OBLICON Cases

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 181163
July 24, 2013
ASIAN TERMINALS, INC., Petitioner,

vs.
PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.), Respondent.
x-----------------------x
G.R. No. 181262
PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.), Petitioner,
vs.
WESTWIND SHIPPING CORPORATION and ASIAN TERMINALS, INC., Respondents.
x-----------------------x
G.R. No. 181319
WESTWIND SHIPPING CORPORATION, Petitioner,
vs.
PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.) and ASIAN
TERMINALS, INC.,Respondents.
DECISION
VILLARAMA, JR., J.:
Before us are three consolidated petitions for review on certiorari assailing the Decision 1 dated
October 15, 2007 and the Resolution2 dated January 11, 2008 of the Court of Appeals (CA)
which affirmed with modification the Decision3 of the Regional Trial Court (RTC) of Makati City,
Branch 148, in Civil Case No. 96-062. The RTC had ordered Westwind Shipping Corporation
(Westwind) and Asian Terminals, Inc. (ATI) to pay, jointly and severally, Philam Insurance Co.,
Inc. (Philam) the sum of P633,957.15, with interest at 12% per annum from the date of judicial
demand and P158,989.28 as attorneys fees.
The facts of the case follow:
On April 15, 1995, Nichimen Corporation shipped to Universal Motors Corporation (Universal
Motors) 219 packages containing 120 units of brand new Nissan Pickup Truck Double Cab 4x2
model, without engine, tires and batteries, on board the vessel S/S "Calayan Iris" from Japan to
Manila. The shipment, which had a declared value of US$81,368 or P29,400,000, was insured
with Philam against all risks under Marine Policy No. 708-8006717-4.4
The carrying vessel arrived at the port of Manila on April 20, 1995, and when the shipment was
unloaded by the staff of ATI, it was found that the package marked as 03-245-42K/1 was in bad
order.5 The Turn Over Survey of Bad Order Cargoes6 dated April 21, 1995 identified two
packages, labeled 03-245-42K/1 and 03/237/7CK/2, as being dented and broken. Thereafter, the
cargoes were stored for temporary safekeeping inside CFS Warehouse in Pier No. 5.
On May 11, 1995, the shipment was withdrawn by R.F. Revilla Customs Brokerage, Inc., the
authorized broker of Universal Motors, and delivered to the latters warehouse in Mandaluyong
City. Upon the request7 of Universal Motors, a bad order survey was conducted on the cargoes
and it was found that one Frame Axle Sub without LWR was deeply dented on the buffle plate
while six Frame Assembly with Bush were deformed and misaligned.8Owing to the extent of the
damage to said cargoes, Universal Motors declared them a total loss.
On August 4, 1995, Universal Motors filed a formal claim for damages in the amount
of P643,963.84 against Westwind,9 ATI10 and R.F. Revilla Customs Brokerage, Inc.11 When
Universal Motors demands remained unheeded, it sought reparation from and was
compensated in the sum of P633,957.15 by Philam. Accordingly, Universal Motors issued a
Subrogation Receipt12 dated November 15, 1995 in favor of Philam.
On January 18, 1996, Philam, as subrogee of Universal Motors, filed a Complaint 13 for damages
against Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. before the RTC of Makati City,
Branch 148.
On September 24, 1999, the RTC rendered judgment in favor of Philam and ordered Westwind
and ATI to pay Philam, jointly and severally, the sum of P633,957.15 with interest at the rate of
12% per annum, P158,989.28 by way of attorneys fees and expenses of litigation.
The court a quo ruled that there was sufficient evidence to establish the respective participation
of Westwind and ATI in the discharge of and consequent damage to the shipment. It found that
the subject cargoes were compressed while being hoisted using a cable that was too short and
taut.
The trial court observed that while the staff of ATI undertook the physical unloading of the
cargoes from the carrying vessel, Westwinds duty officer exercised full supervision and control
throughout the process. It held Westwind vicariously liable for failing to prove that it exercised
extraordinary diligence in the supervision of the ATI stevedores who unloaded the cargoes from
the vessel. However, the court absolved R.F. Revilla Customs Brokerage, Inc. from liability in
light of its finding that the cargoes had been damaged before delivery to the consignee.
The trial court acknowledged the subrogation between Philam and Universal Motors on the
strength of the Subrogation Receipt dated November 15, 1995. It likewise upheld Philams claim
for the value of the alleged damaged vehicle parts contained in Case Nos. 03-245-42K/1 and
03-245-51K or specifically for "7 pieces of Frame Axle Sub Without Lower and Frame Assembly
with Bush."14
Westwind filed a Motion for Reconsideration15 which was, however, denied in an Order16 dated
October 26, 2000.
On appeal, the CA affirmed with modification the ruling of the RTC. In a Decision dated October
15, 2007, the appellate court directed Westwind and ATI to pay Philam, jointly and severally, the
amount of P190,684.48 with interest at the rate of 12% per annum until fully paid, attorneys fees
of P47,671 and litigation expenses.
The CA stressed that Philam may not modify its allegations by claiming in its Appellees
Brief17 that the six pieces of Frame Assembly with Bush, which were purportedly damaged, were
also inside Case No. 03-245-42K/1. The CA noted that in its Complaint, Philam alleged that "one
(1) pc. FRAME AXLE SUB W/O LWR from Case No. 03-245-42K/1 was completely deformed
and misaligned, and six (6) other pcs. of FRAME ASSEMBLY WITH BUSH from Case No. 03245-51K were likewise completely deformed and misaligned."18
The appellate court accordingly affirmed Westwind and ATIs joint and solidary liability for the
damage to only one (1) unit of Frame Axle Sub without Lower inside Case No. 03-245-42K/1. It
also noted that when said cargo sustained damage, it was not yet in the custody of the
consignee or the person who had the right to receive it. The CA pointed out that Westwinds duty
to observe extraordinary diligence in the care of the cargoes subsisted during unloading thereof
by ATIs personnel since the former exercised full control and supervision over the discharging
operation.
Similarly, the appellate court held ATI liable for the negligence of its employees who carried out
the offloading of cargoes from the ship to the pier. As regards the extent of ATIs liability, the CA
ruled that ATI cannot limit its liability to P5,000 per damaged package. It explained that Section
7.0119 of the Contract for Cargo Handling Services20 does not apply in this case since ATI was
not yet in custody and control of the cargoes when the Frame Axle Sub without Lower suffered
damage.
Citing Belgian Overseas Chartering and Shipping N.V. v. Philippine First Insurance Co.,
Inc.,21 the appellate court also held that Philams action for damages had not prescribed
notwithstanding the absence of a notice of claim.
All the parties moved for reconsideration, but their motions were denied in a Resolution dated
January 11, 2008. Thus, they each filed a petition for review on certiorari which were
consolidated together by this Court considering that all three petitions assail the same CA
decision and resolution and involve the same parties.
Essentially, the issues posed by petitioner ATI in G.R. No. 181163, petitioner Philam in G.R. No.
181262 and petitioner Westwind in G.R. No. 181319 can be summed up into and resolved by
addressing three questions: (1) Has Philams action for damages prescribed? (2) Who between
Westwind and ATI should be held liable for the damaged cargoes? and (3) What is the extent of
their liability?
Petitioners Arguments
G.R. No. 181163
Petitioner ATI disowns liability for the damage to the Frame Axle Sub without Lower inside Case
No. 03-245-42K/1. It shifts the blame to Westwind, whom it charges with negligence in the
supervision of the stevedores who unloaded the cargoes. ATI admits that the damage could
have been averted had Westwind observed extraordinary diligence in handling the goods. Even
so, ATI suspects that Case No. 03-245-42K/1 is "weak and defective"22 considering that it alone
sustained damage out of the 219 packages.
Notwithstanding, petitioner ATI submits that, at most, it can be held liable to pay only P5,000 per
package pursuant to its Contract for Cargo Handling Services. ATI maintains that it was not
properly notified of the actual value of the cargoes prior to their discharge from the vessel.
G.R. No. 181262
Petitioner Philam supports the CA in holding both Westwind and ATI liable for the deformed and
misaligned Frame Axle Sub without Lower inside Case No. 03-245-42K/1. It, however, faults the
appellate court for disallowing its claim for the value of six Chassis Frame Assembly which were
likewise supposedly inside Case Nos. 03-245-51K and 03-245-42K/1. As to the latter container,
Philam anchors its claim on the results of the Inspection/Survey Report23 of Chartered Adjusters,
Inc., which the court received without objection from Westwind and ATI. Petitioner believes that
with the offer and consequent admission of evidence to the effect that Case No. 03-245-42K/1
contains six pieces of dented Chassis Frame Assembly, Philams claim thereon should be
treated, in all respects, as if it has been raised in the pleadings. Thus, Philam insists on the
reinstatement of the trial courts award in its favor for the payment of P633,957.15 plus legal
interest, P158,989.28 as attorneys fees and costs.
G.R. No. 181319
Petitioner Westwind denies joint liability with ATI for the value of the deformed Frame Axle Sub
without Lower in Case No. 03-245-42K/1. Westwind argues that the evidence shows that ATI
was already in actual custody of said case when the Frame Axle Sub without Lower inside it was
misaligned from being compressed by the tight cable used to unload it. Accordingly, Westwind
ceased to have responsibility over the cargoes as provided in paragraph 4 of the Bill of Lading
which provides that the responsibility of the carrier shall cease when the goods are taken into
the custody of the arrastre.
Westwind contends that sole liability for the damage rests on ATI since it was the latters
stevedores who operated the ships gear to unload the cargoes. Westwind reasons that ATI is an
independent company, over whose employees and operations it does not exercise control.
Moreover, it was ATIs employees who selected and used the wrong cable to lift the box
containing the cargo which was damaged.
Westwind likewise believes that ATI is bound by its acceptance of the goods in good order
despite a finding that Case No. 03-245-42K/1 was partly torn and crumpled on one side.
Westwind also notes that the discovery that a piece of Frame Axle Sub without Lower was
completely deformed and misaligned came only on May 12, 1995 or 22 days after the cargoes
were turned over to ATI and after the same had been hauled by R.F. Revilla Customs Brokerage,
Inc.
Westwind further argues that the CA erred in holding it liable considering that Philams cause of
action has prescribed since the latter filed a formal claim with it only on August 17, 1995 or four
months after the cargoes arrived on April 20, 1995. Westwind stresses that according to the
provisions of clause 20, paragraph 224 of the Bill of Lading as well as Article 36625 of the Code of
Commerce, the consignee had until April 20, 1995 within which to make a claim considering the
readily apparent nature of the damage, or until April 27, 1995 at the latest, if it is assumed that
