E. Merritt vs. Govt., of the phil. Islands gr no.

L-11154
FACTS: The facts of the case took place in the 1910s. E. Merritt was a constructor who was excellent at
his work. One day, while he was riding his motorcycle along Calle Padre Faura, he was bumped by a
government ambulance. The driver of the ambulance was proven to have been negligent. Because of the
incident, Merritt was hospitalized and he was severely injured beyond rehabilitation so much so that he
could never perform his job the way he used to and that he cannot even earn at least half of what he used
to earn.
In order for Merritt to recover damages, he sought to sue the government which later authorized Merritt to
sue the government by virtue of Act 2457 enacted by the legislature (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). The lower court then determined the amount of damages and ordered the
government to pay the same.
ISSUE: Whether or not the government is liable for the negligent act of the driver of the ambulance.
HELD: No. 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. It follows therefrom that the
state, by virtue of such provisions of law, is not responsible for the damagessuffered 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 ofbranches of public service and in the appointment of its agents. The State can only be
liable if 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.
In the case at bar, the ambulance driver was not a special agent nor was a government officer acting as a
special agent hence, there can be no liability from the government. The Government 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.

FONTANILLA V. MALIAMAN
G.R. No. L-55963, February 27, 1991
Petitioners: Spouses Jose Fontanilla and Virginia Fontanilla
Respondents: Hon. Inocencio D. Maliaman and National Irrigation Administration (NIA)

FACTS
On December 1, 1989, the Court rendered a decision declaring National Irrigation Administration
(NIA), a government agency performing proprietary functions. Like an ordinary employer, NIA was
held liable for the injuries, resulting in death, of Francisco Fontanilla, son of petitioner spouses
Jose and Virginia Fontanilla, caused by the fault and/or negligence of NIAs driver employee Hugo
Garcia; and NIA was ordered to pay the petitioners the amounts of P 12,000 for the death of the
victim; P3,389 for hospitalization and burial expenses; P30,000 as moral damages; P8,000 as
exemplary damages, and attorneys fees of 20% of the total award.
The National Irrigation Administration (NIA) maintains, however, that it does not perform solely and
primarily proprietary functions, but is an agency of the government tasked with governmental
functions, and is therefore not liable for the tortuous act of its driver Garcia, who was not its special
agent. For this, they have filed a motion for reconsideration on January 26, 1990.
NIA believes this bases this on:
PD 552 amended some provisions
of RA 3601 (the law which created the NIA)
The case of Angat River Irrigation
System v. Angat River Workers Union
Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised a
governmental function because the nature of its powers and functions does not show that it was

intended to bring to the Government any special corporate benefit or pecuniary profit, a strong
dissenting opinion held that Angat River system is a government entity exercising proprietary
functions.

The Angat dissenting opinion:

Alegre protested the announced termination of his employment. He argued that although his contract
did stipulate that the same would terminate on July 17, 1976, since his services were necessary
and desirable in the usual business of his employer, and his employment had lasted for five years ,
he had acquired the status of regular employee and could not be removed except for valid cause.
The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet
been promulgated, which came into effect some 3 years after the perfection of the contract.

ISSUE
Whether or not NIA is a government agency with a juridical personality separate and distinct from the
government, thereby opening it up to the possibility that it may be held liable for the damages caused
by its driver, who was not its special agent.

HELD: YES
Reasoning the functions of government have been classified into governmental or constituent and
proprietary or ministrant. The former involves the exercise of sovereignty and considered as
compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as
optional.
The National Irrigation Administration was not created for purposes of local government. While it may
be true that the NIA was essentially a service agency of the government aimed at promoting public
interest and public welfare, such fact does not make the NIA essentially and purely a "governmentfunction" corporation. NIA was created for the purpose of "constructing, improving, rehabilitating, and
administering all national irrigation systems in the Philippines, including all communal and pump
irrigation projects." Certainly, the state and the community as a whole are largely benefited by the
services the agency renders, but these functions are only incidental to the principal aim of the agency,
which is the irrigation of lands.

