G.R. No.
82248 January 30, 1992
ERNESTO MARTIN, petitioner, vs. HON. COURT OF APPEALS and MANILA
ELECTRIC COMPANY, respondents.
CRUZ, J.:
This case turns on the proper application of the familiar rule that he who alleges must
prove his allegation.
Ernesto Martin was the owner of a private car bearing license plate No. NPA-930. At
around 2 o'clock in the morning of May 11, 1982, while being driven by Nestor Martin, it
crashed into a Meralco electric post on Valley Golf Road, in Antipolo, Rizal. The car was
wrecked and the pole severely damaged. Meralco subsequently demanded reparation
from Ernesto Martin, but the demand was rejected. It thereupon sued him for damages
in the Regional Trial Court of Pasig, alleging inter alia that he was liable to it in the sum
of P17,352.00 plus attorney's fees and litigation costs as the employer of Nestor Martin.
The petitioner's main defense was that Nestor Martin was not his employee.
After the plaintiff had rested, the defendant moved to dismiss the complaint on the
ground that no evidence had been adduced to show that Nestor Martin was his employee.
The motion was denied. The case was considered submitted for decision with the express
waiver by the defendant of his right to present his own evidence. The defendant thus did
not rebut the plaintiff's allegation that he was Nestor Martin's employer.
In the decision dated August 27, 1985, Judge Eutropio Migriño held in favor of the
plaintiff, awarding him the amount claimed, with 12% interest, and P4,000.00 attorney's
fees, plus costs.1 The decision was seasonably elevated to the Court of Appeals, which
affirmed it in toto on February 22, 1988, 2 prompting this petition for review.
The petition has merit.
It is important to stress that the complaint for damages was filed by the private
respondent against only Ernesto Martin as alleged employer of Nestor Martin, the driver
of the car at the time of the accident. Nestor Martin was not impleaded. The action was
based on tort under Article 2180 of the Civil Code, providing in part that:
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
The above rule is applicable only if there is an employer-employee relationship although
it is not necessary that the employer be engaged in any business or industry. It differs in
this sense from Article 103 of the Revised Penal Code, which requires that the employer
be engaged in an industry to be subsidiarily liable for the felony committed by his
employee in the course of his employment.
Whether or not engaged in any business or industry, the employer under Article 2180 is
liable for the torts committed by his employees within the scope of their assigned task.
But it is necessary first to establish the employment relationship. Once this is done, the
plaintiff must show, to hold the employer liable, that the employee was acting within the
scope of his assigned task when the tort complained of was committed. It is only then that
the defendant, as employer, may find it necessary to interpose the defense of due
diligence in the selection and supervision of the employee as allowed in that article. 3
In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the
defendant was the employer of Nestor Martin at the time of the accident. The trial court
merely presumed the existence of the employer-employee relationship and held that the
petitioner had not refuted that presumption. It noted that although the defendant alleged
that he was not Nestor Martin's employer, "he did not present any proof to substantiate
his allegation."
As the trial court put it:
There is no need to stretch one's imagination to realize that a car owner entrusts his
vehicle only to his driver or to anyone whom he allows to drive it. Since neither
plaintiff nor defendant has presented any evidence on the status of Nestor Martin, the
Court presumes that he was at the time of the incident, an employee of the defendant.
It is elementary that he who makes an allegation is required to prove the same.
Defendant alleges that Nestor Martin was not his employee but he did not present
any proof to substantiate his allegation. While it is true plaintiff did not present
evidence on its allegation that Nestor Martin was defendant's employee, the Court
believes and so holds, that there was no need for such evidence. As above adverted
to, the Court can proceed on the presumption that one who drives the motor vehicle
is an employee of the owner thereof.
A presumption is defined as an inference as to the existence of a fact not actually known,
arising from its usual connection with another which is known, 4 or a conjecture based on
past experience as to what course human affairs ordinarily take. 5 It is either a
presumption juris, or of law, or a presumption hominis, or of fact. 6
There is no law directing the deduction made by the courts below from the particular
facts presented to them by the parties. Such deduction is not among the conclusive
presumptions under Section 2 or the disputable presumptions under Section 3 of Rule 131
of the Rules of Court. In other words, it is not a presumption juris.
Neither is it a presumption hominis, which is a reasonable deduction from the facts proved
without an express direction of law to that effect. 7 The facts proved, or not denied, viz.,
the ownership of the car and the circumstances of the accident, are not enough bases for
the inference that the petitioner is the employer of Nestor Martin.
In the modern urban society, most male persons know how to drive and do not have to
employ others to drive for them unless this is needed for business reasons. Many cannot
1
afford this luxury, and even if they could, may consider it an unnecessary expense and
inconvenience. In the present case, the more plausible assumption is that Nestor Martin
is a close relative of Ernesto Martin and on the date in question borrowed the car for some
private purpose. Nestor would probably not have been accommodated if he were a mere
employee for employees do not usually enjoy the use of their employer's car at two o'clock
in the morning.
As the employment relationship between Ernesto Martin and Nestor Martin could not be
presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had the
burden of proof, or the duty "to present evidence on the fact in issue necessary to establish
his claim" as required by Rule 131, Section 1 of the Revised Rules of Court. Failure to do
this was fatal to its action.
It was enough for the defendant to deny the alleged employment relationship, without
more, for he was not under obligation to prove this negative
averment. Ei incumbit probatio qui dicit, non qui negat. 8 This Court has consistently
applied the ancient rule that "if the plaintiff, upon whom rests the burden of proving his
cause of action, fails to show in a satisfactory manner the facts upon which he bases his
claim, the defendant is under no obligation to prove his exception or defense." 9
The case of Amor v. Soberano, 10 a Court of Appeals decision not elevated to this Court,
was misapplied by the respondent court in support of the petitioner's position. The
vehicle involved in that case was a six-by-six truck, which reasonably raised the factual
presumption that it was engaged in business and that its driver was employed by the
owner of the vehicle. The case at bar involves a private vehicle as its license plate
indicates. No evidence was ever offered that it was being used for business purposes or
that, in any case, its driver at the time of the accident was an employee of the petitioner.
It is worth mentioning in this connection that
in Filamer Christian Institute v. Court of Appeals, 11 the owner of the jeep involved in the
accident was absolved from liability when it was shown that the driver of the vehicle was
not employed as such by the latter but was a "working scholar" as that term is defined by
the Omnibus Rules Implementing the Labor Code. 12 He was assigned to janitorial duties.
Evidence was introduced to establish the employment relationship but it failed
nonetheless to hold the owner responsible. Significantly, no similar evidence was even
presented in the case at bar, the private respondent merely relying on its mere allegation
that Nestor Martin was the petitioner's employee. Allegation is not synonymous with
proof.
The above observations make it unnecessary to examine the question of the driver's
alleged negligence or the lack of diligence on the part of the petitioner in the selection and
supervision of his employee. These questions have not arisen because the employment
relationship contemplated in Article 1860 of the Civil Code has not been established.
2
WHEREFORE, the petition is GRANTED. The decision of the respondent court is
REVERSED, and Civil Case No. 48045 in the Regional Trial Court of Pasig, Branch 151, is
DISMISSED, with costs against the respondent. It is so ordered.
G.R. No. 66207 May 18, 1992
MAXIMINO SOLIMAN, JR., represented by his judicial guardian VIRGINIA C.
SOLIMAN, petitioner, vs. HON. JUDGE RAMON TUAZON, Presiding Judge of
Branch LXI, Regional Trial Court of Region III, Angeles City, and the REPUBLIC
CENTRAL COLLEGES, represented by its President, respondents.
RESOLUTION
FELICIANO, J.:
On 22 March 1983, petitioner Soliman, Jr. filed a civil complaint for damages against
private respondent Republic Central Colleges ("Colleges"), the R.L. Security Agency Inc.
and one Jimmy B. Solomon, a security guard, as defendants. The complaint alleged that:
. . . on 13 August 1982, in the morning thereof, while the plaintiff was in the campus
ground and premises of the defendant, REPUBLIC CENTRAL COLLEGES, as he was
and is still a regular enrolled student of said school taking his morning classes, the
defendant, JIMMY B. SOLOMON, who was on said date and hour in the premises of
said school performing his duties and obligations as a duly appointed security guard
under the employment, supervision and control of his employer-defendant R.L.
SECURITY AGENCY, INC., headed by Mr. Benjamin Serrano, without any
provocation, in a wanton, fraudulent, reckless, oppressive or malevolent manner,
with intent to kill, attack, assault, strike and shoot the plaintiff on the abdomen with
a .38 Caliber Revolver, a deadly weapon, which ordinarily such wound sustained
would have caused plaintiff's death were it not for the timely medical assistance given
to him. The plaintiff was treated and confined at Angeles Medical Center, Angeles
City, and, as per doctor's opinion, the plaintiff may not be able to attend to his regular
classes and will be incapacitated in the performance of his usual work for a duration
of from three to four months before his wounds would be completely healed. 1
Private respondent Colleges filed a motion to dismiss, contending that the complaint
stated no cause of action against it. Private respondent argued that it is free from any
liability for the injuries sustained by petitioner student for the reason that private
respondent school was not the employer of the security guard charged, Jimmy Solomon,
and hence was not responsible for any wrongful act of Solomon. Private respondent
school further argued that Article 2180, 7th paragraph, of the Civil Code did not apply,
since said paragraph holds teachers and heads of establishment of arts and trades liable
for damages caused by their pupils and students or apprentices, while security guard
Jimmy Solomon was not a pupil, student or apprentice of the school.
In an order dated 29 November 1983, respondent Judge granted private respondent
school's motion to dismiss, holding that security guard Jimmy Solomon was not an
employee of the school which accordingly could not be held liable for his acts or
omissions. Petitioner moved for reconsideration, without success.
In this Petition for Certiorari and Prohibition, it is contended that respondent trial judge
committed a grave abuse of discretion when he refused to apply the provisions of Article
2180, as well as those of Articles 349, 350 and 352, of the Civil Code and granted the
school's motion to dismiss.
Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted by
one against another by fault or negligence exists not only for one's own act or omission,
but also for acts or omissions of a person for whom one is by law responsible. Among the
persons held vicariously responsible for acts or omissions of another person are the
following:
xxx xxx xxx
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
xxx xxx xxx
Lastly, teachers or heads of establishments of arts and trades shall be
liable for damages caused by their pupils, their students or apprentices,
so long as they remain in their custody.
xxx xxx xxx
The first paragraph quoted above offers no basis for holding the Colleges liable for the
alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner
Soliman, Jr. Private respondent school was not the employer of Jimmy Solomon. The
employer of Jimmy Solomon was the R.L. Security Agency Inc., while the school was the
client or customer of the R.L. Security Agency Inc. It is settled that where the security
agency, as here, recruits, hires and assigns the work of its watchmen or security guards,
the agency is the employer of such guards or watchmen. 2 Liability for illegal or harmful
acts committed by the security guards attaches to the employer agency, and not to the
clients or customers of such agency. 3 As a general rule, a client or customer of a security
agency has no hand in selecting who among the pool of security guards or watchmen
employed by the agency shall be assigned to it; the duty to observe the diligence of a good
father of a family in the selection of the guards cannot, in the ordinary course of events,
be demanded from the client whose premises or property are protected by the security
guards. The fact that a client company may give instructions or directions to the security
guards assigned to it, does not, by itself, render the client responsible as an employer of
the security guards concerned and liable for their wrongful acts or omissions. Those
instructions or directions are ordinarily no more than requests commonly envisaged in
3
the contract for services entered into with the security agency. There being no employer-
employee relationship between the Colleges and Jimmy Solomon, petitioner student
cannot impose vicarious liability upon the Colleges for the acts of security guard
Solomon.
Since there is no question that Jimmy Solomon was not a pupil or student or an apprentice
of the Colleges, he being in fact an employee of the R.L. Security Agency Inc., the other
above-quoted paragraph of Article 2180 of the Civil Code is similarly not available for
imposing liability upon the Republic Central Colleges for the acts or omissions of Jimmy
Solomon.
The relevant portions of the other Articles of the Civil Code invoked by petitioner are as
follows:
Art. 349. The following persons shall exercise substitute parental
authority:
xxx xxx xxx
(2) Teachers and professors;
xxx xxx xxx
(4) Directors of trade establishments with regard to apprentices;
xxx xxx xxx
Art. 350. The persons named in the preceding article shall exercise
reasonable supervision over the conduct of the child.
xxx xxx xxx
Art. 352. The relations between teacher and pupil, professor and
student are fixed by government regulations and those of each school
or institution. In no case shall corporal punishment be countenanced.
The teacher or professor shall cultivate the best potentialities of the
heart and mind of the pupil or student.
In Palisoc v. Brillantes, 4 invoked by petitioner, the Court held the owner and president of
a school of arts and trades known as the "Manila Technical Institute," Quezon Blvd.,
Manila, responsible in damages for the death of Dominador Palisoc, a student of Institute,
which resulted from fist blows delivered by Virgilio L. Daffon, another student of the
Institute. It will be seen that the facts of Palisoc v. Brillantes brought it expressly within the
7th paragraph of Article 2180, quoted above; but those facts are entirely different from
the facts existing in the instant case.
Persons exercising substitute parental authority are made responsible for damage
inflicted upon a third person by the child or person subject to such substitute parental
authority. In the instant case, as already noted, Jimmy Solomon who committed allegedly
tortious acts resulting in injury to petitioner, was not a pupil, student or apprentice of the
Republic Central Colleges; the school had no substitute parental authority over Solomon.
Clearly, within the confines of its limited logic, i.e., treating the petitioner's claim as one
based wholly and exclusively on Article 2180 of the Civil Code, the order of the
respondent trial judge was correct. Does it follow, however, that respondent Colleges
could not be held liable upon any other basis in law, for or in respect of the injury
sustained by petitioner, so as to entitle respondent school to dismissal of petitioner's
complaint in respect of itself?
The very recent case of the Philippine School of Business Administration (PSBA) v. Court of
Appeals, 5 requires us to give a negative answer to that question.
In PSBA, the Court held that Article 2180 of the Civil Code was not applicable where a
student had been injured by one who was an outsider or by one over whom the school
did not exercise any custody or control or supervision. At the same time, however, the
Court stressed that an implied contract may be held to be established between a school
which accepts students for enrollment, on the one hand, and the students who are
enrolled, on the other hand, which contract results in obligations for both parties:
When an academic institution accepts students for enrollment, there is established
a contract between them, resulting in bilateral obligations which parties are bound
to comply with. For its part, the school undertakes to provide the student with an
education that would presumably suffice to equip him with the necessary tools
and skills to pursue higher education or a profession. On the other hand, the
student covenants to abide by the school's academic requirements and observe its
rules and regulations.
Institutions of learning must also meet the implicit or "built-in" obligation of
providing their students with an atmosphere that promotes or assists in attaining
its primary undertaking of imparting knowledge. Certainly, no student can absorb
the intricacies of physics or higher mathematics or explore the realm of the arts
and other sciences when bullets are flying or grenades exploding in the air or
where there looms around the school premises a constant threat to life and limb.
Necessarily, the school must ensure that adequate steps are taken to maintain
peace and order within the campus premises and to prevent the breakdown
thereof. 6
In that case, the Court was careful to point out that:
4
In the circumstances obtaining in the case at bar, however, there is, as yet, no
finding that the contract between the school and Bautista had been breached thru
the former's negligence in providing proper security measures. This would be for
the trial court to determine. And, even if there be a finding of negligence, the same
could give rise generally to a breach of contractual obligation only. Using the test
of Cangco, supra, the negligence of the school would not be relevant absent a
contract. In fact, that negligence becomes material only because of the contractual
relation between PSBA and Bautista. In other words, a contractual relation is a
condition sine qua non to the school's liability. The negligence of the school cannot
exist independently of the contract, unless the negligence occurs under the
circumstances set out in Article 21 of the Civil Code.
The Court is not unmindful of the attendant difficulties posed by the obligation of
schools, above-mentioned, for conceptually a school, like a common carrier,
cannot be an insurer of its students against all risks. This is specially true in the
populous student communities of the so-called "university belt" in Manila where
there have been reported several incidents ranging from gang wars to other forms
of hooliganism. It would not be equitable to expect of schools to anticipate all types
of violent trespass upon their premises, for notwithstanding the security measures
installed, the same may still fail against an individual or group determined to
carry out a nefarious deed inside school premises and environs. Should this be the
case, the school may still avoid liability by proving that the breach of its
contractual obligation to the students was not due to its negligence, here
statutorily defined to be the omission of that degree of diligence which is required
by the nature of obligation and corresponding to the circumstances of person, time
and place. 7
In the PSBA case, the trial court had denied the school's motion to dismiss the complaint
against it, and both the Court of Appeals and this Court affirmed the trial court's order.
In the case at bar, the court a quo granted the motion to dismiss filed by respondent
Colleges, upon the assumption that petitioner's cause of action was based, and could have
been based, only on Article 2180 of the Civil Code. As PSBA, however, states, acts which
are tortious or allegedly tortious in character may at the same time constitute breach of a
contractual, or other legal, obligation. Respondent trial judge was in serious error when
he supposed that petitioner could have no cause of action other than one based on Article
2180 of the Civil Code. Respondent trial judge should not have granted the motion to
dismiss but rather should have, in the interest of justice, allowed petitioner to prove acts
constituting breach of an obligation ex contractu or ex lege on the part of respondent
Colleges.
In line, therefore, with the most recent jurisprudence of this Court, and in order to avoid
a possible substantial miscarriage of justice, and putting aside technical considerations,
we consider that respondent trial judge committed serious error correctible by this Court
in the instant case.
ACCORDINGLY, the Court Resolved to GRANT DUE COURSE to the Petition, to TREAT
the comment of respondent Colleges as its answer, and to REVERSE and SET ASIDE the
Order dated 29 November 1983. This case is REMANDED to the court a quo for further
proceedings consistent with this Resolution.
G.R. No. L-12986 March 31, 1966
THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF
DOMINGA ONG, petitioners-appellants, vs. CALTEX (PHIL.), INC., MATEO
BOQUIREN and THE COURT OF APPEALS, respondents-appellees.
MAKALINTAL., J.:
This case is before us on a petition for review of the decision of the Court of Appeals,
which affirmed that of the Court of First Instance of Manila dismissing petitioners' second
amended complaint against respondents.
The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears
that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the
corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being
hosed from a tank truck into the underground storage, right at the opening of the
receiving tank where the nozzle of the hose was inserted. The fire spread to and burned
several neighboring houses, including the personal properties and effects inside them.
Their owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and
Mateo Boquiren, the first as alleged owner of the station and the second as its agent in
charge of operation. Negligence on the part of both of them was attributed as the cause
of the fire.
The trial court and the Court of Appeals found that petitioners failed to prove negligence
and that respondents had exercised due care in the premises and with respect to the
supervision of their employees.
The first question before Us refers to the admissibility of certain reports on the fire
prepared by the Manila Police and Fire Departments and by a certain Captain Tinio of the
Armed Forces of the Philippines. Portions of the first two reports are as follows:
1. Police Department report: —
Investigation disclosed that at about 4:00 P.M. March 18, 1948, while
Leandro Flores was transferring gasoline from a tank truck, plate No.
T-5292 into the underground tank of the Caltex Gasoline Station
located at the corner of Rizal Avenue and Antipolo Street, this City, an
unknown Filipino lighted a cigarette and threw the burning match stick
near the main valve of the said underground tank. Due to the gasoline
fumes, fire suddenly blazed. Quick action of Leandro Flores in pulling
off the gasoline hose connecting the truck with the underground tank
prevented a terrific explosion. However, the flames scattered due to the
5
hose from which the gasoline was spouting. It burned the truck and the
following accessorias and residences.
2. The Fire Department report: —
In connection with their allegation that the premises was (sic) subleased for the
installation of a coca-cola and cigarette stand, the complainants furnished this
Office a copy of a photograph taken during the fire and which is submitted
herewith. it appears in this picture that there are in the premises a coca-cola
cooler and a rack which according to information gathered in the neighborhood
contained cigarettes and matches, installed between the gasoline pumps and the
underground tanks.
The report of Captain Tinio reproduced information given by a certain Benito Morales
regarding the history of the gasoline station and what the chief of the fire department had
told him on the same subject.
The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and
hence inadmissible. This ruling is now assigned as error. It is contended: first, that said
reports were admitted by the trial court without objection on the part of respondents;
secondly, that with respect to the police report (Exhibit V-Africa) which appears signed
by a Detective Zapanta allegedly "for Salvador Capacillo," the latter was presented as
witness but respondents waived their right to cross-examine him although they had the
opportunity to do so; and thirdly, that in any event the said reports are admissible as an
exception to the hearsay rule under section 35 of Rule 123, now Rule 130.
The first contention is not borne out by the record. The transcript of the hearing of
September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as
evidence, were objected to by counsel for each of respondents on the ground that they
were hearsay and that they were "irrelevant, immaterial and impertinent." Indeed, in the
court's resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the
admission of the others, including the disputed ones, carried no such explanation.
On the second point, although Detective Capacillo did take the witness stand, he was not
examined and he did not testify as to the facts mentioned in his alleged report (signed by
Detective Zapanta). All he said was that he was one of those who investigated "the
location of the fire and, if possible, gather witnesses as to the occurrence, and that he
brought the report with him. There was nothing, therefore, on which he need be cross-
examined; and the contents of the report, as to which he did not testify, did not thereby
become competent evidence. And even if he had testified, his testimony would still have
been objectionable as far as information gathered by him from third persons was
concerned.
Petitioners maintain, however, that the reports in themselves, that is, without further
testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which
provides that "entries in official records made in the performance of his duty by a public
officer of the Philippines, or by a person in the performance of a duty specially enjoined
by law, are prima facie evidence of the facts therein stated."
There are three requisites for admissibility under the rule just mentioned: (a) that the
entry was made by a public officer, or by another person specially enjoined by law to do
so; (b) that it was made by the public officer in the performance of his duties, or by such
other person in the performance of a duty specially enjoined by law; and (c) that the public
officer or other person had sufficient knowledge of the facts by him stated, which must
have been acquired by him personally or through official information (Moran, Comments
on the Rules of Court, Vol. 3 [1957] p. 398).
Of the three requisites just stated, only the last need be considered here. Obviously the
material facts recited in the reports as to the cause and circumstances of the fire were not
within the personal knowledge of the officers who conducted the investigation. Was
knowledge of such facts, however, acquired by them through official information? As to
some facts the sources thereof are not even identified. Others are attributed to Leopoldo
Medina, referred to as an employee at the gas station were the fire occurred; to Leandro
Flores, driver of the tank truck from which gasoline was being transferred at the time to
the underground tank of the station; and to respondent Mateo Boquiren, who could not,
according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their
statements as "official information" acquired by the officers who prepared the reports, the
persons who made the statements not only must have personal knowledge of the facts
stated but must have the duty to give such statements for record. 1
The reports in question do not constitute an exception to the hearsay rule; the facts stated
therein were not acquired by the reporting officers through official information, not
having been given by the informants pursuant to any duty to do so.
The next question is whether or not, without proof as to the cause and origin of the fire,
the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of
appellees. Both the trial court and the appellate court refused to apply the doctrine in the
instant case on the grounds that "as to (its) applicability ... in the Philippines, there seems
to he nothing definite," and that while the rules do not prohibit its adoption in appropriate
cases, "in the case at bar, however, we find no practical use for such doctrine." The
question deserves more than such summary dismissal. The doctrine has actually been
applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co.
(CA-G.R. No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals
was penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court.
The facts of that case are stated in the decision as follows:
In the afternoon of May 5, 1946, while the plaintiff-appellee and other
companions were loading grass between the municipalities of Bay and Calauan,
in the province of Laguna, with clear weather and without any wind blowing,
an electric transmission wire, installed and maintained by the defendant
Philippine Power and Development Co., Inc. alongside the road, suddenly
6
parted, and one of the broken ends hit the head of the plaintiff as he was about
to board the truck. As a result, plaintiff received the full shock of 4,400 volts
carried by the wire and was knocked unconscious to the ground. The electric
charge coursed through his body and caused extensive and serious multiple
burns from skull to legs, leaving the bone exposed in some parts and causing
intense pain and wounds that were not completely healed when the case was
tried on June 18, 1947, over one year after the mishap.
The defendant therein disclaimed liability on the ground that the plaintiff had failed to
show any specific act of negligence, but the appellate court overruled the defense under
the doctrine of res ipsa loquitur. The court said:
The first point is directed against the sufficiency of plaintiff's evidence to place
appellant on its defense. While it is the rule, as contended by the appellant, that
in case of noncontractual negligence, or culpa aquiliana, the burden of proof is on
the plaintiff to establish that the proximate cause of his injury was the negligence
of the defendant, it is also a recognized principal that "where the thing which
caused injury, without fault of the injured person, is under the exclusive control
of the defendant and the injury is such as in the ordinary course of things does
not occur if he having such control use proper care, it affords reasonable
evidence, in the absence of the explanation, that the injury arose from
defendant's want of care."