the damage is not readily apparent.
Lastly, petitioner Westwind contests the imposition of 12% interest on the award of damages to
Philam reckoned from the time of extrajudicial demand. Westwind asserts that, at most, it can
only be charged with 6% interest since the damages claimed by Philam does not constitute a
loan or forbearance of money.
The Courts Ruling
The three consolidated petitions before us call for a determination of who between ATI and
Westwind is liable for the damage suffered by the subject cargo and to what extent. However,
the resolution of the issues raised by the present petitions is predicated on the appreciation of
factual issues which is beyond the scope of a petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, as amended. It is settled that in petitions for review on
certiorari, only questions of law may be put in issue. Questions of fact cannot be entertained.26
There is a question of law if the issue raised is capable of being resolved without need of
reviewing the probative value of the evidence. The resolution of the issue must rest solely on
what the law provides on the given set of circumstances. Once it is clear that the issue invites a
review of the evidence presented, the question posed is one of fact. If the query requires a reevaluation of the credibility of witnesses, or the existence or relevance of surrounding
circumstances and their relation to each other, the issue in that query is factual. 27
In the present petitions, the resolution of the question as to who between Westwind and ATI
should be liable for the damages to the cargo and to what extent would have this Court pass
upon the evidence on record. But while it is not our duty to review, examine and evaluate or
weigh all over again the probative value of the evidence presented,28 the Court may nonetheless
resolve questions of fact when the case falls under any of the following exceptions:
(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when
the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse
of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond
the issues of the case, or its findings are contrary to the admissions of both the appellant and
the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings
are conclusions without citation of specific evidence on which they are based; (9) when the facts
set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record.29
In the cases at bar, the fifth and seventh exceptions apply. While the CA affirmed the joint liability
of ATI and Westwind, it held them liable only for the value of one unit of Frame Axle Sub without
Lower inside Case No. 03-245-42K/1. The appellate court disallowed the award of damages for
the six pieces of Frame Assembly with Bush, which petitioner Philam alleged, for the first time in
its Appellees Brief, to be likewise inside Case No. 03-245-42K/1. Lastly, the CA reduced the
award of attorneys fees to P47,671.
Foremost, the Court holds that petitioner Philam has adequately established the basis of its
claim against petitioners ATI and Westwind. Philam, as insurer, was subrogated to the rights of
the consignee, Universal Motors Corporation, pursuant to the Subrogation Receipt executed by
the latter in favor of the former. The right of subrogation accrues simply upon payment by the
insurance company of the insurance claim.30 Petitioner Philams action finds support in Article
2207 of the Civil Code, which provides as follows:
Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract
complained of, the insurance company shall be subrogated to the rights of the insured against
the wrongdoer or the person who has violated the contract. x x x.
In their respective comments31 to Philams Formal Offer of Evidence,32 petitioners ATI and
Westwind objected to the admission of Marine Certificate No. 708-8006717-4 and the
Subrogation Receipt as documentary exhibits "B" and "P," respectively. Petitioner Westwind
objects to the admission of both documents for being hearsay as they were not authenticated by
the persons who executed them. For the same reason, petitioner ATI assails the admissibility of
the Subrogation Receipt. As regards Marine Certificate No. 708-8006717-4, ATI makes issue of
the fact that the same was issued only on April 27, 1995 or 12 days after the shipment was
loaded on and transported via S/S "Calayan Iris."
The nature of documents as either public or private determines how the documents may be
presented as evidence in court. Public documents, as enumerated under Section 19,33 Rule 132
of the Rules of Court, are self-authenticating and require no further authentication in order to be
presented as evidence in court.34
In contrast, a private document is any other writing, deed or instrument executed by a private
person without the intervention of a notary or other person legally authorized by which some
disposition or agreement is proved or set forth. Lacking the official or sovereign character of a
public document, or the solemnities prescribed by law, a private document requires
authentication35 in the manner prescribed under Section 20, Rule 132 of the Rules:
SEC. 20. Proof of private document. Before any private document offered as authentic is
received in evidence, its due execution and authenticity must be proved either:
(a) By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or handwriting of the maker.
Any other private document need only be identified as that which it is claimed to be.
The requirement of authentication of a private document is excused only in four instances,
specifically: (a) when the document is an ancient one within the context of Section 21,36 Rule
132 of the Rules; (b) when the genuineness and authenticity of the actionable document have
not been specifically denied under oath by the adverse party; (c) when the genuineness and
authenticity of the document have been admitted; or (d) when the document is not being offered
as genuine.37
A This is a photocopy of the said policy issued by the consignee Universal Motors Corporation.
Indubitably, Marine Certificate No. 708-8006717-4 and the Subrogation Receipt are private
documents which Philam and the consignee, respectively, issue in the pursuit of their business.
Since none of the exceptions to the requirement of authentication of a private document obtains
in these cases, said documents may not be admitted in evidence for Philam without being
properly authenticated.
I see. May I request, if Your Honor please, that this marine risk policy of the plaintiff as submitted
by claimant Universal Motors Corporation be marked as Exhibit B.
Contrary to the contention of petitioners ATI and Westwind, however, Philam presented its
claims officer, Ricardo Ongchangco, Jr. to testify on the execution of the Subrogation Receipt, as
follows:
Mark it.39
ATTY. PALACIOS
Q How were you able to get hold of this subrogation receipt?
A Because I personally delivered the claim check to consignee and have them receive the said
check.
Q I see. Therefore, what you are saying is that you personally delivered the claim check of
Universal Motors Corporation to that company and you have the subrogation receipt signed by
them personally?
A Yes, sir.
Q And it was signed in your presence?
A Yes, sir.38
Indeed, all that the Rules require to establish the authenticity of a document is the testimony of a
person who saw the document executed or written. Thus, the trial court did not err in admitting
the Subrogation Receipt in evidence despite petitioners ATI and Westwinds objections that it
was not authenticated by the person who signed it.
However, the same cannot be said about Marine Certificate No. 708-8006717-4 which
Ongchangcho, Jr. merely identified in court. There is nothing in Ongchangco, Jr.s testimony
which indicates that he saw Philams authorized representative sign said document, thus:
ATTY. PALACIOS
Q Now, I am presenting to you a copy of this marine certificate 708-8006717-4 issued by Philam
Insurance Company, Inc. to Universal Motors Corporation on April 15, 1995. Will you tell us what
relation does it have to that policy risk claim mentioned in that letter?
ATTY. PALACIOS
COURT
As regards the issuance of Marine Certificate No. 708-8006717-4 after the fact of loss occurred,
suffice it to say that said document simply certifies the existence of an open insurance policy in
favor of the consignee. Hence, the reference to an "Open Policy Number 9595093" in said
certificate. The Court finds it completely absurd to suppose that any insurance company, of
sound business practice, would assume a loss that has already been realized, when the
profitability of its business rests precisely on the non-happening of the risk insured against.
Yet, even with the exclusion of Marine Certificate No. 708-8006717-4, the Subrogation Receipt,
on its own, is adequate proof that petitioner Philam paid the consignees claim on the damaged
goods. Petitioners ATI and Westwind failed to offer any evidence to controvert the same. In
Malayan Insurance Co., Inc. v. Alberto,40 the Court explained the effect of payment by the insurer
of the insurance claim in this wise:
We have held that payment by the insurer to the insured operates as an equitable assignment to
the insurer of all the remedies that the insured may have against the third party whose
negligence or wrongful act caused the loss. The right of subrogation is not dependent upon, nor
does it grow out of, any privity of contract. It accrues simply upon payment by the insurance
company of the insurance claim. The doctrine of subrogation has its roots in equity. It is
designed to promote and accomplish justice; and is the mode that equity adopts to compel the
ultimate payment of a debt by one who, in justice, equity, and good conscience, ought to pay.41
Neither do we find support in petitioner Westwinds contention that Philams right of action has
prescribed.
The Carriage of Goods by Sea Act (COGSA) or Public Act No. 521 of the 74th US Congress,
was accepted to be made applicable to all contracts for the carriage of goods by sea to and from
Philippine ports in foreign trade by virtue of Commonwealth Act (C.A.) No. 65.42 Section 1 of C.A.
No. 65 states:
Section 1. That the provisions of Public Act Numbered Five hundred and twenty-one of the
Seventy-fourth Congress of the United States, approved on April sixteenth, nineteen hundred
and thirty-six, be accepted, as it is hereby accepted to be made applicable to all contracts for the
carriage of goods by sea to and from Philippine ports in foreign trade: Provided, That nothing in
the Act shall be construed as repealing any existing provision of the Code of Commerce which is
now in force, or as limiting its application.
The prescriptive period for filing an action for the loss or damage of the goods under the COGSA
is found in paragraph (6), Section 3, thus:
(6) Unless notice of loss or damage and the general nature of such loss or damage be given in
writing to the carrier or his agent at the port of discharge before or at the time of the removal of
the goods into the custody of the person entitled to delivery thereof under the contract of
carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods
as described in the bill of lading. If the loss or damage is not apparent, the notice must be given
within three days of the delivery.
Said notice of loss or damage maybe endorsed upon the receipt for the goods given by the
person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at the time of their receipt
been the subject of joint survey or inspection.
