,000.00, exemplary damages of P25,000.00, and attorneys fees
of P10,000.00 plus the costs of suit.1

Not satisfied, the Intons elevated the case to the Court of Appeals (CA). 2 They asked the CA to
increase the award of damages and hold Aquinas solidarily liable with Yamyamin. Finding that an
employer-employee relation existed between Aquinas and Yamyamin, the CA found them solidarily
liable to Jose Luis. The CA, however, declined to increase the award of damages. 3 Jose Luis moved
for partial reconsideration but this was denied. Aquinas, for its part, appealed directly to this Court
from the CA decision through a petition for review on certiorari.
 The Issue Presented

The sole issue presented in this case is whether or not the CA was correct in holding Aquinas
solidarily liable with Yamyamin for the damages awarded to Jose Luis.

The Courts Ruling

The CA found Aquinas liable to Jose Luis based on Article 2180 of the Civil Code upon the CAs
belief that the school was Yamyamins employer. Aquinas contests this.

The Court has consistently applied the "four-fold test" to determine the existence of an employer-
employee relationship: the employer (a) selects and engages the employee; (b) pays his wages; (c)
has power to dismiss him; and (d) has control over his work. Of these, the most crucial is the
element of control. Control refers to the right of the employer, whether actually exercised or
reserved, to control the work of the employee as well as the means and methods by which he
accomplishes the same.4

In this case, the school directress testified that Aquinas had an agreement with a congregation of
sisters under which, in order to fulfill its ministry, the congregation would send religion teachers to
Aquinas to provide catechesis to its students. Aquinas insists that it was not the school but
Yamyamins religious congregation that chose her for the task of catechizing the schools grade
three students, much like the way bishops designate the catechists who would teach religion in
public schools. Under the circumstances, it was quite evident that Aquinas did not have control over
Yamyamins teaching methods. The Intons had not refuted the school directress testimony in this
regard. Consequently, it was error for the CA to hold Aquinas solidarily liable with Yamyamin. 1wphi1

Of course, Aquinas still had the responsibility of taking steps to ensure that only qualified outside
catechists are allowed to teach its young students. In this regard, it cannot be said that Aquinas took
no steps to avoid the occurrence of improper conduct towards the students by their religion teacher.

First, Yamyamins transcript of records, certificates, and diplomas showed that she was
qualified to teach religion.

Second, there is no question that Aquinas ascertained that Yamyamin came from a
legitimate religious congregation of sisters and that, given her Christian training, the school
had reason to assume that she would behave properly towards the students.

Third, the school gave Yamyamin a copy of the schools Administrative Faculty Staff Manual
that set the standards for handling students. It also required her to attend a teaching
orientation before she was allowed to teach beginning that June of 1998. 5

Fourth, the school pre-approved the content of the course she was to teach6 to ensure that
she was really catechizing the students.

And fifth, the school had a program for subjecting Yamyamin to classroom
evaluation.7 Unfortunately, since she was new and it was just the start of the school year,
Aquinas did not have sufficient opportunity to observe her methods. At any rate, it acted
 promptly to relieve her of her assignment as soon as the school learned of the incident. 8 It
cannot be said that Aquinas was guilty of outright neglect.

Regarding the Intons plea for an award of greater amounts of damages, the Court finds no
justification for this since they did not appeal from the decision of the CA. The Intons prayed for the
increase only in their comment to the petition. They thus cannot obtain from this Court any
affirmative relief other than those that the CA already granted them in its decision. 9

WHEREFORE, the Court GRANTS the petition, SETS ASIDE the decision of the Court of Appeals in
CA-G.R. CV 88106 dated August 4, 2008, and HOLDS petitioner Aquinas School not liable in
damages to respondent Jose Luis Inton.

SO ORDERED.
G.R. No. 193861 March 14, 2012

PAULITA "EDITH" SERRA,1 Petitioner,

vs.
NELFA T. MUMAR, Respondent.

DECISION

CARPIO, J.:

Before the Court is a petition for review under Rule 45 of the Revised Rules of Court, assailing the
31 July 2009 Decision2 and 27 July 2010 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV
No. 00023-MIN.

The Facts

At around 6:30 in the evening of 3 April 2000, there was a vehicular accident along the National
Highway in Barangay Apopong, General Santos City, which resulted in the death of Armando Mumar
(Mumar), husband of respondent Nelfa T. Mumar (respondent).

Based on the evidence presented before the Regional Trial Court (RTC) of General Santos City, one
Armando Tenerife (Tenerife) was driving his Toyota Corolla sedan on the National Highway heading
in the direction of Polomolok, South Cotabato. Tenerife noticed the van owned by petitioner Paulita
"Edith" Serra (petitioner) coming from the opposite direction, which was trying to overtake a
passenger jeep, and in the process encroached on his lane. The left side of the sedan was hit by the
van, causing the sedan to swerve to the left and end up on the other side of the road. The van
collided head on with the motorcycle, which was about 12 meters behind the sedan on the outer
lane, causing injuries to Mumar, which eventually led to his death.

On the other hand, petitioner denied that her van was overtaking the jeepney at the time of the
incident. She claimed that the left tire of Tenerifes sedan burst, causing it to sideswipe her van.
Consequently, the left front tire of the van also burst and the vans driver, Marciano de Castro (de
Castro), lost control of the vehicle. The van swerved to the left towards Mumars motorcycle. The
impact resulted in the death of Mumar.

Subsequently, respondent filed a complaint against petitioner for Damages by Reason of Reckless
Imprudence resulting to Homicide and Attachment before the General Santos City RTC.

Ruling of the Regional Trial Court

On 20 November 2003, the General Santos City RTC promulgated a judgment, 4 the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered against defendant Paulita Sierra, her co-defendant not
having been served with summons because he could no longer be found, finding her liable for
damages by reason of reckless imprudence, and she is hereby ordered to pay plaintiff the sum of:

1. P65,000.00 for burial damages;

2. P300,000.00 for loss of income;

 3. P50,000.00 as moral damages; and

4. P50,000.00 as exemplary damages.

SO ORDERED.5

The RTC found that, based on the evidence presented at the trial, at the time of impact "the van was
overtaking another vehicle without due regard for the safety of others, bumped the Toyota Car (sic)
and the motorcycle traveling in the right lane going to Polomolok, South Cotabato." The RTC noted
that the damage to the van was located at the bumper, evincing a frontal collision, while the damage
to the sedan was on the left side door and window, evincing that the van sideswiped the sedan.
Likewise, the RTC found that the van encroached on the sedan and motorcycles lane, in the
process hitting the motorcycle, causing the injuries and subsequent death of Mumar.6

As to the claim for damages, the RTC said that Nelfa testified that her husband was earning
about P6,000.00 a month without presenting any documentary evidence to prove her claim, but
nonetheless awarded her P300,000.00 for damages due to loss of income.

Petitioner appealed the RTC ruling to the CA.

Ruling of the Court of Appeals

In its 31 July 2009 Decision, the CA denied the appeal and affirmed with modification the RTCs
ruling:

FOR REASONS STATED, the appeal is DENIED. The assailed Decision of the Regional Trial Court
of General Santos City, 11th Judicial Region, Branch 23, in Civil Case No. 6764 is AFFIRMED with
MODIFICATION in that the appellant is ordered to pay appellee the following:

1. Civil indemnity in the amount of P50,000.00;

2. Indemnity for loss of earning capacity in the amount of P1,224,000.00;

3. Temperate damages amounting to P25,000.00 in lieu of the award for burial expenses;

4. Moral damages in the amount of P50,000.00.

5. The total amount of damages shall bear an interest of 12% per annum from the finality of
this Decision until fully paid.

The awards for burial expenses and exemplary damages are deleted.

SO ORDERED.7

The CA adopted the factual findings of the RTC. It also ruled that the RTC erred in awarding burial
expenses and actual damages for loss of earning capacity despite lack of proof. Based on the wifes
claim that the victim earned not less than P6,000.00 a month and his age at the time of death, based
on his birth certificate (29), the CA applied the formula:
Net earning capacity = 2/3 x (80 less the age of the victim at time of death) x [Gross Annual Income
less the Reasonable and Necessary Living Expenses (50% of gross income)]

Using the foregoing formula, the CA awarded damages due to loss of earning capacity in the amount
of P1,224,000.00.8

Likewise, the CA said that the RTC erred in not awarding civil indemnity in the amount
of P50,000.00. The CA also awarded temperate damages of P25,000.00 finding that respondent
spent for her husbands burial although the exact amount could not be proven.

Petitioners Arguments

Petitioner raises the following issues:

I. Whether or not the (sic) both the lower court and the Court of Appeals committed reversible
error in finding that the incident which killed Armando Mumar was not purely accidental for
which defendants may not be held liable[;]

II. Whether or not both the lower court and the Court of Appeals committed reversible error in
holding Editha Serra as liable for damages and in not appreciating that she was not
negligent in the selection and supervision of the driver of the van, Marciano de Castro[;]

III. Whether or not the Court of Appeals erred in awarding to herein respondent "loss of
earning capacity" despite complete absence of documentary evidence that the deceased
Mumar was self-employed and earning less than the minimum wage under current labor
laws in force at the time of his death, following the ruling in People v. Mallari, G.R. No.
145993, June 17, 2003[.]9

Petitioner maintains that it was Tenerifes sedan that encroached on the lane of the van after the
sedans left front tire blew out. Petitioner points out that Tenerife himself admitted that what
happened was merely a "sliding collision."10 She points out that the sedan not only cut across two
lanes headed in the opposite direction, it also made a half-circle such that it stopped on the shoulder
of the left side of the road (opposite its original lane), and then faced towards its origin, General
Santos City. This could be for no other reason than that Tenerife completely lost control of his vehicle
because the tire burst. Then, the sedan rammed into the van causing the latters front tire to tear;
thus, the vans driver also lost control of the vehicle and headed towards the opposite lane and hit
Mumar. Yet, the van was still facing its destination General Santos City. The greater damage to the
van was from hitting the signboard on the side of the road and not from hitting the sedan.

Petitioner argues that the foregoing description of the events proves that it is purely accidental and
without negligence on her drivers part.

Petitioner also insists that she was not negligent in the selection and supervision of the driver of the
van. Respondent had the burden to prove that petitioner was negligent but failed to do so, petitioner
claims.

As to the CAs award of damages due to loss of earning capacity, petitioner argues that the same
has no basis. She points out that there was no documentary evidence presented or formally offered
at the trial to substantiate the claim for damages due to loss of earning capacity. Likewise, petitioner
further argues that, based on Nelfas testimony that her husband was earning "not less than P6,000
a month," the conclusion was that he was earning not less than the minimum wage at the time of the
accident.

Petitioner counters that in 2005 the minimum wage in Region XII, where the accident occurred,
was P200.00 per day plus a cost of living allowance of P13.50, or P5,558.00 per month. Petitioner
posits that it was safe to assume that at the time of the accident on 3 April 2000, the minimum wage
was lower than the rate in 2005.

Petitioner also argues that in Mumars line of work contracting and manufacturing steel grills,
fences and gates some form of documentary evidence would be available to support his widows
claim. That these were not presented in evidence would remove the claim from the exceptions to the
requirement that the amount of actual damages must be duly proved. 11

Thus, petitioner prays that the assailed CA decision and resolution be reversed and set aside. In the
alternative, petitioner prays that, should the Court sustain the finding of negligence, that the award of
damages for loss of earning capacity in the sum of P1,224,000.00 be completely deleted for lack of
evidentiary basis.12

Respondents Argument

In her Comment, respondent counters that petitioner raises no new matter, and the arguments are
merely a rehash of those raised before the lower courts, which had already ruled on these. 13

The Courts Ruling

The petition is partly granted. The Court affirms the decision of the CA, but modifies the award for
damages.

Uniform Findings of Fact by the RTC and CA

A petition for review on certiorari should raise only questions of law. In resolving a petition for review,
the Court "does not sit as an arbiter of facts for it is not the function of the Supreme Court to analyze
or weigh all over again the evidence already considered in the proceedings below." 14

When supported by substantial evidence, the factual findings of the CA affirming those of the trial
court15 are final and conclusive on this Court and may not be reviewed on appeal, 16 unless petitioner
can show compelling or exceptional reasons17 for this Court to disregard, overturn or modify such
findings.

In the present case, the Court notes the uniform factual findings by the RTC and CA, and petitioner
has not shown compelling or exceptional reasons warranting deviation from these findings.

Both the trial court and the CA found that it was petitioners van, then being driven by de Castro, that
encroached on the sedans lane, then hit the latter and, eventually, Mumars motorcycle.

The Court has previously held that evidence to be worthy of credit, must not only proceed from a
credible source but must, in addition, be credible in itself. The evidence must be natural, reasonable
and probable as to make it easy to believe. No better test has yet been found to determine the value
of the testimony of a witness than its conformity to the knowledge and common experience of
mankind.18
Petitioners testimony is not credible considering that she admitted that she did not see the actual
bumping of the van with the sedan because "it was dark and showering." 19 When she came out of
the van, she said she did not notice the sedan. She then left the scene to ask help from her brother,
without even coming to the aid of her driver.20

Moreover, the traffic investigators findings are more consistent with human experience.