And the burden of evidence is shifted to him to establish that he has observed
due care and diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89,
56 L. ed. 680.) This rule is known by the name of res ipsa loquitur (the transaction
speaks for itself), and is peculiarly applicable to the case at bar, where it is
unquestioned that the plaintiff had every right to be on the highway, and the
electric wire was under the sole control of defendant company. In the ordinary
course of events, electric wires do not part suddenly in fair weather and injure
people, unless they are subjected to unusual strain and stress or there are defects
in their installation, maintenance and supervision; just as barrels do not
ordinarily roll out of the warehouse windows to injure passersby, unless some
one was negligent. (Byrne v. Boadle, 2 H & Co. 722; 159 Eng. Reprint 299, the
leading case that established that rule). Consequently, in the absence of
contributory negligence (which is admittedly not present), the fact that the wire
snapped suffices to raise a reasonable presumption of negligence in its
installation, care and maintenance. Thereafter, as observed by Chief Baron
Pollock, "if there are any facts inconsistent with negligence, it is for the defendant
to prove."
It is true of course that decisions of the Court of Appeals do not lay down doctrines
binding on the Supreme Court, but we do not consider this a reason for not applying the
particular doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible
material, in the storage and sale of which extreme care must be taken. On the other hand,
fire is not considered a fortuitous event, as it arises almost invariably from some act of
man. A case strikingly similar to the one before Us is Jones vs. Shell Petroleum
Corporation, et al., 171 So. 447:
Arthur O. Jones is the owner of a building in the city of Hammon which in the
year 1934 was leased to the Shell Petroleum Corporation for a gasoline filling
station. On October 8, 1934, during the term of the lease, while gasoline was
being transferred from the tank wagon, also operated by the Shell Petroleum
Corporation, to the underground tank of the station, a fire started with resulting
damages to the building owned by Jones. Alleging that the damages to his
building amounted to $516.95, Jones sued the Shell Petroleum Corporation for
the recovery of that amount. The judge of the district court, after hearing the
testimony, concluded that plaintiff was entitled to a recovery and rendered
judgment in his favor for $427.82. The Court of Appeals for the First Circuit
reversed this judgment, on the ground the testimony failed to show with
reasonable certainty any negligence on the part of the Shell Petroleum
Corporation or any of its agents or employees. Plaintiff applied to this Court for
a Writ of Review which was granted, and the case is now before us for
decision.1äwphï1.ñët
In resolving the issue of negligence, the Supreme Court of Louisiana held:
Plaintiff's petition contains two distinct charges of negligence — one relating to
the cause of the fire and the other relating to the spreading of the gasoline about
the filling station.
Other than an expert to assess the damages caused plaintiff's building by the
fire, no witnesses were placed on the stand by the defendant.
Taking up plaintiff's charge of negligence relating to the cause of the fire, we find
it established by the record that the filling station and the tank truck were under
the control of the defendant and operated by its agents or employees. We further
find from the uncontradicted testimony of plaintiff's witnesses that fire started
in the underground tank attached to the filling station while it was being filled
from the tank truck and while both the tank and the truck were in charge of and
being operated by the agents or employees of the defendant, extended to the
hose and tank truck, and was communicated from the burning hose, tank truck,
and escaping gasoline to the building owned by the plaintiff.
Predicated on these circumstances and the further circumstance of defendant's
failure to explain the cause of the fire or to show its lack of knowledge of the
cause, plaintiff has evoked the doctrine of res ipsa loquitur. There are many cases
in which the doctrine may be successfully invoked and this, we think, is one of
them.
Where the thing which caused the injury complained of is shown to be under
the management of defendant or his servants and the accident is such as in the
7
ordinary course of things does not happen if those who have its management or
control use proper care, it affords reasonable evidence, in absence of explanation
by defendant, that the accident arose from want of care. (45 C.J. #768, p. 1193).
This statement of the rule of res ipsa loquitur has been widely approved and
adopted by the courts of last resort. Some of the cases in this jurisdiction in which
the doctrine has been applied are the following, viz.: Maus v. Broderick, 51 La.
Ann. 1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So.
731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La.
63, 38 So. 892; Bents v. Page, 115 La. 560, 39 So. 599.
The principle enunciated in the aforequoted case applies with equal force here. The
gasoline station, with all its appliances, equipment and employees, was under the control
of appellees. A fire occurred therein and spread to and burned the neighboring houses.
The persons who knew or could have known how the fire started were appellees and
their employees, but they gave no explanation thereof whatsoever. It is a fair and
reasonable inference that the incident happened because of want of care.
In the report submitted by Captain Leoncio Mariano of the Manila Police Department
(Exh. X-1 Africa) the following appears:
Investigation of the basic complaint disclosed that the Caltex Gasoline Station
complained of occupies a lot approximately 10 m x 10 m at the southwest corner
of Rizal Avenue and Antipolo. The location is within a very busy business
district near the Obrero Market, a railroad crossing and very thickly populated
neighborhood where a great number of people mill around t
until
gasoline
tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded
and this constitute a secondary hazard to its operation which in turn endangers
the entire neighborhood to conflagration.
Furthermore, aside from precautions already taken by its operator the concrete
walls south and west adjoining the neighborhood are only 2-1/2 meters high at
most and cannot avoid the flames from leaping over it in case of fire.
Records show that there have been two cases of fire which caused not only
material damages but desperation and also panic in the neighborhood.
Although the soft drinks stand had been eliminated, this gasoline service station
is also used by its operator as a garage and repair shop for his fleet of taxicabs
 numbering ten or more, adding another risk to the possible outbreak of fire at
this already small but crowded gasoline station.
The foregoing report, having been submitted by a police officer in the performance of his
duties on the basis of his own personal observation of the facts reported, may properly
be considered as an exception to the hearsay rule. These facts, descriptive of the location
and objective circumstances surrounding the operation of the gasoline station in question,
strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since
on their face they called for more stringent measures of caution than those which would
satisfy the standard of due diligence under ordinary circumstances. There is no more
eloquent demonstration of this than the statement of Leandro Flores before the police
investigator. Flores was the driver of the gasoline tank wagon who, alone and without
assistance, was transferring the contents thereof into the underground storage when the
fire broke out. He said: "Before loading the underground tank there were no people, but
while the loading was going on, there were people who went to drink coca-cola (at the
coca-cola stand) which is about a meter from the hole leading to the underground tank."
He added that when the tank was almost filled he went to the tank truck to close the
valve, and while he had his back turned to the "manhole" he, heard someone shout "fire."
Even then the fire possibly would not have spread to the neighboring houses were it not
for another negligent omission on the part of defendants, namely, their failure to provide
a concrete wall high enough to prevent the flames from leaping over it. As it was the
concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely of
galvanized iron sheets, which would predictably crumple and melt when subjected to
intense heat. Defendants' negligence, therefore, was not only with respect to the cause of
the fire but also with respect to the spread thereof to the neighboring houses.
There is an admission on the part of Boquiren in his amended answer to the second
amended complaint that "the fire was caused through the acts of a stranger who, without
authority, or permission of answering defendant, passed through the gasoline station and
negligently threw a lighted match in the premises." No evidence on this point was
adduced, but assuming the allegation to be true — certainly any unfavorable inference
from the admission may be taken against Boquiren — it does not extenuate his negligence.
A decision of the Supreme Court of Texas, upon facts analogous to those of the present
case, states the rule which we find acceptable here. "It is the rule that those who distribute
a dangerous article or agent, owe a degree of protection to the public proportionate to
and commensurate with a danger involved ... we think it is the generally accepted rule as
applied to torts that 'if the effects of the actor's negligent conduct actively and
continuously operate to bring about harm to another, the fact that the active and
substantially simultaneous operation of the effects of a third person's innocent, tortious
or criminal act is also a substantial factor in bringing about the harm, does not protect the
actor from liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in
another way, "The intention of an unforeseen and unexpected cause, is not sufficient to
relieve a wrongdoer from consequences of negligence, if such negligence directly and
proximately cooperates with the independent cause in the resulting injury." (MacAfee, et
al. vs. Traver's Gas Corporation, 153 S.W. 2nd 442.)
8
The next issue is whether Caltex should be held liable for the damages caused to
appellants. This issue depends on whether Boquiren was an independent contractor, as
held by the Court of Appeals, or an agent of Caltex. This question, in the light of the facts
not controverted, is one of law and hence may be passed upon by this Court. These facts
are: (1) Boquiren made an admission that he was an agent of Caltex; (2) at the time of the
fire Caltex owned the gasoline station and all the equipment therein; (3) Caltex exercised
control over Boquiren in the management of the state; (4) the delivery truck used in
delivering gasoline to the station had the name of CALTEX painted on it; and (5) the
license to store gasoline at the station was in the name of Caltex, which paid the license
fees. (Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-
Africa).
In Boquiren's amended answer to the second amended complaint, he denied that he
directed one of his drivers to remove gasoline from the truck into the tank and alleged
that the "alleged driver, if one there was, was not in his employ, the driver being an
employee of the Caltex (Phil.) Inc. and/or the owners of the gasoline station." It is true
that Boquiren later on amended his answer, and that among the changes was one to the
effect that he was not acting as agent of Caltex. But then again, in his motion to dismiss
appellants' second amended complaint the ground alleged was that it stated no cause of
action since under the allegations thereof he was merely acting as agent of Caltex, such
that he could not have incurred personal liability. A motion to dismiss on this ground is
deemed to be an admission of the facts alleged in the complaint.
Caltex admits that it owned the gasoline station as well as the equipment therein, but
claims that the business conducted at the service station in question was owned and
operated by Boquiren. But Caltex did not present any contract with Boquiren that would
reveal the nature of their relationship at the time of the fire. There must have been one in
existence at that time. Instead, what was presented was a license agreement manifestly
tailored for purposes of this case, since it was entered into shortly before the expiration
of the one-year period it was intended to operate. This so-called license agreement
(Exhibit 5-Caltex) was executed on November 29, 1948, but made effective as of January
1, 1948 so as to cover the date of the fire, namely, March 18, 1948. This retroactivity
provision is quite significant, and gives rise to the conclusion that it was designed
precisely to free Caltex from any responsibility with respect to the fire, as shown by the
clause that Caltex "shall not be liable for any injury to person or property while in the
property herein licensed, it being understood and agreed that LICENSEE (Boquiren) is
not an employee, representative or agent of LICENSOR (Caltex)."
But even if the license agreement were to govern, Boquiren can hardly be considered an
independent contractor. Under that agreement Boquiren would pay Caltex the purely
nominal sum of P1.00 for the use of the premises and all the equipment therein. He could
sell only Caltex Products. Maintenance of the station and its equipment was subject to the
approval, in other words control, of Caltex. Boquiren could not assign or transfer his
rights as licensee without the consent of Caltex. The license agreement was supposed to
be from January 1, 1948 to December 31, 1948, and thereafter until terminated by Caltex
upon two days prior written notice. Caltex could at any time cancel and terminate the
agreement in case Boquiren ceased to sell Caltex products, or did not conduct the business
with due diligence, in the judgment of Caltex. Termination of the contract was therefore
a right granted only to Caltex but not to Boquiren. These provisions of the contract show
the extent of the control of Caltex over Boquiren. The control was such that the latter was
virtually an employee of the former.
Taking into consideration the fact that the operator owed his position to the
company and the latter could remove him or terminate his services at will; that
the service station belonged to the company and bore its tradename and the
operator sold only the products of the company; that the equipment used by the
operator belonged to the company and were just loaned to the operator and the
company took charge of their repair and maintenance; that an employee of the
company supervised the operator and conducted periodic inspection of the
company's gasoline and service station; that the price of the products sold by the
operator was fixed by the company and not by the operator; and that the receipts
signed by the operator indicated that he was a mere agent, the finding of the
Court of Appeals that the operator was an agent of the company and not an
independent contractor should not be disturbed.
To determine the nature of a contract courts do not have or are not bound to rely
upon the name or title given it by the contracting parties, should thereby a
controversy as to what they really had intended to enter into, but the way the
contracting parties do or perform their respective obligations stipulated or
agreed upon may be shown and inquired into, and should such performance
conflict with the name or title given the contract by the parties, the former must
prevail over the latter. (Shell Company of the Philippines, Ltd. vs. Firemens'
Insurance Company of Newark, New Jersey, 100 Phil. 757).
The written contract was apparently drawn for the purpose of creating the
apparent relationship of employer and independent contractor, and of avoiding
liability for the negligence of the employees about the station; but the company
was not satisfied to allow such relationship to exist. The evidence shows that it
immediately assumed control, and proceeded to direct the method by which the
work contracted for should be performed. By reserving the right to terminate
the contract at will, it retained the means of compelling submission to its orders.
Having elected to assume control and to direct the means and methods by which
the work has to be performed, it must be held liable for the negligence of those
performing service under its direction. We think the evidence was sufficient to
sustain the verdict of the jury. (Gulf Refining Company v. Rogers, 57 S.W. 2d,
183).
Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no
cash invoices were presented to show that Boquiren had bought said gasoline from
Caltex. Neither was there a sales contract to prove the same.
As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the
amount of P2,000.00 collected by them on the insurance of the house. The deduction is
9
now challenged as erroneous on the ground that Article 2207 of the New Civil Code,
which provides for the subrogation of the insurer to the rights of the insured, was not yet
in effect when the loss took place. However, regardless of the silence of the law on this
point at that time, the amount that should be recovered be measured by the damages
actually suffered, otherwise the principle prohibiting unjust enrichment would be
violated. With respect to the claim of the heirs of Ong P7,500.00 was adjudged by the
lower court on the basis of the assessed value of the property destroyed, namely,
P1,500.00, disregarding the testimony of one of the Ong children that said property was
worth P4,000.00. We agree that the court erred, since it is of common knowledge that the
assessment for taxation purposes is not an accurate gauge of fair market value, and in this
case should not prevail over positive evidence of such value. The heirs of Ong are
therefore entitled to P10,000.00.
Wherefore, the decision appealed from is reversed and respondents-appellees are held
liable solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80
and P10,000.00, respectively, with interest from the filing of the complaint, and costs.
G.R. No. 115024 February 7, 1996
MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI
and ALEXANDER COMMERCIAL, INC., respondents.
x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x
G.R. No. 117944 February 7, 1996
RICHARD LI, petitioner, vs. COURT OF APPEALS and LOURDES
VALENZUELA, respondents.
DECISION
KAPUNAN, J.:
These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court
stem from an action to recover damages by petitioner Lourdes Valenzuela in the Regional
Trial Court of Quezon City for injuries sustained by her in a vehicular accident in the
early morning of June 24, 1990. The facts found by the trial court are succinctly
summarized by the Court of Appeals below:
This is an action to recover damages based on quasi-delict, for serious physical
injuries sustained in a vehicular accident.
Plaintiff's version of the accident is as follows: At around 2:00 in the morning of
June 24, 1990, plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi
lancer with Plate No. FFU 542 from her restaurant at Marcos highway to her
home at Palanza Street, Araneta Avenue. She was travelling along Aurora Blvd.
with a companion, Cecilia Ramon, heading towards the direction of Manila.
Before reaching A. Lake Street, she noticed something wrong with her tires; she
stopped at a lighted place where there were people, to verify whether she had a
flat tire and to solicit help if needed. Having been told by the people present that
her rear right tire was flat and that she cannot reach her home in that car's
condition, she parked along the sidewalk, about 1-1/2 feet away, put on her
emergency lights, alighted from the car, and went to the rear to open the trunk.
She was standing at the left side of the rear of her car pointing to the tools to a
man who will help her fix the tire when she was suddenly bumped by a 1987
Mitsubishi Lancer driven by defendant Richard Li and registered in the name of
defendant Alexander Commercial, Inc. Because of the impact plaintiff was
thrown against the windshield of the car of the defendant, which was destroyed,
and then fell to the ground. She was pulled out from under defendant's car.
Plaintiff's left leg was severed up to the middle of her thigh, with only some skin
and sucle connected to the rest of the body. She was brought to the UERM
Medical Memorial Center where she was found to have a "traumatic
amputation, leg, left up to distal thigh (above knee)". She was confined in the
hospital for twenty (20) days and was eventually fitted with an artificial leg. The
expenses for the hospital confinement (P120,000.00) and the cost of the artificial
leg (P27,000.00) were paid by defendants from the car insurance.
In her complaint, plaintiff prayed for moral damages in the amount of P1
million, exemplary damages in the amount of P100,000.00 and other medical and
related expenses amounting to a total of P180,000.00, including loss of expected
earnings.
Defendant Richard Li denied that he was negligent. He was on his way home,
travelling at 55 kph; considering that it was raining, visibility was affected and
the road was wet. Traffic was light. He testified that he was driving along the
inner portion of the right lane of Aurora Blvd. towards the direction of Araneta
Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San
Juan, with a car coming from the opposite direction, travelling at 80 kph, with
"full bright lights". Temporarily blinded, he instinctively swerved to the right to
avoid colliding with the oncoming vehicle, and bumped plaintiff's car, which he
did not see because it was midnight blue in color, with no parking lights or early
warning device, and the area was poorly lighted. He alleged in his defense that
the left rear portion of plaintiff's car was protruding as it was then "at a standstill
diagonally" on the outer portion of the right lane towards Araneta Avenue (par.
18, Answer). He confirmed the testimony of plaintiff's witness that after being
bumped the car of the plaintiff swerved to the right and hit another car parked
on the sidewalk. Defendants counterclaimed for damages, alleging that plaintiff
was reckless or negligent, as she was not a licensed driver.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident
report and the sketch of the three cars involved in the accident, testified that the
plaintiff's car was "near the sidewalk"; this witness did not remember whether
the hazard lights of plaintiff's car were on, and did not notice if there was an
early warning device; there was a street light at the corner of Aurora Blvd. and
F. Roman, about 100 meters away. It was not mostly dark, i.e. "things can be
seen" (p. 16, tsn, Oct. 28, 1991).
10
A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff
alighted from her car and opened the trunk compartment, defendant's car came
approaching very fast ten meters from the scene; the car was "zigzagging". The
rear left side of plaintiff's car was bumped by the front right portion of
defendant's car; as a consequence, the plaintiff's car swerved to the right and hit
the parked car on the sidewalk. Plaintiff was thrown to the windshield of
defendant's car, which was destroyed, and landed under the car. He stated that
defendant was under the influence of liquor as he could "smell it very well" (pp.
43, 79, tsn, June 17, 1991).
After trial, the lower court sustained the plaintiff's submissions and found defendant
Richard Li guilty of gross negligence and liable for damages under Article 2176 of the
Civil Code. The trial court likewise held Alexander Commercial, Inc., Li's employer,
jointly and severally liable for damages pursuant to Article 2180. It ordered the
defendants to jointly and severally pay the following amounts:
1. P41,840.00, as actual damages, representing the miscellaneous expenses of the
plaintiff as a result of her severed left leg;
2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage
of plaintiff's Bistro La Conga restaurant three (3) weeks after the accident on June
24, 1990; (b) P20,000.00, a month, as unrealized profits of the plaintiff in her
Bistro La Conga restaurant, from August, 1990 until the date of this judgment
and (c) P30,000.00, a month for unrealized profits in plaintiff's two (2) beauty
salons from July, 1990 until the date of this decision;
3. P1,000,000.00, in moral damages;
4. P50,000.00, as exemplary damages;
5. P60,000.00, as reasonable attorney's fees; and
6. Costs.
As a result of the trial court's decision, defendants filed an Omnibus Motion for New Trial
and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs.
Richard Li), tending to show that the point of impact, as depicted by the pieces of
glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora
Blvd. The trial court denied the motion. Defendants forthwith filed an appeal with the
respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of
Appeals found that there was "ample basis from the evidence of record for the trial court's
finding that the plaintiff's car was properly parked at the right, beside the sidewalk when
it was bumped by defendant's car."1 Dismissing the defendants' argument that the
plaintiff's car was improperly parked, almost at the center of the road, the respondent
court noted that evidence which was supposed to prove that the car was at or near center
of the right lane was never presented during the trial of the case.2 The respondent court
furthermore observed that:
Defendant Li's testimony that he was driving at a safe speed of 55 km./hour is
self serving; it was not corroborated. It was in fact contradicted by eyewitness
Rodriguez who stated that he was outside his beerhouse located at Aurora
Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when his
attention was caught by a beautiful lady (referring to the plaintiff) alighting from
her car and opening the trunk compartment; he noticed the car of Richard Li
"approaching very fast ten (10) meters away from the scene"; defendant's car was
zigzagging", although there were no holes and hazards on the street, and
"bumped the leg of the plaintiff" who was thrown against the windshield of
defendant's care, causing its destruction. He came to the rescue of the plaintiff,
who was pulled out from under defendant's car and was able to say "hurting
words" to Richard Li because he noticed that the latter was under the influence
of liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June 17, 1991).
He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970's, but did not
know either plaintiff or defendant Li before the accident.
In agreeing with the trial court that the defendant Li was liable for the injuries sustained
by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's employer,
Alexander Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela
and reduced the amount of moral damages to P500,000.00. Finding justification for
exemplary damages, the respondent court allowed an award of P50,000.00 for the same,
in addition to costs, attorney's fees and the other damages. The Court of Appeals,
likewise, dismissed the defendants' counterclaims.3
Consequently, both parties assail the respondent court's decision by filing two separate
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be
held liable for damages because the proximate cause of the accident was Ma. Lourdes
Valenzuela's own negligence. Alternatively, he argues that in the event that this Court
finds him negligent, such negligence ought to be mitigated by the contributory negligence
of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent
court's decision insofar as it absolves Alexander Commercial, Inc. from liability as the
owner of the car driven by Richard Li and insofar as it reduces the amount of the actual
and moral damages awarded by the trial court.4
As the issues are intimately related, both petitions are hereby consolidated.
It is plainly evident that the petition for review in G.R. No. 117944 raises no substantial
questions of law. What it, in effect, attempts to have this Court review are factual findings
of the trial court, as sustained by the Court of Appeals finding Richard Li grossly
negligent in driving the Mitsubishi Lancer provided by his company in the early morning
hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court
11
of Appeals are binding and conclusive upon us, and this Court will not normally disturb
such factual findings unless the findings of fact of the said court are palpably
unsupported by the evidence on record or unless the judgment itself is based on a
misapprehension of facts.5
In the first place, Valenzuela's version of the incident was fully corroborated by an
uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located
just across the scene of the accident. On trial, he testified that he observed a car being
driven at a "very fast" speed, racing towards the general direction of Araneta
Avenue.6 Rodriguez further added that he was standing in front of his establishment, just
ten to twenty feet away from the scene of the accident, when he saw the car hit
Valenzuela, hurtling her against the windshield of the defendant's Mitsubishi Lancer,
from where she eventually fell under the defendant's car. Spontaneously reacting to the
incident, he crossed the street, noting that a man reeking with the smell of liquor had
alighted from the offending vehicle in order to survey the incident. 7 Equally important,
Rodriguez declared that he observed Valenzuela's car parked parallel and very near the
sidewalk,8 contrary to Li's allegation that Valenzuela's car was close to the center of the
right lane. We agree that as between Li's "self-serving" asseverations and the observations
of a witness who did not even know the accident victim personally and who immediately
gave a statement of the incident similar to his testimony to the investigator immediately
after the incident, the latter's testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of the transcript,
We are not prepared to set aside the trial court's reliance on the testimony of
Rodriguez negating defendant's assertion that he was driving at a safe speed.
While Rodriguez drives only a motorcycle, his perception of speed is not
necessarily impaired. He was subjected to cross-examination and no attempt
was made to question .his competence or the accuracy of his statement that
defendant was driving "very fast". This was the same statement he gave to the
police investigator after the incident, as told to a newspaper report (Exh. "P").
We see no compelling basis for disregarding his testimony.
The alleged inconsistencies in Rodriguez' testimony are not borne out by an
examination of the testimony. Rodriguez testified that the scene of the accident
was across the street where his beerhouse is located about ten to twenty feet
away (pp. 35-36, tsn, June 17, 1991). He did not state that the accident transpired
immediately in front of his establishment. The ownership of the Lambingan se
Kambingan is not material; the business is registered in the name of his mother,
but he explained that he owns the establishment (p. 5, tsn, June 20, 1991).
Moreover, the testimony that the streetlights on his side of Aurora Boulevard
were on the night the accident transpired (p. 8) is not necessarily contradictory
to the testimony of Pfc. Ramos that there was a streetlight at the corner of Aurora
Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991).
With respect to the weather condition, Rodriguez testified that there was only a
drizzle, not a heavy rain and the rain has stopped and he was outside his
 establishment at the time the accident transpired (pp. 64-65, tsn, June 17, 1991).
This was consistent with plaintiff's testimony that it was no longer raining when
she left Bistro La Conga (pp. 10-11, tsn, April 29, 1991). It was defendant Li who
stated that it was raining all the way in an attempt to explain why he was
travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc.
Ramos that it was raining, he arrived at the scene only in response to a telephone
call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no
substantial inconsistencies in Rodriguez's testimony that would impair the
essential integrity of his testimony or reflect on his honesty. We are compelled
to affirm the trial court's acceptance of the testimony of said eyewitness.