NIA is a government agency invested with a corporate personality separate and distinct from the
government, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides:
Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as the
National Irrigation Administration. . . . which shall be organized immediately after the approval of this
Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all
provinces, for the proper conduct of its business. (Emphasis for emphasis).
Besides, Section 2, subsection b of P.D. 552 provides that:
(b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by
or under its administration, such fees or administration charges as may be necessary to cover the cost
of operation, maintenance and insurance, and to recover the cost of construction within a reasonable
period of time to the extent consistent with government policy; to recover funds or portions thereof
expended for the construction and/or rehabilitation of communal irrigation systems which funds shall
accrue to a special fund for irrigation development under section 2 hereof;
Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited,
and then on the crops raised thereon, which liens shall have preference over all other liens except for
taxes on the land, and such preferred liens shall not be removed until all fees or administration charges
are paid or the property is levied upon and sold by the National Irrigation Administration for the
satisfaction thereof. . . .
The same section also provides that NIA may sue and be sued in court.
It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of
Directors. Section 2, subsection (f): . . . and to transact such business, as are directly or indirectly
necessary, incidental or conducive to the attainment of the above powers and objectives, including the
power to establish and maintain subsidiaries, and in general, to exercise all the powers of a corporation
under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act.
DISPOSITION: The court concluded that the National Irrigation Administration is a government agency
with a juridical personality separate and distinct from the government. It is not a mere agency of the
government but a corporate body performing proprietary functions. Therefore, it may be held liable for
the damages caused by the negligent act of its driver who was not its special agent.
ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY.
The decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby
AFFIRMED.
DISSENTING: PADILLA: to say that NIA has opened itself to suit is one thing; to say that it is liable for
damages arising from tort committed by its employees, is still another thing.
The state or a government agency performing governmental functions may be held liable for tort
committed by its employees only when it acts through a special agent.

Spouses Fernando Viloria and Lourdes Viloria vs Continental Airlines, Inc.

Facts: In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a
travel agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel
agent, Margaret Mager, advised the couple that they cannot travel by train because it is fully booked; that
they must purchase plane tickets for Continental Airlines; that if they wont purchase plane tickets; theyll
never reach their destination in time. The couple believed Magers representations and so they purchased
two plane tickets worth $800.00.
Later however, the spouses found out that the train trip isnt fully booked and so they purchased train
tickets and went to their destination by train instead. Then they called up Mager to request for a refund for
the plane tickets. Mager referred the couple to Continental Airlines. As the couple are now in the
Philippines, they filed their request with Continental Airlines office in Ayala. The spouses Viloria alleged
that Mager misled them into believing that the only way to travel was by plane and so they were fooled
into buying expensive tickets.
Continental Airlines refused to refund the amount of the ticket and so the spouses sued the airline
company. In its defense, Continental Airlines claimed that the ticket sold to them by Mager is nonrefundable; that, if any, they are not bound by the misrepresentations of Mager because theres no
agency existing between Continental Airlines and Mager.
The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC.
ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager.
HELD: Yes. All the elements of agency are present, to wit:
1.

there is consent, express or implied of the parties to establish the relationship;

2.

the object is the execution of a juridical act in relation to a third person;

3.

the agent acts as a representative and not for himself, and

4.

the agent acts within the scope of his authority.

The first and second elements are present as Continental Airlines does not deny that it concluded an
agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into
contracts of carriage with third persons on the airlines behalf. The third element is also present as it is
undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines and
not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its behalf.
The fourth element is also present considering that Continental Airlines has not made any allegation that
Holiday Travel exceeded the authority that was granted to it.
Continental Airlines also never questioned the validity of the transaction between Mager and the spouses.
Continental Airlines is therefore in estoppels. Continental Airlines cannot be allowed to take an altogether
different position and deny that Holiday Travel is its agent without condoning or giving imprimatur to
whatever damage or prejudice that may result from such denial or retraction to Spouses Viloria, who
relied on good faith on Continental Airlines acts in recognition of Holiday Travels authority. Estoppel is
primarily based on the doctrine of good faith and the avoidance of harm that will befall an innocent party
due to its injurious reliance, the failure to apply it in this case would result in gross travesty of justice.