In any event the carrier and the ship shall be discharged from all liability in respect of loss or
damage unless suit is brought within one year after delivery of the goods or the date when the
goods should have been delivered: Provided, That if a notice of loss or damage, either apparent
or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the
right of the shipper to bring suit within one year after the delivery of the goods or the date when
the goods should have been delivered.
In the Bill of Lading43 dated April 15, 1995, Rizal Commercial Banking Corporation (RCBC) is
indicated as the consignee while Universal Motors is listed as the notify party. These
designations are in line with the subject shipment being covered by Letter of Credit No. I501054,
which RCBC issued upon the request of Universal Motors.
A letter of credit is a financial device developed by merchants as a convenient and relatively safe
mode of dealing with sales of goods to satisfy the seemingly irreconcilable interests of a seller,
who refuses to part with his goods before he is paid, and a buyer, who wants to have control of
his goods before paying.44 However, letters of credit are employed by the parties desiring to
enter into commercial transactions, not for the benefit of the issuing bank but mainly for the
benefit of the parties to the original transaction,45 in these cases, Nichimen Corporation as the
seller and Universal Motors as the buyer. Hence, the latter, as the buyer of the Nissan CKD
parts, should be regarded as the person entitled to delivery of the goods. Accordingly, for
purposes of reckoning when notice of loss or damage should be given to the carrier or its agent,
the date of delivery to Universal Motors is controlling.
S/S "Calayan Iris" arrived at the port of Manila on April 20, 1995, and the subject cargoes were
discharged to the custody of ATI the next day. The goods were then withdrawn from the CFS
Warehouse on May 11, 1995 and the last of the packages delivered to Universal Motors on May
17, 1995. Prior to this, the latter filed a Request for Bad Order Survey46 on May 12,1995
following a joint inspection where it was discovered that six pieces of Chassis Frame Assembly
from two bundles were deformed and one Front Axle Sub without Lower from a steel case was
dented. Yet, it was not until August 4, 1995 that Universal Motors filed a formal claim for
damages against petitioner Westwind.
Even so, we have held in Insurance Company of North America v. Asian Terminals, Inc. that a
request for, and the result of a bad order examination, done within the reglementary period for
furnishing notice of loss or damage to the carrier or its agent, serves the purpose of a claim. A
claim is required to be filed within the reglementary period to afford the carrier or depositary
reasonable opportunity and facilities to check the validity of the claims while facts are still fresh
in the minds of the persons who took part in the transaction and documents are still
available.47 Here, Universal Motors filed a request for bad order survey on May 12, 1995, even
before all the packages could be unloaded to its warehouse.
Moreover, paragraph (6), Section 3 of the COGSA clearly states that failure to comply with the
notice requirement shall not affect or prejudice the right of the shipper to bring suit within one
year after delivery of the goods. Petitioner Philam, as subrogee of Universal Motors, filed the
Complaint for damages on January 18, 1996, just eight months after all the packages were
delivered to its possession on May 17, 1995. Evidently, petitioner Philams action against
petitioners Westwind and ATI was seasonably filed.
This brings us to the question that must be resolved in these consolidated petitions. Who
between Westwind and ATI should be liable for the damage to the cargo?
It is undisputed that Steel Case No. 03-245-42K/1 was partly torn and crumpled on one side
while it was being unloaded from the carrying vessel. The damage to said container was noted
in the Bad Order Cargo Receipt48dated April 20, 1995 and Turn Over Survey of Bad Order
Cargoes dated April 21, 1995. The Turn Over Survey of Bad Order Cargoes indicates that said
steel case was not opened at the time of survey and was accepted by the arrastre in good order.
Meanwhile, the Bad Order Cargo Receipt bore a notation "B.O. not yet t/over to ATI." On the
basis of these documents, petitioner ATI claims that the contents of Steel Case No. 03-24542K/1 were damaged while in the custody of petitioner Westwind.
We agree.
Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods transported by them. Subject to
certain exceptions enumerated under Article 173449 of the Civil Code, common carriers are
responsible for the loss, destruction, or deterioration of the goods. The extraordinary
responsibility of the common carrier lasts from the time the goods are unconditionally placed in
the possession of, and received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person who has a right to
receive them.50
The court a quo, however, found both petitioners Westwind and ATI, jointly and severally, liable
for the damage to the cargo. It observed that while the staff of ATI undertook the physical
unloading of the cargoes from the carrying vessel, Westwinds duty officer exercised full
supervision and control over the entire process. The appellate court affirmed the solidary liability
of Westwind and ATI, but only for the damage to one Frame Axle Sub without Lower.
Upon a careful review of the records, the Court finds no reason to deviate from the finding that
petitioners Westwind and ATI are concurrently accountable for the damage to the content of
Steel Case No. 03-245-42K/1.
Section 251 of the COGSA provides that under every contract of carriage of goods by the sea,
the carrier in relation to the loading, handling, stowage, carriage, custody, care and discharge of
such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and
immunities set forth in the Act. Section 3 (2)52thereof then states that among the carriers
responsibilities are to properly load, handle, stow, carry, keep, care for and discharge the goods
carried.53
At the trial, Westwinds Operation Assistant, Menandro G. Ramirez, testified on the presence of
a ship officer to supervise the unloading of the subject cargoes.
ATTY. LLAMAS
Q Having been present during the entire discharging operation, do you remember who else were
present at that time?
A Our surveyor and our checker the foreman of ATI.
Q Were there officials of the ship present also?
A Yes, sir there was an officer of the vessel on duty at that time.54
xxxx
Q Who selected the cable slink to be used?
It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain
under the custody of the carrier.57 The Damage Survey Report58 of the survey conducted by Phil.
Navtech Services, Inc. from April 20-21, 1995 reveals that Case No. 03-245-42K/1 was
damaged by ATI stevedores due to overtightening of a cable sling hold during discharge from the
vessels hatch to the pier. Since the damage to the cargo was incurred during the discharge of
the shipment and while under the supervision of the carrier, the latter is liable for the damage
caused to the cargo.
This is not to say, however, that petitioner ATI is without liability for the damaged cargo.
The functions of an arrastre operator involve the handling of cargo deposited on the wharf or
between the establishment of the consignee or shipper and the ships tackle. Being the
custodian of the goods discharged from a vessel, an arrastre operators duty is to take good
care of the goods and to turn them over to the party entitled to their possession.59
Handling cargo is mainly the arrastre operators principal work so its drivers/operators or
employees should observe the standards and measures necessary to prevent losses and
damage to shipments under its custody.60
While it is true that an arrastre operator and a carrier may not be held solidarily liable at all
times,61 the facts of these cases show that apart from ATIs stevedores being directly in charge of
the physical unloading of the cargo, its foreman picked the cable sling that was used to hoist the
packages for transfer to the dock. Moreover, the fact that 218 of the 219 packages were
unloaded with the same sling unharmed is telling of the inadequate care with which ATIs
stevedore handled and discharged Case No. 03-245-42K/1.
With respect to petitioners ATI and Westwinds liability, we agree with the CA that the same
should be confined to the value of the one piece Frame Axle Sub without Lower.
A ATI Operation.
Q Are you aware of how they made that selection?
A Before the vessel arrived we issued a manifesto of the storage plan informing the ATI of what
type of cargo and equipment will be utilitized in discharging the cargo. 55
xxxx
Q You testified that it was the ATI foremen who select the cable slink to be used in discharging,
is that correct?
A Yes sir, because they are the one who select the slink and they know the kind of cargoes
because they inspected it before the discharge of said cargo.
Q Are you aware that the ship captain is consulted in the selection of the cable sling?
A Because the ship captain knows for a fact the equipment being utilized in the discharge of the
cargoes because before the ship leave the port of Japan the crew already utilized the proper
equipment fitted to the cargo.56(Emphasis supplied.)
In the Bad Order Inspection Report62 prepared by Universal Motors, the latter referred to Case
No. 03-245-42K/1 as the source of said Frame Axle Sub without Lower which suffered a deep
dent on its buffle plate. Yet, it identified Case No. 03-245-51K as the container which bore the six
pieces Frame Assembly with Bush. Thus, in Philams Complaint, it alleged that "the entire
shipment showed one (1) pc. FRAME AXLE SUB W/O LWR from Case No. 03-245-42K/1 was
completely deformed and misaligned, and six (6) other pcs. of FRAME ASSEMBLY WITH BUSH
from Case No. 03-245-51K were likewise completely deformed and misaligned." 63 Philam later
claimed in its Appellees Brief that the six pieces of Frame Assembly with Bush were also inside
the damaged Case No. 03-245-42K/1.
However, there is nothing in the records to show conclusively that the six Frame Assembly with
Bush were likewise contained in and damaged inside Case No. 03-245-42K/1. In the Inspection
Survey Report of Chartered Adjusters, Inc., it mentioned six pieces of chassis frame assembly
with deformed body mounting bracket. However, it merely noted the same as coming from two
bundles with no identifying marks.
Lastly, we agree with petitioner Westwind that the CA erred in imposing an interest rate of 12%
on the award of damages. Under Article 2209 of the Civil Code, when an obligation not
constituting a loan or forbearance of money is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate of 6% per annum.64 In the
similar case of Belgian Overseas Chartering and Shipping NV v. Philippine First Insurance Co.,
lnc.,65 the Court reduced the rate of interest on the damages awarded to the carrier therein to 6%
from the time of the filing of the complaint until the finality of the decision.
vs.
x-----------------------x
WHEREFORE, the Court AFFIRMS with MODIFICATION the Decision dated October 15,2007
and the Resolution dated January 11, 2008 of the Court of Appeals in CA-G.R. CV No. 69284 in
that the interest rate on the award ofP190,684.48 is reduced to 6% per annum from the date of
extrajudicial demand, until fully paid.
With costs against the petitioners in G.R. No. 181163 and G.R. No. 181319, respectively.
G.R. No. 181319