Against the unassailable testimony of witness Rodriguez we note that Li's testimony was
peppered with so many inconsistencies leading us to conclude that his version of the
accident was merely adroitly crafted to provide a version, obviously self-serving, which
would exculpate him from any and all liability in the incident. Against Valenzuela's
corroborated claims, his allegations were neither backed up by other witnesses nor by the
circumstances proven in the course of trial. He claimed that he was driving merely at a
speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him,
which was (the) plaintiff's car". He alleged that upon seeing this sudden "apparition" he
put on his brakes to no avail as the road was slippery.9
One will have to suspend disbelief in order to give credence to Li's disingenuous and
patently self-serving asseverations. The average motorist alert to road conditions will have
no difficulty applying the brakes to a car traveling at the speed claimed by Li. Given a
light rainfall, the visibility of the street, and the road conditions on a principal
metropolitan thoroughfare like Aurora Boulevard, Li would have had ample time to react
to the changing conditions of the road if he were alert - as every driver should be - to
those conditions. Driving exacts a more than usual toll on the senses. Physiological "fight
or flight" 10 mechanisms are at work, provided such mechanisms were not dulled by
drugs, alcohol, exhaustion, drowsiness, etc.11 Li's failure to react in a manner which would
have avoided the accident could therefore have been only due to either or both of the two
factors: 1) that he was driving at a "very fast" speed as testified by Rodriguez; and 2) that
he was under the influence of alcohol.12 Either factor working independently would have
diminished his responsiveness to road conditions, since normally he would have slowed
down prior to reaching Valenzuela's car, rather than be in a situation forcing him to
suddenly apply his brakes. As the trial court noted (quoted with approval by respondent
court):
Secondly, as narrated by defendant Richard Li to the San Juan Police
immediately after the incident, he said that while driving along Aurora Blvd.,
out of nowhere he saw a dark maroon lancer right in front of him which was
plaintiff's car, indicating, again, thereby that, indeed, he was driving very fast,
oblivious of his surroundings and the road ahead of him, because if he was not,
then he could not have missed noticing at a still far distance the parked car of
the plaintiff at the right side near the sidewalk which had its emergency lights
on, thereby avoiding forcefully bumping at the plaintiff who was then standing
at the left rear edge of her car.
12
Since, according to him, in his narration to the San Juan Police, he put on his
brakes when he saw the plaintiff's car in front of him, but that it failed as the
road was wet and slippery, this goes to show again, that, contrary to his claim,
he was, indeed, running very fast. For, were it otherwise, he could have easily
completely stopped his car, thereby avoiding the bumping of the plaintiff,
notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he
was running slow, as he claimed, at only about 55 kilometers per hour, then,
inspite of the wet and slippery road, he could have avoided hitting the plaintiff
by the mere expedient or applying his brakes at the proper time and distance.
It could not be true, therefore, as he now claims during his testimony, which is
contrary to what he told the police immediately after the accident and is,
therefore, more believable, that he did not actually step on his brakes but simply
swerved a little to the right when he saw the on-coming car with glaring
headlights, from the opposite direction, in order to avoid it.
For, had this been what he did, he would not have bumped the car of the plaintiff
which was properly parked at the right beside the sidewalk. And, it was not
even necessary for him to swerve a little to the right in order to safely avoid a
collision with the on-coming car, considering that Aurora Blvd. is a double lane
avenue separated at the center by a dotted white paint, and there is plenty of
space for both cars, since her car was running at the right lane going towards
Manila on the on-coming car was also on its right lane going to Cubao.13
Having come to the conclusion that Li was negligent in driving his company-issued
Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was
likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard,
which entire area Li points out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory
negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection.14 Based on the foregoing definition, the standard or act
to which, according to petitioner Li, Valenzuela ought to have conformed for her own
protection was not to park at all at any point of Aurora Boulevard, a no parking zone. We
cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted
with an emergency is not to be held up to the standard of conduct normally applied to an
individual who is in no such situation. The law takes stock of impulses of humanity when
placed in threatening or dangerous situations and does not require the same standard of
thoughtful and reflective care from persons confronted by unusual and oftentimes
threatening conditions.15
Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,16 an
individual who suddenly finds himself in a situation of danger and is required to act
without much time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence if he fails to undertake what subsequently
and upon reflection may appear to be a better solution, unless the emergency was brought
by his own negligence.17
Applying this principle to a case in which the victims in a vehicular accident swerved to
the wrong lane to avoid hitting two children suddenly darting into the street, we held,
in Mc Kee vs. Intermediate Appellate Court,18 that the driver therein, Jose Koh, "adopted the
best means possible in the given situation" to avoid hitting the children. Using the
"emergency rule" the Court concluded that Koh, in spite of the fact that he was in the
wrong lane when the collision with an oncoming truck occurred, was not guilty of
negligence.19
While the emergency rule applies to those cases in which reflective thought, or the
opportunity to adequately weigh a threatening situation is absent, the conduct which is
required of an individual in such cases is dictated not exclusively by the suddenness of
the event which absolutely negates thoroughful care, but by the over-all nature of the
circumstances. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night
will not be faulted for stopping at a point which is both convenient for her to do so and
which is not a hazard to other motorists. She is not expected to run the entire boulevard
in search for a parking zone or turn on a dark street or alley where she would likely find
no one to help her. It would be hazardous for her not to stop and assess the emergency
(simply because the entire length of Aurora Boulevard is a no-parking zone) because the
hobbling vehicle would be both a threat to her safety and to other motorists. In the instant
case, Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St.,
noticed that she had a flat tire. To avoid putting herself and other motorists in danger,
she did what was best under the situation. As narrated by respondent court: "She stopped
at a lighted place where there were people, to verify whether she had a flat tire and to
solicit help if needed. Having been told by the people present that her rear right tire was
flat and that she cannot reach her home she parked along the sidewalk, about 1 1/2 feet
away, behind a Toyota Corona Car."20 In fact, respondent court noted, Pfc. Felix Ramos,
the investigator on the scene of the accident confirmed that Valenzuela's car was parked
very close to the sidewalk.21 The sketch which he prepared after the incident showed
Valenzuela's car partly straddling the sidewalk, clear and at a convenient distance from
motorists passing the right lane of Aurora Boulevard. This fact was itself corroborated by
the testimony of witness Rodriguez.22
Under the circumstances described, Valenzuela did exercise the standard reasonably
dictated by the emergency and could not be considered to have contributed to the
unfortunate circumstances which eventually led to the amputation of one of her lower
extremities. The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had taken all
reasonable precautions.
13
Obviously in the case at bench, the only negligence ascribable was the negligence of Li on
the night of the accident. "Negligence, as it is commonly understood is conduct which
creates an undue risk of harm to others."23 It is the failure to observe that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury.24 We stressed, in Corliss vs. Manila Railroad Company,25 that
negligence is the want of care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly
demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears
emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour
had settled into a drizzle rendering the street slippery. There is ample testimonial
evidence on record to show that he was under the influence of liquor. Under these
conditions, his chances of effectively dealing with changing conditions on the road were
significantly lessened. As Presser and Keaton emphasize:
[U]nder present day traffic conditions, any driver of an automobile must be
prepared for the sudden appearance of obstacles and persons on the highway,
and of other vehicles at intersections, such as one who sees a child on the curb
may be required to anticipate its sudden dash into the street, and his failure to
act properly when they appear may be found to amount to negligence.26
Li's obvious unpreparedness to cope with the situation confronting him on the night of
the accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Li's employer.
In denying liability on the part of Alexander Commercial, the respondent court held that:
There is no evidence, not even defendant Li's testimony, that the visit was in
connection with official matters. His functions as assistant manager sometimes
required him to perform work outside the office as he has to visit buyers and
company clients, but he admitted that on the night of the accident he came from
BF Homes Paranaque he did not have "business from the company" (pp. 25-26,
ten, Sept. 23, 1991). The use of the company car was partly required by the nature
of his work, but the privilege of using it for non-official business is a "benefit",
apparently referring to the fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in
the discharge of their respective duties, the basis of which liability is
not respondeat superior, but the relationship of pater familias, which theory bases
the liability of the master ultimately on his own negligence and not on that of
his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer
may be held liable for the negligence of his employee, the act or omission which
caused damage must have occurred while an employee was in the actual
performance of his assigned tasks or duties (Francis High School vs. Court of
Appeals, 194 SCRA 341). In defining an employer's liability for the acts done
within the scope of the employee's assigned tasks, the Supreme Court has held
 that this includes any act done by an employee, in furtherance of the interests of
the employer or for the account of the employer at the time of the infliction of
the injury or damage (Filamer Christian Institute vs. Intermediate Appellate
Court, 212 SCRA 637). An employer is expected to impose upon its employees
the necessary discipline called for in the performance of any act "indispensable
to the business and beneficial to their employer" (at p. 645).
In light of the foregoing, We are unable to sustain the trial court's finding that
since defendant Li was authorized by the company to use the company car
"either officially or socially or even bring it home", he can be considered as using
the company car in the service of his employer or on the occasion of his
functions. Driving the company car was not among his functions as assistant
manager; using it for non-official purposes would appear to be a fringe benefit,
one of the perks attached to his position. But to impose liability upon the
employer under Article 2180 of the Civil Code, earlier quoted, there must be a
showing that the damage was caused by their employees in the service of the
employer or on the occasion of their functions. There is no evidence that Richard
Li was at the time of the accident performing any act in furtherance of the
company's business or its interests, or at least for its benefit. The imposition of
solidary liability against defendant Alexander Commercial Corporation must
therefore fail.27
We agree with the respondent court that the relationship in question is not based on the
principle of respondeat superior, which holds the master liable for acts of the servant, but
that of pater familias, in which the liability ultimately falls upon the employer, for his
failure to exercise the diligence of a good father of the family in the selection and
supervision of his employees. It is up to this point, however, that our agreement with the
respondent court ends. Utilizing the bonus pater familias standard expressed in Article
2180 of the Civil Code, 28 we are of the opinion that Li's employer, Alexander Commercial,
Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals29 upon which respondent court
has placed undue reliance, dealt with the subject of a school and its teacher's supervision
of students during an extracurricular activity. These cases now fall under the provision
on special parental authority found in Art. 218 of the Family Code which generally
encompasses all authorized school activities, whether inside or outside school premises.
Second, the employer's primary liability under the concept of pater familias embodied by
Art 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in
character. His liability is relieved on a showing that he exercised the diligence of a good
father of the family in the selection and supervision of its employees. Once evidence is
introduced showing that the employer exercised the required amount of care in selecting
its employees, half of the employer's burden is overcome. The question of
diligent supervision, however, depends on the circumstances of employment.
14
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision
of its employee during the performance of the latter's assigned tasks would be enough to
relieve him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil
Code. The employer is not expected to exercise supervision over either the employee's
private activities or during the performance of tasks either unsanctioned by the former or
unrelated to the employee's tasks. The case at bench presents a situation of a different
character, involving a practice utilized by large companies with either their employees of
managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with
courtesy vehicles. These company cars are either wholly owned and maintained by the
company itself or are subject to various plans through which employees eventually
acquire their vehicles after a given period of service, or after paying a token amount.
Many companies provide liberal "car plans" to enable their managerial or other
employees of rank to purchase cars, which, given the cost of vehicles these days, they
would not otherwise be able to purchase on their own.
Under the first example, the company actually owns and maintains the car up to the point
of turnover of ownership to the employee; in the second example, the car is really owned
and maintained by the employee himself. In furnishing vehicles to such employees, are
companies totally absolved of responsibility when an accident involving a company-
issued car occurs during private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan,
require rigorous tests of road worthiness from their agents prior to turning over the car
(subject of company maintenance) to their representatives. In other words, like a good
father of a family, they entrust the company vehicle only after they are satisfied that the
employee to whom the car has been given full use of the said company car for company
or private purposes will not be a threat or menace to himself, the company or to others.
When a company gives full use and enjoyment of a company car to its employee, it in
effect guarantees that it is, like every good father, satisfied that its employee will use the
privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of
using a company-issued car. For large companies other than those cited in the example of
the preceding paragraph, the privilege serves important business purposes either related
to the image of success an entity intends to present to its clients and to the public in
general, or - for practical and utilitarian reasons - to enable its managerial and other
employees of rank or its sales agents to reach clients conveniently. In most cases,
providing a company car serves both purposes. Since important business transactions
and decisions may occur at all hours in all sorts of situations and under all kinds of guises,
the provision for the unlimited use of a company car therefore principally serves the
business and goodwill of a company and only incidentally the private purposes of the
individual who actually uses the car, the managerial employee or company sales agent.
As such, in providing for a company car for business use and/or for the purpose of
furthering the company's image, a company owes a responsibility to the public to see to
it that the managerial or other employees to whom it entrusts virtually unlimited use of
a company issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did
not require him to scrupulously keep normal office hours as he was required quite often
to perform work outside the office, visiting prospective buyers and contacting and
meeting with company clients. 30 These meetings, clearly, were not strictly confined to
routine hours because, as a managerial employee tasked with the job of representing his
company with its clients, meetings with clients were both social as well as work-related
functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled
both Li - as well as the corporation - to put up the front of a highly successful entity,
increasing the latter's goodwill before its clientele. It also facilitated meeting between Li
and its clients by providing the former with a convenient mode of travel.
Moreover, Li's claim that he happened to be on the road on the night of the accident
because he was coming from a social visit with an officemate in Paranaque was a bare
allegation which was never corroborated in the court below. It was obviously self-serving.
Assuming he really came from his officemate's place, the same could give rise to
speculation that he and his officemate had just been from a work-related function, or they
were together to discuss sales and other work related strategies.
In fine, Alexander Commercial, inc. has not demonstrated, to our satisfaction, that it
exercised the care and diligence of a good father of the family in entrusting its company
car to Li. No allegations were made as to whether or not the company took the steps
necessary to determine or ascertain the driving proficiency and history of Li, to whom it
gave full and unlimited use of a company car.31 Not having been able to overcome the
burden of demonstrating that it should be absolved of liability for entrusting its company
car to Li, said company, based on the principle of bonus pater familias, ought to be jointly
and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela
during the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent
court, except as to the amount of moral damages. In the case of moral damages, while the
said damages are not intended to enrich the plaintiff at the expense of a defendant, the
award should nonetheless be commensurate to the suffering inflicted. In the instant case
we are of the opinion that the reduction in moral damages from an amount of
P1,000,000.00 to P800,000,00 by the Court of Appeals was not justified considering the
nature of the resulting damage and the predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation
of her left lower extremity at the distal left thigh just above the knee. Because of this,
Valenzuela will forever be deprived of the full ambulatory functions of her left extremity,
even with the use of state of the art prosthetic technology. Well beyond the period of
hospitalization (which was paid for by Li), she will be required to undergo adjustments
in her prosthetic devise due to the shrinkage of the stump from the process of healing.
15
These adjustments entail costs, prosthetic replacements and months of physical and
occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will
have to be replaced and re-adjusted to changes in the size of her lower limb effected by
the biological changes of middle-age, menopause and aging. Assuming she reaches
menopause, for example, the prosthetic will have to be adjusted to respond to the changes
in bone resulting from a precipitate decrease in calcium levels observed in the bones of
all post-menopausal women. In other words, the damage done to her would not only be
permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The
replacements, changes, and adjustments will require corresponding adjustive physical
and occupational therapy. All of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting
damage because it would be highly speculative to estimate the amount of psychological
pain, damage and injury which goes with the sudden severing of a vital portion of the
human body. A prosthetic device, however technologically advanced, will only allow a
reasonable amount of functional restoration of the motor functions of the lower limb. The
sensory functions are forever lost. The resultant anxiety, sleeplessness, psychological
injury, mental and physical pain are inestimable.
As the amount of moral damages are subject to this Court's discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord
with the extent and nature of the injury - physical and psychological - suffered by
Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the
early morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the Court of Appeals is
modified with the effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.
G.R. No. L-11154 March 21, 1916
E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE
ISLANDS, defendant-appellant.
TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city
of Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the
cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general
damages which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the
complaint," and (2) "in limiting the time when plaintiff was entirely disabled to two
months and twenty-one days and fixing the damage accordingly in the sum of P2,666,
instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in
finding that the collision between the plaintiff's motorcycle and the ambulance of the
General Hospital was due to the negligence of the chauffeur; (b) in holding that the
Government of the Philippine Islands is liable for the damages sustained by the plaintiff
as a result of the collision, even if it be true that the collision was due to the negligence of
the chauffeur; and (c) in rendering judgment against the defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff,
riding on a motorcycle, was going toward the western part of Calle Padre Faura,
passing along the west side thereof at a speed of ten to twelve miles an hour,
upon crossing Taft Avenue and when he was ten feet from the southwestern
intersection of said streets, the General Hospital ambulance, upon reaching said
avenue, instead of turning toward the south, after passing the center thereof, so
that it would be on the left side of said avenue, as is prescribed by the ordinance
and the Motor Vehicle Act, turned suddenly and unexpectedly and long before
reaching the center of the street, into the right side of Taft Avenue, without
having sounded any whistle or horn, by which movement it struck the plaintiff,
who was already six feet from the southwestern point or from the post place
there.
By reason of the resulting collision, the plaintiff was so severely injured that,
according to Dr. Saleeby, who examined him on the very same day that he was
taken to the General Hospital, he was suffering from a depression in the left
parietal region, a would in the same place and in the back part of his head, while
blood issued from his nose and he was entirely unconscious.
The marks revealed that he had one or more fractures of the skull and that the
grey matter and brain was had suffered material injury. At ten o'clock of the
night in question, which was the time set for performing the operation, his pulse
was so weak and so irregular that, in his opinion, there was little hope that he
would live. His right leg was broken in such a way that the fracture extended to
the outer skin in such manner that it might be regarded as double and the would
be exposed to infection, for which reason it was of the most serious nature.
At another examination six days before the day of the trial, Dr. Saleeby noticed
that the plaintiff's leg showed a contraction of an inch and a half and a curvature
that made his leg very weak and painful at the point of the fracture. Examination
of his head revealed a notable readjustment of the functions of the brain and
nerves. The patient apparently was slightly deaf, had a light weakness in his
eyes and in his mental condition. This latter weakness was always noticed when
the plaintiff had to do any difficult mental labor, especially when he attempted
to use his money for mathematical calculations.
16
According to the various merchants who testified as witnesses, the plaintiff's
mental and physical condition prior to the accident was excellent, and that after
having received the injuries that have been discussed, his physical condition had
undergone a noticeable depreciation, for he had lost the agility, energy, and
ability that he had constantly displayed before the accident as one of the best
constructors of wooden buildings and he could not now earn even a half of the
income that he had secured for his work because he had lost 50 per cent of his
efficiency. As a contractor, he could no longer, as he had before done, climb up
ladders and scaffoldings to reach the highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work
as a contractor, he had to dissolved the partnership he had formed with the
engineer. Wilson, because he was incapacitated from making mathematical
calculations on account of the condition of his leg and of his mental faculties,
and he had to give up a contract he had for the construction of the Uy Chaco
building."
We may say at the outset that we are in full accord with the trial court to the effect that
the collision between the plaintiff's motorcycle and the ambulance of the General Hospital
was due solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by
the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666,
the amount allowed for the loss of wages during the time the plaintiff was incapacitated
from pursuing his occupation. We find nothing in the record which would justify us in
increasing the amount of the first. As to the second, the record shows, and the trial court
so found, that the plaintiff's services as a contractor were worth P1,000 per month. The
court, however, limited the time to two months and twenty-one days, which the plaintiff
was actually confined in the hospital. In this we think there was error, because it was
clearly established that the plaintiff was wholly incapacitated for a period of six months.
The mere fact that he remained in the hospital only two months and twenty-one days
while the remainder of the six months was spent in his home, would not prevent recovery
for the whole time. We, therefore, find that the amount of damages sustained by the
plaintiff, without any fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee
of the Government, the inquiry at once arises whether the Government is legally-liable
for the damages resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the
Philippine Islands and authorizing the Attorney-General of said Islands to
appear in said suit.
 Whereas a claim has been filed against the Government of the Philippine Islands
by Mr. E. Merritt, of Manila, for damages resulting from a collision between his
motorcycle and the ambulance of the General Hospital on March twenty-fifth,
nineteen hundred and thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to
determine the amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended
that an Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit
in the courts against the Government, in order that said questions may be
decided: Now, therefore,
By authority of the United States, be it enacted by the Philippine Legislature, that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First
Instance of the city of Manila against the Government of the Philippine Islands
in order to fix the responsibility for the collision between his motorcycle and the
ambulance of the General Hospital, and to determine the amount of the
damages, if any, to which Mr. E. Merritt is entitled on account of said collision,
and the Attorney-General of the Philippine Islands is hereby authorized and
directed to appear at the trial on the behalf of the Government of said Islands, to
defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its immunity from
suit or did it also concede its liability to the plaintiff? If only the former, then it cannot be
held that the Act created any new cause of action in favor of the plaintiff or extended the
defendant's liability to any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual
without its consent. It is also admitted that the instant case is one against the Government.
As the consent of the Government to be sued by the plaintiff was entirely voluntary on
its part, it is our duty to look carefully into the terms of the consent, and render judgment
accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix
the responsibility for the collision between his motorcycle and the ambulance of the
General Hospital and to determine the amount of the damages, if any, to which Mr. E.
Merritt is entitled on account of said collision, . . . ." These were the two questions
submitted to the court for determination. The Act was passed "in order that said questions
may be decided." We have "decided" that the accident was due solely to the negligence of
17
the chauffeur, who was at the time an employee of the defendant, and we have also fixed
the amount of damages sustained by the plaintiff as a result of the collision. Does the Act
authorize us to hold that the Government is legally liable for that amount? If not, we must
look elsewhere for such authority, if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and
State Governments in the United States," we may look to the decisions of the high courts
of that country for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers
or agents whom it employs, except when expressly made so by legislative enactment, is
well settled. "The Government," says Justice Story, "does not undertake to guarantee to
any person the fidelity of the officers or agents whom it employs, since that would involve
it in all its operations in endless embarrassments, difficulties and losses, which would be
subversive of the public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U.
S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed.,
991.)
In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from
the state for personal injuries received on account of the negligence of the state officers at
the state fair, a state institution created by the legislature for the purpose of improving
agricultural and kindred industries; to disseminate information calculated to educate and
benefit the industrial classes; and to advance by such means the material interests of the
state, being objects similar to those sought by the public school system. In passing upon
the question of the state's liability for the negligent acts of its officers or agents, the court
said:
No claim arises against any government is favor of an individual, by reason of
the misfeasance, laches, or unauthorized exercise of powers by its officers or
agents. (Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51,
53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
Green vs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203;
Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the
cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from suit. It does
not thereby concede its liability to plaintiff, or create any cause of action in his
favor, or extend its liability to any cause not previously recognized. It merely
gives a remedy to enforce a preexisting liability and submits itself to the
jurisdiction of the court, subject to its right to interpose any lawful defense.
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act
of 1913, which authorized the bringing of this suit, read:
 SECTION 1. Authority is hereby given to George Apfelbacher, of the town of
Summit, Waukesha County, Wisconsin, to bring suit in such court or courts and
in such form or forms as he may be advised for the purpose of settling and
determining all controversies which he may now have with the State of
Wisconsin, or its duly authorized officers and agents, relative to the mill
property of said George Apfelbacher, the fish hatchery of the State of Wisconsin
on the Bark River, and the mill property of Evan Humphrey at the lower end of
Nagawicka Lake, and relative to the use of the waters of said Bark River and
Nagawicka Lake, all in the county of Waukesha, Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature admitted liability
on the part of the state for the acts of its officers, and that the suit now stands
just as it would stand between private parties. It is difficult to see how the act
does, or was intended to do, more than remove the state's immunity from suit.
It simply gives authority to commence suit for the purpose of settling plaintiff's
controversies with the estate. Nowhere in the act is there a whisper or suggestion
that the court or courts in the disposition of the suit shall depart from well
established principles of law, or that the amount of damages is the only question
to be settled. The act opened the door of the court to the plaintiff. It did not pass
upon the question of liability, but left the suit just where it would be in the
absence of the state's immunity from suit. If the Legislature had intended to
change the rule that obtained in this state so long and to declare liability on the
part of the state, it would not have left so important a matter to mere inference,
but would have done so in express terms. (Murdock Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows:
All persons who have, or shall hereafter have, claims on contract or for
negligence against the state not allowed by the state board of examiners, are
hereby authorized, on the terms and conditions herein contained, to bring suit
thereon against the state in any of the courts of this state of competent
jurisdiction, and prosecute the same to final judgment. The rules of practice in
civil cases shall apply to such suits, except as herein otherwise provided.
And the court said:
This statute has been considered by this court in at least two cases, arising under
different facts, and in both it was held that said statute did not create any liability
or cause of action against the state where none existed before, but merely gave
an additional remedy to enforce such liability as would have existed if the statute
had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
Melvin vs. State, 121 Cal., 16.)
18
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all
claims against the commonwealth, whether at law or in equity," with an exception not
necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co.
vs. Commonwealth (152 Mass., 28), said:
The statute we are discussing disclose no intention to create against the state a
new and heretofore unrecognized class of liabilities, but only an intention to
provide a judicial tribunal where well recognized existing liabilities can be
adjudicated.