FILAMER CHRISTIAN INSTITUTE v IAC

August 17, 1992

FACTS:

Funtecha was a working student, being a part-time janitor and scholar of Filamer Christian
Institute.

One day, Funtecha, who already had a students drivers license, requested Masa, the school
driver and son of the school president, to allow him to drive the school vehicle. Assenting to the request,
Masa stopped the vehicle he was driving and allowed Funtecha to take over behind the wheel.

However, after negotiating a sharp dangerous curb, Funtecha came upon a fast moving truck so
that he had to swerve to the right to avoid a collision. Upon swerving, they bumped a pedestrian walking
in his lane. The pedestrian died due to the accident.

ISSUE: Won Filamer Christian Institute should be held liable

HELD: YES


First it should be noted that driving the vehicle to and from the house of the school president were
both Allan and Funtecha reside is an act in furtherance of the interest of the petitioner-school. The
school jeep had to be brought home so that the school driver can use it to fetch students in the morning
of the next school day.

Thus, in learning how to drive while taking the vehicle home in the direction of Allans home,
Funtecha definitely was not having a joy ride or for enjoyment, but ultimately, for the service for which
the jeep was intended by the petitioner school.

(School president had knowledge of Funtechas desire to learn how to drive.)

Court is thus constrained to conclude that the act of Funtecha in taking over the steering wheel
was one done for and in behalf of his employer for which act the school cannot deny any responsibility
by arguing that it was done beyond the scope of his janitorial duties.

The fact that Funtecha was not the school driver does not relieve the school from the burden of
rebutting the presumption of negligence on its part. It is sufficient that the act of driving at the time of the
incident was for the benefit of the school.

Petitioner school has failed to show that it exercised diligence of a good father of a family.

Petitioner has not shown that it has set forth rules and guidelines as would prohibit any one of its
employees from taking control over its vehicles if one is not the official driver or prohibiting the
authorized driver from letting anyone than him to drive the vehicle. Furthermore, school had failed to
show that it impose sanctions or warned its employees against the use of its vehicles by persons other
than the driver.

Thus, Filamer has an obligation to pay damages for injury arising from the unskilled manner by
which Funtecha drove the vehicle since the law imposes upon the employers vicarious liability for acts
or omissions of its employees.

The liability of the employer, under Article 2180, is primary and solidary. However, the employer shall
have recourse against the negligent employee for whatever damages are paid to the heirs of the
plaintiff.

VICTORY LINER, INC. vs. HEIRS OF ANDRES MALECDAN

FACTS: Petitioner is a common carrier. Private respondent Elena Malecdan is the
widow of the deceased, while private respondents Veronica, Virginia, Mary Pauline,
7