As found by the investigator, the van ended up on the other side of the road, opposite the lane it was
originally traversing. The vans forward momentum was going towards the opposite side. If indeed
the van stayed on its proper lane when the sedans tire blew out and lost control, the sedan would
have bumped into the van on the latters lane and the van would have ended up on the side of the
road with the sedan. Likewise, if the van had stayed on its lane, and the impact of the sedan
propelled it forward, the van would have hit the jeepney in front of it, not Mumars motorcycle, which
was on the opposite lane to the right of the sedan. The only plausible explanation is it was the van,
while trying to overtake the jeepney in front of it at a fast speed, that bumped into the sedan and
subsequently, Mumars motorcycle.

Petitioner insists that the traffic investigator SPO3 Haron Abdullatips report should be disregarded
because he was not at the scene when the accident happened.

Rarely does it happen that the investigating officer personally witnesses an accident that he
investigates, yet this does not mean that his observations are not valid. A traffic investigators
training and experience allow him to determine how an accident occurred even without witnessing
the accident himself.

In this case, Abdullatip had been a traffic investigator for nine years.21 Even if he arrived at the scene
after the accident, he saw the vehicles in their relative positions as a result of the accident. His
experience, as well as his evaluation of the statements from various witnesses, guided him in
assessing who was at fault. In any case, the presumption of regularity in the exercise of functions is
in his favor and therefore his report must be given credence.

Liability for Damages of Petitioner

Under Article 2180 of the Civil Code, employers are liable for the damages caused by their
employees acting within the scope of their assigned tasks. Whenever an employees negligence
causes damage or injury to another, there instantly arises a presumption that the employer failed to
exercise the due diligence of a good father of the family in the selection or supervision of its
employees.22 The liability of the employer is direct or immediate. It is not conditioned upon prior
recourse against the negligent employee and a prior showing of insolvency of such employee. 23

Moreover, under Article 2184 of the Civil Code,24 if the causative factor was the drivers negligence,
the owner of the vehicle who was present is likewise held liable if he could have prevented the
mishap by the exercise of due diligence.

Petitioner failed to show that she exercised the level of diligence required in supervising her driver in
order to prevent the accident. She admitted that de Castro had only been her driver for one year and
she had no knowledge of his driving experience or record of previous accidents. She also admitted
that it was de Castro who maintained the vehicle and would even remind her "to pay the installment
of the car."25
Petitioner also admitted that, at the time of the accident, she did not know what was happening and
only knew they bumped into another vehicle when the driver shouted. She then closed her eyes and
a moment later felt something heavy fall on the roof of the car. When the vehicle stopped, petitioner
left the scene purportedly to ask help from her brother, leaving the other passengers to come to the
aid of her injured driver.

Damages for Loss of Earning Capacity

Next, the Court holds that the CA erred in awarding damages for loss of earning capacity in the
absence of documentary evidence to support the claim.

Damages for loss of earning capacity is in the nature of actual damages,26 which as a rule must
be duly proven27 by documentary evidence, not merely by the self-serving testimony of the widow.

By way of exception, damages for loss of earning capacity may be awarded despite the absence of
documentary evidence when (1) the deceased is self-employed earning less than the minimum
wage under current labor laws, and judicial notice may be taken of the fact that in the deceaseds
line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage
worker earning less than the minimum wage under current labor laws.28

Based solely on Nelfas testimony, the CA determined that the deceased falls within one of these
exceptions. Nelfa testified that her husband was in the business of contracting and manufacturing
grills, fences and gates,29and his earnings "exceed P6,000.00"30 per month prior to his death. She
presented no documentary proof of her claims.

It was error for the CA to have awarded damages for loss of earning capacity based on Nelfas
testimony alone.

First, while it is conceded that the deceased was self-employed, the Court cannot accept that in his
line of work there was no documentary proof available to prove his income from such occupation.
There would have been receipts, job orders, or some form of written contract or agreement between
the deceased and his clients when he is contracted for a job.

Second, and more importantly, decedent was not earning "less than the minimum wage" at the time
of his death.

Wage Order No. RTWPB-XI-07,31 issued by the Regional Tripartite Wages and Productivity Board-XI
of the National Wages and Productivity Commission, under the Department of Labor and
Employment, took effect on 1 November 1999 and mandated the minimum wage rate in Region XI,
including General Santos City, at the time of the accident. Section 1 provides:

SECTION 1. NEW MINIMUM WAGE RATES. Effective November 1, 1999, the new minimum wage
rates in Region XI shall be as follows:

SECTOR/INDUSTRY Davao City Provinces of:

General Santos City Davao del Norte
Island Garden City of Davao del Sur
Samal Davao Oriental
Tagum City Compostela Valley
South Cotabato
 NON-AGRICULTURE 148.00 146.00
AGRICULTURE
- Plantation (i.e. more than 24 138.00 136.00
Hectares or employing at least
20 workers)
- Non-Plantation 117.00 115.00
RETAIL/SERVICE
- Employing more than 10 148.00 146.00
workers
- Employing not more than 10 117.00 115.00
workers

Respondent testified that her husband was earning not less than P6,000.00 per month. On the
1wphi1

other hand, the highest minimum wage rate at the time of the accident, based on Wage Order No.
RTWPB-XI-07, was P148.00. At that rate, the monthly minimum wage would be P3,256.00,32 clearly
an amount less than what respondent testified to as her husbands monthly earnings. The deceased
would not fall within the recognized exceptions.

There is therefore no basis for the CAs computation for Mumars supposed net earning capacity and
the subsequent award of damages due to loss of earning capacity.

WHEREFORE, we GRANT IN PART the petition. We AFFIRM WITH MODIFICATION the Decision
of the Court of Appeals dated 31 July 2009 and Resolution dated 27 July 2010 in CA-G.R. CV No.
00023-MIN. We ORDER petitioner to pay respondent the following:

1. Civil indemnity of P50,000.00;

2. Temperate damages of P25,000.00, in lieu of the award for burial expenses;

3. Moral damages of P50,000.00; and

4. Interest on the total monetary award at the rate of 12% per annum from the finality of this
decision until the award is fully satisfied.

SO ORDERED.
G.R. No. 174089 January 25, 2012

ORIX METRO LEASING AND FINANCE CORPORATION (Formerly CONSOLIDATED ORIX

LEASING AND FINANCE CORPORATION), Petitioner,
vs.
MINORS: DENNIS, MYLENE, MELANIE and MARIKRIS, all surnamed MANGALINAO y DIZON,
MANUEL M. ONG, LORETO LUCILO, SONNY LI, AND ANTONIO DE LOS
SANTOS, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 174266

SONNY LI and ANTONIO DE LOS SANTOS, Petitioners,

vs.
MINORS: DENNIS, MYLENE, MELANIE and MARIKRIS, all surnamed MANGALINAO y DIZON,
LORETO LUCILO, CONSOLIDATED ORIX LEASING AND FINANCE CORPORATION and
MANUEL M. ONG, Respondents.

DECISION

DEL CASTILLO, J.:

The ones at fault are to answer for the effects of vehicular accidents.

A multiple-vehicle collision in North Luzon Expressway (NLEX) resulting in the death of all the
passengers in one vehicle, including the parents and a sibling of the surviving orphaned minor heirs,
compelled the latter to file an action for damages against the registered owners and drivers of the
two 10-wheeler trucks that collided with their parents Nissan Pathfinder (Pathfinder).

Assailed in these consolidated Petitions for Review on Certiorari1 filed by Orix Metro Leasing and
Finance Corporation (Orix)2 and by Sonny Li (Sonny) and Antonio delos Santos (Antonio)3 are the
October 27, 2005 Decision4 and August 17, 2006 Resolution5 of the Court of Appeals (CA) in CA-
G.R. CV No. 70530.

Factual Antecedents

On June 27, 1990, at about 11:15 p.m., three vehicles were traversing the two-lane northbound
NLEX in the vicinity of Barangay Tibag, Pulilan, Bulacan. It was raining that night.

Anacleto Edurese, Jr. (Edurese) was driving a Pathfinder with plate number BBG-334. His Isabela-
bound passengers were the owners of said vehicle, spouses Roberto and Josephine Mangalinao
(Mangalinao spouses), their daughter Marriane, housemaid Rufina Andres and helper Armando
Jebueza (Jebueza). Before them on the outer lane was a Pampanga-bound Fuso 10-wheeler truck
(Fuso), with plate number PAE-160, driven by Loreto Lucilo (Loreto), who was with truck helper
Charlie Palomar (Charlie). The Fuso was then already moving in an erratic and swerving
motion.6 Following behind the Pathfinder was another 10-wheeler truck, an Isuzu Cargo (Isuzu) with
plate number PNS-768 driven by Antonio, who was then with helper Rodolfo Navia (Rodolfo).
Just when the Pathfinder was already cruising along the NLEXs fast lane and about to overtake the
Fuso, the latter suddenly swerved to the left and cut into the Pathfinders lane thereby blocking its
way. As a result, the Pathfinder hit the Fusos left door and left body.7 The impact caused both
vehicles to stop in the middle of the expressway. Almost instantly, the inevitable pileup happened.
Although Antonio stepped on the brakes,8 the Isuzus front crashed9 into the rear of the Pathfinder
leaving it a total wreck.10 Soon after, the Philippine National Construction Corporation (PNCC) patrol
arrived at the scene of the accident and informed the Pulilan police about the vehicular mishap.
Police Investigator SPO2 Emmanuel Banag responded at about 2:15-2:30 a.m. of June 28, 1990
and investigated the incident as gathered from the information and sketch11 provided by the PNCC
patrol as well as from the statements12 provided by the truck helpers Charlie and Rodolfo.

In the meantime, the Mangalinao spouses, the driver Edurese, and the helper Jebueza were
declared dead on the spot while 6-month old Marriane and the housemaid were declared dead on
arrival at a nearby hospital.13The occupants of the trucks escaped serious injuries and death.

As their letters14 to the registered owners of the trucks demanding compensation for the accident
were ignored, the minor children of the Mangalinao spouses, Dennis, Mylene, Melanie and Marikris,
through their legal guardian,15 consequently filed on January 16, 1991 a Complaint 16 for damages
based on quasi-delict, before the Regional Trial Court (RTC) of Makati which was docketed as Civil
Case No. 91-123.17 They impleaded the drivers Loreto and Antonio, as well as the registered owners
of the Fuso and the Isuzu trucks, namely Orix and Sonny,18respectively. The children imputed
recklessness, negligence, and imprudence on the truck drivers for the deaths of their sister and
parents; while they hold Sonny and Orix equally liable for failing to exercise the diligence of a good
father of a family in the selection and supervision of their respective drivers. The children demanded
payment of more than P10.5 million representing damages and attorneys fees.

Orix in its Motion to Dismiss19 interposed that it is not the actual owner of the Fuso truck. As the trial
court denied the motion,20 it then filed its Answer with Compulsory Counterclaim and Cross-
claim.21 Orix reiterated that the children had no cause of action against it because on September 9,
1983, it already sold the Fuso truck to MMO Trucking owned by Manuel Ong (Manuel). 22 The latter
being the alleged owner at the time of the collision, Orix filed a Third Party Complaint 23 against
Manuel, a.k.a. Manuel Tan.

In their Answer with Compulsory Counterclaim and Cross-Claim, 24 Sonny and Antonio attributed fault
for the accident solely on Loretos reckless driving of his truck which suddenly stopped and slid
across the highway. They claimed that Sonny had exercised the expected diligence required of an
employer; that Antonio had been all along driving with care; and, that with the abrupt and
unexpected collision of the vehicles before him and their precarious proximity, he had no way of
preventing his truck from hitting the Pathfinder.

For failing to file any responsive pleading, both Manuel and Loreto were declared in default. 25

Ruling of the Regional Trial Court

After trial, the court a quo issued a Decision26 on February 9, 2001 finding Sonny, Antonio, Loreto
and Orix liable for damages. It likewise ruled in favor of Orix anent its third party complaint, the latter
having sufficiently proven that Manuel of MMO Trucking is the real owner of the Fuso.

The dispositive portion of the RTC Decision states:

Wherefore, premises considered, judgment is hereby rendered in favor of plaintiffs and against the
defendants, ordering the latter to pay plaintiffs, jointly and severally, the following:
 1. P3,077,000.00 as actual damages;

2. P2,000,000.00 as moral damages;

3. P1,000,000.00 as exemplary damages; and

4. P400,000.00 as and for reasonable attorneys fees

5. legal interest at six percent (6%) per annum on the above-stated amounts from the filing of
the complaint on January 16, 1991 until fully paid; and

6. costs of suit and expenses of litigation.

Third party defendant Manuel M. Ong is ordered to indemnify third party plaintiff [Orix] for the
amounts adjudged against the latter in this case.

SO ORDERED. 27

Ratiocinating its finding of recklessness on both truck drivers, the RTC said:

The evidence leaves no doubt that both truck drivers were at fault and should be held liable. Lucilo,
who was driving the Fuso truck, was reckless when he caused the swerving of his vehicle directly on
the lane of the Pathfinder to his left. The Pathfinder had no way to avoid a collision because it was
about to pass the truck when suddenly blocked. On the other hand, the Isuzu truck was practically
tailgating the Pathfinder on the dark slippery highway such that when the Pathfinder collided with the
Fuso truck, it became inevitable for the Isuzu truck to crash into the Pathfinder. So, de los Santos,
the driver of the Isuzu truck was likewise reckless.28

In an attempt to exonerate itself, Orix appealed to the CA29 followed by Sonny and Antonio.30 All of
them challenged the factual findings and conclusions of the court a quo with regard to their
respective liabilities, each pinpointing to the negligence of the other and vice versa. All of them
likewise assailed the amounts the RTC awarded to the minors for lack of basis.