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of
the statute of New York, jurisdiction of claims for damages for injuries in the management
of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be
conceded that the state can be made liable for injuries arising from the negligence of its
agents or servants, only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability
to any cause not previously recognized, we will now examine the substantive law
touching the defendant's liability for the negligent acts of its officers, agents, and
employees. Paragraph 5 of article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when
the damage should have been caused by the official to whom properly it
pertained to do the act performed, in which case the provisions of the preceding
article shall be applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to
another by his fault or negligence is based, as is evidenced by the same Law 3,
Title 15, Partida 7, on that the person obligated, by his own fault or negligence,
takes part in the act or omission of the third party who caused the damage. It
follows therefrom that the state, by virtue of such provisions of law, is not
responsible for the damages suffered by private individuals in consequence of
acts performed by its employees in the discharge of the functions pertaining to
their office, because neither fault nor even negligence can be presumed on the
part of the state in the organization of branches of public service and in the
appointment of its agents; on the contrary, we must presuppose all foresight
humanly possible on its part in order that each branch of service serves the
general weal an that of private persons interested in its operation. Between these
latter and the state, therefore, no relations of a private nature governed by the
civil law can arise except in a case where the state acts as a judicial person
capable of acquiring rights and contracting obligations. (Supreme Court of
Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which
arise out of fault or negligence; and whereas in the first article thereof. No. 1902,
where the general principle is laid down that where a person who by an act or
omission causes damage to another through fault or negligence, shall be obliged
to repair the damage so done, reference is made to acts or omissions of the
persons who directly or indirectly cause the damage, the following articles refers
to this persons and imposes an identical obligation upon those who maintain
fixed relations of authority and superiority over the authors of the damage,
because the law presumes that in consequence of such relations the evil caused
by their own fault or negligence is imputable to them. This legal presumption
gives way to proof, however, because, as held in the last paragraph of article
1903, responsibility for acts of third persons ceases when the persons mentioned
in said article prove that they employed all the diligence of a good father of a
family to avoid the damage, and among these persons, called upon to answer in
a direct and not a subsidiary manner, are found, in addition to the mother or the
father in a proper case, guardians and owners or directors of an establishment
or enterprise, the state, but not always, except when it acts through the agency
of a special agent, doubtless because and only in this case, the fault or negligence,
which is the original basis of this kind of objections, must be presumed to lie
with the state.
That although in some cases the state might by virtue of the general principle set
forth in article 1902 respond for all the damage that is occasioned to private
parties by orders or resolutions which by fault or negligence are made by
branches of the central administration acting in the name and representation of
the state itself and as an external expression of its sovereignty in the exercise of
its executive powers, yet said article is not applicable in the case of damages said
to have been occasioned to the petitioners by an executive official, acting in the
exercise of his powers, in proceedings to enforce the collections of certain
property taxes owing by the owner of the property which they hold in sublease.
That the responsibility of the state is limited by article 1903 to the case wherein
it acts through a special agent(and a special agent, in the sense in which these
words are employed, is one who receives a definite and fixed order or
commission, foreign to the exercise of the duties of his office if he is a special
official) so that in representation of the state and being bound to act as an agent
thereof, he executes the trust confided to him. This concept does not apply to
any executive agent who is an employee of the acting administration and who
on his own responsibility performs the functions which are inherent in and
naturally pertain to his office and which are regulated by law and the
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and the principle
laid down in a decision, among others, of the 18th of May, 1904, in a damage
case, the responsibility of the state is limited to that which it contracts through a
special agent, duly empowered by a definite order or commission to perform some
act or charged with some definite purpose which gives rise to the claim, and not where
19
the claim is based on acts or omissions imputable to a public official charged
with some administrative or technical office who can be held to the proper
responsibility in the manner laid down by the law of civil responsibility.
Consequently, the trial court in not so deciding and in sentencing the said entity
to the payment of damages, caused by an official of the second class referred to,
has by erroneous interpretation infringed the provisions of articles 1902 and
1903 of the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine Islands) is only
liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts
of its agents, officers and employees when they act as special agents within the meaning
of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the
General Hospital was not such an agent.
For the foregoing reasons, the judgment appealed from must be reversed, without costs
in this instance. Whether the Government intends to make itself legally liable for the
amount of damages above set forth, which the plaintiff has sustained by reason of the
negligent acts of one of its employees, by legislative enactment and by appropriating
sufficient funds therefor, we are not called upon to determine. This matter rests solely
with the Legislature and not with the courts.
G.R. No. 70547 January 22, 1993
PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners, vs.
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT,
INC., respondents..
MELO, J.:
The imputation of culpa on the part of herein petitioners as a result of the collision
between its strain, bound for Manila from La Union, with a Baliwag transit bus at the
railroad crossing on the road going to Hagonoy, Bulacan on August l0, 1974, is the subject
of the petition at bar directed against the judgment of affirmance rendered by respondent
court, through the Fourth Civil Cases Division (Sison, Bidin (P), Veloso, JJ.), vis-a-vis the
decretal portion handed down by the court of origin in:
1. Ordering the defendants, jointly and severally to pay the plaintiff the amount of
P179,511.52 as actual damages.
2. Ordering the defendants jointly and severally to pay the plaintiff P436,642.03 as
reimbursement for the damages paid by the plaintiff to death, injury and damage
claimants.
3. Ordering the defendants jointly and severally to pay exemplary damages in the
amount of P50, 000.00 to the plaintiff.
 4. Ordering the defendants jointly and severally to pay the plaintiff attorney's fees
in the amount of P5, 000.00.
5. Ordering the defendants, jointly and severally to pay the plaintiff interest at the
legal rate on the above amounts due the plaintiff from August 10, 1974 until fully
paid.
6. Ordering the defendants to pay the cost of this suit.
7. Ordering the dismissal of the defendants' counterclaim for lack of factual and
legal basis. (p. 101, Record on Appeal; p. 103. Rollo.)
Culled from the text of the assailed disposition are the facts of the case at bar which are
hereunder adopted verbatim:
The case arose from a collision of a passenger express train of defendant Philippine
National Railways, (PNR) coming from San Fernando, La Union and bound for
Manila and a passenger bus of Baliwag Transit, Inc. which was on its way to Hagonoy,
Bulacan, from Manila, but upon reaching the railroad crossing at Barrio Balungao,
Calumpit, Bulacan at about 1:30 in the afternoon of August 10, 1974, got stalled and
was hit by defendant's express train causing damages to plaintiff's bus and its
passengers, eighteen (18) of whom died and fifty-three (53) others suffered physical
injuries. Plaintiff alleging that the proximate cause of the collision was the negligence
and imprudence of defendant PNR and its locomotive engineer, Honorio Cirbado, in
operating its passenger train in a busy intersection without any bars, semaphores,
signal lights, flagman or switchman to warn the public of approaching train that
would pass through the crossing, filed the instant action for Damages against
defendants. The defendants, in their Answer traversed the material allegation of the
Complaint and as affirmative defense alleged that the collision was caused by the
negligence, imprudence and lack of foresight of plaintiff's bus driver, Romeo Hughes.
At the pre-trial conference held on June 23, 1976, the parties agreed on a partial
stipulation of facts and issues which as amplified at the continuation of the pre-trial
conference, on July 12, 1976, are as follows:
1 That plaintiff is a duly constituted corporation registered with the Securities and
Exchange Commission engaged in the business of transportation and operating
public utility buses for the public with lines covering Manila, Caloocan City,
Quezon City, Malabon, Rizal, Bulacan, Pampanga and Nueva Ecija, and
particularly from Manila to Hagonoy, Bulacan and return in the month of August,
l974 passing thru the town of Calumpit Bulacan, temporarily while the bridge at
Hagonoy, Bulacan was under construction;
2 That defendant Philippine National Railways is a purely government owned and
controlled corporation duly registered and existing virtue of Presidential Decree
20
No. 741, with capacity to sue and be sued, and is likewise engaged in transporting
passengers and cargoes by trains and buses and that, it operates a train line
between San Fernando, La Union and Manila particularly Passenger Express Train
with Body No. 73, passing along the intersection of Barrio Balungao, Calumpit,
Bulacan, in going to San Fernando, La Union from Manila and return;
3. That on August 10, 1974, at about 1:20 o'clock in the afternoon, a Baliuag Transit
Bus with Body No. 1066 and Plate No. XS-929 PUB-Bulacan '74 was driven by its
authorized driver Romeo Hughes and PNR Train No. 73 was operated by Train
Engineer Honorio Cabardo alias Honorio Cirbado and at the railroad intersection
at Barrio Balungao, Calumpit, Bulacan, said passenger train No. 73 hit and
bumped the right mid portion of the plaintiff's passenger bus No. 1066, while the
rear portion of said bus was at the railroad track and its direction was towards
Hagonoy, Bulacan at about 1:30 o'clock in the afternoon;
4. That at the time of the collision there was a slight rainfall in the vicinity of the
scene of the accident and that there was at said intersection no bars, semaphores,
and signal lights that would warn the public of the approaching train that was
about to pass through the intersection and likewise there was no warning devices
to passing trains showing that they were about to pass an intersection in going to
Manila from San Fernando, La Union and back;
5. That on account of said collision, the Baliuag Transit Bus with Body No. 1066
driven by Romeo Hughes was damaged and eighteen (18) of its passengers died
and the rest who were more than fifty three (53) passengers suffered physical
injuries;
6. That after the investigation the Chief of Police of Calumpit, Bulacan, filed a
criminal case of Reckless Imprudence Causing Multiple Homicide with Multiple
Physical Injuries and Damage to Property against Romeo Hughes y Parfan, driver
of the Baliuag Transit bus docketed under Crim. Case No. 2392; while the train
Engineer Honorio Cabardo alias Honorio Cirbado was not included as an accused
in said case, although his train No. 73 was the one that hit and bumped the right
rear portion of the said bus;
7. That immediately after the said accident Major Manuel A. Macam, Chief of the
Municipal Police of Calumpit, Bulacan, together with some of his policemen
conducted an investigation of the accident;
8. That at the railroad crossing in Calumpit, Bulacan where the accident took place
there is no railroad crossing bar, however, during the pre-war days there was a
railroad crossing bar at said intersection; that, however, there was only one sign
of railroad crossing "Stop, Look and Listen" placed on a concrete slab and attached
to a concrete post existing at the approach of the railroad track from the Highway
going towards Hagonoy, Bulacan and that after the said railroad track there was
 a designated jeep parking area at the right side in the direction from the Highway
to Hagonoy Bulacan;
9. That the train No. 73 driven by Train Engineer Honorio Cabardo alias Honorio
Cirbado stopped after passing the railroad crossing at a distance of about 50
meters from the said intersection after the collision on August, 1974;
10. That the expected time of arrival of said Train No. 73 in Manila was 2:41 P.M.
and its departure time from San Fernando, La Union was 9:00 A.M. and its
expected arrival at Calumpit, Bulacan was 1:41 P.M. with no stop at Calumpit,
Bulacan.
SIMPLIFICATION OF ISSUES
11. That the principal issue in the instant case is who between the driver Romeo
Hughes of Baliuag Transit, Incorporated and the train engineer Honorio Cabardo
alias Honorio Cirbado of the Philippine National Railways was negligent or
whether or not both are negligent; that likewise which of said companies was
negligent at said railroad intersection;
12. That another additional issue is whether the Baliuag Transit Incorporated has
exercised the diligence of a good father of the family in the selection and
supervision of its employees. (pp.
85-87, Record on Appeal). ( Annex A, Petition; pp. 79-82, Rollo)
In addition, respondent court deemed it necessary to reflect the salient findings of
the case for damages as formulated by the trial court:
Posed for resolution are the following issues: Who between the driver Romeo Hughes
of the Baliuag Transit Incorporated and Honorio Cabardo, train Engineer of the
Philippine National Railways was negligent in the operation of their respective
vehicles, or whether or both were negligent? Could either of the companies Baliuag
Transit Incorporated and the Philippine National Railways be held accountable for
the collision because of negligence?
The defendants presented several statements or affidavits of alleged witnesses to the
collision, specifically Exhibits 2, 3, 4, 5, 6, 11, 13, 14, 15, 16, 17, 18 and 19; the Court is
at a loss as to why the persons who gave the said statements were not presented as
witnesses during the trial of
case, as aptly said, the statements are hearsay evidence (Azcueta v. Cabangbang, —
45 O.G. 144); at most they be taken as proof only of the fact that statements of said
persons were taken and that investigation was conducted of the incident; the Court
cannot consider the averments in said statements as testimonies or evidence of truth.
Defendants endeavored to show that the proximate and immediate cause of the
collision was the negligence of the bus driver because the driver did not make a stop
before ascending the railtrack; he did not heed the warning or shoutings of bystanders
and passengers and proceeded in traversing the railtrack at a fast speed; that the bus
driver was in fact violating Section 42(d) of R.A. 4136, otherwise known as the Land
Transportation and Traffic Code for failure to "stop, look, and listen" at the
intersection, before crossing the railtrack; that it is incumbent upon him to take the
necessary precautions at the intersection because the railroad track is in itself a
warning; and the bus driver ignored such a warning and must assume the
responsibility for the result of the motion taken by him (U.S. v. Mananquil, 42 Phil.
90)
Except the testimony of the train engineer Cabardo, there is no admissible evidence
to show that indeed, the bus driver did not take the necessary precaution in traversing
the track. Note that he first noticed the bus when it was only 15 meters away from
him; he could not have possibly noticed the position of the bus before negotiating the
track.
On the other hand, it was shown by plaintiff that the bus driver Romeo Hughes took
the necessary precautions in traversing the track.
The bus driver had stopped before traversing the track and in fact asked the conductor
to alight and made a "Look and Listen" before proceeding; the conductor had done
just that and made a signal to proceed when he did not see any oncoming train. (TSN,
October 2l, 1976, p. 4); plaintiff's bus drivers and conductors are enjoined to observe
such a precautionary measure in seminars conducted by the company. (TSN,
September 23, 1976. pp. 26-27).
The evidence disclosed that the train was running fast because by his own testimony,
the train engineer had testified that before reaching the station of Calumpit the terrain
was downgrade and levelled only after passing the Calumpit bridge (TSN, July 28,
1976, p. 14 ); the tendency of the train, coming from a high point is to accelerate as the
gravity will necessarily make it so, especially when it is pulling seven coaches loaded
with goods and passengers.
Moreover, upon impact, the bus loaded with passengers was dragged and thrown
into a ditch several meters away; the train had stopped only after the engine portion
was about 190 meters away from the fallen bus; several passengers were injured and
at least 20 died; such facts conclusively indicate that the train was speeding, because
the if it were moving at moderate speed, it would not run some 190 meters after impact
and throw the bus at quite a distance especially so when it is claimed that the train's
emergency brakes were applied.
Further, the train was an express train; its departure was 9:00 A.M. at San
Fernando, La Union and expected in Manila at 2:41 P.M.; the collision occurred at
21
1:30 P.M. or 4 1/2 hours after it left La Union; surely, the train could have not
negotiated such a distance in so short a time if it were not running at fast speed.
It may be argued that a railroad is not subject to the same restrictions to the speed
of its train as a motorists (Mckelvey v. Delaware L. and W.R. Co. 253 App. D.V.
109, 300 NYS 1263 ); but it does not follow that a train will be permitted to run fast
under all conditions at any rate of speed it may choose. It must regulate its speed
with proper regard for the safety of human life and property (Johnson v. Southern
Pacific Company (Cal. App. 288 p. 81), considering the surrounding circumstances
particularly the nature of the locality (Atchinson, T. and SFR Co. v. Nicks (Arts)
165 p. 2d 167).
Cabardo's route included the passage over the said intersection; he could have
noticed that it is a very busy intersection because the crossroad leads to the
Calumpit Poblacion as well as to the neighboring town of Hagonoy; there was a
parking lot by the side of the track whereat passengers board jeepneys for the
neighboring barrios and towns; stalls abound in the vicinity and bystanders
congregate nearby. A prudent train operator must, under the circumstances,
slacken his speed almost for the protection of motorists and pedestrians, not only
when a collision is inevitable but even if no hindrance is apparent on the way;
Moreover, there was an intermittent rain at the time of the collision (see stipulation
of facts and photographs); the condition of the weather was such that even if for
this reason alone, the train engineer should have foreseen that danger of collision
lurked because of poor visibility of slippery road; he should have taken extra
precaution by considerably slackening its speed. This he failed to do even if the
nature of his job required him to observe care exercised by a prudent man.
Contributory negligence may not be ascribed to the bus driver; it was evident that
he had taken the necessary precautions before passing over the railway track; if
the bus was hit, it was for reasons beyond the control of the bus driver because he
had no place to go; there were vehicles to his left which prevented him in swerving
towards that direction; his bus stalled in view of the obstructions in his front where
a sand and gravel truck stopped because of a jeep maneuvering into a garage up
front. All the wheels at the bus have already passed the rail portion of the track
and only the rear portion of the bus' body occupied or covered the railtrack. This
was evident because the part of the bus hit by the train was the rear since the bus
fell on a nearby ditch. Otherwise, if the bus was really hit in mid-body, the bus
could have been halved into two because of the force of the impact.
The stipulation of facts between the parties show that there was no crossing bar at
the railroad intersection at Calumpit, Bulacan at the time of collision (par. 8,
Stipulation of Facts); the plaintiff contended and the defendants did not deny, that
there were no signal lights, semaphores, flagman or switchman thereat; the
absence of such devices, the plaintiff argues constitute negligence on the part of
the Philippine National Railways.
22
A railroad is not required to have a gate (crossing bar) or a flagman, or to maintain
signals at every intersection; only at such places reasonably necessary; what is
considered reasonably necessary will depend on the amount of travel upon the
road, the frequency with which trains pass over it and the view which could be
obtained of trains as they approach the crossing, and other conditions (Pari v. Los
Angeles, Ry. Corporation (Cal A2d) 128 p2d 563; Swdyk v. Indiana Harbor Belt R.
Co. 148 F. 2d 795, and others).
As has been amply discussed, the crossroad at the intersection at Calumpit is one
which is a busy thoroughfare; it leads to the Poblacion at Calumpit and other
barrios as well as the town of Hagonoy; the vicinity is utilized as a parking and
waiting area for passengers of jeepneys that ply between the barrios, clearly, the
flow of vehicular traffic thereat is huge. It can be said also that, since there is no
other railtrack going North except that one passing at Calumpit, trains pass over
it frequently;
A portion of the intersection is being used as a parking area with stalls and other
obstructions present making it difficult, if not impossible, to see approaching
trains (see photographs).
The failure of the Philippine National Railways to put a cross bar, or signal light,
flagman or switchman, or semaphores is evidence of negligence and disregard of
the safety of the public, even if there is no law or ordinance requiring it, because
public safety demands that said devices or equipments be installed, in the light of
aforesaid jurisprudence. In the opinion of this Court the X sign or the presence of
"STOP, LOOK, LISTEN" warnings would not be sufficient protection of the
motoring public as well as the pedestrians, in the said intersection;
The parties likewise have stipulated that during the pre-war days, there was a
railroad crossing bar at the said intersection (Par-8, Stipulation of Facts). It appears
that it was a self imposed requirement which has been abandoned. In a case it was
held that where the use of a flagman was self imposed, the abandonment thereof
may constitute negligence. (Fleming v. Missouri and A. Ry. Co. 198 ARDC 290,
128 S.W. 2d 286 and others; cited in Sec. 1082 SCRWARTZ, Vol. 2). Similarly, the
abandonment by the PNR of the use of the crossing bar at the intersection at
Calumpit constitutes negligence, as its installation has become imperative,
because of the prevailing circumstances in the place.
A railroad company has been adjudged guilty of negligence and civilly liable for
damages when it failed to install semaphores, or where it does not see to it that its
flagman or switchman comply with their duties faithfully, to motorist injured by
a crossing train as long as he had crossed without negligence on his part (Lilius
vs. MRR, 39 Phil. 758). (Decision, pages 94-100, R A.; pp. 83-89, Rollo).
On the aspect of whether the Philippine National Railways enjoys immunity from suit,
respondent court initially noted that an exculpation of this nature that was raised for the
first time on appeal may no longer be entertained in view of the proscription under
Section 2, Rule 9 of the Revised Rules of Court, apart from the fact that the lawyer of
petitioner agreed to stipulate inter alia that the railroad company had capacity to sue and
be sued. This being so, respondent court continued, PNR was perforce estopped from
disavowing the prejudicial repercussion of an admission in judicio. Even as the laws
governing the creation and rehabilitation of the PNR were entirely mute on its power to
sue and be sued, respondent court nonetheless opined that such prerogative was implied
from the general power to transact business pertinent or indispensable to the attainment
of the goals of the railroad company under Section 4 of Republic Act No. 4156 as amended
by Republic Act No. 6366:
Sec. 4 General Powers — The Philippine National Railways shall have
the following general powers:
(a) To do all such other things and to transact all such business directly
or indirectly necessary, incidental or conducive to the attainment of the
purpose of the corporation; and
(b) Generally, to exercise all powers of a railroad corporation under the
Corporation law.
in conjunction with Section 2(b) of Presidential Decree No. 741:
(b) To own or operate railroad transways, bus lines, trucklines,
subways, and other kinds of land transportation, vessels, and pipelines,
for the purpose of transporting for consideration, passengers, mail and
property between any points in the Philippines;
Thus, respondent court utilized the doctrine of implied powers announced in National
Airports Corporation vs. Teodoro, Sr. and Philippine Airlines, Inc. (91 Phil. 203 [1952]), to the
effect that the power to sue and be sued is implicit from the faculty to transact private
business. At any rate, respondent court characterized the railroad company as a private
entity created not to discharge a governmental function but, among other things, to
operate a transport service which is essentially a business concern, and thus barred from
invoking immunity from suit.
In brushing aside petitioners' asseveration that the bus driver outraced the train at the
crossing, respondent court observed that the bus was hit by the train at its rear portion
then protruding over the tracks as the bus could not move because another truck at its
front was equally immobile due to a jeep maneuvering into a nearby parking area. Under
these tight conditions, respondent court blamed the train engineer who admitted to have
seen the maneuvering jeep at a distance (TSN, July 28, 1976, page 18) and had the last
clear chance to apply the brakes, knowing fully well that the vehicles following the jeep
could not move away from the path of the train. Apart from these considerations, it was
perceived below that the train was running fast during the entire trip since the train
23
stopped 190 meters from the point of impact and arrived at Calumpit, Bulacan earlier
than its expected time of arrival thereat.
Moreover, respondent court agreed with the conclusion reached by the trial court that the
absence of a crossing bar, signal light, flagman or switchman to warn the public of an
approaching train constitutes negligence per the pronouncement of this Court in Lilius vs.
Manila Railroad Company (59 Phil 758 [1934]).
Concerning the exercise of diligence normally expected of an employer in the selection
and supervision of its employees, respondent court expressed the view that PNR was
remiss on this score since it allowed Honorio Cabardo, who finished only primary
education and became an engineer only through sheer experience, to operate the
locomotive, not to mention the fact that such plea in avoidance was not asserted in the
answer and was thus belatedly raised on appeal.
Petitioner moved to reconsider, but respondent court was far from persuaded. Hence, the
petition before Us which, in essence, incorporates similar disputations anent PNR's
immunity from suit and the attempt to toss the burden of negligence from the train
engineer to the bus driver of herein private respondent.
The bone of contention for exculpation is premised on the familiar maxim in political law
that the State, by virtue of its sovereign nature and as reaffirmed by constitutional
precept, is insulated from suits without its consent (Article 16, Section 3, 1987 Constitution).
However, equally conceded is the legal proposition that the acquiescence of the State to
be sued can be manifested expressly through a general or special law, or indicated
implicitly, as when the State commences litigation for the purpose of asserting an
affirmative relief or when it enters into a contract (Cruz,Philippine Political Law, 1991
edition, page 33; Sinco, Philippine Political Law, Eleventh Edition, 1962, page 34). When
the State participates in a covenant, it is deemed to have descended from its superior
position to the level of an ordinary citizen and thus virtually opens itself to judicial
process. Of course, We realize that this Court qualified this form of consent only to those
contracts concluded in a proprietary capacity and therefore immunity will attach for those
contracts entered into in a governmental capacity, following the ruling in the 1985 case
of United States of America vs. Ruiz (136 SCRA 487 [1985]; cited by Cruz, supra at pages 36-
37). But the restrictive interpretation laid down therein is of no practical worth nor can it
give rise to herein petitioner PNR's exoneration since the case of Malong vs. Philippine
National Railways (138 SCRA 63, [1985]); 3 Padilla, 1987 Constitution with Comments and
Cases, 1991 edition, page 644), decided three months after Ruiz was promulgated, was
categorical enough to specify that the Philippine National Railways "is not performing
any governmental function" (supra, at page 68).
In Malong, Justice Aquino, speaking for the Court en banc, declared:
The Manila Railroad Company, the PNR's predecessor, as a common
carrier, was not immune from suit under Act No. 1510, its charter.
 The PNR Charter, Republic Act No. 4156, as amended by Republic Act
No. 6366 and Presidential Decree No. 741, provides that the PNR is a
government instrumentality under government ownership during its
50-year term, 1964 to 2014. It is under the Office of the President of the
Philippines. Republic Act No. 6366 provides:
Sec. 1-a. Statement of policy. — The Philippine National Railways, being a factor
for socio-economic development and growth, shall be a part of the infrastructure
program of the government and as such shall remain in and under government
ownership during its corporate existence. The Philippine National Railways
must be administered with the view of serving the interests of the public by
providing them the maximum of service and, while aiming at its greatest utility
by the public, the economy of operation must be ensured so that service can be
rendered at the minimum passenger and freight prices possible.