Arthur, Viola, Manuel and Valentin Malecdan are their children. Andres Malecdan
was a 75 year-old farmer residing in Barangay Nungnungan 2, Municipality of
Cauayan, Province of Isabela. On July 15, 1994, at around 7:00 p.m., while Andres
was crossing the National Highway on his way home from the farm, a Dalin Liner
bus on the southbound lane stopped to allow him and his carabao to pass. However,
as Andres was crossing the highway, a bus of petitioner Victory Liner, driven by
Ricardo C. Joson, Jr., bypassed the Dalin bus. In so doing, respondent hit the old man
and the carabao on which he was riding. As a result, Andres Malecdan was thrown
off the carabao, while the beast toppled over. The Victory Liner bus sped past the
old man, while the Dalin bus proceeded to its destination without helping him. The
incident was witnessed by Andres Malecdan's neighbor, Virgilio Lorena, who was
resting in a nearby waiting shed after working on his farm. Malecdan sustained a
wound on his left shoulder, from which bone fragments protruded. He was taken by
Lorena and another person to the Cagayan District Hospital where he died a few
hours after arrival. The carabao also died soon afterwards. Subsequently, a criminal
complaint for reckless imprudence resulting in homicide and damage to property
was filed against the Victory Liner bus driver Ricardo Joson, Jr. RULING OF TRIAL
COURT: The dispositive portion of the trial court's decision reads: WHEREFORE,
judgment is hereby rendered ordering the defendants to pay, jointly and severally
to the plaintiffs the amounts of: a. P50,000.00 as death indemnity; b. P88,339.00 for
actual damages; c. P200,000.00 for moral damages; d. P50,000.00 as exemplary
damages; e. Thirty percent (30%) as attorney's fees of whatever amount that can
be collected by the plaintiff; and f. The costs of the suit. The counterclaim of the
defendant Victory Liner, Inc. against the plaintiffs and the thirdparty complaint of
the same defendant against the Zenith Insurance Corporation are dismissed. SO
ORDERED. RULING OF C.A.: On appeal, the decision was affirmed by the Court of
Appeals, with the modification that the award of attorney's fees was fixed at
P50,000.00.
ISSUES: I. Whether or not the honorable court of appeals erred in affirming the
appealed decision of the regional trial court granting p200,000.00 as moral
damages which is double the p100,000.00 as prayed for by the private respondents
in their complaint and in granting actual damages not supported by official receipts
and spent way beyond the burial of the deceased victim. II. Whether or not the
affirmation by the honorable court of appeals of the appealed decision of the
regional trial court granting the award of moral and exemplary damages and
attorney's fees which were not proved and considering that there is no finding of
bad faith and gross negligence on the part of the petitioner was not established, is
in accord with law and jurisprudence. III. Whether or not the honorable court of
appeals erred in affirming the appealed decision of the regional trial court which
disregarded the appellant's testimonial and documentary evidence that it has
exercised extraordinary diligence in the selection and supervision of its employees,
or stated differently, whether or not the affirmation by the court of appeals of the
appealed decision of the trial court that is contrary to law and jurisprudence
constitutes grave abuse and excess of jurisdiction.
RULING: We find the appealed decision to be in order. First. Victory Liner, Inc. no
longer questions the findings of the Regional Trial Court that Andres Malecdan was
8

injured as a result of the gross negligence of its driver, Ricardo Joson, Jr. What
petitioner now questions is the finding that it (petitioner) failed to exercise the
diligence of a good father of the family in the selection and supervision of its
employee. Petitioner argues, With all due respect, the assignment of three
inspectors to check and remind the drivers of petitioner Victory Liner of its policies
in a two-and-a-half hour driving distance, the installation of tachometers to monitor
the speed of the bus all throughout the trip, the periodic monitoring and checking of
the trips from one station to another through a trip ticket from station to station, the
regular periodic conducting of safety and defensive driving [training sessions] for its
drivers are concrete and physical proofs of the formulated operating standards, the
implementation and monitoring of the same, designed for the exercise of due
diligence of a good father of a family in the supervision of its employees. It
explained that it did not present bus driver Joson, Jr. on the witness stands because
he had been dismissed from the company after the incident, which it found was a
breach in the company regulations. Petitioner blames private respondents for the
death of their father, Andres Malecdan, who was already 75 years old, for allowing
him to plough their field by himself. The contention has no merit. Article 2176
provides: Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no preexisting contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter. Article 2180 provides for
the solidary liability of an employer for the quasi-delict committed by an employee.
The responsibility of employers for the negligence of their employees in the
performance of their duties is primary and, therefore, the injured party may recover
from the employers directly, regardless of the solvency of their employees. The
rationale for the rule on vicarious liability has been explained thus: What has
emerged as the modern justification for vicarious liability is a rule of policy, a
deliberate allocation of a risk. The losses caused by the torts of employees, which
as a practical matter are sure to occur in the conduct of the employer's enterprise,
are placed upon that enterprise itself, as a required cost of doing business. They are
placed upon the employer because, having engaged in an enterprise, which will on
the basis of all past experience involve harm to others through the tort of
employees, and sought to profit by it, it is just that he, rather than the innocent
injured plaintiff, should bear them; and because he is better able to absorb them
and to distribute them, through prices, rates or liability insurance, to the public, and
so to shift them to society, to the community at large. Added to this is the
makeweight argument that an employer who is held strictly liable is under the
greatest incentive to be careful in the selection, instruction and supervision of his
servants, and to take every precaution to see that the enterprise is conducted
safely. Employers may be relieved of responsibility for the negligent acts of their
employees acting within the scope of their assigned task only if they can show that
"they observed all the diligence of a good father of a family to prevent damage." For
this purpose, they have the burden of proving that they have indeed exercised such
diligence, both in the selection of the employee and in the supervision of the
performance of his duties. In the selection of prospective employees, employers are
required to examine them as to their qualifications, experience and service
records.18 With respect to the supervision of employees, employers must formulate
9