Ruling of the Court of Appeals

On October 27, 2005, the CA rendered its Decision31 affirming the factual findings of the trial court of
reckless driving. It said:

It may be true that it was the Nissan Pathfinder which first hit and bumped and eventually crashed
into the Fuso truck. However, this would not have happened if the truck did not swerve into the lane
of the Nissan Pathfinder. As afore-mentioned [sic], the latter had no way then to avoid a collision
because it was about to overtake the former.

As a motorist, Lucilo [Loreto] should have operated his truck with reasonable caution considering the
width, traffic, grades, crossing, curvatures, visibility and other conditions of the highway and the
conditions of the atmosphere and weather. He should have carefully and cautiously driven his
vehicle so as not to have endangered the property or the safety or rights of other persons. By failing
to drive with reasonable caution, Lucilo is, hence, liable for the resultant vehicle collision.

Neither do [we] find credence in delos Santos claim that he is without liability for the vehicular
collision. We cannot overemphasize the primacy in probative value of physical evidence, that mute
but eloquent manifestation of the truth. An examination of the destroyed front part of the Isuzu truck,
as shown by photographic evidence, clearly indicates strong bumping of the rear of the Pathfinder.
The photographs belie delos Santos claim that he was driving at a safe speed and even slowed
down when he noticed the [erratic] traveling of the Fuso truck. In fact, by his own admission, it was a
matter of seconds before his Isuzu truck hit the Nissan Pathfinder - a clear indication that he did not
actually [slow] down considering the weather and road condition at that time. Had he been actually
prudent in driving, the impact on the Nissan Pathfinder would not have been that great or he might
have even taken evasive action to avoid hitting it. Sadly, that was not the case as shown by the
evidence on record.32

The CA also ruled that Orix, as the registered owner of the Fuso, is considered in the eyes of the law
and of third persons responsible for the deaths of the passengers of the Pathfinder, regardless of the
lack of an employer-employee relationship between it and the driver Loreto.

The CA modified the award of damages as follows:

1. P150,000.00 as indemnity for the death of Spouses Roberto and Josephine Mangalinao and
their daughter Marianne Mangalinao;

2. P2,000,000.00 for loss of earning capacity;

3. P64,200.00 for funeral expenses;

4. P1,000,000.00 as moral damages;

5. P1,000,000.00 as exemplary damages;

6. P400,000.00 as attorneys fees.

If the amounts adjudged remain unpaid upon the finality of this decision, the interest rate shall be
twelve percent (12%) per annum computed from the time the judgment bec[a]me final and executory
until fully satisfied.

The six percent (6%) interest per annum from the filing of the complaint indicated in the assailed
decision is DELETED.

SO ORDERED.33

Orix and Sonny joined by Antonio, filed their separate Motions for Reconsideration 34 but same were
denied in a Resolution35 dated August 17, 2006.

Hence, these consolidated petitions.

Petitioners Respective Arguments

Orixs contentions in its petition may be summarized as follows:

1. It is not the owner and operator of the Fuso at the time of the collision and should not be held
responsible for compensating the minor children of the Mangalinaos;
 2. The Fusos swerving towards the inner lane where the Pathfinder is cruising is attributable
not to the alleged negligence of Loreto but to adverse driving conditions, i.e., the stormy
weather and slippery road;

3. The CA has no reliable evidentiary basis for computing loss of earning capacity as the
Balance Sheet and Income Statement of Roberto Mangalinao, as certified by accountant
Wilfredo de Jesus for the year 1989, is hearsay evidence; and

4. The award of attorneys fees sustained by the CA is not justified and is exorbitant.

On the other hand, Sonny and Antonio argue in their petition that:

1. the CA erred in affirming the trial courts erroneous finding that the Isuzu was tailgating,
which is contradicted by the material evidence on record;

2. the proximate cause of the death of the victims is Loretos gross negligence. Antonio should
have been accorded the benefit of the emergency rule wherein he was immediately
confronted with a sudden danger and had no time to think of how to avoid it;

3. the CA should not have awarded damages and attorneys fees because of the total absence
of evidence to substantiate them.

In short, petitioners want us to review the finding of negligence by the CA of both truck drivers, the
solidary liability of Orix as the registered owner of the Fuso, and the propriety of the damages the CA
awarded in favor of the Mangalinao children.

Our Ruling

The finding of negligence of petitioners as found by the lower courts is binding

Negligence and proximate cause are factual issues.36 Settled is the rule that this Court is not a trier
of facts, and the concurrence of the findings of fact of the courts below are conclusive. "A petition for
review on certiorari under Rule 45 of the Rules of Court should include only questions of law -
questions of fact are not reviewable"37 save for several exceptions,38 two of which petitioners
invoke, i.e., that the finding is grounded on speculations, surmises, and conjectures, and that the
judgment is based on a misapprehension of facts.

There is no compelling reason to disturb the lower courts factual conclusions.

With regard to the Fuso, we note the statement given by the helper Charlie before the Pulilan police
immediately after the incident:

T: Pakisalaysay mo nga ang mga pangyayari?

S: Nuon nga pong oras at petsang nabanggit habang ako ay sakay ng isang truck patungo
Pampanga at sa lugar ng pinangyarihan ay namireno ang aking driver dahil sa madulas at nagawi
kami sa gawing kaliwa (inner lane) na isang mabilis na pajero (Nissan 4x4) ang bumangga sa
gawing unahan hanggang sa tagiliran gawing kaliwa, na ang nasabing pajero ay papalusot
(overtake) na pagkatapos nuon ay may isa (1) pang truck na bumangga sa hulihan. 39
Based on the helpers statement, the Fuso had lost control, skidded to the left and blocked the way
of the Pathfinder, which was about to overtake. The Pathfinder had absolutely no chance to avoid
the truck. Instead of slowing down and moving towards the shoulder in the highway if it really
needed to stop, it was very negligent of Loreto to abruptly hit the brake in a major highway wherein
vehicles are highly likely to be at his rear. He opened himself up to a major danger and naturally, a
collision was imminent.

On the other hand, the parties for the Isuzu contend that the CA erred in ruling that the truck was
moving at a fast speed and was tailgating. They assert that they be absolved because the fault lay
entirely on the Fuso, which had been zigzagging along the highway. They aver that when the Fuso
and the Pathfinder collided in the middle of the highway with the Fuso blocking both lanes of the
northbound stretch, there was no room left for driver Antonio to maneuver to avoid them, and that
the Pathfinder was hit as a natural consequence.

The Isuzus driver, Antonio, claims that he and the two vehicles before him were travelling at the right
lane of the highway, and on his part, he was travelling at a speed of 50-60 kph and that he was three
cars away from the Pathfinder. When the Pathfinder hit the left side of the Fuso, he stepped on the
brake but still struck the Pathfinder.40 He further narrated:

CROSS-EXAMINATION BY ATTY. DOMINGO:

Q And what was this if you noticed anything before the incident happened?

A The Fu[s]o Cargo Truck was swerving from left to right, Sir.

Q How long before this collision did you notice this kind of travelling on the part of the Fu[s]o
Cargo Truck?

A About 15 to 20 minutes, Sir.

Q When you noticed this, what if anything, did you do?

A I slow[ed] down, Sir.

Q When you said you slow[ed] down, at what speed do you mean you were travelling?

A More or less 50 kph., Sir.

Q So prior to that, you were travelling faster than 50 to 60 kph. Is that correct?

A Yes, Sir.

Q And [in spite] of that, you testified that you hit the Nissan Pathfinder after it hit the Fu[s]o
Cargo Truck?

A Despite the fact that it slow[ed] down, I also hit the Nissan Pathfinder when I skidded
because of the slippery condition of the road at that time.

Q And it was precisely this slippery condition of the road that you are talking about that
caused you to hit the Nissan Pathfinder?
A Yes, Sir.41

xxxx

Q I will just go back to the incident on the collision. At what particular point in the vehicle you
were driving hit the Nissan Pathfinder? At what portion of the Nissan Pathfinder was it hit by
the vehicle that you were driving?

A At the rear portion of the Nissan Pathfinder, Sir.

Q What portion, the right o[r] the left portion of the rear?

A I hit the right side of the rear portion of the Nissan Pathfinder, Sir.

Q And what happened to the Nissan Pathfinder after you hit it on the right rear portion?

A The back portion of the Nissan Pathfinder was damaged, Sir.

Q And what was the extent of the [damage] on the back portion?

A The rear portion was extensively damaged, Sir.

Q After you hit the rear portion of the Nissan Pathfinder, did your vehicle hit any other portion
of that Nissan Pathfinder?

A None, Sir.

Q After you hit the Nissan Pathfinder at the rear, in what manner did it move, if it moved?

A After I hit the rear portion of the Nissan Pathfinder, it did not move anymore, but I also hit
the right side of the Fu[s]o Cargo Truck, Sir.

COURT:

For a while, what part of the Fu[s]o Cargo Truck did you hit?

WITNESS:

A I hit the sidings of the Fu[s]o Cargo Truck, Your Honor.42

xxxx

CROSS-EXAMINATION BY ATTY. GUERRERO:

Q When the Pathfinder hit the Fu[s]o Truck, were you still behind the Pathfinder?

A Yes, Sir.

Q [Were you] still in the same lane that you were travelling 30 minutes before the impact?
 A Yes, Sir.

Q You did not move from your lane [in spite] of the collision between the Pathfinder and the
Fu[s]o Truck?

A No, Sir. I did not move. I stayed on my lane.43

xxxx

REDIRECT EXAMINATION BY ATTY. NATIVIDAD:

Q You stated a while ago, during the cross-examination by counsel that the moment you saw
the Nissan Pathfinder [smash] against the side of the Fu[s]o, you did not move your Truck
anymore. Why did you not swerve to the left or to the right?

A Because there was an [oncoming] bus signalling [sic] to me, Sir.

Q How about to the right, why did you not abruptly maneuver your truck to the right to avoid
hitting the Nissan Pathfinder?

A I cannot move my truck to the right side because my truck will not pass thorugh [sic] the
lane because it is very narrow and if I will do that, I might fall on the other side of the highway
where houses were standing.

Q You said that you were unable to pass through the right side of the road. Why [were you]
not able to pass [through] to the right side[?] You said it was too narrow. Why is it too
narrow?

A Because the Fu[s]o Truck cut across the highway and my truck cannot pass through that
space. It is only in the fast lane where I can pass through, Sir.

Q All the while this bumping or the impact between the Nissan Pathfinder and the Fu[s]o
Truck and your bumping against the Nissan Pathfinder happened in a few seconds only. Is
that correct?

A Yes, Sir.44

The exact positions of the vehicles upon a perusal of the sketch45 (drawn only after the Fuso was
moved to the shoulder to decongest traffic) would show that both the Pathfinder and the Isuzu rested
on the highway diagonally. The left part of the former occupied the right portion of the inner lane
while the rest of its body was already on the outer lane, indicating that it was about to change
lane, i.e., to the inner lane to overtake. Meanwhile, the point of collision between the Pathfinder and
the Isuzu occurred on the right portion of the outer lane, with the Isuzus front part ramming the
Pathfinders rear, while the rest of the 10-wheelers body lay on the shoulder of the road.

We are not convinced that the Isuzu is without fault. As correctly found by the CA, the smashed front
of the Isuzu strongly indicates the strong impact of the ramming of the rear of the Pathfinder that
pinned its passengers. Furthermore, Antonio admitted that despite stepping on the brakes, the Isuzu
still suddenly smashed into the rear of the Pathfinder causing extensive damage to it, as well as
hitting the right side of the Fuso. These militate against Antonios claim that he was driving at a safe
speed, that he had slowed down, and that he was three cars away. Clearly, the Isuzu was not within
the safe stopping distance to avoid the Pathfinder in case of emergency. Thus, the Emergency Rule
invoked by petitioners will not apply. Such principle states:

[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. 46

Considering the wet and slippery condition of the road that night, Antonio should have been prudent
to reduce his speed and increase his distance from the Pathfinder. Had he done so, it would be
improbable for him to have hit the vehicle in front of him or if he really could not avoid hitting it,
prevent such extensive wreck to the vehicle in front. With the glaring evidence, he obviously failed to
exercise proper care in his driving.

Orix as the operator on record of the

Fuso truck is liable to the heirs of the victims of the mishap

Orix cannot point fingers at the alleged real owner to exculpate itself from vicarious liability under
Article 218047 of the Civil Code. Regardless of whoever Orix claims to be the actual owner of the
Fuso by reason of a contract of sale, it is nevertheless primarily liable for the damages or injury the
truck registered under it have caused. It has already been explained:

Were a registered owner allowed to evade responsibility by proving who the supposed transferee or
owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility
and transfer the same to an indefinite person, or to one who possesses no property with which to
respond financially for the damage or injury done. A victim of recklessness on the public highways is
usually without means to discover or identify the person actually causing the injury or damage. He
has no means other than by a recourse to the registration in the Motor Vehicles Office to determine
who is the owner. The protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership. x x x 48

Besides, the registered owners have a right to be indemnified by the real or actual owner of the
amount that they may be required to pay as damage for the injury caused to the plaintiff, 49 which Orix
rightfully acknowledged by filing a third-party complaint against the owner of the Fuso, Manuel.