The charter also provides:
Sec. 4. General powers. — The Philippine National Railways shall have the
following general powers:
(a) To do all such other things and to transact all such business directly or
indirectly necessary, incidental or conducive to the attainment of the purpose of
the corporation; and
(b) Generally, to exercise all powers of a railroad corporation under the
Corporation Law. (This refers to Sections 81 to 102 of the Corporation Law on
railroad corporations, not reproduced in the Corporation Code.)
Section 36 of the Corporation Code provides that every corporation has the power to sue
and be sued in its corporate name. Section 13(2) of the Corporation Law provides that
every corporation has the power to sue and be sued in any court.
A sovereign is exempt from suit, not because of any formal conception
or obsolete theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the right depends
(Justice Holmes in Kawananakoa vs. Polyblank, 205 U.S. 353, 51 L. 3d 834).
The public service would be hindered, and public safety endangered,
if the supreme authority could be subjected to suit at the instance of every citizen
and, consequently, controlled in the use and disposition of the means required for
the proper administration of the Government (The Siren vs. U.S., 7 Wall. 152, 19 L.
ed. 129). (at pp. 65-66).
To the pivotal issue of whether the State acted in a sovereign capacity when it organized
the PNR for the purpose of engaging in transportation, Malong continued to hold that:
24
. . . in the instant case the State divested itself of its sovereign capacity when it
organized the PNR which is no different from its predecessor, the Manila Railroad
Company. The PNR did not become immune from suit. It did not remove itself from
the operation of Articles 1732 to 1766 of the Civil Code on common carriers.
The correct rule is that "not all government entities, whether corporate or
noncorporate, are immune from suits. Immunity from suit is determined by the
character of the objects for which the entity was organized." (Nat. Airports Corp. vs.
Teodoro and Phil. Airlines, Inc., 91 Phil. 203, 206; Santos vs. Santos, 92 Phil. 281, 285;
Harry Lyons, Inc. vs. USA, 104 Phil. 593).
Suits against State agencies with respect to matters in which they have assumed to act
in a private or nongovernmental capacity are not suits against the State (81 C.J.S. 1319).
Suits against State agencies with relation to matters in which they have assumed
to act in a private or nongovernmental capacity, and various suits against certain
corporations created by the State for public purposes, but to engage in matters
partaking more of the nature of ordinary business rather than functions of a
governmental or political character, are not regarded as suits against the State.
The latter is true, although the State may own the stock or property of such a
corporation, for by engaging in business operations through a corporation the
State divests itself so far of its sovereign character, and by implicating consents to
suits against the corporation. (81 C.J.S. 1319).
The foregoing rule was applied to State Dock Commissions carrying on business
relating to pilots, terminals and transportation (Standard Oil Co. of New Jersey vs.
U.S., 27 Fed. 2nd 370) and to State Highways Commissions created to build public
roads and given appropriations in advance to discharge obligations incurred in their
behalf (Arkansas State Highway Commission vs. Dodge, 26 SW 2nd 879 and State
Highway Commission of Missouri vs. Bates, 296 SW 418, cited in National Airports
case).
The point is that when the government enters into a commercial business it abandons
its sovereign capacity and is to be treated like any other private corporation (Bank of
the U.S. vs. Planters' Bank, 9 Wheat. 904, 6 L ed. 244, cited in Manila Hotel Employees
Association vs. Manila Hotel Company, et al., 73 Phil. 374, 388). The Manila Hotel case
also relied on the following rulings:
By engaging in a particular business through the instrumentality of a corporation,
the government divests itself pro hac vice of its sovereign character, so as to render
the corporation subject to the rules of law governing private corporations.
When the State acts in its proprietary capacity, it is amenable to all the rules of law
which bind private individuals.
 There is not one law for the sovereign and another for the subject, but when the
sovereign engages in business and the conduct of business enterprises, and
contracts with individuals, whenever the contract in any form comes before the
courts, the rights and obligation of the contracting parties must be adjusted upon
the same principles as if both contracting parties were private persons. Both stand
upon equality before the law, and the sovereign is merged in the dealer, contractor
and suitor (People vs. Stephens, 71 N.Y. 549).
It should be noted that in Philippine National Railways vs. Union de Maquinistas,
etc., L-31948, July 25, 1978, 84 SCRA 223, it was held that the PNR funds could be
garnished at the instance of a labor union.
It would be unjust if the heirs of the victim of an alleged negligence of the PNR
employees could not sue the PNR for damages. Like any private common carrier, the
PNR is subject to the obligations of persons engaged in that private enterprise. It is
not performing any governmental function.
Thus, the National Development Company is not immune from suit. It does not
exercise sovereign functions. It is an agency for the performance of purely corporate,
proprietary or business functions (National Development Company vs. Tobias, 117
Phil. 703, 705 and cases cited therein; National Development Company vs. NDC
Employees and Workers' Union, L-32387, August 19, 1975, 66 SCRA 18l, 184).
Other government agencies not enjoying immunity from suit are the Social Security
System (Social Security System vs. Court of Appeals, L-41299, February 21, 1983, 120
SCRA 707) and the Philippine National Bank (Republic vs. Philippine National Bank,
121 Phil. 26). (at pp. 66-68).
We come now to the question of whether respondent court properly agreed with the trial
court in imputing negligence on the part of the train engineer and his employer.
It was demonstrated beyond cavil in the course of the pre-trial hearings held for the
purpose of stipulating on crucial facts that the bus was hit on the rear portion thereof after
it crossed the railroad tracks. Then, too the train engineer was frank enough to say that
he saw the jeep maneuvering into a parking area near the crossing which caused the
obstruction in the flow of traffic such that the gravel and sand truck including the bus of
herein private respondent were not able to move forward or to take the opposite lane due
to other vehicles. The unmindful demeanor of the train engineer in surging forward
despite the obstruction before him is definitely anathema to the conduct of a prudent
person placed under the same set of perceived danger. Indeed:
When it is apparent, or when in the exercise of reasonable diligence
commensurate with the surroundings it should be apparent, to the
company that a person on its track or to get on its track is unaware of
his danger or cannot get out of the way, it becomes the duty of the
company to use such precautions, by warnings, applying brakes, or
25
otherwise, as may be reasonably necessary to avoid injury to him.
(65 Am. Jur., Second Edition. p. 649).
Likewise, it was established that the weather condition was characterized with
intermittent rain which should have prompted the train engineer to exercise extra
precaution. Also, the train reached Calumpit, Bulacan ahead of scheduled arrival thereat,
indicating that the train was travelling more than the normal speed of 30 kilometers per
hour. If the train were really running at 30 kilometers per hour when it was approaching
the intersection, it would probably not have travelled 190 meters more from the place of
the accident (page 10, Brief for Petitioners). All of these factors, taken collectively,
engendered the concrete and yes, correct conclusion that the train engineer was negligent
who, moreover, despite the last opportunity within his hands vis-a-vis the weather
condition including the presence of people near the intersection, could have obviated the
impending collision had he slackened his speed and applied the brakes (Picart vs. Smith,
37 Phil. 809 [1918]).Withal, these considerations were addressed to the trial judge who,
unlike appellate magistrates, was in a better position to assign weight on factual
questions. Having resolved the question of negligence between the train engineer and the
bus driver after collating the mass of evidence, the conclusion reached thereafter thus
commands great respect especially so in this case where respondent court gave its nod of
approval to the findings of the court of origin (Co vs. Court of Appeals, 193 SCRA 198;
206 [1991]); Amigo vs. Teves, 50 O.G. 5799; Regalado, Remedial Law Compendium, Fifth
edition, page 353).
What exacerbates against petitioners' contention is the authority in this jurisdiction to the
effect that the failure of a railroad company to install a semaphore or at the very least, to
post a flagman or watchman to warn the public of the passing train amounts to negligence
(Lilius vs. Manila Railroad Company, 59 Phil. 758 [1934]).
WHEREFORE, the petition is hereby DISMISSED and the decision of respondent court
AFFIRMED.
SO ORDERED.
G.R. No. 61516 March 21, 1989
FLORENTINA A. GUILATCO, petitioner, vs. CITY OF DAGUPAN, and the
HONORABLE COURT OF APPEALS, respondents.
SARMIENTO, J.:
In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco,
the following judgment was rendered against the respondent City of Dagupan:
xxx
(1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the
amount of P 15,924 (namely P8,054.00 as hospital, medical and other expenses
 [Exhs. H to H-60], P 7,420.00 as lost income for one (1) year [Exh. F] and P 450.00
as bonus). P 150,000.00 as moral damages, P 50,000.00 as exemplary damages, and
P 3,000.00 as attorney's fees, and litigation expenses, plus costs and to appropriate
through its Sangguniang Panglunsod (City Council) said amounts for said
purpose;
(2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G.
Tangco; and
(3) Dismissing the counterclaims of defendant City of Dagupan and defendant
City Engr. Alfredo G. Tangco, for lack of merit. 2
The facts found by the trial court are as follows: 3
It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court
Interpreter of Branch III, CFI--Dagupan City, while she was about to board a
motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the
control and supervision of the City of Dagupan) accidentally fell into a manhole
located on said sidewalk, thereby causing her right leg to be fractured. As a result
thereof, she had to be hospitalized, operated on, confined, at first at the
Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a period of
16 days). She also incurred hospitalization, medication and other expenses to the
tune of P 8,053.65 (Exh. H to H-60) or a total of P 10,000.00 in all, as other receipts
were either lost or misplaced; during the period of her confinement in said two
hospitals, plaintiff suffered severe or excruciating pain not only on her right leg
which was fractured but also on all parts of her body; the pain has persisted even
after her discharge from the Medical City General Hospital on October 9, 1978, to
the present. Despite her discharge from the Hospital plaintiff is presently still
wearing crutches and the Court has actually observed that she has difficulty in
locomotion. From the time of the mishap on July 25, 1978 up to the present,
plaintiff has not yet reported for duty as court interpreter, as she has difficulty of
locomotion in going up the stairs of her office, located near the city hall in
Dagupan City. She earns at least P 720.00 a month consisting of her monthly salary
and other means of income, but since July 25, 1978 up to the present she has been
deprived of said income as she has already consumed her accrued leaves in the
government service. She has lost several pounds as a result of the accident and she
is no longer her former jovial self, she has been unable to perform her religious,
social, and other activities which she used to do prior to the incident.
Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well
as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong Rizal
(Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of any
doubt the extent of the fracture and injuries sustained by the plaintiff as a result of
the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo
corroborated the testimony of the plaintiff regarding the mishap and they have
confirmed the existence of the manhole (Exhs. A, B, C and sub-exhibits) on the
26
sidewalk along Perez Blvd., at the time of the incident on July 25, 1978 which was
partially covered by a concrete flower pot by leaving gaping hole about 2 ft. long
by 1 1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (see Exhs. D
and D-1).
Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-
officio Highway Engineer, City Engineer of the Public Works and Building Official
for Dagupan City, admitted the existence of said manhole along the sidewalk in
Perez Blvd., admittedly a National Road in front of the Luzon Colleges. He also
admitted that said manhole (there are at least 11 in all in Perez Blvd.) is owned by
the National Government and the sidewalk on which they are found along Perez
Blvd. are also owned by the National Government. But as City Engineer of
Dagupan City, he supervises the maintenance of said manholes or drainage
system and sees to it that they are properly covered, and the job is specifically done
by his subordinates, Mr. Santiago de Vera (Maintenance Foreman) and Engr.
Ernesto Solermo also a maintenance Engineer. In his answer defendant Tangco
expressly admitted in par. 7-1 thereof, that in his capacity as ex-officio Highway
Engineer for Dagupan City he exercises supervision and control over National
roads, including the Perez Blvd. where the incident happened.
On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower
court findings on the ground that no evidence was presented by the plaintiff- appellee to
prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5
The city contends that Perez Boulevard, where the fatal drainage hole is located, is a
national road that is not under the control or supervision of the City of Dagupan. Hence,
no liability should attach to the city. It submits that it is actually the Ministry of Public
Highways that has control or supervision through the Highway Engineer which, by mere
coincidence, is held concurrently by the same person who is also the City Engineer of
Dagupan.
After examination of the findings and conclusions of the trial court and those of the
appellate court, as well as the arguments presented by the parties, we agree with those of
the trial court and of the petitioner. Hence, we grant the petition.
In this review on certiorari, we have simplified the errors assigned by the petitioner to a
single issue: whether or not control or supervision over a national road by the City of
Dagupan exists, in effect binding the city to answer for damages in accordance with article
2189 of the Civil Code.
The liability of public corporations for damages arising from injuries suffered by
pedestrians from the defective condition of roads is expressed in the Civil Code as
follows:
Article 2189. Provinces, cities and municipalities shall be liable for
damages for the death of, or injuries suffered by, any person by reason
 of the defective condition of roads, streets, bridges, public buildings,
and other public works under their control or supervision.
It is not even necessary for the defective road or street to belong to the province, city or
municipality for liability to attach. The article only requires that either control or
supervision is exercised over the defective road or street. 6
In the case at bar, this control or supervision is provided for in the charter of Dagupan
and is exercised through the City Engineer who has the following duties:
Sec. 22. The City Engineer--His powers, duties and compensation-
There shall be a city engineer, who shall be in charge of the department
of Engineering and Public Works. He shall receive a salary of not
exceeding three thousand pesos per annum. He shall have the
following duties:
xxx
(j) He shall have the care and custody of the public system of
waterworks and sewers, and all sources of water supply, and shall
control, maintain and regulate the use of the same, in accordance with
the ordinance relating thereto; shall inspect and regulate the use of all
private systems for supplying water to the city and its inhabitants, and
all private sewers, and their connection with the public sewer system.
xxx
The same charter of Dagupan also provides that the laying out, construction and
improvement of streets, avenues and alleys and sidewalks, and regulation of the use
thereof, may be legislated by the Municipal Board . 7 Thus the charter clearly indicates
that the city indeed has supervision and control over the sidewalk where the open
drainage hole is located.
The express provision in the charter holding the city not liable for damages or injuries
sustained by persons or property due to the failure of any city officer to enforce the
provisions of the charter, can not be used to exempt the city, as in the case at bar.8
The charter only lays down general rules regulating the liability of the city. On the other
hand article 2189 applies in particular to the liability arising from "defective streets, public
buildings and other public works." 9
The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision
over the said road. But the city can not be excused from liability by the argument that the
duty of the City Engineer to supervise or control the said provincial road belongs more
to his functions as an ex-officio Highway Engineer of the Ministry of Public Highway
27
than as a city officer. This is because while he is entitled to an honorarium from the
Ministry of Public Highways, his salary from the city government substantially exceeds
the honorarium.
We do not agree.
Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex- Officio
Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last
but not the least, as Building Official for Dagupan City, receives the following monthly
compensation: P 1,810.66 from Dagupan City; P 200.00 from the Ministry of Public
Highways; P 100.00 from the Bureau of Public Works and P 500.00 by virtue of P.D. 1096,
respectively." 10 This function of supervision over streets, public buildings, and other
public works pertaining to the City Engineer is coursed through a Maintenance Foreman
and a Maintenance Engineer.11 Although these last two officials are employees of the
National Government, they are detailed with the City of Dagupan and hence receive
instruction and supervision from the city through the City Engineer.
There is, therefore, no doubt that the City Engineer exercises control or supervision over
the public works in question. Hence, the liability of the city to the petitioner under article
2198 of the Civil Code is clear.
Be all that as it may, the actual damages awarded to the petitioner in the amount of P
10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court
should not have rounded off the amount. In determining actual damages, the court can
not rely on "speculation, conjecture or guess work" as to the amount. Without the actual
proof of loss, the award of actual damages becomes erroneous. 12
On the other hand, moral damages may be awarded even without proof of pecuniary loss,
inasmuch as the determination of the amount is discretionary on the court.13 Though
incapable of pecuniary estimation, moral damages are in the nature of an award to
compensate the claimant for actual injury suffered but which for some reason can not be
proven. However, in awarding moral damages, the following should be taken into
consideration:
(1) First, the proximate cause of the injury must be the claimee's acts.14
(2) Second, there must be compensatory or actual damages as
satisfactory proof of the factual basis for damages.15
(3) Third, the award of moral damages must be predicated on any of
the cases enumerated in the Civil Code. 16
In the case at bar, the physical suffering and mental anguish suffered by the petitioner
were proven. Witnesses from the petitioner's place of work testified to the degeneration
in her disposition-from being jovial to depressed. She refrained from attending social and
civic activities.17
Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was
not permanent and disabled her only during her treatment which lasted for one year.
Though evidence of moral loss and anguish existed to warrant the award of
damages,18 the moderating hand of the law is called for. The Court has time and again
called attention to the reprehensible propensity of trial judges to award damages without
basis,19 resulting in exhorbitant amounts.20
Although the assessment of the amount is better left to the discretion of the trial
court 21 under preceding jurisprudence, the amount of moral damages should be
reduced to P 20,000.00.
As for the award of exemplary damages, the trial court correctly pointed out the basis:
To serve as an example for the public good, it is high time that the Court, through
this case, should serve warning to the city or cities concerned to be more conscious
of their duty and responsibility to their constituents, especially when they are
engaged in construction work or when there are manholes on their sidewalks or
streets which are uncovered, to immediately cover the same, in order to minimize
or prevent accidents to the poor pedestrians.22
Too often in the zeal to put up "public impact" projects such as beautification drives, the
end is more important than the manner in which the work is carried out. Because of this
obsession for showing off, such trivial details as misplaced flower pots betray the careless
execution of the projects, causing public inconvenience and inviting accidents.
Pending appeal by the respondent City of Dagupan from the trial court to the appellate
court, the petitioner was able to secure an order for garnishment of the funds of the City
deposited with the Philippine National Bank, from the then presiding judge, Hon.
Willelmo Fortun. This order for garnishment was revoked subsequently by the
succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the
petitioner's motion for reconsideration which was also denied. 23
We rule that the execution of the judgment of the trial court pending appeal was
premature. We do not find any good reason to justify the issuance of an order of execution
even before the expiration of the time to appeal .24
WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the
respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of
the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby
REINSTATED with the indicated modifications as regards the amounts awarded:
28
(1) Ordering the defendant City of Dagupan to pay the plaintiff actual
damages in the amount of P 15,924 (namely P 8,054.00 as hospital,
medical and other expenses; P 7,420.00 as lost income for one (1) year
and P 450.00 as bonus); P 20,000.00 as moral damages and P 10,000.00
as exemplary damages.
The attorney's fees of P 3,000.00 remain the same.
SO ORDERED.
G.R. No. 150304 June 15, 2005
QUEZON CITY GOVERNMENT and Engineer RAMIR J. TIAMZON, Petitioners, vs.
FULGENCIO DACARA*, Respondent.
DECISION
PANGANIBAN, J.:
The review of cases under Rule 45 of the Rules of Court is limited to errors of law. Unless
there is a showing that the findings of the lower court are totally devoid of support or are
glaringly erroneous, this Court will not analyze or weigh evidence all over again. Under
the circumstance, the factual findings and conclusions of the Court of Appeals affirming
those of the trial courts will be conclusive upon the Supreme Court. Furthermore, well-
entrenched is the rule that points of law, theories, issues and arguments not brought to
the attention of the trial court cannot be raised for the first time on appeal or certiorari.
Finally, this Court reiterates the principle that moral damages are designed to compensate
the claimant for actual injury suffered, not to impose a penalty on the wrongdoer. Hence,
absent any definite finding as to what they consist of, the alleged moral damages suffered
would become a penalty rather than a compensation for actual injury suffered.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the
February 21, 2001 Decision2and the October 9, 2001 Resolution3 of the Court of Appeals
(CA) in CA-GR CV No. 29392. The challenged Decision disposed as follows:
"WHEREFORE, premises considered, the Decision dated June 29, 1990 in Civil Case No.
Q-88-233 should be AFFIRMED, with costs against the appellants."4
The assailed Resolution denied petitioners' Motion for Reconsideration.
The Facts
The CA summarized the facts in this manner:
"Sometime on February 28, 1988 at about 1:00 A.M., Fulgencio Dacara, Jr., son of
Fulgencio P. Dacara, Sr. and owner of '87 Toyota Corolla 4-door Sedan with Plate No. 877
(sic), while driving the said vehicle, rammed into a pile of earth/street diggings found at
Matahimik St., Quezon City, which was then being repaired by the Quezon City
government. As a result, Dacarra (sic), Jr. allegedly sustained bodily injuries and the
vehicle suffered extensive damage for it turned turtle when it hit the pile of earth.
"Indemnification was sought from the city government (Record, p. 22), which however,
yielded negative results. Consequently, Fulgencio P. Dacara (hereinafter referred to as
FULGENCIO), for and in behalf of his minor son, Jr., filed a Complaint (Record, p. 1) for
damages against the Quezon City and Engr. Ramir Tiamzon, as defendants, before the
Regional Trial Court, National Capital Judicial Region, Branch 101, Quezon City,
docketed as Civil Case No. Q-88-233. FULGENCIO prayed that the amount of not less
than ₱20,000.00 actual or compensatory damages, ₱150,000.00 moral damages, ₱30,000.00
exemplary damages, and ₱20,000.00 attorney's fees and costs of the suit be awarded to
him.
"In an Answer with Affirmative and/or Special Defenses (Record, p. 11), defendants
admitted the occurrence of the incident but alleged that the subject diggings was
provided with a moun[d] of soil and barricaded with reflectorized traffic paint with sticks
placed before or after it which was visible during the incident on February 28, 1988 at 1:00
A.M. In short, defendants claimed that they exercised due care by providing the area of
the diggings all necessary measures to avoid accident. Hence, the reason why Fulgencio
Dacara, Jr. fell into the diggings was precisely because of the latter's negligence and failure
to exercise due care."5
After trial on the merits, the Regional Trial Court (RTC), Branch 101, Quezon City,
rendered its Decision6 dated June 29, 1990. The evidence proffered by the complainant
(herein respondent) was found to be sufficient proof of the negligence of herein
petitioners. Under Article 2189 of the Civil Code,7 the latter were held liable as follows:
"WHEREFORE, premises above considered, based on the quantum of evidence presented
by the plaintiff which tilts in their favor elucidating the negligent acts of the city
government together with its employees when considered in the light of Article 2189,
judgment is hereby rendered ordering the defendants to indemnify the plaintiff the sum
of twenty thousand pesos as actual/compensatory damages, ₱10,000.00 as moral
damages, ₱5,000.00 as exemplary damages, ₱10,000.00 as attorney's fees and other costs
of suit."8
In their appeal to the CA, petitioners maintained that they had observed due diligence
and care in installing preventive warning devices, and that it was in fact the plaintiff who
had failed to exercise prudence by driving too fast to avoid the diggings. Moreover, the
lower court allegedly erred in using Article 2189 of the Civil Code, which supposedly
applied only to liability for the death or injuries suffered by a person, not for damage to
property.
Ruling of the Court of Appeals
29
The CA agreed with the RTC's finding that petitioners' negligence was the proximate
cause of the damage suffered by respondent.9 Noting the failure of petitioners to present
evidence to support their contention that precautionary measures had indeed been
observed, it ruled thus:
"x x x. Sadly, the evidence indicates that [petitioners] failed to show that they placed
sufficient and adequate precautionary signs at Matahimik Street to minimize or prevent
the dangers to life and limb under the circumstances. Contrary to the testimony of the
witnesses for the [petitioners], namely Engr. Ramir Tiamzon, Ernesto Landrito and
Eduardo Castillo, that there were signs, gasera which was buried so that its light could
not be blown off by the wind and barricade, none was ever presented to stress and prove
the sufficiency and adequacy of said contention."10
Further upholding the trial court's finding of negligence on the part of herein petitioners,
the CA gave this opinion:
"x x x. As observed by the trial court, the negligence of [petitioners] was clear based on
the investigation report of Pfc. William P. Villafranca stating to the effect 'that the subject
vehicle rammed into a pile of earth from a deep excavation thereat without any warning
devi[c]e whatsoever and as a consequence thereof, Dacara, Jr. lost control of his driven
car and finally turned-turtle causing substantial damage to the same.' As a defense against
liability on the basis of quasi-delict, one must have exercised the diligence of a good father
of a family which [petitioners] failed to establish in the instant case." 11
Whether Article 2189 is applicable to cases in which there has been no death or physical
injury, the CA ruled in the affirmative:
"x x x. More importantly, we find it illogical to limit the liability to death or personal injury
only as argued by appellants in the case at bar applying the foregoing provisions. For,
injury is an act that damages, harms or hurts and mean in common as the act or result of
inflicting on a person or thing something that causes loss, pain, distress, or impairment.
Injury is the most comprehensive, applying to an act or result involving an impairment
or destruction of right, health, freedom, soundness, or loss of something of value." 12
Hence, this Petition.13
Issues
Petitioners raise the following issues for our consideration:
"1. The Honorable Court of Appeals decided a question of law/substance
contrary to applicable law and jurisprudence when it affirmed the award of
moral damage suit (sic) the amount of ₱10,000.00.
 2. The Honorable Court of Appeals decided a question of law/substance
contrary to applicable law and jurisprudence when it affirmed the award of
exemplary damage sin (sic) the amount of ₱5,000.00 and attorney's fee in the
[a]mount of ₱10,000.00.
3. The Honorable Court of Appeals gravely erred and/;or (sic) had acted with
grave abuse of discretion amounting to lack and/or excess of jurisdiction when
it refused to hold that respondent's son in the person of Fulgencio Dacara, Jr.
was negligent at the time of incident."14
Because the issues regarding the liability of petitioners for moral and exemplary damages
presuppose that their negligence caused the vehicular accident, we first resolve the
question of negligence or the proximate cause of the incident.