standard operating procedures, monitor their implementation and impose

disciplinary measures for breaches thereof. These facts must be shown by concrete
proof, including documentary evidence. In the instant case, petitioner presented the
results of Joson, Jr.'s written examination, actual driving tests, x-ray examination,
psychological examination, NBI clearance, physical examination, hematology
examination, urinalysis, student driver training, shop training, birth certificate, high
school diploma and reports from the General Maintenance Manager and the
Personnel Manager showing that he had passed all the tests and training sessions
and was ready to work as a professional driver. However, as the trial court noted,
petitioner did not present proof that Joson, Jr. had nine years of driving experience.
Petitioner also presented testimonial evidence that drivers of the company were
given seminars on driving safety at least twice a year. Again, however, as the trial
court noted there is no record of Joson, Jr. ever attending such a seminar. Petitioner
likewise failed to establish the speed of its buses during its daily trips or to submit in
evidence the trip tickets, speed meters and reports of field inspectors. The finding of
the trial court that petitioner's bus was running at a very fast speed when it
overtook the Dalin bus and hit the deceased was not disputed by petitioner. For
these reasons, we hold that the trial court did not err in finding petitioner to be
negligent in the supervision of its driver Joson, Jr. Second. To justify an award of
actual damages, there should be proof of the actual amount of loss incurred in
connection with the death, wake or burial of the victim. We cannot take into account
receipts showing expenses incurred some time after the burial of the victim, such as
expenses relating to the 9th day, 40th day and 1st year death anniversaries. In this
case, the trial court awarded P88,339.00 as actual damages. While these were duly
supported by receipts, these included the amount of P5,900.00, the cost of one pig
which had been butchered for the 9th day death anniversary of the deceased. This
item cannot be allowed. We, therefore, reduce the amount of actual damages to
P82,439.00.00. The award of P200,000.00 for moral damages should likewise be
reduced. The trial court found that the wife and children of the deceased underwent
"intense moral suffering" as a result of the latter's death. Under Art. 2206 of the
Civil Code, the spouse, legitimate children and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental anguish by
reason of the death of the deceased. Under the circumstances of this case an award
of P100,000.00 would be in keeping with the purpose of the law in allowing moral
damages. On the other hand, the award of P50,000.00 for indemnity is in
accordance with current rulings of the Court. Art. 2231 provides that exemplary
damages may be recovered in cases involving quasidelicts if the defendant acted
with gross negligence. Exemplary damages are imposed not to enrich one party or
impoverish another but to serve as a deterrent against or as a negative incentive to
curb socially deleterious actions. In this case, petitioner's driver Joson, Jr. was
grossly negligent in driving at such a high speed along the national highway and
overtaking another vehicle which had stopped to allow a pedestrian to cross. Worse,
after the accident, Joson, Jr. did not stop the bus to help the victim. Under the
circumstances, we believe that the trial court's award of P50,000.00 as exemplary
damages is proper. Finally, private respondents are entitled to attorney's fees.
Under Art. 2008 of the Civil Code, attorney's fees may be recovered when, as in the
instant case, exemplary damages are awarded. In the recent case of Metro Manila
10