vs.
SO ORDERED.
DECISION
MARTIN S. VILLARAMA, JR.
Associate Justice
VILLARAMA, JR., J.:
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
DIOSDADO M. PERALTA*
Associate Justice
LUCAS P. BERSAMIN
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 181163
July 24, 2013

vs.
x-----------------------x
G.R. No. 181262
Branch 148.
taut.
with Bush."14
October 26, 2000.
operation.
damage.
their liability?
G.R. No. 181163
G.R. No. 181262
G.R. No. 181319
Inc.
The Courts Ruling

check.
them personally?
A Yes, sir.
A Yes, sir.38
ATTY. PALACIOS
as genuine.37
ATTY. PALACIOS
COURT
Mark it.39
follows:
ATTY. PALACIOS
prescribed.
No. 65 states:

xxxx
A ATI Operation.
We agree.
receive them.50
xxxx
is that correct?
carried.53
ATTY. LLAMAS
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
DIOSDADO M. PERALTA*
Associate Justice
LUCAS P. BERSAMIN
SUPREME COURT
Manila
G.R. No. 181163
extrajudicial demand, until fully paid.
x-----------------------x
With costs against the petitioners in G.R. No. 181163 and G.R. No. 181319, respectively.
FIRST DIVISION
July 24, 2013

vs.
G.R. No. 181262
vs.
x-----------------------x
G.R. No. 181319
vs.
DECISION
VILLARAMA, JR., J.:
Branch 148.
taut.
with Bush."14
October 26, 2000.
operation.
damage.
their liability?
G.R. No. 181163
G.R. No. 181262
G.R. No. 181319
Inc.
The Courts Ruling

as genuine.37
follows:
ATTY. PALACIOS

check.
them personally?
A Yes, sir.
A Yes, sir.38
ATTY. PALACIOS
ATTY. PALACIOS
COURT
prescribed.
No. 65 states:
Mark it.39
We agree.
receive them.50
carried.53
ATTY. LLAMAS

xxxx
A ATI Operation.