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Negligence
Maintaining that they were not negligent, petitioners insist that they placed all the
necessary precautionary signs to alert the public of a roadside construction. They argue
that the driver (Fulgencio Dacara Jr.) of respondent's car was overspeeding, and that his
own negligence was therefore the sole cause of the incident.
Proximate cause is defined as any cause that produces injury in a natural and continuous
sequence, unbroken by any efficient intervening cause, such that the result would not
have occurred otherwise.15 Proximate cause is determined from the facts of each case,
upon a combined consideration of logic, common sense, policy and precedent.16
What really caused the subject vehicle to turn turtle is a factual issue that this Court cannot
pass upon, absent any whimsical or capricious exercise of judgment by the lower courts
or an ample showing that they lacked any basis for their conclusions. 17 The unanimity of
the CA and the trial court in their factual ascertainment that petitioners' negligence was
the proximate cause of the accident bars us from supplanting their findings and
substituting these with our own. The function of this Court is limited to the review of the
appellate court's alleged errors of law. It is not required to weigh all over again the factual
evidence already considered in the proceedings below.18 Petitioners have not shown that
they are entitled to an exception to this rule.19 They have not sufficiently demonstrated
any special circumstances to justify a factual review.
That the negligence of petitioners was the proximate cause of the accident was aptly
discussed in the lower court's finding, which we quote:
30
"Facts obtaining in this case are crystal clear that the accident of February 28, 1988 which
caused almost the life and limb of Fulgencio Dacara, Jr. when his car turned turtle was
the existence of a pile of earth from a digging done relative to the base failure at
Matahimik Street nary a lighting device or a reflectorized barricade or sign perhaps which
could have served as an adequate warning to motorist especially during the thick of the
night where darkness is pervasive.
"Contrary to the testimony of the witnesses for the defense that there were signs, gasera
which was buried so that its light could not be blown off by the wind and
barricade, none was ever presented to stress the point that sufficient and adequate
precautionary signs were placed at Matahimik Street. If indeed signs were placed thereat,
how then could it be explained that according to the report even of the policeman which
for clarity is quoted again, none was found at the scene of the accident.
xxxxxxxxx
"Negligence of a person whether natural or juridical over a particular set of events is
transfixed by the attending circumstances so that the greater the danger known or
reasonably anticipated, the greater is the degree of care required to be observed.
xxxxxxxxx
"The provisions of Article 2189 of the New Civil Code capsulizes the responsibility of the
city government relative to the maintenance of roads and bridges since it exercises the
control and supervision over the same. Failure of the defendant to comply with the
statutory provision found in the subject-article is tantamount to negligence per se which
renders the City government liable. Harsh application of the law ensues as a result thereof
but the state assumed the responsibility for the maintenance and repair of the roads and
bridges and neither exception nor exculpation from liability would deem just and
equitable."20 (Emphasis supplied)
Petitioners belatedly point out that Fulgencio Jr. was driving at the speed of 60 kilometers
per hour (kph) when he met the accident. This speed was allegedly well above the
maximum limit of 30 kph allowed on "city streets with light traffic, when not designated
'through streets,'" as provided under the Land Transportation and Traffic Code (Republic
Act 4136). Thus, petitioners assert that Fulgencio Jr., having violated a traffic regulation,
should be presumed negligent pursuant to Article 2185 21 of the Civil Code.22
These matters were, however, not raised by petitioners at any time during the trial. It is
evident from the records that they brought up for the first time the matter of violation of
RA 4136 in their Motion for Reconsideration23 of the CA Decision dated February 21, 2001.
It is too late in the day for them to raise this new issue. It is well-settled that points of law,
theories or arguments not brought out in the original proceedings cannot be considered
on review or appeal.24 To consider their belatedly raised arguments at this stage of the
proceedings would trample on the basic principles of fair play, justice, and due process. 25
Indeed, both the trial and the appellate courts' findings, which are amply substantiated
by the evidence on record, clearly point to petitioners' negligence as the proximate cause
of the damages suffered by respondent's car. No adequate reason has been given to
overturn this factual conclusion.
Second Issue:
Moral Damages
Petitioners argue that moral damages are recoverable only in the instances specified in
Article 221926 of the Civil Code. Although the instant case is an action for quasi-delict,
petitioners contend that moral damages are not recoverable, because no evidence of
physical injury were presented before the trial court.27
To award moral damages, a court must be satisfied with proof of the following requisites:
(1) an injury -- whether physical, mental, or psychological -- clearly sustained by the
claimant; (2) a culpable act or omission factually established; (3) a wrongful act or
omission of the defendant as the proximate cause of the injury sustained by the claimant;
and (4) the award of damages predicated on any of the cases stated in Article 2219. 28
Article 2219(2) specifically allows moral damages to be recovered for quasi-
delicts, provided that the act or omission caused physical injuries. There can be no recovery
of moral damages unless the quasi-delict resulted in physical injury.29 This rule was
enunciated in Malonzo v. Galang30 as follows:
"x x x. Besides, Article 2219 specifically mentions 'quasi-delicts causing physical injuries,'
as an instance when moral damages may be allowed, thereby implying that all other
quasi-delicts not resulting in physical injuries are excluded, excepting of course, the
special torts referred to in Art. 309 (par. 9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32,
34 and 35 on the chapter on human relations (par. 10, Art. 2219)."
In the present case, the Complaint alleged that respondent's son Fulgencio Jr. sustained
physical injuries. The son testified that he suffered a deep cut on his left arm when the car
overturned after hitting a pile of earth that had been left in the open without any warning
device whatsoever.
It is apparent from the Decisions of the trial and the appellate courts, however, that no
other evidence (such as a medical certificate or proof of medical expenses) was presented
to prove Fulgencio Jr.'s bare assertion of physical injury. Thus, there was no credible proof
that would justify an award of moral damages based on Article 2219(2) of the Civil Code.
Moreover, the Decisions are conspicuously silent with respect to the claim of respondent
that his moral sufferings were due to the negligence of petitioners. The Decision of the
trial court, which summarizes the testimony of respondent's four witnesses, makes no
31
mention of any statement regarding moral suffering, such as mental anguish, besmirched
reputation, wounded feelings, social humiliation and the like.
Moral damages are not punitive in nature, but are designed to compensate and alleviate
in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury
unjustly inflicted on a person.31 Intended for the restoration of the psychological or
emotional status quo ante, the award of moral damages is designed to compensate
emotional injury suffered, not to impose a penalty on the wrongdoer.
For the court to arrive upon a judicious approximation of emotional or moral injury,
competent and substantial proof of the suffering experienced must be laid before it.
Essential to this approximation are definite findings as to what the supposed moral
damages suffered consisted of; otherwise, such damages would become a penalty rather
than a compensation for actual injury suffered.32
Furthermore, well-settled is the rule that moral damages cannot be awarded -- whether
in a civil33 or a criminal case34 -- in the absence of proof of physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, or similar injury.35 The award of moral damages must be solidly
anchored on a definite showing that respondent actually experienced emotional and
mental sufferings. Mere allegations do not suffice; they must be substantiated by clear
and convincing proof.36
Third Issue:
Exemplary Damages
Petitioners argue that exemplary damages and attorney's fees are not recoverable.
Allegedly, the RTC and the CA "did not find that petitioners were guilty of gross
negligence in the performance of their duty and responsibilities." 37
Exemplary damages cannot be recovered as a matter of right. 38 While granting them is
subject to the discretion of the court, they can be awarded only after claimants have
shown their entitlement to moral, temperate or compensatory damages. 39 In the case
before us, respondent sufficiently proved before the courts a quo that petitioners'
negligence was the proximate cause of the incident, thereby establishing his right to actual
or compensatory damages. He has adduced adequate proof to justify his claim for the
damages caused his car. The question that remains, therefore, is whether exemplary
damages may be awarded in addition to compensatory damages.
Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary damages
may be recovered if the defendant acted with gross negligence.40 Gross negligence means
such utter want of care as to raise a presumption that the persons at fault must have been
conscious of the probable consequences of their carelessness, and that they must have
nevertheless been indifferent (or worse) to the danger of injury to the person or property Petitioner,
of others.41 The negligence must amount to a reckless disregard for the safety of persons Present:
or property. Such a circumstance obtains in the instant case.
PANGANIBAN, J., Chairman
A finding of gross negligence can be discerned from the Decisions of both the CA and the - versus - SANDOVAL-GUTIERREZ,
trial court. We quote from the RTC Decision: CORONA,
CARPIO MORALES, and
"Sad to state that the City Government through its instrumentalities have (sic) failed to GARCIA, JJ.
show the modicum of responsibility, much less, care expected of them (sic) by the THE HON. COURT OF APPEALS, LAURA BIGLANG-
constituents of this City. It is even more deplorable that it was a case of a street digging AWA, METROPOLITAN WATERWORKS AND Promulgated:
in a side street which caused the accident in the so-called 'premier city.'"421avvphi1.zw+ SEWERAGE SYSTEM (MWSS), and KWOK CHEUNG,
Respondents. August 9, 2005
The CA reiterated the finding of the trial court that petitioners' negligence was clear,
considering that there was no warning device whatsoever43 at the excavation site. x-------------------------------------------------------------------------------------x
DECISION
The facts of the case show a complete disregard by petitioners of any adverse consequence
of their failure to install even a single warning device at the area under renovation. GARCIA, J.:
Considering further that the street was dimly lit,44 the need for adequate precautionary
measures was even greater. By carrying on the road diggings without any warning or
barricade, petitioners demonstrated a wanton disregard for public safety. Indeed, the
In this appeal by way of a petition for review on certiorari under Rule 45 of the
February 28, 1988 incident was bound to happen due to their gross negligence. It is clear
that under the circumstances, there is sufficient factual basis for a finding of gross Rules of Court, petitioner Municipality of San Juan urges us to annul and set aside
negligence on their part. the decision dated 08 September 1995[1] of the Court of Appeals in CA-G.R. CV No.
38906, affirming with modification an earlier decision of the Regional Trial Court at Pasig
Article 2229 of the Civil Code provides that exemplary damages may be imposed by way City in an action for damages thereat commenced by private respondent Laura Biglang-
of example or correction for the public good. The award of these damages is meant to be awa against, among others, the herein petitioner.
a deterrent to socially deleterious actions.45 Public policy requires such imposition to
suppress wanton acts of an offender.46 It must be emphasized that local governments and
their employees should be responsible not only for the maintenance of roads and streets, The material facts are not at all disputed:
but also for the safety of the public. Thus, they must secure construction areas with
adequate precautionary measures.
Under a Contract For Water Service Connections[2] entered into by and between the
Not only is the work of petitioners impressed with public interest; their very existence is Metropolitan Waterworks and Sewerage System (MWSS) and Kwok Cheung as sole
justified only by public service. Hence, local governments have the paramount proprietor of K.C. Waterworks System Construction (KC, for short), the former engaged
responsibility of keeping the interests of the public foremost in their agenda. For these the services of the latter to install water service connections. Article 11 (Scope of Work),
reasons, it is most disturbing to note that the present petitioners are the very parties paragraph 2.01 of the agreement provides:
responsible for endangering the public through such a rash and reckless act.

WHEREFORE, the Petition is hereby PARTLY GRANTED. The Decision of the Court of 2.01 The CONTRACTOR agrees to install water service connections,
Appeals is AFFIRMED, with the MODIFICATION that the award of moral damages transfer location of tapping to the nearest main, undertake separation
is DELETED. No costs. of service connection, change rusted connections, within the service
area of the MWSS specified in each job order covered by this Contract,
SO ORDERED. from the water main up to the installation of the verticals. Tapping of
the service pipe connection and mounting of water meter shall be
THE MUNICIPALITY OF SAN JUAN, METRO MANILA, G.R. No. 121920 undertaken exclusively or solely by the MWSS;

32
 On 20 May 1988, KC was given a Job Order by the South Sector Office of MWSS
to conduct and effect excavations at the corner of M. Paterno and Santolan Road, San Later, Biglang-awa amended her complaint twice. In her second amended
Juan, Metro Manila, a national road, for the laying of water pipes and tapping of water to complaint, she included KC as one of the defendants.
the respective houses of water concessionaires.
After due proceedings, the trial court rendered judgment in favor of Biglang-awa
adjudging MWSS and the Municipality of San Juan jointly and severally liable to her.
That same day, KC dispatched five (5) of its workers under Project Engineer
Dated 29 February 1992, the decision[5] dispositively reads in full, thus:
Ernesto Battad, Jr. to conduct the digging operations in the specified place. The workers
installed four (4) barricades made up of two-inch thick GI pipes welded together, 1.3
WHEREFORE, foregoing considered, judgment is hereby
meters wide and 1.2 meters high, at the area where the digging is to take place. The
rendered declaring the Municipality of San Juan, Metro Manila and the
digging operations started at 9 oclock in the morning and ended at about 3 oclock in the
Metropolitan Waterworks and Sewerage System jointly and severally
afternoon. The workers dug a hole one (1) meter wide and 1.5 meters deep, after which
liable to the plaintiff [Biglang-awa]. Both defendants are ordered to pay
they refilled the excavated portion of the road with the same gravel and stone excavated
plaintiff the amounts of:
from the area. At that time, only of the job was finished in view of the fact that the workers
were still required to re-excavate that particular portion for the tapping of pipes for the
(a) P18,389.55, for actual damages suffered by the plaintiff;
water connections to the concessionaires.
(b) P15,000.00, for moral damages;
Meanwhile, between 10 oclock and 11 oclock in the evening of 31 May 1988,
Priscilla Chan was driving her Toyota Crown car with Plate No. PDK 991 at a speed of
(c) P10,000.00, for exemplary damages;
thirty (30) kilometers per hour on the right side of Santolan Road towards the direction
of Pinaglabanan, San Juan, Metro Manila. With her on board the car and seated on the
(d) P5,000.00, for attorneys fees; and
right front seat was Assistant City Prosecutor Laura Biglang-awa. The road was flooded
as it was then raining hard. Suddenly, the left front wheel of the car fell on a manhole
(e) to pay the costs.
where the workers of KC had earlier made excavations. As a result, the humerus on the
right arm of Prosecutor Biglang-awa was fractured. Thereupon, Priscilla Chan contacted
SO ORDERED.
Biglang-awas husband who immediately arrived at the scene and brought his wife to the
Cardinal Santos Hospital.
Unable to accept the judgment, both Biglang-awa and the Municipality of San
Juan went to the Court of Appeals via ordinary appeal under Rule 41 of the Rules of
Dispatched to the scene of the accident to conduct an investigation thereof, Pfc.
Court, which appeal was thereat docketed as CA-G.R. CV No. 38906.
Felix Ramos of the Traffic Division of the San Juan Police Station, upon arriving thereat,
saw Priscilla Chans car already extracted from the manhole and placed beside the
As stated at the outset hereof, the appellate court, in a decision dated 08
excavated portion of the road. According to this police officer, he did not see any
September 1995, affirmed with modification that of the trial court, to wit:
barricades at the scene when he arrived less than an hour later. A Traffic Accident
Investigation Report[3] was thereafter prepared and signed by Pfc. Ramos.
IN THE LIGHT OF ALL THE FOREGOING, the Decision
appealed from is AFFIRMED but modified as follows:
At the hospital, the attending physician, after having performed a close
1. The Appellees KC and MWSS and the
reduction and application of abduction splint on Biglang-awa, placed a plastic cast on her
Appellant San Juan are hereby ordered to pay, jointly and severally, to
right arm. Barring complications, the injury she suffered was expected to heal in four (4)
[Biglang-awa] the amounts of P50,000.00 by way of moral
to six (6) weeks, although she must revisit her doctor from time to time for check-up and
damages, P50,000.00 by way of exemplary damages and P5,000.00 by
rehabilitation. After some time, the plastic cast was removed. Biglang-awa sustained no
way of attorneys fees, without prejudice to the right of the Appellee
deformity and no tenderness of the area of the injury but she could not sleep on her right
MWSS for reimbursement from the Appellee KC under the
side because she still felt pain in that portion of her body. A Medical Certificate[4] on her
Contract, Exhibit 3-MWSS:
injuries was issued by Dr. Antonio Rivera.
2. The counterclaims of the Appellees and
Consequent to the foregoing incident, Biglang-awa filed before the Regional
Appellant San Juan and the cross-claim of the latter are DISMISSED.
Trial Court at Pasig, Metro Manila a complaint for damages against MWSS, the
Without pronouncement as to costs.
Municipality of San Juan and a number of San Juan municipal officials.

33
 SO ORDERED. (Words in bracket supplied).
Therefrom, petitioner Municipality of San Juan came to this Court thru the
present recourse, on its submissions that:
I.
THE RESPONDENT APPELLATE COURT HAS DECIDED A
QUESTION OF SUBSTANCE NOT HEREFORE DECIDED BY THE
SUPREME COURT.
II.
THE RESPONDENT APPELLATE COURT HAS DECIDED A
QUESTION PROBABLY NOT IN ACCORD WITH THE LAW AND
JURISPRUDENCE.
With no similar recourse having been taken by the other parties, the Court shall
limit itself to the liability or non-liability of petitioner municipality for the injury sustained
by Biglang-awa.
In denying liability for the subject accident, petitioner essentially anchored its
defense on two provisions of laws, namely: (1) Section 149, [1][z] of Batas Pambansa Blg.
337, otherwise known as the Local Government Code of 1983; and (2) Section 8, Ordinance
82-01, of the Metropolitan Manila Commission.
Petitioner maintains that under Section 149, [1][z] of the Local Government
Code,[6] it is obliged to provide for the construction, improvement, repair and
maintenance of only municipal streets, avenues, alleys, sidewalks, bridges, parks and
other public places. Ergo, since Santolan Road is concededly a national and not a
municipal road, it cannot be held liable for the injuries suffered by Biglang-awa on
account of the accident that occurred on said road.
Additionally, petitioner contends that under Section 8, Ordinance No. 82-01, of
the Metropolitan Manila Commission, which reads:
In the event of death, injury and/or damages caused by the non-
completion of such works and/or failure of one undertaking the work
to adopt the required precautionary measures for the protection of the
general public or violation of any of the terms or conditions of the
permit, the permittee/excavator shall assume fully all liabilities for
such death, injury or damage arising therefrom. For this purpose, the
excavator/permittee shall purchase insurance coverage to answer for
third party liability,
only the Project Engineer of KC and MWSS can be held liable for the same accident.
34
The petition must have to be denied.
Jurisprudence[7] teaches that for liability to arise under Article 2189[8] of the Civil
Code, ownership of the roads, streets, bridges, public buildings and other public works,
is not a controlling factor, it being sufficient that a province, city or municipality has
control or supervision thereof. This, we made clear in City of Manila vs. Teotico, et al[9]:
At any rate, under Article 2189 of the Civil Code, it is not
necessary for the liability therein established to attach that the defective
roads or streets belong to the province, city or municipality from which
responsibility is exacted. What said article requires is that the province,
city or municipality have either "control or supervision" over said street
or road. x x x
It is argued, however, that under Section 149, [1][z] of the Local Government
Code, petitioner has control or supervision only over municipal and not national roads,
like Santolan Road.
Sadly, petitioner failed to take note of the other provisions of Section 149 of the same
Code, more particularly the following:
Section 149. Powers and Duties. (1) The sangguniang bayan shall:
(bb) Regulate the drilling and excavation of the ground for the laying of gas,
water, sewer, and other pipes; the building and repair of tunnels, sewers, drains
and other similar structures; erecting of poles and the use of crosswalks, curbs
and gutters therein, and adopt measures to ensure public safety against open
canals, manholes, live wires and other similar hazards to life and property, and
provide just compensation or relief for persons suffering from them;
(Underscoring supplied)
Clear it is from the above that the Municipality of San Juan can regulate the
drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes
within its territorial jurisdiction.
Doubtless, the term regulate found in the aforequoted provision of Section 149
can only mean that petitioner municipality exercises the power of control, or, at the very
least, supervision over all excavations for the laying of gas, water, sewer and other pipes
within its territory.
We must emphasize that under paragraph [1][bb] of Section 149, supra, of the
Local Government Code, the phrases regulate the drilling and excavation of the ground
for the laying of gas, water, sewer, and other pipes, and adopt measures to ensure public
safety against open canals, manholes, live wires and other similar hazards to life and
property, are not modified by the term municipal road. And neither can it be fairly
inferred from the same provision of Section 149 that petitioners power of regulation vis--
vis the activities therein mentioned applies only in cases where such activities are to be
performed in municipal roads. To our mind, the municipalitys liability for injuries caused
by its failure to regulate the drilling and excavation of the ground for the laying of gas,
water, sewer, and other pipes, attaches regardless of whether the drilling or excavation is
made on a national or municipal road, for as long as the same is within its territorial
jurisdiction.
We are thus in full accord with the following pronouncements of the appellate
court in the decision under review:
While it may be true that the Department of Public Works and
Highways may have issued the requisite permit to the Appellee KC
and/or concessionaires for the excavation on said road, the Appellant
San Juan is not thereby relieved of its liability to [Biglang-awa] for its
own gross negligence. Indeed, Evangeline Alfonso, the witness for the
Appellant San Juan unabashedly [sic] admitted, when she testified in
the Court a quo, that even if the Department of Public Works and
Highways failed to effect the requisite refilling, the Appellant San Juan
was mandated to undertake the necessary precautionary measures to
avert accidents and insure the safety of pedestrians and commuters:
xxx
The [petitioner] cannot validly shirk from its obligation to maintain and
insure the safe condition of the road merely because the permit for the
excavation may have been issued by a government entity or unit other
than the Appellant San Juan or that the excavation may have been done
by a contractor under contract with a public entity like the Appellee
MWSS.
Neither is the [petitioner] relieved of liability based on its purported
lack of knowledge of the excavation and the condition of the road
during the period from May 20, 1988 up to May 30, 1988 when the
accident occurred. It must be borne in mind that the obligation of the
[petitioner] to maintain the safe condition of the road within its
territory is a continuing one which is not suspended while a street is
being repaired
(Corpus Juris Secundum, MunicipalCorporations, page 120).
Knowledge of the condition of the road and the defects and/or
obstructions on the road may be actual or constructive. It is enough that
the authorities should have known of the aforesaid circumstances in
the exercise of ordinary care
(City of Louisevilleversus Harris, 180 Southwestern Reporter. page 65
). In the present recourse, Santolan Road and the Greenhills area
coming from Ortigas Avenue going to Pinaglabanan, San Juan, Metro
Manila is a busy thoroughfare. The gaping hole in the middle of the
road of Santolan Road could not have been missed by the authorities
concerned. After all, the [petitioner] San Juan is mandated to effect a
constant and unabated monitoring of the conditions of the roads to
insure the safety of motorists. Persuasive authority has it that:
35
It is the duty of the municipal authorities to
exercise an active vigilance over the streets; to see
that they are kept in a reasonably safe condition for
public travel. They cannot fold their arms and shut
their eyes and say they have no notice.
(Todd versus City of Troy, 61 New York 506).
(Words in bracket supplied).
Nor can petitioner seek shelter on Section 8 of Ordinance 82-01 of the Metropolitan
Manila Commission.
Concededly, Section 8 of the Ordinance makes the permittee/excavator liable for death,
injury and/or damages caused by the non-completion of works and/or failure of the one
undertaking the works to adopt the required precautionary measures for the protection
of the general public. Significantly, however, nowhere can it be found in said Ordinance
any provision exempting municipalities in Metro Manila from liabilities caused by their
own negligent acts. Afortiori, nothing prevents this Court from applying other relevant
laws concerning petitioners liability for the injuries sustained by Biglang-awa on that
fateful rainy evening of 31 May 1988.
WHEREFORE, the instant petition is DENIED and the assailed decision of the
appellate court AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 171705
EDUARDO VARELA, Petitioner, - versus - MA. DAISY REVALEZ,
Respondents. July 29, 2010
MENDOZA, JJ.
x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
RESOLUTION
CARPIO, J.:
The Case
This is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition
challenges the 17 August 2005 Decision[1] and 27 February 2006 Resolution[2] of the Court
of Appeals in CA-G.R. CV No. 73212. The Court of Appeals affirmed with modification
the 20 June 2001 Decision[3] of the Regional Trial Court (RTC), Negros Occidental, Judicial
Region 6, Branch 60, Cadiz City in Civil Case No. 547-C.
The Facts
Petitioner Eduardo G. Varela (Varela) was the mayor of Cadiz City. He created a
reorganization committee. On 22 September 1998, he submitted to the Sangguniang
Panlungsod of Cadiz City the committees Proposed Reorganizational Structure and
Staffing Pattern of Cadiz City. On the same day, 22 September 1998, the Sangguniang
Panlungsod approved without modification and without hearing the proposal. The
Sangguniang Panlungsod passed Resolution No. 98-112 authorizing and appropriating
funds for the reorganization of the city government. Resolution No. 98-112 declared all
positions in the city government vacant, except elective positions and positions in the city
and assistant city treasurer. On 15 October 1998, Varela signed Resolution No. 98-112.
On 10 November 1998, Varela gave notices of termination to the city government
employees, informing them that their employment would end at the close of business
hours on 31 December 1998. The employees opposed and questioned the legality of
Resolution No. 98-112. Varela ignored them.