Transit Corporation v. Court of Appeals, we held an award of P50,000.00 as

attorney's fees to be reasonable. Hence, private respondents are entitled to
attorney's fees in that amount. WHEREFORE, the decision of the Court of Appeals,
dated January 17, 2002, is hereby AFFIRMED, with the MODIFICATION that petitioner
Victory Liner, Inc. is ordered to pay the following amounts to the respondent heirs of
Andres Malecdan: 1. Death indemnity in the amount of Fifty Thousand Pesos
(P50,000.00); 2. Actual damages in the amount of Eighty-Two Thousand Four
Hundred Thirty-Nine Pesos (P82,439.00); 3. Moral damages in the amount of One
Hundred Thousand Pesos (P100,000.00); 4. Exemplary damages in the amount of
Fifty Thousand Pesos (P50,000.00); 5. Attorney's fees in the amount of Fifty
Thousand Pesos (P50,000.00); and 6. Costs of suit. SO ORDERED.

METRO MANILA TRANSIT CORP v CA

June 21, 1993

FACTS:

Nenita Custodio was a paying passenger of a public utility jeepney, then driven by Calebag and
owned by Lamayo, when it collided with a bus driven by Leonardo and owned by the Metro Manila
Transit Corp (MMTC).

The collision happened after failure of both vehicles to slow down or blow their horns when they
were simultaneously approaching the same intersection in Taguig.

As a result of the collision, Custodio suffered physical injuries. Assisted by her parents, since she
was still a minor, she filed a complaint for damages against the drivers of the automobiles and their
respective employers.

At the trial court, MMTC presented its training officer and its transport supervisor who respectively
testified that:

1. it was not only careful and diligent in choosing and screening applicants for job openings,
2. but was also strict and diligent in supervising its employees,
a. by seeing to it that its employees were in proper uniforms,
b. briefed in traffic rules and regulations before the start of duty, and
c.

that it checked its employees to determine WON they were positive for alcohol and

11

d. that they followed other rules and regulations of the Bureau of Land Transportation and of the
company.

TC found both drivers concurrently negligent. As joint tortfeasors, both drivers, as well as Lamayo
(owner of the jeepney) were held solidarily liable for damages sustained by Custodio. MMTC was
absolved on the ground that it exercised diligence of a good father of a family in selecting and
supervising its employees.

CA modified TCs decision by holding MMTC solidarily liable with the other defendants on the
ground that the testimonies of the training officer and transport supervisor were not enough to
overcome the presumption of negligence; they were not able to present any evidence that its driver has
complied with all the clearances and trainings, and evidence as to the alleged written guidelines of the
company.

ISSUE: Did MMTC exercise due diligence. Should it be held solidarily liable with the other defendants

HELD: No

Conclusion of CA is more firmly grounded on jurisprudence and amply supported by evidence of

record than that of TC.

It is procedurally required for each party in case to prove his own affirmative assertion by the
degree of evidence required by law. Such party must present all available evidence at his disposal in
the manner that may be necessary to buttress his claim.

In the instant case, inasmuch as the witnesses (training supervisor and transport supervisor)
dwelt on mere generalities, they cannot be considered as sufficiently persuasive proof that MMTC
observed due diligence in the selection and supervision of employees.

MMTC should have presented other evidence, object or documentary, to buttress an apparently
biased testimony. Declarations are not enough.

Hence, MMTC fell short of the required evidentiary quantum as would convincingly and
undoubtedly prove its diligence.

With the allegation and subsequent proof of negligence against the defendant driver and of an
employer-employee relationship between him and MMTC in this instance, the case is undoubtedly
based on a quasi-delict under Article 2180.