xxxx
is that correct?
extrajudicial demand, until fully paid.With costs against the petitioners in G.R. No. 181163 and
G.R. No. 181319, respectively.
SO ORDERED.
G.R. No. 156034
October 1, 2003
DELSAN TRANSPORT LINES, INC., petitioner,

vs.
C & A construction, inc., respondent.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review under Rule 45 of the Revised Rules of Court are the June 14,
2002 decision1 of the Court of Appeals in CA-G.R. CV No. 59034, which reversed the
decision2 of the Regional Trial Court of Manila, Branch 46, in Civil Case No. 95-75565, and its
November 7, 2002 resolution3 denying petitioners motion for reconsideration.
The undisputed facts reveal that respondent C & A Construction, Inc. was engaged by the
National Housing Authority (NHA) to construct a deflector wall at the Vitas Reclamation Area in
Vitas, Tondo, Manila.4 The project was completed in 1994 but it was not formally turned over to
NHA.
On October 9, 1994, M/V Delsan Express, a ship owned and operated by petitioner Delsan
Transport Lines, Inc., anchored at the Navotas Fish Port for the purpose of installing a cargo
pump and clearing the cargo oil tank. At around 12:00 midnight of October 20, 1994, Captain
Demetrio T. Jusep of M/V Delsan Express received a report from his radio head operator in
Japan5 that a typhoon was going to hit Manila6 in about eight (8) hours.7 At approximately 8:35 in
the morning of October 21, 1994, Capt. Jusep tried to seek shelter at the North Harbor but could
not enter the area because it was already congested.8 At 10:00 a.m., Capt. Jusep decided to
drop anchor at the vicinity of Vitas mouth, 4 miles away from a Napocor power barge. At that
time, the waves were already reaching 8 to 10 feet high. Capt. Jusep ordered his crew to go full
ahead to counter the wind which was dragging the ship towards the Napocor power barge. To
avoid collision, Capt. Jusep ordered a full stop of the vessel.9 He succeeded in avoiding the
power barge, but when the engine was re-started and the ship was maneuvered full astern, it hit
the deflector wall constructed by respondent.10 The damage caused by the incident amounted to
P456,198.24.11
Respondent demanded payment of the damage from petitioner but the latter refused to pay.
Consequently, respondent filed a complaint for damages with the Regional Trial Court of Manila,
Branch 46, which was docketed as Civil Case No. 95-75565. In its answer, petitioner claimed
that the damage was caused by a fortuitous event.12
On February 13, 1998, the complaint filed by respondent was dismissed. The trial court ruled
that petitioner was not guilty of negligence because it had taken all the necessary precautions to
avoid the accident. Applying the "emergency rule", it absolved petitioner of liability because the
latter had no opportunity to adequately weigh the best solution to a threatening situation. It
further held that even if the maneuver chosen by petitioner was a wrong move, it cannot be held
liable as the cause of the damage sustained by respondent was typhoon "Katring", which is an
act of God.13
On appeal to the Court of Appeals, the decision of the trial court was reversed and set aside. 14 It
found Capt. Jusep guilty of negligence in deciding to transfer the vessel to the North Harbor only
at 8:35 a.m. of October 21, 1994 and thus held petitioner liable for damages.
Hence, petitioner filed the instant petition contending that Capt. Jusep was not negligent in
waiting until 8:35 in the morning of October 21, 1994 before transferring the vessel to the North
Harbor inasmuch as it was not shown that had the transfer been made earlier, the vessel could
have sought shelter.15 It further claimed that it cannot be held vicariously liable under Article
2180 of the Civil Code because respondent failed to allege in the complaint that petitioner was
negligent in the selection and supervision of its employees.16 Granting that Capt. Jusep was
indeed guilty of negligence, petitioner is not liable because it exercised due diligence in the
selection of Capt. Jusep who is a duly licensed and competent Master Mariner.17
The issues to be resolved in this petition are as follows (1) Whether or not Capt. Jusep was
negligent; (2) If yes, whether or not petitioner is solidarily liable under Article 2180 of the Civil
Code for the quasi-delict committed by Capt. Jusep?
Article 2176 of the Civil Code provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is called a quasidelict. The test for determining the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use the reasonable care and
caution which an ordinary prudent person would have used in the same situation? If not, then he
is guilty of negligence.18
In the case at bar, the Court of Appeals was correct in holding that Capt. Jusep was negligent in
deciding to transfer the vessel only at 8:35 in the morning of October 21, 1994. As early as 12:00
midnight of October 20, 1994, he received a report from his radio head operator in Japan19 that a
typhoon was going to hit Manila20 after 8 hours.21 This, notwithstanding, he did nothing, until 8:35
in the morning of October 21, 1994, when he decided to seek shelter at the North Harbor, which
unfortunately was already congested. The finding of negligence cannot be rebutted upon proof
that the ship could not have sought refuge at the North Harbor even if the transfer was done
earlier. It is not the speculative success or failure of a decision that determines the existence of
negligence in the present case, but the failure to take immediate and appropriate action under
the circumstances. Capt. Jusep, despite knowledge that the typhoon was to hit Manila in 8
hours, complacently waited for the lapse of more than 8 hours thinking that the typhoon might
change direction.22 He cannot claim that he waited for the sun to rise instead of moving the
vessel at midnight immediately after receiving the report because of the difficulty of traveling at
night. The hour of 8:35 a.m. is way past sunrise. Furthermore, he did not transfer as soon as the
sun rose because, according to him, it was not very cloudy23 and there was no weather
disturbance yet.24
When he ignored the weather report notwithstanding reasonable foresight of harm, Capt. Jusep
showed an inexcusable lack of care and caution which an ordinary prudent person would have
observed in the same situation.25 Had he moved the vessel earlier, he could have had greater
chances of finding a space at the North Harbor considering that the Navotas Port where they
docked was very near North Harbor.26 Even if the latter was already congested, he would still
have time to seek refuge in other ports.
The trial court erred in applying the emergency rule. Under this rule, one who suddenly finds
himself in a place of danger, and is required to act without time to consider the best means that
may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt
what subsequently and upon reflection may appear to have been a better method, unless the
danger in which he finds himself is brought about by his own negligence.27 Clearly, the
emergency rule is not applicable to the instant case because the danger where Capt. Jusep
found himself was caused by his own negligence.
Anent the second issue, we find petitioner vicariously liable for the negligent act of Capt.
Jusep.1awphi1.nt Under Article 2180 of the Civil Code an employer may be held solidarily
liable for the negligent act of his employee. Thus
Art. 2180. The obligation imposed in Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
xxxxxxxxx
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.
In the case at bar, however, petitioner presented no evidence that it formulated rules/guidelines
for the proper performance of functions of its employees and that it strictly implemented and
monitored compliance therewith. Failing to discharge the burden, petitioner should therefore be
held liable for the negligent act of Capt. Jusep.
So also, petitioner cannot disclaim liability on the basis of respondents failure to allege in its
complaint that the former did not exercise due diligence in the selection and supervision of its
employees. In Viron Transportation Co., Inc. v. Delos Santos,31 it was held that it is not
necessary to state that petitioner was negligent in the supervision or selection of its employees,
inasmuch as its negligence is presumed by operation of law. Allegations of negligence against
the employee and that of an employer-employee relation in the complaint are enough to make
out a case of quasi-delict under Article 2180 of the Civil Code.32
Considering that petitioner did not assail the damages awarded by the trial court, we find no
reason to alter the same. The interest imposed should, however, be modified. In Eastern
Shipping Lines, Inc. v. Court of Appeals,33it was held that the rate of interest on obligations not
constituting a loan or forbearance of money is six percent (6%) per annum. If the purchase price
can be established with certainty at the time of the filing of the complaint, the six percent (6%)
interest should be computed from the date the complaint was filed until finality of the decision.
After the judgment becomes final and executory until the obligation is satisfied, the amount due
shall earn interest at 12% per year, the interim period being deemed equivalent to a forbearance
of credit.34
xxxxxxxxx
The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage.
Whenever an employees negligence causes damage or injury to another, there instantly arises
a presumptionjuris tantum that the employer failed to exercise diligentissimi patris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. To avoid
liability for a quasi-delict committed by his employee, an employer must overcome the
presumption by presenting convincing proof that he exercised the care and diligence of a good
father of a family in the selection and supervision of his employee. 28
There is no question that petitioner, who is the owner/operator of M/V Delsan Express, is also
the employer of Capt. Jusep who at the time of the incident acted within the scope of his duty.
The defense raised by petitioner was that it exercised due diligence in the selection of Capt.
Jusep because the latter is a licensed and competent Master Mariner. It should be stressed,
however, that the required diligence of a good father of a family pertains not only to the
selection, but also to the supervision of employees. It is not enough that the employees chosen
be competent and qualified, inasmuch as the employer is still required to exercise due diligence
in supervising its employees.
Accordingly, the amount of P456,198.27 due the respondent shall earn 6% interest per annum
from October 3, 1995 until the finality of this decision. If the adjudged principal and the interest
(or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per
annum computed from the time the judgment becomes final and executory until it is fully
satisfied.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED.1awphi1.nt The June
14, 2002 decision of the Court of Appeals in CA-G.R. CV No. 59034 ordering petitioner Delsan
Transport Lines, Inc., to pay respondent C & A Construction, Inc., damages in the amount of
P456,198.27, plus P30,000.00 as attorneys fees, is AFFIRMED with the MODIFICATION that
the award of P456,198.27 shall earn interest at the rate of 6% per annum from October 3, 1995,
until finality of this decision, and 12% per annum thereafter on the principal and interest (or any
part thereof) until full payment.
SO ORDERED.
Vitug, and Carpio, JJ., concur.
Davide, Jr., C.J., (Chairman), no part; was former counsel of party.
29
In Fabre, Jr. v. Court of Appeals, it was held that due diligence in supervision requires the
formulation of rules and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent compliance with the
rules. Corollarily, in Ramos v. Court of Appeals,30 the Court stressed that once negligence on the
part of the employees is shown, the burden of proving that he observed the diligence in the
selection and supervision of its employees shifts to the employer.
Azcuna, J., on leave.
G.R. No. 141716
July 4, 2002
SAN MIGUEL CORPORATION, petitioner,