The heirs deserve to receive the damages awarded by the CA, with modifications as to their
amounts

With regard to actual damages, one is entitled to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved.50 Anent the funeral and burial expenses, the receipts
issued by San Roque Funeral Homes51 in the amount of P57,000.00 and by St. Peter Memorial
Homes52 in the amount of P50,000.00, as supported by the testimonies of the witnesses who
secured these documents, prove payment by the respondent heirs of the funeral costs not only of
their deceased relatives but of the latters helpers as well, and thus we find it proper to award the
total amount of P107,000.00.

In addition to P150,000.00 indemnity for the death of the spouses Mangalinao and their daughter
Marianne as a result of quasi-delict, actual damages shall likewise include the loss of the earning
capacity of the deceased.53 In this case, the CA awarded P2,000,000.00, which it found reasonable
after considering the income statement of Roberto Mangalinao as of the year 1989. 54 Petitioners
challenge this for lack of basis, arguing that the CA failed to consider the formula provided by this
Court,55 and that the income statement was not even testified to by the accountant who prepared
such document.

In its Decision, the CA, while recognizing that there is a formula provided for computing the loss of
the earning capacity of the victims, itself acknowledged that such formula cannot be used to arrive at
the net earning capacity using the 1989 income statement alone, more so when such was not
authenticated by the proper party. If the net income stated therein was used in the formula, the CA
would have awarded the Mangalinao heirs more than P18,000,000.00. It did not, however, use the
income statement as its sole gauge.

While the net income had not been sufficiently established, the Court recognizes the fact that the
Mangalinao heirs had suffered loss deserving of compensation. What the CA awarded is in actuality
a form of temperate damages. Such form of damages under Article 222456 of the Civil Code is given
in the absence of competent proof on the actual damages suffered.57 "In the past, we awarded
temperate damages in lieu of actual damages for loss of earning capacity where earning capacity is
plainly established but no evidence was presented to support the allegation of the injured partys
actual income."58 In this case, Roberto Mangalinao, the breadwinner of the family, was a
businessman engaged in buying and selling palay and agricultural supplies that required high capital
in its operations and was only 37 at the time of his death. Moreover, the Pathfinder which the
Mangalinaos own, became a total wreck. Under the circumstances, we find the award
of P500,000.00 as temperate damages as reasonable.59 lawphi1

Moral damages,60 it must be stressed, are not intended to enrich plaintiff at the expense of the
defendant. They are awarded to enable the injured party to obtain means, diversions, or
amusements that will serve to alleviate the moral suffering he/she had undergone due to the other
partys culpable action and must, perforce, be proportional to the suffering inflicted. 61 While the
children did not testify before the court, undoubtedly, they suffered the pain and ordeal of losing both
their parents and sibling and hence, the award of moral damages is justified. However, the amount
must be reduced to P500,000.00.62

"In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence."63 It is given by way of example or correction for the public good. 64 Before the court may
consider such award, the plaintiff must show his entitlement first to moral, temperate, or
compensatory damages,65 which the respondents have. In the case at bench, the reckless driving of
the two trucks involved caused the death of the victims. However, we shall reduce the amount of
exemplary damages to P200,000.00.66

Lastly, because exemplary damages are awarded and that we find it equitable that expenses of
litigation should be recovered,67 we find it sufficient and reasonable enough to grant attorneys fees
of P50,000.00.68

Parenthetically, the Manifestation and Motion with notice of change of address by counsel for
respondents; and the transmittal of CAs rollo consisting of 256 pages with two attached Supreme
Court petitions, one folder of original records and one folder of transcript of stenographic notes, by
the Judicial Records Division, CA, are noted.

WHEREFORE, the instant petitions are PARTIALLY GRANTED. The Decision of the Court of
Appeals in CA-G.R. CV No. 70530 is AFFIRMED with MODIFICATIONS. The award of actual
damages is hereby INCREASED to P107,000.00. The award of moral damages
is REDUCED to P500,000.00, the award of temperate damages for loss of earning capacity is
likewise REDUCED to P500,000.00, and the award of exemplary damages and of attorneys fees
are REDUCED to P200,000.00 and P50,000.00, respectively. All other awards of the Court of
Appeals are AFFIRMED.

SO ORDERED.
G.R. No. 174156 June 20, 2012

FILCAR TRANSPORT SERVICES, Petitioner,

vs.
JOSE A. ESPINAS, Respondent.

DECISION

BRION, J.:

We resolve the present petition for review on certiorari1 filed by petitioner Filcar Transport Services
(Filcar), challenging the decision2 and the resolution3 of the Court of Appeals (CA) in CA-G.R. SP No.
86603.

The facts of the case, gathered from the records, are briefly summarized below.

On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car along
Leon Guinto Street in Manila. Upon reaching the intersection of Leon Guinto and President Quirino
Streets, Espinas stopped his car. When the signal light turned green, he proceeded to cross the
intersection. He was already in the middle of the intersection when another car, traversing President
Quirino Street and going to Roxas Boulevard, suddenly hit and bumped his car. As a result of the
impact, Espinas car turned clockwise. The other car escaped from the scene of the incident, but
Espinas was able to get its plate number.

After verifying with the Land Transportation Office, Espinas learned that the owner of the other car,
with plate number UCF-545, is Filcar.

Espinas sent several letters to Filcar and to its President and General Manager Carmen Flor,
demanding payment for the damages sustained by his car. On May 31, 2001, Espinas filed a
complaint for damages against Filcar and Carmen Flor before the Metropolitan Trial Court (MeTC) of
Manila, and the case was raffled to Branch 13. In the complaint, Espinas demanded that Filcar and
Carmen Flor pay the amount of P97,910.00, representing actual damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped Espinas car, the car
was assigned to its Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar
further stated that when the incident happened, the car was being driven by Atty. Flors personal
driver, Timoteo Floresca.

Atty. Flor, for his part, alleged that when the incident occurred, he was attending a birthday
celebration at a nearby hotel, and it was only later that night when he noticed a small dent on and
the cracked signal light of the car. On seeing the dent and the crack, Atty. Flor allegedly asked
Floresca what happened, and the driver replied that it was a result of a "hit and run" while the car
was parked in front of Bogota on Pedro Gil Avenue, Manila.

Filcar denied any liability to Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen Flor both
said that they always exercised the due diligence required of a good father of a family in leasing or
assigning their vehicles to third parties.
The MeTC Decision

The MeTC, in its decision dated January 20, 2004,4 ruled in favor of Espinas, and ordered Filcar and
Carmen Flor, jointly and severally, to pay Espinas P97,910.00 as actual damages, representing the
cost of repair, with interest at 6% per annum from the date the complaint was filed; P50,000.00 as
moral damages; P20,000.00 as exemplary damages; and P20,000.00 as attorneys fees. The MeTC
ruled that Filcar, as the registered owner of the vehicle, is primarily responsible for damages
resulting from the vehicles operation.

The RTC Decision

The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate jurisdiction,
affirmed the MeTC decision.5 The RTC ruled that Filcar failed to prove that Floresca was not its
employee as no proof was adduced that Floresca was personally hired by Atty. Flor. The RTC
agreed with the MeTC that the registered owner of a vehicle is directly and primarily liable for the
damages sustained by third persons as a consequence of the negligent or careless operation of a
vehicle registered in its name. The RTC added that the victim of recklessness on the public
highways is without means to discover or identify the person actually causing the injury or damage.
Thus, the only recourse is to determine the owner, through the vehicles registration, and to hold him
responsible for the damages.

The CA Decision

On appeal, the CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC decision
by ruling that Carmen Flor, President and General Manager of Filcar, is not personally liable to
Espinas. The appellate court pointed out that, subject to recognized exceptions, the liability of a
corporation is not the liability of its corporate officers because a corporate entity subject to well-
recognized exceptions has a separate and distinct personality from its officers and shareholders.
Since the circumstances in the case at bar do not fall under the exceptions recognized by law, the
CA concluded that the liability for damages cannot attach to Carmen Flor.

The CA, however, affirmed the liability of Filcar to pay Espinas damages. According to the CA, even
assuming that there had been no employer-employee relationship between Filcar and the driver of
the vehicle, Floresca, the former can be held liable under the registered owner rule.

The CA relied on the rule that the registered owner of a vehicle is directly and primarily responsible
to the public and to third persons while the vehicle is being operated. Citing Erezo, et al. v.
Jepte,6 the CA said that the rationale behind the rule is to avoid circumstances where vehicles
running on public highways cause accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of identification. In Erezo, the
Court said that the main aim of motor vehicle registration is to identify the owner, so that if a vehicle
causes damage or injury to pedestrians or other vehicles, responsibility can be traced to a definite
individual and that individual is the registered owner of the vehicle.7

The CA did not accept Filcars argument that it cannot be held liable for damages because the driver
of the vehicle was not its employee. In so ruling, the CA cited the case of Villanueva v.
Domingo8 where the Court said that the question of whether the driver was authorized by the actual
owner is irrelevant in determining the primary and direct responsibility of the registered owner of a
vehicle for accidents, injuries and deaths caused by the operation of his vehicle.
Filcar filed a motion for reconsideration which the CA denied in its Resolution dated July 6, 2006.

Hence, the present petition.

The Issue

Simply stated, the issue for the consideration of this Court is: whether Filcar, as registered owner of
the motor vehicle which figured in an accident, may be held liable for the damages caused to
Espinas.

Our Ruling

The petition is without merit.

Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus vicariously
liable under Article 2176 in relation with Article 2180 of the Civil Code

It is undisputed that Filcar is the registered owner of the motor vehicle which hit and caused damage
to Espinas car; and it is on the basis of this fact that we hold Filcar primarily and directly liable to
Espinas for damages.

As a general rule, one is only responsible for his own act or omission. 9 Thus, a person will generally
be held liable only for the torts committed by himself and not by another. This general rule is laid
down in Article 2176 of the Civil Code, which provides to wit:

Article 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.

Based on the above-cited article, the obligation to indemnify another for damage caused by ones
act or omission is imposed upon the tortfeasor himself, i.e., the person who committed the negligent
act or omission. The law, however, provides for exceptions when it makes certain persons liable for
the act or omission of another.

One exception is an employer who is made vicariously liable for the tort committed by his employee.
Article 2180 of the Civil Code states:

Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.

xxxx

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.

xxxx
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.

Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated on an
employees act or omission may be instituted against the employer who is held liable for the
negligent act or omission committed by his employee.

Although the employer is not the actual tortfeasor, the law makes him vicariously liable on the basis
of the civil law principle of pater familias for failure to exercise due care and vigilance over the acts of
ones subordinates to prevent damage to another.10 In the last paragraph of Article 2180 of the Civil
Code, the employer may invoke the defense that he observed all the diligence of a good father of a
family to prevent damage.

As its core defense, Filcar contends that Article 2176, in relation with Article 2180, of the Civil Code
is inapplicable because it presupposes the existence of an employer-employee relationship.
According to Filcar, it cannot be held liable under the subject provisions because the driver of its
vehicle at the time of the accident, Floresca, is not its employee but that of its Corporate Secretary,
Atty. Flor.

We cannot agree. It is well settled that in case of motor vehicle mishaps, the registered owner of the
motor vehicle is considered as the employer of the tortfeasor-driver, and is made primarily liable for
the tort committed by the latter under Article 2176, in relation with Article 2180, of the Civil Code.

In Equitable Leasing Corporation v. Suyom,11 we ruled that in so far as third persons are concerned,
the registered owner of the motor vehicle is the employer of the negligent driver, and the actual
employer is considered merely as an agent of such owner.

In that case, a tractor registered in the name of Equitable Leasing Corporation (Equitable) figured in
an accident, killing and seriously injuring several persons. As part of its defense, Equitable claimed
that the tractor was initially leased to Mr. Edwin Lim under a Lease Agreement, which agreement has
been overtaken by a Deed of Sale entered into by Equitable and Ecatine Corporation (Ecatine).
Equitable argued that it cannot be held liable for damages because the tractor had already been sold
to Ecatine at the time of the accident and the negligent driver was not its employee but of Ecatine.

In upholding the liability of Equitable, as registered owner of the tractor, this Court said that
"regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as
the public and third persons are concerned; consequently, it is directly and primarily responsible for
the consequences of its operation."12 The Court further stated that "[i]n contemplation of law, the
owner/operator of record is the employer of the driver, the actual operator and employer being
considered as merely its agent."13 Thus, Equitable, as the registered owner of the tractor, was
considered under the law on quasi delict to be the employer of the driver, Raul Tutor; Ecatine, Tutors
actual employer, was deemed merely as an agent of Equitable.

Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle primarily
and directly liable for damages under Article 2176, in relation with Article 2180, of the Civil Code, the
existence of an employer-employee relationship, as it is understood in labor relations law, is not
required. It is sufficient to establish that Filcar is the registered owner of the motor vehicle causing
damage in order that it may be held vicariously liable under Article 2180 of the Civil Code.
Rationale for holding the registered owner vicariously liable

The rationale for the rule that a registered owner is vicariously liable for damages caused by the
operation of his motor vehicle is explained by the principle behind motor vehicle registration, which
has been discussed by this Court in Erezo, and cited by the CA in its decision:

The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or
that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can
be fixed on a definite individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of identification. It is to
forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle
registration is primarily ordained, in the interest of the determination of persons responsible for
damages or injuries caused on public highways. [emphasis ours]

Thus, whether there is an employer-employee relationship between the registered owner and the
driver is irrelevant in determining the liability of the registered owner who the law holds primarily and
directly responsible for any accident, injury or death caused by the operation of the vehicle in the
streets and highways.

As explained by this Court in Erezo, the general public policy involved in motor vehicle registration is
the protection of innocent third persons who may have no means of identifying public road
malefactors and, therefore, would find it difficult if not impossible to seek redress for damages
they may sustain in accidents resulting in deaths, injuries and other damages; by fixing the person
held primarily and directly liable for the damages sustained by victims of road mishaps, the law
ensures that relief will always be available to them.

To identify the person primarily and directly responsible for the damages would also prevent a
situation where a registered owner of a motor vehicle can easily escape liability by passing on the
blame to another who may have no means to answer for the damages caused, thereby defeating the
claims of victims of road accidents. We take note that some motor vehicles running on our roads are
driven not by their registered owners, but by employed drivers who, in most instances, do not have
the financial means to pay for the damages caused in case of accidents.

These same principles apply by analogy to the case at bar. Filcar should not be permitted to evade
its liability for damages by conveniently passing on the blame to another party; in this case, its
Corporate Secretary, Atty. Flor and his alleged driver, Floresca. Following our reasoning in Equitable,
the agreement between Filcar and Atty. Flor to assign the motor vehicle to the latter does not bind
Espinas who was not a party to and has no knowledge of the agreement, and whose only recourse
is to the motor vehicle registration.

Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the
employee acts beyond the scope of his assigned task or that it exercised the due diligence of a good
father of a family to prevent damage - because the motor vehicle registration law, to a certain extent,
modified Article 2180 of the Civil Code by making these defenses unavailable to the registered
owner of the motor vehicle. Thus, for as long as Filcar is the registered owner of the car involved in
1awp++i1

the vehicular accident, it could not escape primary liability for the damages caused to Espinas.
The public interest involved in this case must not be underestimated. Road safety is one of the most
common problems that must be addressed in this country. We are not unaware of news of road
accidents involving reckless drivers victimizing our citizens. Just recently, such pervasive
recklessness among most drivers took the life of a professor of our state university.14 What is most
disturbing is that our existing laws do not seem to deter these road malefactors from committing acts
of recklessness.

We understand that the solution to the problem does not stop with legislation. An effective
administration and enforcement of the laws must be ensured to reinforce discipline among drivers
and to remind owners of motor vehicles to exercise due diligence and vigilance over the acts of their
drivers to prevent damage to others.

Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is irrelevant in
arriving at the conclusion that Filcar is primarily and directly liable for the damages sustained by
Espinas. While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain
any provision on the liability of registered owners in case of motor vehicle mishaps, Article 2176, in
relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as registered owner, to
answer for the damages caused to Espinas car. This interpretation is consistent with the strong
public policy of maintaining road safety, thereby reinforcing the aim of the State to promote the
responsible operation of motor vehicles by its citizens.

This does not mean, however, that Filcar is left without any recourse against the actual employer of
the driver and the driver himself. Under the civil law principle of unjust enrichment, the registered
owner of the motor vehicle has a right to be indemnified by the actual employer of the driver of the
amount that he may be required to pay as damages for the injury caused to another.

The set-up may be inconvenient for the registered owner of the motor vehicle, but the inconvenience
cannot outweigh the more important public policy being advanced by the law in this case which is
the protection of innocent persons who may be victims of reckless drivers and irresponsible motor
vehicle owners.

WHEREFORE, the petition is DENIED. The decision dated February 16, 2006 and the resolution
dated July 6, 2006 of the Court of Appeals are AFFIRMED. Costs against petitioner Filcar Transport
Services.

SO ORDERED.
G.R. No. 173870 April 25, 2012

OSCAR DEL CARMEN, JR., Petitioner,

vs.
GERONIMO BACOY, Guardian and representing the children, namely: MARY MARJORIE B.
MONSALUD, ERIC B. MONSALUD, METZIE ANN B. MONSALUD, KAREEN B. MONSALUD,
LEONARDO B. MONSALUD, JR., and CRISTINA B. MONSALUD, Respondents.

DECISION

DEL CASTILLO, J.:

In this Petition for Review on Certiorari,1 the registered owner of a motor vehicle challenges the
Decision2 dated July 11, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67764 which held him
liable for damages to the heirs of the victims who were run over by the said vehicle.

Factual Antecedents

At dawn on New Years Day of 1993, Emilia Bacoy Monsalud (Emilia), along with her spouse
Leonardo Monsalud, Sr. and their daughter Glenda Monsalud, were on their way home from a
Christmas party they attended in Poblacion, Sominot, Zamboanga Del Sur. Upon reaching Purok
Paglaom in Sominot, they were run over by a Fuso passenger jeep bearing plate number UV-PEK-
600 that was being driven by Allan Maglasang (Allan). The jeep was registered in the name of
petitioner Oscar del Carmen, Jr. (Oscar Jr.) and used as a public utility vehicle plying the Molave,
Zamboanga del Sur to Sominot, Zamboanga del Sur and vice versa route.

Because of the unfortunate incident, Criminal Case No. 93-103473 for Reckless Imprudence
Resulting in Multiple Homicide was filed against Allan before the Regional Trial Court of Molave,
Zamboanga del Sur, Branch 23. In a Decision dated March 13, 1997, said court declared Allan guilty
beyond reasonable doubt of the crime charged.4

During the pendency of said criminal case, Emilias father, Geronimo Bacoy (Geronimo), in behalf of
the six minor children5 of the Monsaluds, filed Civil Case No. 96-20219,6 an independent civil action
for damages based on culpa aquiliana. Aside from Allan, also impleaded therein were his alleged
employers, namely, the spouses Oscar del Carmen, Sr. (Oscar Sr.) and Norma del Carmen
(Spouses del Carmen) and the registered owner of the jeep, their son Oscar Jr. Geronimo prayed for
the reimbursement of funeral and burial expenses, as well as the award of attorneys fees, moral and
exemplary damages resulting from the death of the three victims, and loss of net income earnings of
Emilia who was employed as a public school teacher at the time of her death. 7

Defendants refused to assume civil liability for the victims deaths. Oscar Sr. averred that the
Monsaluds have no cause of action against them because he and his wife do not own the jeep and
that they were never the employers of Allan.8 For his part, Oscar Jr. claimed to be a victim himself.
He alleged that Allan and his friends9stole his jeep while it was parked beside his drivers rented
house to take it for a joyride. Both he and a vehicle mechanic testified that the subject jeep can
easily be started by mere pushing sans the ignition key. The vehicles engine shall then run but
without any headlights on.10 And implying that this was the manner by which the vehicle was illegally
taken, Oscar Jr. submitted as part of his documentary evidence the statements 11 of Jemar Alarcon
(Jemar) and Benjamin Andujar (Benjamin). The two, who were with Allan in the jeep at the time of
the accident, declared before the investigating officer that during said time, the vehicles headlights
were off. Because of this allegation, Oscar Jr. even filed before the same trial court a carnapping
case against Allan and his companions docketed as Criminal Case No. 93-10380. 12 The case was,
however, dismissed for insufficiency of evidence.13

Oscar Jr. clarified that Allan was his jeep conductor and that it was the latters brother, Rodrigo
Maglasang (Rodrigo), who was employed as the driver.14 In any event, Allans employment as
conductor was already severed before the mishap occurred on January 1, 1993 since he served as
such conductor only from the first week of December until December 14, 1992. 15 In support of this,
Oscar Jr. presented as witnesses Faustino Sismundo (Faustino) and Cresencio "Junior" Baobao
(Cresencio). Faustino, a resident of Molave, testified that when he boarded the jeep heading to
Sominot on December 31, 1992, it was Cresencio who was the conductor. He also believed that
Crecencio started to work as such at around December 15 or 16, 1992. 16 Cresencio, for his part,
testified that he worked as Oscar Jr.s conductor from December 15, 1992 to January 1, 1993 and
that Rodrigo was his driver.17 He stated that upon learning that the jeep figured in an accident, he
never bothered to verify the news. Instead, he went to Midsalip to work there as a conductor for his
brothers vehicle, thereby terminating his employment with Oscar Jr.18

Oscar Jr. likewise testified that it was routinary that after a days trip, the jeep would be parked
beside Rodrigos rented house19 for the next early-morning operation.

Geronimo, on the other hand, averred that Allan was still Oscar Jr.s employee subsequent to
December 14, 1992. To prove this, he presented as witnesses Saturnino Jumawan (Saturnino) and
Jose Navarro (Jose). Saturnino testified that he would pay his fare to Allan every time he would
board the jeep in going to Molave and that the last time he rode the subject vehicle was on
December 23, 1992. He also claimed that immediately before January 1, 1993, Rodrigo and Allan
used to park the jeep at the yard of his house.20 Jose likewise attested that Allan was still the jeep
conductor during the said period as he had ridden the jeep many times in mid-December of 1992. 21

Ruling of the Regional Trial Court

In its Decision22 dated April 17, 2000, the RTC exculpated the spouses del Carmen from civil liability
for insufficiency of evidence. However, their son Oscar Jr. was held civilly liable in a subsidiary
capacity. The RTC anchored its ruling primarily on the principle of res ipsa loquitur, i.e., that a
presumption of negligence on the part of a defendant may be inferred if the thing that caused an
injury is shown to be under his management and that in the ordinary course of things, the accident
would not have happened had there been an exercise of care. Said court ratiocinated that Oscar Jr.,
as the registered owner of the jeep, managed and controlled the same through his driver Rodrigo, in
whose house the jeep was usually parked. Since both Oscar Jr. and Rodrigo were well aware that
the jeep could easily be started by a mere push even without the ignition key, they should have
taken the necessary precaution to prevent the vehicle from being used by unauthorized persons like
Allan. The RTC thus concluded that such lack of proper precaution, due care and foresight constitute
negligence making the registered owner of the vehicle civilly liable for the damage caused by the
same.

The RTC disposed of the case as follows:

Wherefore, judgment is hereby entered in favor of the plaintiffs and against the defendants Allan
Maglasang and Oscar del Carmen, Jr. ordering
 1. Defendant ALLAN MAGLASANG to pay the plaintiffs, and in case of insolvency, for
defendant OSCAR DEL CARMEN, JR., to pay the plaintiffs, the following sums:

a. P73,112.00 for their funeral and burial expenses;

b. P1,000,000.00 moral damages for the death of the late Emilia Monsalud;

c. P250,000.00 moral damages for the death of the late Leonardo Monsalud, Sr.;

d. P250,000.00 moral damages for the death of the late Glenda Monsalud;

e. P40, 000.00, for exemplary damages;

f. P20,000.00 attorneys fees; and

g. The cost of this proceedings.

2. The dismissal of the complaint as against the spouses OSCAR DEL CARMEN SR. and
NORMA DEL CARMEN.

SO ORDERED.23

Oscar Jr. moved for reconsideration24 contending that the provision on vicarious liability of the
employer under Article 2180 of the Civil Code25 requires the existence of employer-employee
relationship and that the employee was acting within the scope of his employment when the tort
occurred. He stressed that even assuming that Allan was his employee, he was hired not as a driver
but as a conductor. Hence, Allan acted beyond the scope of his employment when he drove the
jeep.

Oscar Jr. also stressed that the fact that the jeep was running without its headlights on at the time of
the accident indubitably shows that the same was stolen. He further alleged that the jeep could not
have been taken by only one person. As Rodrigo declared in Criminal Case No. 93-10380
(carnapping case), based on his experience, the jeep cannot be pushed by only one person but by
at least five people in order for it to start. This was due to the vehicles mass and the deep canal
which separates the parking area from the curved road that was obstructed by a house. 26

Setting aside its earlier decision, the lower court in its Order27 dated June 21, 2000 granted the
Motion for Reconsideration and absolved Oscar Jr. from civil liability. It cited Article 103 of the
Revised Penal Code which provides that for an employer to be subsidiarily liable for the criminal acts
of his employee, the latter should have committed the same in the discharge of his duties. The court
agreed with Oscar Jr. that this condition is wanting in Allans case as he was not acting in the
discharge of his duties as a conductor when he drove the jeep.

The court also declared the doctrine of res ipsa loquitur inapplicable since the property owner cannot
be made responsible for the damages caused by his property by reason of the criminal acts of
another. It then adjudged that only Allan should bear the consequences of his criminal acts. Thus:

WHEREFORE, premises considered, the MOTION FOR

RECONSIDERATION is granted, and defendant OSCAR DEL CARMEN JR. is hereby absolved
from all civil liability arising from the felonious acts of convicted accused ALLAN MAGLASANG.

IT IS SO ORDERED.28

Geronimo appealed.

Ruling of the Court of Appeals

In its July 11, 2006 Decision,29 the CA granted the appeal.