12


As held in Gutierrez v Gutierrez, where the injury is due to the concurrent negligence of the
drivers of the colliding vehicles, the drivers and owners of the said vehicles shall be primarily, directly
and solidarily liable for damages and it is immaterial that one action is based on quasi-delict and the
other on culpa contractual, as the solidarity of the obligation is justified by the very nature thereof.

CASTILEX INDUSTRIAL CORP vs VASQUEZ

FACTS: On Aug. 28, 1988, around 1:30-2 am, Romeo Vasquez was driving his motorcycle around the
Osmea Rotunda in the normal flow and collided with the company pick-up driven by Benjamin Abad who
was going against the flow of the the traffic in the same Rotunda.
Vasquez died at the hospital on Sept. 5, 1988. Abad signed an acknowledgement of Responsible
party wherein he would pay all the expenses.
Vasquez parents commenced an action for damages against Abad and Castilex. TC held that
both must pay jointly and solidarily. CA affirmed but held that the liability of Castilex is only vicarious and
not solidary.

ISSUE: WON an employer may be held vicariously (subsidiarily) liable for the death resulting from the
negligent operation by a managerial employee of a company-issued vehicle

HELD: NO

RATIO: Art 2180 par 5 says that WON engaged in any business or industry, an employer is liable for the
torts committed by emplyees within the scope of his assigned tasks. But it is necessary to first establish
the employee-employer relnship. Then the plaintiff must show, to hold emplyer 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 employer can interpose the defense of due diligence in the selection and supervision of its
employee.
In the case at bar, it is undisputed that Abad was production manager of Castilex. At the night of
the incident, he did some overtime work at petitioners office. Thereafter he went to a restaurant at a place
known as a haven for prostitutes, pimps,and drug pushers and addicts
The Court finds that Abad was engaged in affairs of his own (had a woman in the car with him not
young enough to call him Daddy!!) or was carrying out a personal purpose not in line with his duties at the
time he figured in a vehicular accident. It was 2 am and way beyond normal working hours. His overtime
had ended.
Since there is a paucity (scarcity, insufficiency) of evidence that Abad was acting within the scope
of the functions entrusted to him, Castilex had no duty to show that it exercised the diligence of a good
father of a family in providing Abad with a service vehicle.
Thus, justice and equity require that Castilex be relieved of vicarious liability for the
consequences of the negligence of Abad in driving its vehicle.

LIBI VS IAC
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FACTS: Wendell Libi, son of petitioners, and Julie Ann Gotiong, the daughter of
private respondent spouses, were sweethearts until Julie broke up withWendell upon
finding out of his sadistic and irresponsible character.Wendell tried hard to reconcile
with Julie Ann but when the latterrefused, Wendell started making threats. On that
fateful day of January 14,1978, Julie Ann and Wendell diedfrom a single gunshot
wound each comingfrom the same Smith and Wesson revolver licensed in the name
of petitionerCresencio Libi. There being no eyewitnesses to the crime, petitioners
and privaterespondents herein advanced conflicting versions of the case.
Privaterespondents claimed that with the use of the same gun, Wendell took hisown
life after killing Julie Ann. On the other hand, the petitioners argued thatan unknown
third party, whom Wendell may have displeased by reason of his work as a narcotic
informant, must have caused the death of Wendell and Julie Ann.As a result of the
death of Julie Ann, private respondents filed an actionto recover damages arising
from the vicarious liability of the parents of Wendell (petitioners herein) under
Article 2180 of the New Civil Code. Aftertrial, the case was dismissed for
insufficiency of evidence. Likewise, thecounterclaim filed by the petitioners was
dismissed for lack of merit.On appeal lodged by private respondents, the
respondent court setaside the dismissal of the case and held petitioners liable under
Art. 2180 of the NCC. Hence this case.Herein petitioners seek for the reversal of
judgment of requiring themto pay P30,000.00 for moral damages, P10,000.00 for
exemplary damages.
ISSUE: Are petitioners liable for vicarious liability under Art 2180 of the NCC?