vs.
HEIRS OF SABINIANO INGUITO, and JULIUS OUANO, respondents.
x---------------------------------------------------------x
G.R. No. 142025 July 4, 2002
JULIUS C. OUANO, petitioner,
vs.
THE COURT OF APPEALS, SAN MIGUEL CORPORATION and THE HEIRS OF SABINIANO
INGIUTO, FELIPE PUSA, ABUNDIO GALON, ISIDRO CELETARIA, GILBERT GONZAGA,
HENRY CABIGAS, RAFAEL MACAIRAN, ROGELIO MORENO, PETER ABAYON, SIMEON
ASENTISTA, NORMAN LOON, EUGENIO GESTOPA, CHRISTOPHER SAVELLON, GEORGE
BASILGO, RAMIL PABAYO, FLAVIANO WABENA, NESTOR GESTOPA, respondents.
YNARES-SANTIAGO, J.:
San Miguel Corporation entered into a Time Charter Party Agreement with Julius Ouano, doing
business under the name and style J. Ouano Marine Services. Under the terms of the
agreement, SMC chartered the M/V Doa Roberta owned by Julius Ouano for a period of two
years, from June 1, 1989 to May 31, 1991, for the purpose of transporting SMCs beverage
products from its Mandaue City plant to various points in Visayas and Mindanao. Pertinent
portions of the Time Charter Party Agreement state:
1. OWNER [i.e., Ouano] warrants ownership, title and interest over the vessel DOA
ROBERTA and represents that on the date the vessel is placed at CHARTERERs San
Miguel Corporation] disposal the following shall be the accurate or approximate
description of the particulars and capacities of the vessel and her equipment:
xxx
xxx
xxx.
2. That for and in consideration of the premises hereinafter stipulated, the OWNER
hereby lets, demises and the CHARTERER hereby hires the use and service of the
aforementioned vessel;
xxx
xxx
xxx.
4. OWNER warrants that the vessel is seaworthy and in proper, useful and operational
condition and in the event that CHARTERER finds any defect in the vessel with
regards to its working order, condition and function, CHARTERER shall immediately
notify OWNER of this fact;
9. There shall be no employer-employee relations between the OWNER and/or its

vessels crew on one hand and the CHARTERER on the other. The crew of the vessel
shall continue to be under the employ, control and supervision of the OWNER.
Consequently, damage or loss that may be attributable to the crew, including loss of
the vessel used shall continue to be the responsibility of, and shall be borne, by the
OWNER; the OWNER further covenants to hold the CHARTERER free from all claims
and liabilities arising out of the acts of the crew and the condition of the vessel;
10. The OWNER shall undertake to pay all compensation of all the vessels crew,
including the benefits, premia and protection in accordance with the provisions of the
New Labor Code and other applicable laws and decrees and the rules and regulations
promulgated by competent authorities as well as all of the SSS premium. Thus, it is
understood that the crew of he vessel shall and always remain the employees of the
OWNER;
11. The OWNER shall be responsible to and shall indemnify the CHARTERER for
damages and losses arising from the incompetence and/or negligence of, and/or the
failure to observe the required extra-ordinary diligence by the crew. It shall be
automatically liable to the CHARTERER for shortlanded shipment and wrong levels,
the value of which shall be withheld from the OWNERs collectibles with the
CHARTERER. However, in the case of wrong levels, CHARTERER shall immediately
reimburse OWNER after the formers laboratory shall be able to determine that the
bottles were never opened after it left the Plant;
xxx
xxx
xxx.1
On November 11, 1990, during the term of the charter, SMC issued sailing orders to the Master
of the MN Doa Roberta, Captain Sabiniano Inguito, instructing him as follows:
1. Sail for Opol, Cagayan 0500H Nov. 12, 1990, or as soon as loading of FGS is
completed, with load:
SEE BILL OF LADING
2. You are expected to arrive Opol 0900H Nov. 13, 1990.
3. You are expected to depart Opol 0900H Nov. 14, 1990, or as soon as loading of
empties is completed, back to Mandaue.
4. You are expected to arrive Mandaue 1300H Nov. 15, 1990.
5. In case you need cash advance, send your request thru radio addressed to us for
needed authority.
6. Maintain communications and keep us posted of your developments.
xxx
xxx
xxx.
7. Observe weather condition, exercise utmost precautionary measures.
BON VOYAGE AND GOOD LUCK.2