Varela created a placement committee with City Administrator Philip G. Zamora, Delina,
Negosa, Jimmy Navarro, Jerry Batislaon and Napud as members. The committee
allegedly met three times.
On 31 December 1998, Varela again gave notices of termination to the city government
employees, informing them that their employment would end at the close of business
hours on 31 December 1998. On 4 January 1999, the employees tried to report for work
but were barred from entering their offices.
Among those laid off was Community Affairs Officer IV Ramon Borromeo
(Borromeo). His department, the special services department, was replaced by the
community and barangay affairs division. The head of the community and barangay
affairs division performed the same functions as the head of the special services
department. Three new positions were created in the community and barangay affairs
division. The three new positions were given to Oscar Magbanua (Magbanua), Moises
Seoren (Seoren), and Santos Ortega (Ortega). Magbanua, Seoren and Ortega were
political supporters of Varela and defeated barangay captain candidates.
Around half of the 101 employees of the city health department were laid off. Those laid
off were the same ones who filed a case, involving the magna carta for health workers,
against Varela. They were also perceived not to have voted for Varela as mayor.
On 12 January 1999, Ma. Daisy G. Revalez and 40 other city government employees filed
with the RTC a complaint[4] against Varela for the declaration of nullity of Resolution No.
98-112 and for damages. In a motion[5] dated 29 January 1999, 47 other city government
employees intervened. In the complaint, the employees stated that, due to the illegal acts
of the Defendant, Plaintiffs suffered mental torture and anguish, sleepless nights,
wounded feelings, besmirched reputation and social humiliation. [6]
The RTCs Ruling
In its 20 June 2001 Decision, the RTC declared Resolution No. 98-112 void and ordered
Varela to pay the government employees P10,000 each for moral damages, P200,000
36
attorneys fees, P20,000 litigation expenses, and court appearance fees at P3,000 per
hearing. The RTC found that Varela acted in bad faith. The Court held:
There is no question that the Sangguniang Panlungsod of Cadiz City is
the legislative arm of the local government unit and as such it possesses
the power to enact the questioned resolution. Plaintiffs however
challenge the manner Res. 98-112 was enacted, and the indecent haste
that accompanied its passage. The proposal emanated from the office
of defendant mayor and in a short time after its submission the measure
was passed. The requisite deliberations, if at all there was one, could
hardly be considered adequate and could best be described as
perfunctory.The minutes of the SP say it all. The deliberations reflected
a lackluster effort and a wimpish attempt by the members of the
Sangguniang Panlungsod to justify the grant to the mayor of legislative
authority to carry out the reorganization. There absolutely was no
public hearing.The proposal coming as it did from the mayor, was a
fait accompli, a done deal in a manner of speaking. x x x
xxxx
Careful examination of the evidence submitted by the defendant,
however, would reveal a systematic effort to purge the city
government of personnel who opposed the mayor politically, or
disagreed with him in his policies. Furthermore, perusal of the
minutes of the deliberations of the Sangguniang Panlungsod reveals
that the City of Cadiz was not in dire financial straits necessitating
radical measures like mass lay-off of personnel. x x x
x x x The City of Cadiz as of 1998, was not in financial extremis. It
had the money, the resources to fund the salaries of personnel. x x
x [Varela] even ignored the concern of a city councilor who said that
at that time (1998) the City already lacked the required personnel, and
so why abolish certain positions? The defendant mayor simply gave
the assurance that they can create any position when the need arises
and the city has the money. This statement betrayed the real
intentions of the defendant insofar as the reorganization is
concerned.
x x x The Mayor did not even explain what basic services would be
affected. As a matter of fact, the office hardest hit and greatly affected
by the mass layoff was the health services department where 50 or so
of the 101 personnel complement were laid off. Does it mean that the
delivery of health services is the least of the priorities of Cadiz City? Or
does it mean that health service from the point of view of the defendant
city mayor is not a basic service? The truth of the matter is that the
health workers of Cadiz filed a case against the mayor for his refusal
to implement provisions of the Magna Carta for Health
Workers. Talk of vindictiveness. The poor health workers laid off
were on the receiving end of the ire of the defendant mayor. There
seemed to be no rhyme or reason to the reorganization scheme.
xxxx
Was the reorganization of the Cadiz City government under Res. 98-
112, done in good faith?The testimony of Ramon Borromeo, which is
uncontradicted, will show the true intent of the reorganization, and
whether or not it was done in good faith:
Q (Atty. Lobrido) What about your position, Mr.
Witness?
A My position as Community Affairs Officer was
abolished but instead an Executive
Assistant IV was made under
the Division Head of the Community and
Barangay Affairs Division.
Q What is the function of the Community and
Barangay Affairs Unit?
A It performs the same function as that of the Community
Affairs Unit of which I am the Division Head as
Community Affairs Officer IV.
Q Considering that you were laid off who took over your
function?
A The Executive Assistant IV, but considering that
the position is coterminous with that of the mayor,
the appointment of Executive Assistant IV
was disapproved by the Civil Service Commission
as head of the Community Affairs Unit and the
present situation as of now is that the community
Affairs and Barangay Unit is without a division head
and that three new positions were created.
Q Who were appointed to the three new positions
you mentioned a while ago?
A Those appointed are Oscar Magbanua,
Moises Seoren, and Santos Ortega.
Q Why do you know these three persons?
A Because they are supporters of the defendant
city mayor and also because they are barangay
37
captains who were defeated in the last barangay
elections.(TSN-Cerbo, pp. 8-10, May 3, 2000).
From the afore-quoted testimony it is clear that the abolition of the
office of Mr. Borromeo in the guise of reorganization was not done
in good faith. The abolition was done for political reasons, (Arao vs.
Luspo, L-23982, July 21, 1967, 20 SCRA 722). As stated in Urgello, if the
abolition merely resulted in placing another person or appointee with
a different designation or name but substantially the same duties, then
it will be considered a device to unseat the incumbent. Clearly the
reorganization is not genuine and it is nothing but a ruse to defeat the
constitutionally protected right of security of tenure.
xxxx
Since all the offices of the personnel of Cadiz City were declared vacant,
and notices of initial termination sent on November 10, 1998, the
placement Committee barely had twenty (20) days to submit a final
report to defendant mayor. With 741 personnel to be reevaluated and
screened, plus other new applicants, the committee did not have
enough time to do their work as envisioned. The Committee had to
screen and evaluate all applications to about 649 positions included in
the new plantilla. Notwithstanding time constraints, the Committee
did not meet until November 17, barely two (2) weeks from their
deadline. Subsequently they met three (3) times. On their first meeting,
the report states, the placement Committee merely agreed to ask the
defendant mayor to turn over to the Committee all the application
letters. Nothing by way of screening or evaluation was done that
day. On the second meeting November 18, the applications were
lumped in bundles or files, and segregated by department.Then they
suggested to borrow the qualification standards from the Human
Resource Management Office. Due to time constraints, it was
suggested that the screening should start immediately, and they agreed
to meet November 19, 1998. As of the second meeting the screening and
evaluation had barely began. On November 19, 1998 the committee met
with Mr. Zamora suggesting that qualification standards be used
mainly eligibility performance rating, education and attainment,
experience and awards and training received. Mr. Napud suggested
that the department heads be interviewed. As of November 19, the
committee had not started its deliberations and screening, but lo and
behold Mr. Zamora came up with a complete list in time for the last
meeting. On November 29, 1998, Mr. Zamora presented to the
members of the committee the list of employees selected by the
Placement Committee. Then the list was submitted to the mayor. These
were reflected in Minutes of the meeting of the Placement Committee.
On the other hand, what did Mr. Zamora say about the deliberations of
the Placement Committee in his capacity as chairman. His testimony is
very instructive.
Q (Atty. Lobrido) And when was the first meeting?
A I think November 17, 1998.
Q What transpired during the first meeting?
A I cannot remember.
xxx xxx
Q After November 18, 1998 meeting, was there
other meeting of the placement committee?
A Yes, sir.
Q When was that?
A On November 19, 1998.
Q And what transpired during that meeting
on November 19, 1998?
A I cannot remember.
It seems incredulous that Mr. Philip Zamora, designated to represent
defendant mayor, would not be able to recall what transpired during
the deliberations of the placement committee.Unless it is shown that
Mr. Zamora suffered severe bouts of amnesia, it would be the height of
tomfoolery to accept that he would not be able to recall the significant
highlights of the meetings. Which can only lead this Court to the
inescapable conclusion that the minutes (Exhibits 15 to 15-C) were
fabricated and contrived, and done after the fact. x x x
x x x Why would Philip Zamora present a list of employees selected to
members of the Placement Committee and tell them this is the result of
their evaluation? Were not the members of the committee the ones who
evaluated and selected the employees? The logical manner that should
have taken place would be that the committee members themselves
would submit the list to the chairman telling him that this was the
result of their evaluation and screening and they were ready to submit
the list to the mayor. As it appears the list was a done deal, a fait
accompli, and the members were merely told to put their imprimatur
to it. The truth of matter however, as can be gleaned from Mr. Zamoras
testimony, is that no meetings were ever conducted by the placement
38
committee. Which explains Mr. Zamoras memory lapses. Nothing of
the sort happened. What happened was that the minutes were hastily
produced as an afterthought and later passed on as the real thing. The
entire proceedings was [sic] a sham, a rigmarole intended to put a
stamp of legitimacy to what otherwise was a well calculated, well
planned scheme to rid Cadiz City of employees who were the
political opponents of the defendant mayor. The ploy was to use the
law as a subterfuge to defeat the security of tenure clause of the
constitution. On top of this masquerade, the defendant city mayor did
not show any compunction or any hesitation to ram the
reorganization down the throats of plaintiffs who resisted the move
and they actually complained. He did not give them the benefit of
the doubt, nor listened to their plea for justice. He simply ran
roughshod over all of them discarding any pretense to uphold due
process of law. It was shocking no less to the 166 plaintiffs who
become [sic] sacrificial lambs in the altar of political convenience and
expediency. This is anathema in a democratic system where the rule of
law reigns supreme.[7] (Emphasis supplied)
Cadiz City Chief Executive Salvador G. Escalante, Jr., through the Office of the City Legal
Officer, filed with the RTC a motion[8] to clarify who between Varela, in his personal
capacity, and Cadiz City was liable for the payment of moral damages, attorneys fees,
litigation expenses and court appearance fees. In its 26 July 2001 Order,[9] the RTC held
that, it is the municipal corporation which is liable for the acts of its officers committed
while in the performance of official duties.[10]
Cadiz City, through the Office of the City Legal Officer, appealed to the Court of Appeals.
The Court of Appeals Ruling
In its 17 August 2005 Decision, the Court of Appeals affirmed with modification the RTCs
20 June 2001 Decision. The Court of Appeals held that Varela was personally liable for
the payment of moral damages, attorneys fees, litigation expenses and court appearance
fees. It reduced the amounts of attorneys fees and litigation expenses from P200,000
to P100,000 and from P20,000 to P10,000, respectively, and deleted the award of court
appearance fees. The Court of Appeals held that:
OUR jurisprudence is replete with cases involving the issue of whether
or not a public officer may be held liable for damages in the
performance of their [sic] duties, to quote:
A public official is by law not immune from damages
in his personal capacity for acts done in bad faith
which, being outside the scope of his authority, are
no longer protected by the mantle of immunity for
official actions.
 Settled is the principle that a public official may be
liable in his personal capacity for whatever damage
he may have caused by his act done with malice and
in bad faith or beyond the scope of his authority or
jurisdiction.
In addition, Book I, Chapter 9 of the Administrative Code of 1987
provides, to quote:
Section 38. Liability of Superior Officers. (1) A public
officer shall not be civilly liable for acts done in the
performance of his official duties, unless there is a
clear showing of bad faith, malice or gross
negligence. x x x
In the case at bar, the court a quo found that bad faith attended the
performance of the official acts of the original defendant, Eduardo G.
Varela. x x x
WE find no reason to disturb the finding of bad faith by the court a quo
considering that the same was amply supported by evidence.[11]
Hence, the present petition.
The Issue
Varela raises as issue that, THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THE PETITIONER PERSONALLY LIABLE FOR THE PAYMENT OF
DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES AS THE PETITIONER
WAS SUED IN HIS OFFICIAL, AND NOT IN HIS PERSONAL CAPACITY. [12] Varela
states that:
All the proceedings in the lower court show beyond question that the
petitioner was charged in his official capacity as then mayor of the real
party-defendant, the respondent City of Capiz.
This is expressly shown by the very title, caption and allegations of
private respondents complaint dated January 12, 1999. The fact that
petitioner was sued in his representative and official capacity was not
contested, and, in fact, admitted by the parties. [13]
The Courts Ruling
The petition is unmeritorious.
39
Varela was sued in his personal capacity, not in his official capacity. In the complaint, the
employees stated that, due to the illegal acts of the Defendant, Plaintiffs suffered mental
torture and anguish, sleepless nights, wounded feelings, besmirched reputation and
social humiliation. The State can never be the author of illegal acts.
The complaint merely identified Varela as the mayor of Cadiz City. It did not
categorically state that Varela was being sued in his official capacity. The identification
and mention of Varela as the mayor of Cadiz City did not automatically transform the
action into one against Varela in his official capacity. The allegations in the complaint
determine the nature of the cause of action.
In Pascual v. Beltran,[14] the Court held that:
[I]n the case at bar, petitioner is actually sued in his personal capacity
inasmuch as his principal, the State, can never be the author of any
wrongful act. The Complaint filed by the private respondent with
the RTC merely identified petitioner as Director of the
Telecommunications Office, but did not categorically state that he
was being sued in his official capacity. The mere mention in the
Complaint of the petitioners position as Regional Director of the
Telecommunications Office does not transform the action into one
against petitioner in his official capacity. What is determinative of
the nature of the cause of action are the allegations in the
complaint. It is settled that the nature of a cause of action is determined
by the facts alleged in the complaint as constituting the cause of
action.The purpose of an action or suit and the law to govern it is to be
determined not by the claim of the party filling [sic] the action, made
in his argument or brief, but rather by the complaint itself, its
allegations and prayer for relief.[15] (Emphasis supplied)
WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 17 August 2005
Decision and 27 February 2006 Resolution of the Court of Appeals in CA-G.R. CV No.
73212.
SO ORDERED.
G.R. No. 73928 August 31, 1987
JOSE E. GENSON, petitioner, vs. SPS. EDUARDO ADARLE and SHERLITA MARI-
ON, and INTERMEDIATE APPELLATE COURT, respondents.
GUTIERREZ, JR., J.:
This is a Petition for review which seeks to set aside the decision in CA-G.R. No. 00783 on
the ground that the findings of the respondent Court of Appeals are based on
misapprehension of facts and conflict with those of the trial court and that the conclusions
drawn therefrom are based on speculations and conjectures.
Arturo Arbatin was the successful bidder in the sale at public auction of junk and other
unserviceable government property located at the compound of the Highway District
Engineer's Office of Roxas City. Private respondent Eduardo Adarle was hired as a
laborer by Arbatin to gather and take away scrap iron from the said compound with a
daily wage of P12.00 or about 312.00 a month.
On September 8, 1979, at 4:00 o'clock in the morning, on a Saturday and a non-working
day, while the private respondent was tying a cable to a pile of scrap iron to be loaded on
a truck inside the premises of the compound, and while the bucket of the payloader
driven by Ramon Buensalido was being raised, the bucket suddenly fell and hit Adarle
on the right back portion of his head just below the nape of his neck. Adarle was rushed
to the St. Anthony Hospital, Roxas City. According to the medical certificate issued by
the attending physician, the private respondent suffered the following injuries:
Thus, on January 19, 1982, the trial court rendered a decision finding all the defendants
liable for damages under Articles 1172 and 2176 of the New Civil Code. The dispositive
portion of the decision reads:
WHEREFORE, this court orders the defendants to pay to plaintiff the amounts
stated in the complainant's prayer as follows:
Ordering the defendants jointly and severally to pay the plaintiff the sum of 312.00
monthly from September 8, 1979 until his release from the hospital.
Ordering the defendants jointly and severally to pay the plaintiff the sum of
P7,410.63 for hospital expenses up to January 14, 1980 and an additional amount
for further hospitalization until the release of plaintiff from the hospital;

1) Comminuted fracture of the vertebral body of 13 with extreme

Ordering the defendants jointly and severally to pay the plaintiff the sum of at
Kyphosis of the segment by x-ray.
least P100,000.00 as actual and compensatory damages, considering that plaintiff
Eduardo Adarle is totally incapacitated for any employment for life;
2) Cord compression 2nd to the injury with paralysis of the lower
extremity, inability to defecate and urinate. (E Exh. A, Exhibits for the
Ordering the defendants jointly and severally to pay the plaintiff the sum of
plaintiff-appellant, Original Records.)
P20,000.00 as moral damages and another sum for exemplary damages which we
leave to the sound discretion of the Honorable Court;
The medical certificate also reported that:
Ordering the defendants jointly and severally to pay the plaintiff the sum of
The patient recovered the use of his urinary bladder and was able to P5,000.00 as attorney's fees. (pp. 129- 130, Original Records).
defecate 2 months after surgery. He is paralyzed from the knee down
to his toes. He can only sit on a wheel chair. The above residual damage
The petitioner appealed to the Intermediate Appellate Court which affirmed the decision
is permanent 2nd to the injury incurred by Mr. Adarle, he is still
of the trial court and further ordered the defendants to pay P5,000.00 exemplary damages.
confined in the Hospital. (idem)
Defendant Candelario Marcelino was, however, absolved from liability.

While still in the hospital, the private respondent instituted the action below for damages
In its decision, the appellate court ruled:
against Arbatin, his employer; Buensalido, the payloader operator; Candelario Marcelino,
the civil engineer; and petitioner, the Highway District Engineer.
That payloader owned by the Government, as found by the lower court, should
not have been operated that Saturday, September 8, 1979, a Saturday, a non-
During the trial on the merits, the petitioner put up the defense that he had no knowledge
working holiday. There is no official order from the proper authorities authorizing
of or participation in the accident and that, when it happened, he was not present in the
Arbatin and plaintiff to work and Buensalido to operate the payloader on that day
government compound. Apart from the fact that it was a Saturday and a non-working
inside the Highway compound. Thereabouts, we can logically deduce that Arbatin
day, he was in Iloilo. As part of his evidence, the petitioner presented a memorandum
and plaintiff went to the compound to work with the previous knowledge and
directed to a certain Mr. Orlando Panaguiton ordering the latter to take charge of the
consent of Highway District Engineer Jose E. Genson. And allowed him, probably
district until his return (Exh. 1).
upon the request of Arbatin. We have noted that Genson testified that his office
does not authorize work on Saturdays.
The trial court found that, with the exception of the petitioner, all of the defendants were
present at the Highway's compound when the accident occurred. However, it still
Genson testified that he was in Iloilo from September 9 and 10, 1979. The accident
adjudged the petitioner liable for damages because the petitioner was supposed to know
occurred on September 8, in the morning. In his answer, Genson did not allege his
what his men do with their government equipment within an area under his supervision.
presence in Iloilo on September 9 and 10 ... .

40
 We fully concur with the lower court's conclusions regarding the physical
presence of appellants inside the compound on that fateful day, pursuant to a
previous understanding with Arbatin for plaintiff to work on the scrap iron and
for Buensalido to operate the payloader inside the compound. Arbatin and
plaintiff would not go to the compound on that Saturday, if there was no previous
understanding with Genson and Buensalido.
The liability of Genson is based on fault, intentional and voluntary or negligent
(Eleano v. Hill, 77 SCRA 106; Jimena v. Lincallo, 63 O.G. 11,15, 8 C. A.R. 2567). He
gave permission to Arbatin, plaintiff and Buensalido to work on Saturday, a non-
working day, in contravention of his office' rules and regulations outlawing work
on Saturdays.. (pp. 29-30, Rollo)
In this present petition, the petitioner contends that the appellate court committed a
palpable error when it ruled that the petitioner was present when the accident happened
and that he had given permission to the other defendants to work on a Saturday, a non-
working day. The petitioner argues that considering these were the facts relied upon by
the said court in holding that he was negligent and thus liable for damages, such a
conclusion, is without basis.
The petitioner further contends that the appellate court erred in not holding that the suit
against the petitioner was, in effect, a suit against the government and, therefore, should
be dismissed under the principle of non-suability of the state.
There being no proof that the making of the tortious inducement was
authorized, neither the State nor its funds can be made liable therefor.
Therefore, the defense of the petitioner that he cannot be made liable under the principle
of non-suability of the state cannot be sustained.
With regard to the main contention of the petitioner that the appellate court based its
conclusions on an erroneous finding of fact, we agree with him that the appellate court's
finding that he was present within the premises when the accident happened is not
supported by evidence indisputably showing that he was indeed there.
Since the evidence fails to establish petitioner Genson's presence when the payloader's
bucket fell on the head of Mr. Adarle, any liability on his part would be based only on his
alleged failure to exercise proper supervision over his subordinates (See Umali v. Bacani,
69 SCRA 263, 267-268).
According to the trial court, Mr. Genson authorized work on a Saturday when no work
was supposed to be done. It stated that the petitioner should know what his men do with
their government equipment and he should neither be lax nor lenient in his supervision
over them.
The petitioner contends that:

1. No evidence on record exists that Genson gave authority to Adarle and Arbatin,
As regards the petitioner's second contention, we hold that the petitioner's Identification
either verbally or in writing, to enter the work inside the Highways Compound on
as the Highway District Engineer in the complaint filed by the private respondent did not
September 8, 1979;
result in the said complaint's becoming a suit against the government or state.

2. Genson never knew or met Arbatin until the trial of the case. This fact was never
In Belizar v. Brazas, (2 SCRA 526), we ruled that "the fact that the duties and positions of
denied by Arbatin nor rebutted by Adarle. How then could Genson have ordered or
the defendants are indicated does not mean that they are being sued in their official
allowed Arbatin to enter the Highways Compound with Adarle?
capacities, especially as the present action is not one against the Government."
Furthermore, the accident in the case at bar happened on a non-working day and there
was no showing that the work performed on that day was authorized by the government. 3. Adarle himself repeatedly admitted that Arbatin, his employer, gave him the
While the equipment used belongs to the Government, the work was private in nature, instructions to enter the compound, thus:
for the benefit of a purchaser of junk. As we have held in the case of Republic v. Palacio (23
SCRA 899,906). Q. Now particularly on September 8, 1979, did Arbatin ask you to go to the
compound in the Highway?
xxx xxx xxx A. Yes sr.
Q. Are you sure of that?
A. Yes, sir.
the ISU liability thus arose from tort and not from contract, and it is a
Q. Where did he say that to you?
well-entrenched rule in this jurisdiction, embodied in Article 2180 of
A. We went to the Highway compound for many times already and that was the
the Civil Code of the Philippines, that the State is liable only for torts
time when I met the incident.
caused by its special agents, specially commissioned to carry out the
Q. The particular day in question September 8. 1979, did you see Arturo Arbatin
acts complained of outside of such agent's regular duties (Merritt v.
and he asked you to go the compound on that day?
Insular Government, supra; Rosete v. Auditor General, 81 Phil. 453)

41
 A. That date was included on the first day when "he instructed us to gather scrap
iron until that work could be finished." (pp. 25-26, tsn., October 10, 1980)
(Emphasis supplied)
Q. Who told you to work there?
A. "Through the instruction of Arturo Arbatin" (pp. 32, tsn., Oct. 10, 1980) (Emphasis
supplied) (pp. 12-13, Rollo).
Insofar as work on a Saturday is concerned, and assuming Mr. Genson verbally allowed
it, we see nothing wrong in the petitioner's authorizing work on that day. As a matter of
fact, it could even be required that the hauling of junk and unserviceable equipment sold
at public auction must be done on non-working days. The regular work of the District
Engineer's office would not be disturbed or prejudiced by a private bidder bringing in his
trucks and obstructing the smooth flow of traffic and the daily routine within the
compound. Obviously, it would also be safer for all concerned to effect the clearing of the
junk pile when everything is peaceful and quiet.
There is no showing from the records that it is against regulations to use government
cranes and payloaders to load items sold at public auction on the trucks of the winning
bidder. The items were formerly government property. Unless the contract specifies
otherwise, it may be presumed that all the parties were in agreement regarding the use
of equipment already there for that purpose. Of course, it would be different if the junk
pile is in a compound where there is no equipment for loading or unloading and the
cranes or payloaders have to be brought there.
There is likewise no sufficient basis for the "master-servant" doctrine in tort law to apply.
Buensalido was not working overtime as a government employee. It is doubtful if the
district engineer can be considered an "employer" for purposes of tort liability who may
be liable even if he was not there. No evidence was presented to show that an application
for overtime work or a claim for overtime pay from the district engineer's office was ever
filed. It is more logical to presume that Buensalido, the operator of the payloader, was
trying to earn a little money on the side from the junk buyer and that his presence in the
compound on that Saturday was a purely private arrangement. From the records of this
case, we are not disposed to rule that a supervisor who tolerates his subordinates to
moonlight on a non-working day in their office premises can be held liable for everything
that happens on that day. It would have been preferable if Mr. Arbatin brought his own
payloader operator and perhaps, his own equipment but we are not dealing with sound
office practice in this case. The issue before us is subsidiary liability for tort comitted by a
government employee who is moonlighting on a non-working day.