HELD: Under said Article 2180, the enforcement of such liability shall be effected
against thefather and, in case of his death or incapacity, the mother. This was
amplified by the Childand Youth Welfare Code which provides that the same shall
devolve upon the father and,in case of his death or incapacity, upon the mother or,
in case of her death or incapacity,upon the guardian, but the liability may also be
voluntarily assumed by a relative or familyfriend of the youthful offender. However,
under the Family Code, this civil liability isnow, without such alternative
qualification, the responsibility of the parents and those whoexercise parental
authority over the minor offender. 33 For civil liability arising fromquasi-delicts
committed by minors, the same rules shall apply in accordance with Articles2180
and 2182 of the Civil Code, as so modified. In the case at bar, whether the death of
the hapless Julie Ann Gotiong was caused by afelony or a quasi-delict committed by
Wendell Libi, respondent court did not err in holding petitioners liable for damages
arising therefrom. Subject to the preceding modifications of the premises relied
upon by it therefor and on the bases of the legal imperatives hereinexplained, we
conjoin in its findings that said petitioners failed to duly exercise the requisite
diligentissimi patris familias to prevent such damages. ACCORDINGLY, the instant
Petition is DENIED and the assailed judgment of respondent Court of Appeals is
hereby AFFIRMED, with costs against petitioners.

TAMARGO vs. COURT OF APPEALS

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FACTS: On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age,

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

ISSUES: whether or not the effects of adoption, insofar as parental authority is

concerned may be given retroactive effect so as to make the adopting parents the
indispensable parties in a damage case filed against their adopted child, for acts
committed by the latter, when actual custody was yet lodged with the biological
parents.

HELD: We do not believe that parental authority is properly regarded as having

been retroactively transferred to and vested in the adopting parents, the Rapisura
spouses, at the time the air rifle shooting happened. We do not consider that
retroactive effect may be giver to the decree of adoption so as to impose a liability
upon the adopting parents accruing at a time when adopting parents had no actual
or physically custody over the adopted child. Retroactive affect may perhaps be
given to the granting of the petition for adoption where such is essential to permit
the accrual of some benefit or advantage in favor of the adopted child. In the
instant case, however, to hold that parental authority had been retroactively lodged
in the Rapisura spouses so as to burden them with liability for a tortious act that
they could not have foreseen and which they could not have prevented (since they
were at the time in the United States and had no physical custody over the child
Adelberto) would be unfair and unconscionable. Such a result, moreover, would be
inconsistent with the philosophical and policy basis underlying the doctrine of
vicarious liability. Put a little differently, no presumption of parental dereliction on
the part of the adopting parents, the Rapisura spouses, could have arisen since
Adelberto was not in fact subject to their control at the time the tort was committed.
Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached
above. Article 35 provides as follows: Art. 35. Trial Custody. No petition for
adoption shall be finally granted unless and until the adopting parents are given by
the courts a supervised trial custody period of at least six months to assess their
adjustment and emotional readiness for the legal union. During the period of trial
custody, parental authority shall be vested in the adopting parents. Under the
above Article 35, parental authority is provisionally vested in the adopting parents
during the period of trial custody, i.e., before the issuance of a decree of adoption,
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precisely because the adopting parents are given actual custody of the child during
such trial period. In the instant case, the trial custody period either had not yet
begun or bad already been completed at the time of the air rifle shooting; in any
case, actual custody of Adelberto was then with his natural parents, not the
adopting parents. Accordingly, we conclude that respondent Bundoc spouses,
Adelberto's natural parents, were indispensable parties to the suit for damages
brought by petitioners, and that the dismissal by the trial court of petitioners'
complaint, the indispensable parties being already before the court, constituted
grave abuse of discretion amounting to lack or excess of jurisdiction. WHEREFORE,
premises considered, the Petition for Review is hereby GRANTED DUE COURSE and
the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP15016 is hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the
trial court is hereby REINSTATED and this case is REMANDED to that court for further
proceedings consistent with this Decision. Costs against respondent Bundoc
spouses. This Decision is immediately executory. SO ORDERED.

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