In accordance with the sailing orders, Captain Inguito obtained the necessary sailing clearance
from the Philippine Coast Guard.3 Loading of the cargo on the M/V Doa Roberta was
completed at 8:30 p.m. of November 11, 1990. However, the vessel did not leave Mandaue City
until 6:00 a.m. of the following day, November 12, 1990.
Meanwhile, at 4:00 a.m. of November 12, 1990, typhoon Ruping was spotted 570 kilometers
east-southeast of Borongan, Samar, moving west-northwest at 22 kilometers per hour in the
general direction of Eastern Visayas. The typhoon had maximum sustained winds of 240
kilometers per hour near the center with gustiness of up to 280 kilometers per hour.4
At 7:00 a.m., November 12, 1990, one hour after the M/V Doa Roberta departed from Mandaue
City and while it was abeam Cawit Island off Cebu, SMC Radio Operator Rogelio P. Moreno
contacted Captain Inguito through the radio and advised him to take shelter. Captain Inguito
replied that they will proceed since the typhoon was far away from them, and that the winds
were in their favor.5
At 2:00 p.m., while the vessel was two kilometers abeam Boljoon Point, Moreno again
communicated with Captain Inguito and advised him to take shelter. The captain responded that
they can manage.6 Hearing this, Moreno immediately tried to get in touch with Rico Ouano to tell
him that Captain Inguito did not heed their advice. However, Rico Ouano was out of his office, so
Moreno left the message with the secretary.7
Moreno again contacted Captain Inguito at 4:00 p.m. of November 12, 1990. By then the vessel
was already 9.5 miles southeast of Balicasag Island heading towards Sulauan Point. The sky
was cloudy with southwesterly winds and the sea was choppy.8 Moreno reiterated the advice
and pointed out that it will be difficult to take shelter after passing Balicasag Island because they
were approaching an open sea. Still, the captain refused to heed his advice.9
At 8:00 p.m., the vessel was 38 miles southeast of Balicasag Island. West-southwest winds were
prevailing. At 10:00 p.m., the M/V Doa Roberta was 25 miles approaching Sulauan
Point.10 Moments later, power went out in Morenos office and resumed at 11:40 p.m. He
immediately made a series of calls to the M/V Doa Roberta but he failed to get in touch with
anyone in the vessel.11
At 1:15 a.m., November 13, 1990, Captain Inguito called Moreno over the radio and requested
him to contact Rico Ouano, son of Julius Ouano, because they needed a helicopter to rescue
them. The vessel was about 20 miles west of Sulauan Point.12
Upon being told by SMCs radio operator, Rico Ouano turned on his radio and read the distress
signal from Captain Ingiuto. When he talked to the captain, the latter requested for a helicopter
to rescue them.13 Rico Ouano talked to the Chief Engineer who informed him that they can no
longer stop the water from coming into the vessel because the crew members were feeling dizzy
from the petroleum fumes.14
At 2:30 a.m. of November 13, 1990, the M/V Doa Roberta sank. Out of the 25 officers and crew
on board the vessel, only five survived, namely, Fernando Bucod, Rafael Macairan, Chenito
Sugabo, Ramil Pabayo and Gilbert Gonzaga.15
On November 24, 1990, shipowner Julius Ouano, in lieu of the captain who perished in the sea
tragedy, filed a Marine Protest.16
The heirs of the deceased captain and crew, as well as the survivors,17 of the ill-fated M/V Doa
Roberta filed a complaint for tort against San Miguel Corporation and Julius Ouano, docketed as
Civil Case No. 2472-L of the Regional Trial Court of Lapu-Lapu City, Branch 27.18
Julius Ouano filed an answer with cross-claim,19 alleging that the proximate cause of the loss of
the vessel and its officers and crew was the fault and negligence of SMC, which had complete
control and disposal of the vessel as charterer and which issued the sailing order for its
departure despite being forewarned of the impending typhoon. Thus, he prayed that SMC
indemnify him for the cost of the vessel and the unrealized rentals and earnings thereof.
In its answer to the complaint19 and answer to the cross-claim,20 SMC countered that it was
Ouano who had the control, supervision and responsibilities over the navigation of the vessel.
This notwithstanding, and despite his knowledge of the incoming typhoon, Ouano never
bothered to initiate contact with his vessel. Contrary to his allegation, SMC argued that the
proximate cause of the sinking was Ouanos breach of his obligation to provide SMC with a
seaworthy vessel duly manned by competent crew members. SMC interposed counterclaims
against Ouano for the value of the cargo lost in the sea tragedy.
After trial, the court a quo rendered judgment finding that the proximate cause of the loss of the
M/V Doa Roberta was attributable to SMC. Thus, it disposed of the case as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:
1. Declaring defendant San Miguel Corporation and its acts or omissions as having
produced the proximate cause which resulted in the death of the crew members of MN
Doa Roberta at past midnight of November 12, 1990 during the height of super
typhoon "Ruping" and as such said defendant is hereby ordered and sentenced to pay
to the heirs of the deceased crew members the following sum[s] plus 12% per annum
from the filing of the Complaint:
A.
For loss of life. . . . . . . P50,000.00 each of the deceased crew
members, namely: Sabiniano Inguito Felipe Pusa, Abundio Galon, Isidro
Celetaria, Henry Cabigas, Pedro Abayon, Simeon Asentista, Norman Loon,
Leonardo Presbitero, Renato Suscano, Antonio Du, George Basilgo, Isagani
Dayondon;
B. For loss of earnings based on life expectancy less 50% representing
estimated living expenses except for the apprentices as they were
presumed at the time of their deaths to be dependent on their parents:
Name
Total loss of earnings
1. Sabiniano, Inguito (sic)
P1,740,000 (50% x P3,480,000)
2. Pusa, Felipe
P 1,200,000 (50% x P2,400,000)
3. Galon, Abundio
P 825,000 (50% x P 1,650,000)
4. Celetaria, Isidro
P 600,000 (50% x P1,200,000)
5. Cabigas, Henry
P 930,000 (50% x P 1,860,000)
13. Dayondon, Isagani
P 120,000 (Ditto)
--------------------------------------------
Total:
P8,645,000
vvvvvvvvvvvvvv
C. P300,000.00 for moral damages and P200,000.00 for exemplary

damages for the heirs of each of the deceased crew members of the M/V
Doa Roberta named in the Amended Complaint including survivor Gilbert
Gonzaga;
D. To pay plaintiffs counsel attorneys fees in the sum of P500,000.00;
6. Abayon, Pedro
7. Asentista, Simeon
8. Loon, Norman
9. Presbitero, Leonardo
10. Suscano, Renato
11. Du, Antonio
12. Basilgo, George
P 660,000 (50% x P 1,320,000)
P 500,000 (50% x P1,000,000)
P 550,000 (50% x P 1,100,000)
2. Under the cross-claim of defendant, Ouano, San Miguel Corporation is further

ordered and sentenced to pay defendant cross-claimant Engr. Julius C. Ouano the
total sum of P32,893,300.00 plus 12% per annum from the filing of his crossclaim,
broken down as follows:
1) P9.8 million for the value of the total loss of the vessel M/V Doa
Roberta;
P 460,000 (50% x P 920,000)
2) P1,833,300.00 for unrealized rental earnings (P3,666,600.00 less 50%

for operating expenses and taxes) from November 19, 1990 to May 31,
1991 as stipulated in the Charter Party Agreement;
P 460,000 (50% x P 920,000)
3) P21,000,000.00 for unrealized earnings of M/V Doa Roberta based on

the expected additional lifetime of the vessel estimated at seven (7) years
(42,000,000.00 less 50% for operating expenses and taxes);
P 480,000 (50% x P 960,000)
P 120,000 (Apprentice)
4) P250,000.00 for and as attorneys fees and P 10,000.00 as expenses of

litigation;
3. The counter-claims against plaintiffs and the cross-claim of defendant San Miguel
Corporation against defendant Engr. Julius C. Ouano are hereby dismissed for lack of
merit.
With costs against defendant San Miguel Corporation.
SMC COULD NOT BE A TORTFEASOR CONSIDERING THE UNDISPUTED FACT