In resolving the case, the CA first determined the preliminary issue of whether there was an
employer-employee relationship between Oscar Jr. and Allan at the time of the accident. It ruled in
the affirmative and gave more credence to the testimonies of Geronimos witnesses than to those of
Oscar Jr.s witnesses, Faustino and Cresencio. The CA ratiocinated that unlike the witness
presented by Geronimo, Faustino never resided in Poblacion and thus has limited knowledge of the
place. His testimony was also unreliable considering that he only rode the subject jeep twice 30 during
the last two weeks of December 1992. As regards Cresencios testimony, the appellate court found it
puzzling why he appeared to have acted uninterested upon learning that the jeep was the subject of
an accident when it was his bread and butter. Said court likewise considered questionable Oscar
Jr.s asseveration that Cresencio replaced Allan as conductor when Cresencio testified that he
replaced a certain Sumagang Jr.31

With regard to the main issue, the CA adjudged Oscar Jr. liable to the heirs of the victims based on
the principle that the registered owner of a vehicle is directly and primarily responsible for the injuries
or death of third parties caused by the operation of such vehicle. It disbelieved Oscar Jr.s defense
that the jeep was stolen not only because the carnapping case filed against Allan and his
companions was dismissed but also because, given the circumstances, Oscar Jr. is deemed to have
given Allan the implied permission to use the subject vehicle. To support its conclusion, the CA cited
the following circumstances: siblings Rodrigo and Allan were both employees assigned to the said
jeep; after a days work, said vehicle would be parked just beside Rodrigos house where Allan also
lived; the jeep could easily be started even without the use of an ignition key; the said parking area
was not fenced or secured to prevent the unauthorized use of the vehicle which can be started even
without the ignition key.

The dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the instant appeal is GRANTED. The assailed Order dated 21
June 2000 of the Regional Trial Court (Branch 23), Molave, Zamboanga del Sur, in Civil Case No.
96-20,219 is SET ASIDE and a new one is hereby entered. OSCAR DEL CARMEN, Jr. and ALLAN
MAGLASANG are held primarily liable, jointly and severally, to pay plaintiffs-appellants:

1. Civil indemnity for the death of Emilia Bacoy Monsalud, Leonardo Monsalud Sr., and
Glenda Monsalud in the amount of Fifty thousand pesos (P50,000.00) each or for the total
amount of One hundred fifty thousand pesos (P150,000.00);

2. Temperate damages in the amount of Twenty-five Thousand Pesos (P25,000.00) each for
the death of Emilia Monsalud, Leonardo Monsalud Sr., and Glenda Monsalud (collectively
the Monsaluds) or for the total amount of Seventy-five thousand pesos (P75,000.00);
 3. Moral damages in the amount of Fifty Thousand Pesos (P50,000.00) each for the death of
the Monsaluds or for a total amount of One Hundred Fifty Thousand Pesos (P150,000.00);

4. Exemplary damages of Forty Thousand Pesos (P40,000.00).

No pronouncement as to costs.

SO ORDERED. 32

Issues

As a result of the adverse judgment, Oscar Jr. filed this Petition for Review on Certiorari alleging that
the CA erred in:

1. x x x basing its conclusions and findings on speculations, surmises and conjectures;

misapprehension of facts which are in conflict with the findings of the trial court;

2. x x x declaring a question of substance not in accord with law and with the applicable
decisions of the Supreme Court;

3. x x x departing from the regular course of the judicial proceedings in the disposition of the
appeal and [in going] beyond the issues of the case.33

Oscar Jr. points out that the CA failed to consider the RTCs ruling in its June 21, 2000 Order which
was in accord with Article 2180 of the Civil Code, i.e., that the tort committed by an employee should
have been done within the scope of his assigned tasks for an employer to be held liable under
culpa aquiliana. However, the CA never touched upon this matter even if it was glaring that Allans
driving the subject vehicle was not within the scope of his previous employment as conductor.
Moreover, Oscar Jr. insists that his jeep was stolen and stresses that the liability of a registered
owner of a vehicle as to third persons, as well as the doctrine of res ipsa loquitur, should not apply to
him. He asserts that although Allan and his companions were not found to have committed the crime
of carnapping beyond reasonable doubt, it was nevertheless established that the jeep was illicitly
taken by them from a well secured area. This is considering that the vehicle was running without its
headlights on at the time of the accident, a proof that it was started without the ignition key.

Our Ruling

Petitioners own evidence casts doubt on his claim that his jeep was stolen by Allan and his alleged
cohorts. Negligence is presumed under the doctrine of res ipsa loquitur.

Oscar Jr.s core defense to release him from responsibility for the death of the Monsaluds is that his
jeep was stolen. He highlights that the unauthorized taking of the jeep from the parking area was
indeed carried out by the clandestine and concerted efforts of Allan and his five companions,
notwithstanding the obstacles surrounding the parking area and the weight of the jeep.

Notably, the carnapping case filed against Allan and his group was already dismissed by the RTC for
insufficiency of evidence. But even in this civil case and as correctly concluded by the CA, the
evidentiary standard of preponderance of evidence required was likewise not met to support Oscar
Jr.s claim that his jeep was unlawfully taken.

Two of Allans co-accused in the carnapping case, Jemar and Benjamin, declared before the police
that when Allan invited them to ride with him, he was already driving the jeep:

04. Q- On that night, on or about 11:30 oclock on December 31, 1992, where were you?

A- I went to the disco near [the] Public Market[,] Sominot, Zamboanga del Sur.

05. Q- While you were in disco place, do you know if there was an incident [that] happened?

A- No sir but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1,
1993, Allan Maglasang arrived driving the jeep and he invited me to ride together with
Benjamin Andujar, Dioscoro Sol, Arniel Rezada and Joven Orot.34

xxxx

04. Q- On that night, on or about 9:00 oclock in the evening more or less on December 31,
1992, where were you?

A- I went to the disco at [the] Public Market[,] Sominot, Zamboanga del Sur.

05. Q- While you were in the disco place, do you know if there was an incident [that]
happened?

A- No, sir, but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1,
1993, Allan Maglasang arrive[d] driving the jeep and he invited me to ride together with
Jemar Alarcon, Dioscoro Sol, Arniel Rizada and Joven Orot. 35

There were six accused in the carnapping case. If Jemar and Benjamin were fetched by Allan who
was driving the jeep, this would mean that only three men pushed the jeep contrary to Rodrigos
testimony in Criminal Case No. 93-10380 that it has to be pushed by at least five people so that it
could start without the ignition key.

On direct examination,36 Oscar Jr. was asked as to what Rodrigo, his driver who had informed him
about the accident on January 1, 1993 at around 7:00 a.m., turned over to him after the incident, viz:

Q: When Rodrigo Maglasang, your driver informed you about the accident, what did he carry
with him if any and turned over to you?

A: The OR (Official Receipt) and the CR (Certificate of Registration) Sir.

Q: How about the key of the vehicle?

A: It was not turned over, Sir.37

Assuming arguendo that Allan stole the jeep by having the same pushed by a group, the ignition key
should then be with Rodrigo as he was entrusted with the jeeps possession. Thus, at the time
Rodrigo faced his employer hours after the incident, it is reasonable to expect that the driver should
have also returned the key to the operator together with the Official Receipt and Certificate of
Registration. Notably, Rodrigo did not do so and instead, the key was allegedly handed over to the
police for reasons unexplained and not available from the records. Interestingly, Oscar Jr. never
presented Rodrigo as his witness. Neither was he able to attest on cross-examination that Allan
really stole the jeep by pushing or that the key was handed over to him by Rodrigo:

Q: On December 31, 1992, you did not know that it was Rodrigo Maglasang who gave the
key to Allan Maglasang. Is that correct?

A: I was not there. So, I do not know but he had an affidavit to show that he turned it over to
the police.

Q: What I was asking you is that, [o]n the night of December 31, 1992, when it was driven by
Allan Maglasang, you did not know that the key was voluntarily given by Rodrigo Maglasang
to Allan Maglasang?

A: I was not there.

Q: So, you could not testify on that, is that correct?

A: Yes Sir, I was not there.38

Furthermore, Oscar Jr. acknowledged the dismissal of the carnapping case, thus:

Q: Now, there was a case filed against Allan Maglasang and [his] x x x co-accused x x x
[n]amely: Benjamin Andojar, Dioscoro Sol, Joven Orot, [Jemar Azarcon] and [Arniel] Rizada,
for carnapping. Is that correct?

A: Yes Sir.

Q: That case was filed by you because you alleged that on December 31, 1992, your jeep
was carnapped by Allan Maglasang and his co-accused, the said mentioned, is that correct?

A: Yes Sir.

Q: You testified on the case in Aurora, is that correct?

A: Yes, Sir.

Q: And you could well remember that this representation is the counsel of the co-accused of
Allan Maglasang, is that correct?

A: Yes Sir.

Q: And that case for carnapping was dismissed, is that correct?

 A: Yes Sir.

Q: Even the case of Allan Maglasang, was also dismissed, is that correct

A: Yes Sir.

Q: Because there was no sufficient evidence to establish that the jeep was carnapped, is that
correct?

A: Yes Sir.39

While Oscar Jr. highlights that the headlights were not on to support his claim that his jeep was
stolen, this circumstance by itself will not prove that it really was stolen. The reason why the
headlights were not on at the time of the accident was not sufficiently established during the trial.
Besides, the fact that the headlights were not on cannot be exclusively attributed to the lack of
ignition key in starting the jeep as there may be other possibilities such as electrical problems,
broken headlights, or that they were simply turned off.

Hence, sans the testimony of witnesses and other relevant evidence to support the defense of
unauthorized taking, we cannot subscribe to Oscar Jr.s claim that his jeep was stolen. The evidence
on record brings forth more questions than clear-cut answers.

Oscar Jr. alleges that the presumption of negligence under the doctrine of res ipsa loquitur (literally,
the thing speaks for itself) should not have been applied because he was vigilant in securing his
vehicle. He claims that the jeep was parked in a well secured area not remote to the watchful senses
of its driver Rodrigo.

Under the doctrine of res ipsa loquitur, "[w]here the thing that caused the injury complained of is
shown to be under the management of the defendant or his servants; and the accident, in the
ordinary course of things, would not happen if those who had management or control used proper
care, it affords reasonable evidence in the absence of a sufficient, reasonable and logical
explanation by defendant that the accident arose from or was caused by the defendants want of
care."40 Res ipsa loquitur is "merely evidentiary, a mode of proof, or a mere procedural convenience,
since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing a specific proof
of negligence."41 It "recognizes that parties may establish prima facie negligence without direct proof,
thus, it allows the principle to substitute for specific proof of negligence. It permits the plaintiff to
present along with proof of the accident, enough of the attending circumstances to invoke the
doctrine, create an inference or presumption of negligence and thereby place on the defendant the
burden of proving that there was no negligence on his part." 42 The doctrine is based partly on "the
theory that the defendant in charge of the instrumentality which causes the injury either knows the
cause of the accident or has the best opportunity of ascertaining it while the plaintiff has no such
knowledge, and is therefore compelled to allege negligence in general terms." 43

The requisites of the doctrine of res ipsa loquitur as established by jurisprudence are as follows:

1) the accident is of a kind which does not ordinarily occur unless someone is negligent;

2) the cause of the injury was under the exclusive control of the person in charge and
 3) the injury suffered must not have been due to any voluntary action or contribution on the
part of the person injured.44

The above requisites are all present in this case. First, no person just walking along the road would
suddenly be sideswiped and run over by an on-rushing vehicle unless the one in charge of the said
vehicle had been negligent. Second, the jeep which caused the injury was under the exclusive
control of Oscar Jr. as its owner. When Oscar Jr. entrusted the ignition key to Rodrigo, he had the
power to instruct him with regard to the specific restrictions of the jeeps use, including who or who
may not drive it. As he is aware that the jeep may run without the ignition key, he also has the
responsibility to park it safely and securely and to instruct his driver Rodrigo to observe the same
precaution. Lastly, there was no showing that the death of the victims was due to any voluntary
action or contribution on their part.

The aforementioned requisites having been met, there now arises a presumption of negligence
against Oscar Jr. which he could have overcome by evidence that he exercised due care and
diligence in preventing strangers from using his jeep. Unfortunately, he failed to do so.

What this Court instead finds worthy of credence is the CAs conclusion that Oscar Jr. gave his
implied permission for Allan to use the jeep. This is in view of Oscar Jr.s failure to provide solid proof
that he ensured that the parking area is well secured and that he had expressly imposed restrictions
as to the use of the jeep when he entrusted the same to his driver Rodrigo. As fittingly inferred by the
CA, the jeep could have been endorsed to Allan by his brother Rodrigo since as already mentioned,
Oscar Jr. did not give Rodrigo any specific and strict instructions on matters regarding its use.
Rodrigo therefore is deemed to have been given the absolute discretion as to the vehicles
operation, including the discretion to allow his brother Allan to use it.

The operator on record of a vehicle is primarily responsible to third persons for the deaths or injuries
consequent to its operation, regardless of whether the employee drove the registered owners
vehicle in connection with his employment.

Without disputing the factual finding of the CA that Allan was still his

employee at the time of the accident, a finding which we see no reason to disturb, Oscar Jr.
contends that Allan drove the jeep in his private capacity and thus, an employers vicarious liability
for the employees fault under Article 2180 of the Civil Code cannot apply to him.