This Court ruled in Dumlao v. Court of Appeals (114 SCRA 247, 251):
Nevertheless, it is a well-settled principle of law that a public official
may be liable in his personal private capacity for whatever damage he
may have caused by his act done with malice and in bad faith,
(Mindanao realty Corp. v. Kintanar, 6 SCRA 814) or beyond the scope
of his authority or jurisdiction. (the Philippine Racing Club v.
42
Bonifacio, G.R. No. L-11844, August 31, 1960) The question, therefore,
is whether petitioner did act in any of the manner aforesaid.
Petitioner contends that, contrary to the holding of the respondent
Court of Appeals, he was not sued in his personal capacity, but in his
official capacity. Neither was malice or bad faith alleged against him in
the complaint, much less proven by the evidence, as the respondent
court made no such finding of malice or bad faith.
Examining the allegations of the complaint and reviewing the evidence
it would indeed be correct to say that petitioner was sued in his official
capacity, and that the most that was imputed to him is act of culpable
neglect, inefficiency and gross indifference in the performance of his
official duties. Verily, this is not imputation of bad faith or malice, and
what is more was not convincingly proven.
According to the respondent court, "Genson and Buensalido divested themselves of their
public positions and privileges to accomodate an acquaintance or probably for inordinate
gain." (p. 31, Rollo).
There is no showing from the records that Genson received anything which could be
called "inordinate gain." It is possible that he permitted work on a Saturday to accomodate
an acquaintance but it is more plausible that he simply wanted to clear his compound of
junk and the best time for the winning bidder to do it was on a non-working day.
At any rate, we see no malice, bad faith, or gross negligence on the part of Genson to hold
him liable for the acts of Buensalido and Arbatin.
WHEREFORE, the decision of the Intermediate Appellate Court is hereby REVERSED
and SET ASIDE. The complaint against Jesus Genson is DISMISSED.
SO ORDERED.
G.R. No. L-53064 September 25, 1980
FELIX LANUZO, plaintiff-appellee, vs. SY BON PING and SALVADOR
MENDOZA, defendants-appellants.
MELENCIO-HERRERA, J.:
Appeal certified to Us by the Court of Appeals 1 as it involves pure legal questions.
On November 25, 1969, a Complaint for damages was instituted in the Court of First
Instance of Camarines Sur (Civil Case No. 6847) by plaintiff Felix Lanuzo against Sy Bon
Ping, the owner and operator of a freight truck bearing Plate No. T-57266, and his driver,
Salvador Mendoza. As alleged therein, at about five o'clock in the afternoon of July 24,
1969, while Salvador Mendoza was driving the truck along the national highway in the
Barrio of San Ramon, Nabua, Camarines Sur, and because of his reckless negligence, we
rammed into the residential house and store of plaintiff. As a result, the house and store
were completely razed to the ground causing damage to plaintiff in the total amount of
P13,000.00. Plaintiff averred that by reason thereof he became destitute as he lost his
means of livelihood from the store which used to give him a monthly income of P300.00.
The defendants moved to dismiss on the ground that another action, Criminal Case No.
4250 for Damage to Property through Reckless Imprudence, was pending in the
Municipal Court of Nabua, Camarines Sur, between the same parties for the same cause.
Plaintiff opposed the dismissal stressing that he had made an express reservation in the
criminal case to institute a civil action for damages separate and distinct from the criminal
suit.
The lower Court denied the Motion to Dismiss for lack of merit.
On August 13, 1970, the trial Court rendered a default judgment in plaintiff's favor, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered (a) ordering the
defendants to pay jointly and severally the amount of P13,000.00 as
damages, resulting to the loss of the store including the merchandise
for sale therein, the residential house of mixed materials, furnitures,
clothing and households fixtures; (b) ordering the said defendants to
pay jointly and severally P300.00 monthly from July 24, 1969 which
represents plaintiff's monthly income from his store until the whole
amount of P13,000.00 is fully paid; and (c) for attorney's fees an amount
equivalent to 20% of the total amount claimed by the plaintiff, plus the
costs of this suit.
Defendants' "Motion for Reconsideration and/or New Trial and To Set Aside Order of
Default" was denied.
Upon elevation by the defendants of the case to the Court of Appeals (CA-G.R. No. 48399-
R) they urged that the civil action was prematurely instituted in view of Rule 111, section
3, providing in part that "after the criminal action has been commenced the civil action
cannot be instituted until final judgment has been rendered in the criminal action."
Additionally, they contended that even assuming their liability, the lower Court
nevertheless committed an error in holding them jointly and severally liable.
On February 20, 1980, the Court of Appeals certified the case to this instance on pure
questions of law.
We start from the fundamental premise, clearly enunciated as early as the case of Barredo
vs. Garcia, et al., 2 that:
43
A distinction exists between the civil liability arising from a crime and
the responsibility for cuasi-delitos or culpa-extracontractual. The same
negligent act causing damages may produce civil liability arising from
a crime under article 100 of the Revised Penal Code, or create an action
for cuasi-delito or culpa extracontractual under articles 1902-1910 of the
Civil Code. Plaintiffs were free to choose which remedy to enforce.
Plaintiff's reservation before the Municipal Court in the criminal case of his right to
institute a civil action separately is quoted hereunder in full:
UNDERSIGNED offended party in the above-entitled case before this
Honorable Court respectfully alleges:
1. That this action which was commenced by the Chief of Police
included in the complaint the claim of the undersigned for civil
liability;
2. That the undersigned is reserving his right to institute the civil action
for damages, docketed as Civil Case No. 6847 of the Court of First
Instance of Camarines Sur, against accused herein and his employer;
WHEREFORE, it is respectfully prayed that reservation be made of
record therein and that the civil aspect of the above-entitled case be not
included herein.
xxx xxx xxx 3
The terms of plaintiff's reservation clearly and unmistakably make out a case for quasi-
delict. This is also evident from the recitals in plaintiff's Complaint averring the employer-
employee relationship between the appellants, alleging that damages to the house and
store were caused by the fact that Salvador Mendoza had driven the truck "recklessly,
with gross negligence and imprudence, without observance of traffic rules and
regulations and without regard to the safety of persons and property", and praying that
appellants be held jointly and solidarity liable for damages. These are, basically, what
should be alleged in actions based on quasi-delict. 4
As it is quite apparent that plaintiff had predicated his present claim for damages
on quasi-delict, he is not barred from proceeding with this independent civil suit. The
institution of a criminal action cannot have the effect of interrupting the civil action based
on quasi-delict. 5 And the separate civil action for quasi-delict may proceed independently
and regardless of the result of the criminal case, 6 except that a plaintiff cannot recover
damages twice for the same act or commission of the defendant. 7
The civil action referred to in Sections 3(a) and (b) of Rule 111 of the Rules of Court, which
should be suspended after the institution of the criminal action, is that arising from delict,
and not the civil action based on quasi-delict or culpa aquiliana.
We come now to the subject of liability of the appellants herein. For his own negligence
in recklessly driving the truck owned and operated by his employer, the driver, Salvador
Mendoza, is primarily liable under Article 2176 of the Civil Code. On the other hand, the
liability of his employer, Sy Bon Ping, is also primary and direct under Article 2180 of the
same Code, which explicitly provides:
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.
For failure of the appellant Sy Bon Ping to rebut the legal presumption of his negligence
in the selection and supervision of this employee, 8 he is likewise responsible for the
damages caused by the negligent act of his employee (driver) Salvador Mendoza, and his
liability is primary and solidary.
... What needs only to be alleged under the aforequoted provision
(Article 2180, Civil Code) is that the employee (driver) has, by his
negligence (quasi-delict) caused damage to make the employer,
likewise, responsible for the tortious act of the employee, and his
liability is, as earlier observed, primary and solidary 9
But although the employer is solidarity liable with the employee for damages, the
employer may demand reimbursement from his employee (driver) for whatever amount
the employer will have to pay the offended party to satisfy the latter's claim. 10
WHEREFORE, the appealed decision is hereby affirmed. Costs against defendants-
appellants.
SO ORDERED.
G.R. No. L-27730 January 21, 1974
PRIMA MALIPOL, in her own behalf and as guardian ad litem of her minor children,
LYDIA MALIJAN, JOSEFINA MALIJAN, TEODORA MALIJAN, and SEBASTIAN
MALIJAN, plaintiffs-appellees, vs. LILY LIM TAN and ERNESTO
LABSAN, defendants-appellants.
ZALDIVAR, J.:1äwphï1.ñët
Appeal on questions of law from the decision dated July 1, 1966, a judgment by default,
and from the order dated October 10, 1966, of the Court of First Instance of Batangas in
its Civil Case No. 1732 which denied defendants-appellants' motion to lift the order of
44
default and for a new trial and which considered the judgment by default as standing
with full force and effect.
In the evening of February 6, 1965, at about 8:35 o'clock, Pantaleon Malijan, who was
walking with his companion Leonardo Amante on the shoulder of the road in Barrio San
Felix, Sto. Tomas, Batangas, was hit by a gasoline tanker and was thrown to the ground.
While he was sprawling on the ground Malijan was run over by the tanker's right wheel
that got detached from its axle. Malijan's companion, with the aid of the barrio captain,
brought Malijan to the San Pablo City Hospital where he died that same night, the cause
of death being "possible traumatic cerebral hemorrhage due to vehicular accident."
The gasoline tanker with Plate No. T-52573, series of 1964, driven at the time of the
accident by herein appellant Ernesto Labsan, was being used in connection with the
gasoline business of the owner, the herein appellant Lily Lim Tan.
Representations and demands for payment of damage having been ignored by
appellants, appellees filed on May 18, 1966 a complaint in the Court of First Instance of
Batangas praying that appellants be condemned to pay, jointly and severally, the
damages as specified in said complaint. The appellees are the mother and the minor
brothers and sisters of the deceased Pantaleon Malijan.
Appellants were duly served with summons on May 19, 1966, but they failed to file their
answer within the reglementary period. Upon appellees' motion of June 8, 1966 the trial
court, in an order dated June 10, 1966, declare the appellants in default, and appellees
were permitted to present their evidence in the absence of the appellants. The trial court
rendered a decision, dated July 1, 1966, the dispositive portion of which reads as follows:
WHEREFORE, finding the averments in the complaint as supported by
the evidence to be reasonable and justified, judgment is hereby
rendered in favor of the plaintiffs and against the defendants. The
defendant driver, Ernesto Labsan, is ordered (1) to pay the sum of
P2,100.00 to the plaintiffs for expenses for hospitalization, medical
treatment, vigil and burial of Pantaleon Malijan; (2) to pay to the
plaintiffs the sum of P6,000.00 for the death of said victim; (3) to pay to
the plaintiffs the sum of P20,000.00 for the loss of earnings of said
deceased for a period of five years; (4) to pay to the plaintiffs the sum
of P5,000.00 for moral damages; (5) to pay to the plaintiffs the sum of
P2,000.00 for attorney's fees and P500.00 for incidental and litigation
expenses; and (6) to pay the costs of the suit. Should Ernesto Labsan
not be able to pay the foregoing damages, they shall be paid for by
defendant Lily Lim Tan, who by law, being the owner and operator of
the gasoline tanker that featured in the accident, is subsidiarily liable.
Copy of the decision was received by the appellees August on 23, 1966.
A motion for execution was filed on August 26, 1966 by appellees but the trial court held
its resolution in abeyance until September 22, 1966 when the judgment would become
final.
On September 21, 1966 appellants filed a verified motion to lift the order of default and
for a new trial, alleging that they were deprived of their day in court when the order of
default was issued and a decision rendered after; that they had good and valid defenses,
namely: (a) that the accident which gave rise to the case was due to force majeure; (b) that
appellant Ernesto Labsan was without fault in the accident that gave rise to the case; and
(c) that appellant Lily Lim Tan had exercised the due diligence required of a good father
of a family to prevent damage. Finding said motion to be without merit, the trial court
denied the same on October 10, 1966. Hence, this appeal wherein appellants made
assignment of errors, as follows:
(a) The trial court erred in finding that appellants took the complaint
for granted by reason of the fact that appellants referred to their lawyer
the complaint for answer only after the lapse of eleven (11) days from
receipt thereof ;
(b) The trial court erred in not holding that the mistake committed by
the late Atty. Daniel Chavez in giving the wrong date of receipt by
appellants of the summons and the complaint to Atty. Romulo R. de
Castro on June 10, 1966 due to the abnormal mental condition of the
late Atty. Daniel Chavez on June 10, 1966 which thereafter resulted in
the commission of suicide by the latter on June 17, 1966, constitutes the
mistake and accident in law which warrant the relief from default and
the granting of the new trial;
(c) The trial court erred in not holding that the fact that appellants,
through Atty. Romulo R. de Castro, filed on June 10, 1966 a motion for
extension of time to file answer, and thereafter actually did file their
answer to the complaint on June 20, 1966 wherein they alleged good,
valid and meritorious defenses against the claim of plaintiffs in the
complaint, should warrant favorable consideration of appellants'
motion to lift order of default and for new trial; and
(d) The trial court erred in not holding that the fact that appellants'
motion to lift order of default and for new trial.
1. In support of their first assignment of error, counsel for appellants contends that the
finding of the trial court, that the appellants took the complaint for granted when they
referred the complaint to their lawyer only on the eleventh day after receipt thereof, was
unwarranted, because appellants had 15 days from receipt of the summons and complaint
to answer and their lawyer, the late Atty. Daniel Chavez, after the complaint was referred
to him on the eleventh day, had still four days to file the answer, which he could very
well do inasmuch as he was well acquainted with the facts because he was the lawyer of
45
appellant Ernesto Labsan in Criminal Case No. 2200 of Court of First Instance of Batangas
for homicide thru reckless imprudence — which case arose from the very accident subject
of appellees' complaint; that appellant Lily Lim Tan, furthermore, had instructed her
employee, Eleuterio Dizon, to handcarry the summons and to deliver it to nobody except
to Atty. Chavez; that Atty. Chavez, in a distance telephone conversation with appellant
Lily Lim Tan, assured the latter that he would attend to the complaint.
We do not find merit in the contention of counsel for appellants. It is within the sound
discretion of the court to set aside an order of default and to permit a defendant to file his
answer and to be heard on the merits even after the reglementary period for the filing of
the answer has expired, but it is not error, or an abuse of discretion, on the part of the
court to refuse to set aside its order of default and to refuse to accept the answer where it
finds no justifiable reason for the delay in the filing of the answer. In the motions for
reconsideration of an order of default, the moving party has the burden of showing such
diligence as would justify his being excused from not filing the answer with the
reglementary period as provided by the Rules of Court, otherwise these guidelines for an
orderly and expeditious procedure would be rendered meaningless. 1 Unless it is shown
clearly that a party has justifiable reason for the delay the court will not ordinarily exercise
its discretion in his favor.2
In the instant case, We agree with the trial court that appellants have not shown that they
exercised such diligence as an ordinary prudent person would exercise, to have the
answer filed within the reglementary period. Appellant Lily Lim Tan admitted in her
affidavit3 that she received the summons and copy of the complaint on May 19, 1966, and
that having read the complaint she found out that she was being sued, together with her
driver, for damages in connection with the accident of February 6, 1965 at Sto. Tomas,
Batangas. The damages asked in the complaint amounts to P36,600.00. The summons
required them to answer the complaint within 15 days from receipt thereof, and warned
them that should they fail to answer within said period the plaintiffs would take
judgment against them for the relief demanded in the complaint. The damages demanded
was not a negligible sum, and appellant Lily Lim Tan, who is a business woman, should
have considered the matter a serious one. Ordinary prudence would dictate that she
should concern herself about the matter, that she should refer said complaint with the
least possible delay to her lawyer. But, for reasons she did not explain, she referred the
complaint to her lawyer only after the lapse of ten (10) days from receipt thereof, i.e., on
May 30, 1966. She should have considered that four days might not be sufficient time for
her lawyer to prepare and file the answer.
Appellants, however, contend that their lawyer, Atty. Chavez, could very well prepare
the answer within the remaining four days of the reglementary period, for he was
conversant with the facts of the case. Be that as it may, the fact was that Atty. Chavez
failed to file the answer. Because Atty. Chavez assured her, in their long distance
telephone conversation that he would take care the complaint, appellant Lily Lim Tan
took for granted that the answer would be filed on time. Said appellant should have
checked before the expiration of the period for filing the answer whether the complaint
was really taken care of, or not. But this, appellant Lily Lim Tan failed to do, and this is
another instance showing her lack of concern over the complaint. There was, therefore,
no showing of due diligence on the part of appellants which would excuse their failure to
file their answer on time. There is no showing either that the other appellant, Ernesto
Labsan, had taken any step to have an answer filed in his behalf — evidently he was
relying on his employer.
2. In support of the second assignment of error, appellants contend that the facts show
that on June 10, 1966, Atty. Chavez, who was then acting strangely, endorsed the
summons and complaint to Atty. Romulo R. de Castro; that upon inquiry by Atty. de
Castro from Atty. Chavez the latter informed him that the summons was served on
appellants on May 30, 1966; that appellant Lily Lim Tan, who was assured by Atty.
Chavez in their long distance telephone conversation that the complaint would be
attended to, could not, by the exercise of ordinary diligence, have foreseen, and avoided,
the circumstance that at the time she referred the summons to Atty. Chavez, the latter
was already in an abnormal condition which later resulted in his committing suicide on
June 17, 1966; that it was Atty. Chavez's abnormal condition and his having given to Atty.
de Castro the wrong date of the receipt of the summons by the appellees that caused the
delay in the filing of the answer; that said circumstances constituted mistake and accident
which entitled appellants to relief from default and a grant of new trial.
Appellants' contention that the delay in filing the answer was due to mistake and accident
is untenable.
The mistake, according to appellants, consisted in Atty. Chavez's having told Atty. de
Castro on June 10, 1966 that appellants received the summons and complaint on May 30,
1966. Even if Atty. Chavez had told Atty. de Castro the correct date, that is, that appellants
received the summons on May 19, 1966, the answer could not have been filed on time by
Atty. de Castro, because the reglementary period for filing the answer expired on June 3,
1966, and it was already June 10, 1966, when the complaint was endorsed by Atty. Chavez
to Atty. de Castro.
The accident, according to appellants' counsel, consisted in Atty. Chavez's being in an
abnormal condition at the time the complaint was given to him on May 30, 1966. This
claim of appellants is not supported by the record.
The record does not show that Atty. Chavez was suffering from an abnormal mind on
May 30, 1966. His actuations on May 30 were those that could be expected of a normal
person. Atty. Chavez asked the employee of appellant Lily Lim Tan about the date when
his employer received the summons and complaint, and because the employee could not
give him the desired information Atty. Chavez placed a long distance telephone call to
appellant Lily Lim Tan to ask about said date. This action of Atty. Chavez showed that
he was very much aware that the reglementary period within which the answer should
be filed was to be computed from the date of the receipt of the summons and the
complaint. It also showed that Atty. Chavez knew the easiest and the most practical
means to get the information that he needed — that was by a long distance telephone call
to his client, Lily Lim Tan. These actuations of Atty. Chavez showed that he knew the
importance of the matter at hand, and he was exercising the ordinary and reasonable care
46
over the interests of his client. These specific actions of Atty. Chavez indicated that as of
May 30, 1966 he had a sound mind.
It is claimed by appellants that on June 10, 1966 Atty. Chavez endorsed the complaint to
Atty. de Castro, and told the latter that the summons and complaint were received by the
appellants on May 30, 1966. It is further claimed by appellants that this information given
by Atty. Chavez — that the summons and complaint were received by the appellants on
May 30, 1966 — was the mistake that caused the delay of the filing of the answer. But it
should be noted that on June 10, 1966 when Atty. Chavez endorsed the complaint to Atty.
de Castro and informed the latter that the summons and complaint were received by the
appellants on May 30, 1966, the period within which the answer should be filed had
already expired — the expiry date being June 3, 1966.<äre||anº•1àw> There is no
showing that between May 30, when Atty. Chavez received the summons and complaint
from the employee of Lily Lim Tan, and June 3, 1973 Atty. Chavez was incapacitated to
file the answer. And so it is clear that before the case was endorsed to Atty. de Castro, the
appellants were already in default. The failure to file the answer on time may well be
attributed to the mistake or "negligence of Atty. Chavez. The appellants are bound by the
mistakes, and may suffer by the negligence, of their lawyer. In fact, on June 8, 1966, or
two days before Atty. Chavez endorsed the case to Atty. de Castro, the appellees had filed
a motion in court to declare the defendants (now the appellants) in default. The moves
taken by Atty. de Castro — in filing a motion for extension of time to file an answer on
June 10, 1966, and in finally filing an answer on June 20, 1966 — were already late.
The fact that Atty. Chavez committed suicide on June 17, 1966 does not necessarily prove
that he was abnormal, incompetent or insane on May 30, 1966. Although there is a judicial
declaration that a sane man would not commit suicide, cognizance is nevertheless taken
of the fact that circumstances at some given time may impel a person to commit
suicide.4 The probative value of suicide in determining the sanity of a person is dependent
on the factual situation in each case. Such matters as the reasons for the act of self-
destruction, the circumstances indicating the person's state of mind at the time, and other
pertinent facts must be considered. The appellants had not indicated to the trial court any
circumstance from which the trial court could form an opinion of the mental condition of
Atty. Chavez before he committed suicide. The trial court, therefore, did not err when it
did not favorably consider the claim of the appellant that their failure to file their answer
to the complaint was due to accident or mistake, as contemplated in Section 3 of Rule 18
of the Rules of Court.
3. In support of the third assignment of error, appellants argue that acting on the wrong
information given by Atty. Chavez, Atty. Romulo de Castro filed on June 10, 1966 a
motion for an extension of 20 days within which to file an answer and that he did file the
answer with good, valid and meritorious defenses on June 20, 1966; that on June 27, 1966
when appellees were allowed to present their evidence ex-parte, the motion for extension
of time and the answer already formed part of the records of the case; that inasmuch as
the late filing of the answer was due to accident and mistake, and appellants had good,
valid, and meritorious defenses, the motion to lift the order of default and for new trial
should have been favorably considered by the court.5
Let it be noted that the lower court rendered its decision on July 1, 1966, and the appellees WHEREFORE, the decision of the Court of First Instance of Batangas, dated July 1, 1966,
received notice of said decision on August 23, 1966. The decision would have become as modified in accordance with the observations We made in the preceding paragraph,
final on September 22, 1966. On September 21, 1966 the appellants filed their motion to and the order, dated October 10, 1966, denying appellants' motion for the lifting of the
lift the order of default and for new trial. The motion of the appellants therefore, was in order of default and for new trial, in Civil Case No. 1732, are affirmed. Costs against
the nature of a motion for a new trial based on fraud, accident, mistake or excusable defendants-appellees.
negligence under paragraph (a) of Section 1 of Rule 37 of the Rules of Court. Under
Section 2 of said Rule 37 the moving party must show that he has a meritorious defense. It is so ordered.
The facts constituting the movant's good and substantial defense, which he may prove if
the petition were granted, must be shown in the affidavit which should accompany the
motion for a new trial.6 In the instant case, the motion to lift the order of default and for
new trial as well as the affidavit of merits accompanying the motion did not contain clear
statements of the facts constituting a good and valid defense which the appellants might
prove if they were given a chance to introduce evidence.<äre||anº•1àw> The allegations
in the motion that defendants have good and valid defenses, namely: that the accident
which gave rise to the case was force majeure; that defendant Ernesto Labsan is absolutely
without fault in the accident that gave rise to the case; and that defendant Lily Lim Tan
has exercised due diligence required of a good father of a family to prevent damage7, are
mere conclusions which did not provide the court with any basis for determining the
nature and merit of the probable defense. An affidavit of merit should state facts, and not
mere opinion or conclusions of law.

Hence the trial court correctly denied the motion to set aside order of default and for new
trial.

We must, however, point out a flaw in the decision of the lower court. It is stated in the
decision appealed from that the driver, Ernesto Labsan, was primarily liable for the
payment of damages adjudged therein, and the appellant Lily Lim Tan, being the owner
and operator of the gasoline tanker that figured in the accident, is subsidiarily liable, that
is, liable only in case Ernesto Labsan was not able to pay. This is not correct. The action
in the instant case was brought not to demand civil liability arising from a crime. The
complaint makes no mention of a crime having been committed, much less of the driver
Ernesto Labsan having been convicted of a crime. But there is an allegation in the
complaint that Ernesto Labsan was the authorized driver of the truck that figured in the
accident, which truck was operated by appellant Lily Lim Tan in connection with her
gasoline business. The prayer in the complaint, furthermore, sought to hold appellants
jointly and solidarily liable for damages. The instant action, therefore, was based, as the
complaint shows, on quasi delict.8 Under Article 218 of the Civil Code, which treats of quasi
delicts, the liability of the owners and managers of an establishment or enterprise for
damages caused by their employees is primary and direct, not subsidiary.9 The employer,
however, can demand from his employee reimbursement of the amount which he paid
under his liability. 10 The employer, appellant Lily Lim Tan, must be held primarily and
directly, not subsidiarily, liable for damages awarded in the decision of the lower court.
This is, of course, without prejudice to the right of appellant Lily Lim Tan to demand from
her co-appellant Ernesto Labsan reimbursement of the damages that she would have to
pay to appellees.

47