The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank,45 the car of therein
respondent bank caused the death of Conrado Aguilar, Jr. while being driven by its assistant vice
president. Despite Article 2180, we still held the bank liable for damages for the accident as said
provision should defer to the settled doctrine concerning accidents involving registered motor
vehicles, i.e., that the registered owner of any vehicle, even if not used for public service, would
primarily be responsible to the public or to third persons for injuries caused the latter while the
vehicle was being driven on the highways or streets.46 We have already ratiocinated that:

The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or
that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can
be fixed on a definite individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of identification. It is to
forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle
registration is primarily ordained, in the interest of the determination of persons responsible for
damages or injuries caused on public highways. 47

Absent the circumstance of unauthorized use48 or that the subject vehicle was stolen49 which are
valid defenses available to a registered owner, Oscar Jr. cannot escape liability for quasi-delict
resulting from his jeeps use.
1wphi1

All told and considering that the amounts of damages awarded are in accordance with prevailing
jurisprudence, the Court concurs with the findings of the CA and sustains the awards made. In
addition, pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals,50 an interest of six percent
(6%) per annum on the amounts awarded shall be imposed, computed from the time the judgment of
the RTC is rendered on April 17, 2000 and twelve percent (12%) per annum on such amount upon
finality of this Decision until the payment thereof.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated July 11,
2006 of the Court of Appeals in CA-G.R. CV No. 67764 is hereby AFFIRMED with further
MODIFICATION that an interest of six percent (6%) per annum on the amounts awarded shall be
imposed, computed from the time the judgment of the Regional Trial Court, Branch 23, Molave,
Zamboanga del Sur is rendered on April 17, 2000 and twelve percent (12%) per annum on such
amount upon finality of this Decision until the payment thereof.

SO ORDERED.
G.R. No. 175512 May 30, 2011

VALLACAR TRANSIT, INC., Petitioner,

vs.
JOCELYN CATUBIG, Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

For review under Rule 45 of the Rules of Court is the Decision1 dated November 17, 2005 and the
Resolution2dated November 16, 2006 of the Court Appeals in CA-G.R. CV No. 66815, which
modified the Decision3 dated January 26, 2000 of the Regional Trial Court (RTC), Branch 30 of
Dumaguete City, in Civil Case No. 11360, an action for recovery of damages based on Article 2180,
in relation to Article 2176, of the Civil Code, filed by respondent Jocelyn Catubig against petitioner
Vallacar Transit, Inc. While the RTC dismissed respondents claim for damages, the Court of Appeals
granted the same.

The undisputed facts are as follows:

Petitioner is engaged in the business of transportation and the franchise owner of a Ceres Bulilit bus
with Plate No. T-0604-1348. Quirino C. Cabanilla (Cabanilla) is employed as a regular bus driver of
petitioner.

On January 27, 1994, respondents husband, Quintin Catubig, Jr. (Catubig), was on his way home
from Dumaguete City riding in tandem on a motorcycle with his employee, Teddy Emperado
(Emperado). Catubig was the one driving the motorcycle. While approaching a curve at kilometers
59 and 60, Catubig tried to overtake a slow moving ten-wheeler cargo truck by crossing-over to the
opposite lane, which was then being traversed by the Ceres Bulilit bus driven by Cabanilla, headed
for the opposite direction. When the two vehicles collided, Catubig and Emperado were thrown from
the motorcycle. Catubig died on the spot where he was thrown, while Emperado died while being
rushed to the hospital.

On February 1, 1994, Cabanilla was charged with reckless imprudence resulting in double homicide
in Criminal Case No. M-15-94 before the Municipal Circuit Trial Court (MCTC) of Manjuyod-Bindoy-
Ayungon of the Province of Negros Oriental. After preliminary investigation, the MCTC issued a
Resolution on December 22, 1994, dismissing the criminal charge against Cabanilla. It found that
Cabanilla was not criminally liable for the deaths of Catubig and Emperado, because there was no
negligence, not even contributory, on Cabanillas part.

Thereafter, respondent filed before the RTC on July 19, 1995 a Complaint for Damages against
petitioner, seeking actual, moral, and exemplary damages, in the total amount of P484,000.00, for
the death of her husband, Catubig, based on Article 2180, in relation to Article 2176, of the Civil
Code. Respondent alleged that petitioner is civilly liable because the latters employee driver,
Cabanilla, was reckless and negligent in driving the bus which collided with Catubigs motorcycle.

Petitioner, in its Answer with Counterclaim, contended that the proximate cause of the vehicular
collision, which resulted in the deaths of Catubig and Emperado, was the sole negligence of Catubig
when he imprudently overtook another vehicle at a curve and traversed the opposite lane of the
road. As a special and affirmative defense, petitioner asked for the dismissal of respondents
complaint for not being verified and/or for failure to state a cause of action, as there was no
allegation that petitioner was negligent in the selection or supervision of its employee driver.

In the Pre-Trial Order4 dated June 10, 1997, the parties stipulated that the primary issue for trial was
whether or not petitioner should be held liable for Catubigs death. Trial then ensued.

Police Officer (PO) 2 Robert B. Elnas (Elnas),5 Emilio Espiritu (Espiritu),6 Dr. Norberto Baldado, Jr.
(Dr. Baldado),7Peter Cadimas (Cadimas),8 and respondent9 herself testified in support of
respondents complaint.

PO2 Elnas conducted an investigation of the collision incident. According to PO2 Elnas, the bus was
running fast, at a speed of 100 kilometers per hour, when it collided with the motorcycle which was
trying to overtake a truck. The collision occurred on the lane of the bus. Catubig was flung 21 meters
away, and Emperado, 11 meters away, from the point of impact. The motorcycle was totaled; the
chassis broke into three parts, and the front wheel and the steering wheel with the shock absorbers
were found 26 meters and 38 meters, respectively, from the collision point. In contrast, only the front
bumper of the bus suffered damage.

Cadimas personally witnessed the collision of the bus and the motorcycle. He recalled that he was
then waiting for a ride to Dumaguete City and saw the Ceres Bulilit bus making a turn at a curve.
Cadimas signaled the said bus to halt but it was running fast. Cadimas also recollected that there
was a cargo truck running slow in the opposite direction of the bus. Cadimas next heard a thud and
saw that the bus already collided with a motorcycle.

Espiritu was the photographer who took photographs of the scene of the accident. He identified the
five photographs which he had taken of Catubig lying on the ground, bloodied; broken parts of the
motorcycle; and the truck which Catubig tried to overtake.

Dr. Baldado was the medico-legal doctor who conducted the post-mortem examination of Catubigs
body. He reported that Catubig suffered from the following injuries: laceration and fracture of the right
leg; laceration and fracture of the left elbow; multiple abrasions in the abdominal area, left anterior
chest wall, posterior right arm, and at the back of the left scapular area; and contusion-hematoma
just above the neck. Dr. Baldado confirmed that Catubig was already dead when the latter was
brought to the hospital, and that the vehicular accident could have caused Catubigs instantaneous
death.

Respondent herself testified to substantiate the amount of damages she was trying to recover from
petitioner for Catubigs death, such as Catubigs earning capacity; expenses incurred for the wake
and burial of Catubig, as well as of Emperado; the cost of the motorcycle; and the costs of the legal
services and fees respondent had incurred.

Respondents documentary exhibits consisted of her and Catubigs Marriage Contract dated August
21, 1982, their two childrens Certificate of Live Births, Catubigs College Diploma dated March 24,
1983, the list and receipts of the expenses for Catubigs burial, the sketch of the collision site
prepared by PO2 Elnas, the excerpts from the police blotter, the photographs of the collision, 10 and
the Post Mortem Report11 on Catubigs cadaver prepared by Dr. Baldado.

In an Order12 dated October 6, 1998, the RTC admitted all of respondents aforementioned evidence.
On the other hand, Rosie C. Amahit (Amahit)13 and Nunally Maypa (Maypa)14 took the witness stand
for petitioner.

Amahit was a Court Stenographer at the MCTC who took the transcript of stenographic notes (TSN)
in Criminal Case No. M-15-94 against Cabanilla. Amahit verified that the document being presented
by the defense in the present case was a true and correct copy of the TSN of the preliminary
investigation held in Criminal Case No. M-15-94 on May 25, 1994, and another document was a
duplicate original of the MCTC Resolution dated December 22, 1994 dismissing Criminal Case No.
M-15-94.

Maypa is the Administrative and Personnel Manager at the Dumaguete branch of petitioner. He
started working for petitioner on September 22, 1990 as a clerk at the Human Resources
Development Department at the Central Office of petitioner in Bacolod City. Sometime in November
1993, he became an Administrative Assistant at the Dumaguete branch of petitioner; and in August
1995, he was promoted to his current position at the same branch.

While he was still an Administrative Assistant, Maypa was responsible for the hiring of personnel
including drivers and conductors. Maypa explained that to be hired as a driver, an applicant should
be 35 to 45 years old, have at least five years experience in driving big trucks, submit police, court,
and medical clearances, and possess all the necessary requirements for driving a motor vehicle of
more than 4,500 kilograms in gross weight such as a professional drivers license with a restriction
code of 3. The applicant should also pass the initial interview, the actual driving and maintenance
skills tests, and a written psychological examination involving defensive driving techniques. Upon
passing these examinations, the applicant still had to go through a 15-day familiarization of the bus
and road conditions before being deployed for work. Maypa, however, admitted that at the time of his
appointment as Administrative Assistant at the Dumaguete branch, Cabanilla was already an
employee driver of petitioner.

Maypa further explained the investigation and grievance procedure followed by petitioner in cases of
vehicular accidents involving the latters employee drivers. Maypa related that Cabanilla had been
put on preventive suspension following the vehicular accident on January 27, 1994 involving the bus
Cabanilla was driving and the motorcycle carrying Catubig and Emperado. Following an internal
investigation of said accident conducted by petitioner, Cabanilla was declared not guilty of causing
the same, for he had not been negligent.

Lastly, Maypa recounted the expenses petitioner incurred as a result of the present litigation.

The documentary exhibits of petitioner consisted of the TSN of the preliminary investigation in
Criminal Case No. M-15-94 held on May 25, 1994 before the MCTC of Manjuyod-Bindoy-Ayungon of
the Province of Negros Oriental; Resolution dated December 22, 1994 of the MCTC in the same
case; and the Minutes dated February 17, 1994 of the Grievance Proceeding conducted by
petitioner involving Cabanilla.15

The RTC, in its Order16 dated November 12, 1999, admitted all the evidence presented by petitioner.

On January 26, 2000, the RTC promulgated its Decision favoring petitioner. Based on the sketch
prepared by PO2 Elnas, which showed that "the point of impact x x x occurred beyond the center
lane near a curve within the lane of the Ceres bus[;]"17 plus, the testimonies of PO2 Elnas and
Cadimas that the motorcycle recklessly tried to overtake a truck near a curve and encroached the
opposite lane of the road, the RTC ruled that the proximate cause of the collision of the bus and
motorcycle was the negligence of the driver of the motorcycle, Catubig. The RTC, moreover, was
convinced through the testimony of Maypa, the Administrative and Personnel Manager of the
Dumaguete branch of petitioner, that petitioner had exercised due diligence in the selection and
supervision of its employee drivers, including Cabanilla.

After trial, the RTC concluded:

WHEREFORE, finding preponderance of evidence in favor of the [herein petitioner] that the [herein
respondents] husband is the reckless and negligent driver and not the driver of the [petitioner], the
above-entitled case is hereby ordered dismissed.

[Petitioners] counterclaim is also dismissed for lack of merit. 18

Respondent appealed to the Court of Appeals. In its Decision dated November 17, 2005, the
appellate court held that both Catubig and Cabanilla were negligent in driving their respective
vehicles. Catubig, on one hand, failed to use reasonable care for his own safety and ignored the
hazard when he tried to overtake a truck at a curve. Cabanilla, on the other hand, was running his
vehicle at a high speed of 100 kilometers per hour. The Court of Appeals also brushed aside the
defense of petitioner that it exercised the degree of diligence exacted by law in the conduct of its
business. Maypa was not in a position to testify on the procedures followed by petitioner in hiring
Cabanilla as an employee driver considering that Cabanilla was hired a year before Maypa assumed
his post at the Dumaguete branch of petitioner.

Thus, the Court of Appeals decreed:

WHEREFORE, based on the foregoing, the assailed decision of the trial court is modified. We rule
that [herein petitioner] is equally liable for the accident in question which led to the deaths of Quintin
Catubig, Jr. and Teddy Emperado and hereby award to the heirs of Quintin Catubig, Jr. the amount
[of] P250,000.00 as full compensation for the death of the latter.19

The Court of Appeals denied the motion for reconsideration of petitioner in a Resolution dated
November 16, 2006.

Hence, the instant Petition for Review.

Petitioner asserts that respondents complaint for damages should be dismissed for the latters
failure to verify the same. The certification against forum shopping attached to the complaint, signed
by respondent, is not a valid substitute for respondents verification that she "has read the pleading
and that the allegations therein are true and correct of her personal knowledge or based on
authentic records."20 Petitioner cited jurisprudence in which the Court ruled that a pleading lacking
proper verification is treated as an unsigned pleading, which produces no legal effect under Section
3, Rule 7 of the Rules of Court.

Petitioner also denies any vicarious or imputed liability under Article 2180, in relation to Article 2176,
of the Civil Code. According to petitioner, respondent failed to prove the culpability of Cabanilla, the
employee driver of petitioner. There are already two trial court decisions (i.e., the Resolution dated
December 22, 1994 of the MCTC of Manjuyod-Bindoy-Ayungon of the Province of Negros Oriental in
Criminal Case No. M-15-94 and the Decision dated January 26, 2000 of the RTC in the instant civil
suit) explicitly ruling that the proximate cause of the collision was Catubigs reckless and negligent
act. Thus, without the fault or negligence of its employee driver, no liability at all could be imputed
upon petitioner.

Petitioner additionally argues, without conceding any fault or liability, that the award by the Court of
Appeals in respondents favor of the lump sum amount of P250,000.00 as total death indemnity
lacks factual and legal basis. Respondents evidence to prove actual or compensatory damages are
all self-serving, which are either inadmissible in evidence or devoid of probative value. The award of
moral and exemplary damages is likewise contrary to the ruling of the appellate court that Catubig
should be equally held liable for his own death.

Respondent maintains that the Court of Appeals correctly adjudged petitioner to be liable for
Catubigs death and that the appellate court had already duly passed upon all the issues raised in
the petition at bar.

The petition is meritorious.

At the outset, we find no procedural defect that would have warranted the outright dismissal of
respondents complaint.

Respondent filed her complaint for damages against petitioner on July 19, 1995, when the 1964
Rules of Court was still in effect. Rule 7, Section 6 of the 1964 Rules of Court provided:

Sec. 6. Verification.A pleading is verified only by an affidavit stating that the person verifying has
read the pleading and that the allegations thereof are true of his own knowledge.

Verifications based on "information and belief," or upon "knowledge, information and belief," shall be
deemed insufficient.

On July 1, 1997, the new rules on civil procedure took effect. The foregoing provision was carried on,
with a few amendments, as Rule 7, Section 4 of the 1997 Rules of Court, viz:

SEC. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his knowledge and belief.

A pleading required to be verified which contains a verification based on "information and belief," or
upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an
unsigned pleading."

The same provision was again amended by A.M. No. 00-2-10, which became effective on May 1,
2000. It now reads:

SEC. 4. Verification. - Except when otherwise specifically required by law or rule, pleadings need not
be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief" or
upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an
unsigned pleading.

The 1997 Rules of Court, even prior to its amendment by A.M. No. 00-2-10, clearly provides that a
pleading lacking proper verification is to be treated as an unsigned pleading which produces no legal
effect. However, it also just as clearly states that "[e]xcept when otherwise specifically required by
law or rule, pleadings need not be under oath, verified or accompanied by affidavit." No such law or
rule specifically requires that respondents complaint for damages should have been verified.

Although parties would often submit a joint verification and certificate against forum shopping, the
two are different.

In Pajuyo v. Court of Appeals,21 we already pointed out that:

A partys failure to sign the certification against forum shopping is different from the partys failure to
sign personally the verification. The certificate of non-forum shopping must be signed by the party,
and not by counsel. The certification of counsel renders the petition defective.

On the other hand, the requirement on verification of a pleading is a formal and not a jurisdictional
requisite. It is intended simply to secure an assurance that what are alleged in the pleading are true
and correct and not the product of the imagination or a matter of speculation, and that the pleading is
filed in good faith. The party need not sign the verification. A partys representative, lawyer or any
person who personally knows the truth of the facts alleged in the pleading may sign the verification. 22

In the case before us, we stress that as a general rule, a pleading need not be verified, unless there
is a law or rule specifically requiring the same. Examples of pleadings that require verification are:
(1) all pleadings filed in civil cases under the 1991 Revised Rules on Summary Procedure; (2)
petition for review from the Regional Trial Court to the Supreme Court raising only questions of law
under Rule 41, Section 2; (3) petition for review of the decision of the Regional Trial Court to the
Court of Appeals under Rule 42, Section 1; (4) petition for review from quasi-judicial bodies to the
Court of Appeals under Rule 43, Section 5; (5) petition for review before the Supreme Court under
Rule 45, Section 1; (6) petition for annulment of judgments or final orders and resolutions under Rule
47, Section 4; (7) complaint for injunction under Rule 58, Section 4; (8) application for preliminary
injunction or temporary restraining order under Rule 58, Section 4; (9) application for appointment of
a receiver under Rule 59, Section 1; (10) application for support pendente lite under Rule 61,
Section 1; (11) petition for certiorari against the judgments, final orders or resolutions of
constitutional commissions under Rule 64, Section 2; (12) petition for certiorari, prohibition, and
mandamus under Rule 65, Sections 1 to 3; (13) petition for quo warranto under Rule 66, Section 1;
(14) complaint for expropriation under Rule 67, Section 1; (15) petition for indirect contempt under
Rule 71, Section 4, all from the 1997 Rules of Court; (16) all complaints or petitions involving intra-
corporate controversies under the Interim Rules of Procedure on Intra-Corporate Controversies; (17)
complaint or petition for rehabilitation and suspension of payment under the Interim Rules on
Corporate Rehabilitation; and (18) petition for declaration of absolute nullity of void marriages and
annulment of voidable marriages as well as petition for summary proceedings under the Family
Code.
In contrast, all complaints, petitions, applications, and other initiatory pleadings must be
accompanied by a certificate against forum shopping, first prescribed by Administrative Circular No.
04-94, which took effect on April 1, 1994, then later on by Rule 7, Section 5 of the 1997 Rules of
Court. It is not disputed herein that respondents complaint for damages was accompanied by such a
certificate.

In addition, verification, like in most cases required by the rules of procedure, is a formal, not
jurisdictional, requirement, and mainly intended to secure an assurance that matters which are
alleged are done in good faith or are true and correct and not of mere speculation. When
circumstances warrant, the court may simply order the correction of unverified pleadings or act on it
and waive strict compliance with the rules in order that the ends of justice may thereby be served. 23

We agree with petitioner, nonetheless, that respondent was unable to prove imputable negligence on
the part of petitioner.

Prefatorily, we restate the time honored principle that in a petition for review under Rule 45, only
questions of law may be raised. It is not our function to analyze or weigh all over again evidence
already considered in the proceedings below, our jurisdiction is limited to reviewing only errors of law
that may have been committed by the lower court. The resolution of factual issues is the function of
lower courts, whose findings on these matters are received with respect. A question of law which we
may pass upon must not involve an examination of the probative value of the evidence presented by
the litigants.24

The above rule, however, admits of certain exceptions. The findings of fact of the Court of Appeals
are generally conclusive but may be reviewed when: (1) the factual findings of the Court of Appeals
and the trial court are contradictory; (2) the findings are grounded entirely on speculation, surmises
or conjectures; (3) the inference made by the Court of Appeals from its findings of fact is manifestly
mistaken, absurd or impossible; (4) there is grave abuse of discretion in the appreciation of facts; (5)
the appellate court, in making its findings, goes beyond the issues of the case and such findings are
contrary to the admissions of both appellant and appellee; (6) the judgment of the Court of Appeals
is premised on a misapprehension of facts; (7) the Court of Appeals fails to notice certain relevant
facts which, if properly considered, will justify a different conclusion; and (8) the findings of fact of the
Court of Appeals are contrary to those of the trial court or are mere conclusions without citation of
specific evidence, or where the facts set forth by the petitioner are not disputed by respondent, or
where the findings of fact of the Court of Appeals are premised on the absence of evidence but are
contradicted by the evidence on record.25

The issue of negligence is basically factual.26 Evidently, in this case, the RTC and the Court of
Appeals have contradictory factual findings: the former found that Catubig alone was negligent, while
the latter adjudged that both Catubig and petitioner were negligent.

Respondent based her claim for damages on Article 2180, in relation to Article 2176, of the Civil
Code, which read:

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 ones own acts or
omissions, but also for those persons for whom one is responsible.

xxxx

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.

xxxx

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.

There is merit in the argument of the petitioner that Article 2180 of the Civil Code imputing fault or
negligence on the part of the employer for the fault or negligence of its employee does not apply to
petitioner since the fault or negligence of its employee driver, Cabanilla, which would have made the
latter liable for quasi-delict under Article 2176 of the Civil Code, has never been established by
respondent. To the contrary, the totality of the evidence presented during trial shows that the
proximate cause of the collision of the bus and motorcycle is attributable solely to the negligence of
the driver of the motorcycle, Catubig.

Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the result would not have
occurred. And more comprehensively, the proximate legal cause is that acting first and producing the
injury, either immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its immediate predecessor,
the final event in the chain immediately effecting the injury as a natural and probable result of the
cause which first acted, under such circumstances that the person responsible for the first event
should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom. 27

The RTC concisely articulated and aptly concluded that Catubigs overtaking of a slow-moving truck
ahead of him, while approaching a curve on the highway, was the immediate and proximate cause of
the collision which led to his own death, to wit:

Based on the evidence on record, it is crystal clear that the immediate and proximate cause of the
collision is the reckless and negligent act of Quintin Catubig, Jr. and not because the Ceres Bus was
running very fast. Even if the Ceres Bus is running very fast on its lane, it could not have caused the
collision if not for the fact that Quintin Catubig, Jr. tried to overtake a cargo truck and encroached on
the lane traversed by the Ceres Bus while approaching a curve. As the driver of the motorcycle,
Quintin Catubig, Jr. has not observed reasonable care and caution in driving his motorcycle which an
ordinary prudent driver would have done under the circumstances. Recklessness on the part of
Quintin Catubig, Jr. is evident when he tried to overtake a cargo truck while approaching a curve in
Barangay Donggo-an, Bolisong, Manjuyod, Negros Oriental. Overtaking is not allowed while
approaching a curve in the highway (Section 41(b), Republic Act [No.] 4136, as amended). Passing
another vehicle proceeding on the same direction should only be resorted to by a driver if the
highway is free from incoming vehicle to permit such overtaking to be made in safety (Section 41(a),
Republic Act [No.] 4136). The collision happened because of the recklessness and carelessness of
[herein respondents] husband who was overtaking a cargo truck while approaching a curve.
Overtaking another vehicle while approaching a curve constitute reckless driving penalized not only
under Section 48 of Republic Act [No.] 4136 but also under Article 365 of the Revised Penal Code.

The Court commiserate with the [respondent] for the untimely death of her husband. However, the
1avvphi1

Court as dispenser of justice has to apply the law based on the facts of the case. Not having proved
by preponderance of evidence that the proximate cause of the collision is the negligence of the
driver of the Ceres bus, this Court has no other option but to dismiss this case. 28 (Emphases
supplied.)

The testimonies of prosecution witnesses Cadimas and PO2 Elnas that Cabanilla was driving the
bus at a reckless speed when the collision occurred lack probative value.

We are unable to establish the actual speed of the bus from Cadimass testimony for he merely
stated that the bus did not stop when he tried to flag it down because it was "running very fast." 29

PO2 Elnas, on the other hand, made inconsistent statements as to the actual speed of the bus at the
time of the collision. During the preliminary investigation in Criminal Case No. M-15-94 before the
MCTC, PO2 Elnas refused to give testimony as to the speed of either the bus or the motorcycle at
the time of the collision and an opinion as to who was at fault.30 But during the trial of the present
case before the RTC, PO2 Elnas claimed that he was told by Cabanilla that the latter was driving the
bus at the speed of around 100 kilometers per hour.31

As the RTC noted, Cadimas and PO2 Elnas both pointed out that the motorcycle encroached the
lane of the bus when it tried to overtake, while nearing a curve, a truck ahead of it, consistent with
the fact that the point of impact actually happened within the lane traversed by the bus. It would be
more reasonable to assume then that it was Catubig who was driving his motorcycle at high speed
because to overtake the truck ahead of him, he necessarily had to drive faster than the truck.
Catubig should have also avoided overtaking the vehicle ahead of him as the curvature on the road
could have obstructed his vision of the oncoming vehicles from the opposite lane.

The evidence shows that the driver of the bus, Cabanilla, was driving his vehicle along the proper
lane, while the driver of the motorcycle, Catubig, had overtaken a vehicle ahead of him as he was
approaching a curvature on the road, in disregard of the provision of the law on reckless driving, at
the risk of his life and that of his employee, Emperado.

The presumption that employers are negligent under Article 2180 of the Civil Code flows from the
negligence of their employees.32 Having adjudged that the immediate and proximate cause of the
collision resulting in Catubigs death was his own negligence, and there was no fault or negligence
on Cabanillas part, then such presumption of fault or negligence on the part of petitioner, as
Cabanillas employer, does not even arise. Thus, it is not even necessary to delve into the defense of
petitioner that it exercised due diligence in the selection and supervision of Cabanilla as its
employee driver.

WHEREFORE, premises considered, the petition is GRANTED. The Decision dated November 17,
2005 and Resolution dated November 16, 2006 of the Court Appeals in CA-G.R. CV No. 66815 are
SET ASIDE and the Decision dated January 26, 2000 of the Regional Trial Court, Branch 30 of
Dumaguete City, dismissing Civil Case No. 11360 is REINSTATED.
SO ORDERED.