THAT:
SO ORDERED.22
Both SMC and Ouano appealed to the Court of Appeals, docketed as CA-G.R. CV No. 48296.
SMC argued that as mere charterer, it did not have control of the vessel and that the proximate
cause of the loss of the vessel and its cargo was the negligence of the ship captain. For his part,
Ouano complained of the reduced damages awarded to him by the trial court.
On December 10, 1998, the Court of Appeals rendered the decision subject of the instant
petitions for review, to wit:
WHEREFORE, judgment is hereby rendered, modifying the decision appealed from,
declaring defendant-appellants San Miguel Corporation and Julian C. Ouano jointly
and severally liable to plaintiffs-appellees, except to the heirs of Capt. Sabiniano
Inguito, for the following reduced amounts:
A.
P50,000.00 death indemnity (loss of life) for each of the deceased officers and
crew of M/V Doa Roberta.
b. Loss of earning for each of the deceased officers and crew, in the amount awarded
by the trial court.
c. P100,000.00 moral damages and P50,000.00 exemplary damages for each
deceased officer and crew members, including Gilbert Gonzaga.
d. P300,000,00 attorneys fees to plaintiffs-appellees.
e. The counter-claims of defendants-appellants against plaintiffs-appellees are
dismissed.
A.
SMC HAS NO LEGAL OR CONTRACTUAL DUTY TO INFORM
OUANO ABOUT THE SITUATION OF THE VESSEL.
B. EVEN WITHOUT SUCH DUTY, SMC NEVERTHELESS EXERCISED
THE NECESSARY DEGREE OF PRUDENCE BY INFORMING OUANO
ABOUT INGUITOS REFUSAL TO TAKE SHELTER.
C. THE COURT OF APPEALS ITSELF FOUND THAT THE PROXIMATE
CAUSE OF THE LOSS OF THE VESSEL WAS INGUITOS FAILURE TO
HEED SMCS ADVICE TO TAKE SHELTER, AND INGUITO WAS AN
EMPLOYEE OF OUANO AND NOT OF SMC.
II.
UNDER THE CHARTER, OUANO WAS RESPONSIBLE AND UNDERTOOK TO
INDEMNIFY SMC FOR ALL DAMAGES ARISING FROM THE NEGLIGENCE OF HIS
CREW, PARTICULARLY INGUITO.25
Meanwhile, petitioner Ouano, in G.R. No. 142025, anchors his petition on the following
assignment of errors:
First Error
The Court of Appeals committed serious error of law and/or grave abuse of discretion
in not finding that the Charter Party between SMC and Ouano is legally and in fact a
demise charter, an issue raised by petitioner from the very start in the Trial Court
Second Error
f. The cross-claims of defendants-appellants SMC and Julius Ouano against each

other are likewise dismissed.
g. Costs against defendants-appellants.
SO ORDERED.23
in not finding that Capt. Inguito, master of the ill-fated M/V Doa Roberta, was legally
and in fact an agent/servant of SMC demise charterer as correctly characterized by
the Trial Court
Third Error
SMC and Ouano filed separate motions for reconsideration, which were denied by the Court of
Appeals for lack of merit.24
Petitioner SMC, in G.R. No. 141716, raises the following arguments:
I.
in completely disregarding or suppressing the findings of fact of the Trial Court on the
issues of possession and control of M/V Doa Roberta by SMC and its actions relating
thereto as demise charterer/owner pro hac vice which led to the tragedy and in not
declaring that said actions of SMC constituted the proximate cause of the sinking and
loss of the vessel and the death of most of its crew members
Fourth Error
in finding Ouano at fault in the sinking of M/V Doa Roberta against the evidence on
record which is largely undisputed
Fifth Error
insofar as it failed to find and declare respondent SMCs tort or negligence as the
proximate cause which resulted in the sinking and total loss of M/V Doa Roberta as
well as the death of its officers and crew members and correspondingly in not
awarding to petitioner Ouano the sums of money as awarded by the Trial Court in the
dispositive part of its decision dated 10 December 1998.
Sixth Error
In any event, the Court of Appeals committed serious error of law and/or grave abuse
of discretion in not declaring and holding petitioner Ouano not liable for the claims of
private respondents heirs of Sabiniano Inguito, et al. and SMC under the wellestablished principle in Maritime Law that the owners liability sinks with the vessel.26
The two petitions were consolidated.
In deciding the cases at bar, the Court of Appeals correctly resolved the issues with an initial
discussion of the definition and kinds of charter parties. Preliminarily, a charter party is a contract
by virtue of which the owner or the agent of a vessel binds himself to transport merchandise or
persons for a fixed price. It has also been defined as a contract by virtue of which the owner or
the agent of the vessel leases for a certain price the whole or a portion of the vessel for the
transportation of goods or persons from one port to another.27
A charter party may either be a (1) bareboat or demise charter or (2) contract of affreightment.
Under a demise or bareboat charter, the charterer mans the vessel with his own people and
becomes, in effect, the owner of the ship for the voyage or service stipulated, subject to liability
for damages caused by negligence.28
In a contract of affreightment, on the other hand, the owner of the vessel leases part or all of its
space to haul goods for others. It is a contract for special service to be rendered by the owner of
the vessel. Under such contract the ship owner retains the possession, command and
navigation of the ship, the charterer or freighter merely having use of the space in the vessel in
return for his payment of the charter hire.29 Otherwise put, a contract of affreightment is one by
which the owner of a ship or other vessel lets the whole or part of her to a merchant or other
person for the conveyance of goods, on a particular voyage, in consideration of the payment of
freight.
A contract of affreightment may be either time charter, wherein the leased vessel is leased to the
charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single
voyage. In both cases, the charterer provides for the hire of the vessel only, either for a
determinate period of time or for a single or consecutive voyage, the ship owner to supply the
ships store, pay for the wages of the master of the crew, and defray the expenses for the
maintenance of the ship.
If the charter is a contract of affreightment, which leaves the general owner in possession of the
ship as owner for the voyage, the rights and the responsibilities of ownership rest on the owner.
The charterer is free from liability to third persons in respect of the ship.30
We concur with the findings of the Court of Appeals that the charter party in these cases was a
contract of affreightment, contrary to petitioner Ouanos protestation that it was a demise charter,
as shown by the following stipulations in the Time Charter Party Agreement:
9. There shall be no employer-employee relations between the OWNER and/or its
vessels crew on one hand and the CHARTERER on the other. The crew of the vessel
shall continue to be under the employ, control and supervision of the OWNER.
Consequently, damage or loss that may be attributable to the crew, including loss of
the vessel used shall continue to be the responsibility of, and shall be borne, by the
OWNER; the OWNER further covenants to hold the CHARTERER free from all claims
and liabilities arising out of the acts of the crew and the condition of the vessel;
10. The OWNER shall undertake to pay all compensation of all the vessels crew,
including the benefits, premia and protection in accordance with the provisions of the
New Labor Code and other applicable laws and decrees and the rules and regulations
promulgated by competent authorities as well as all of the SSS premium. Thus, it is
understood that the crew of he vessel shall and always remain the employees of the
OWNER;
11. The OWNER shall be responsible to and shall indemnify the CHARTERER for
damages and losses arising from the incompetence and/or, negligence of, and/or the
failure to observe the required extraordinary diligence by the crew. It shall be
automatically liable to the CHARTERER for shortlanded shipment and wrong levels,
the value of which shall be withheld from the OWNERs collectibles with the
CHARTERER. However, in the case of wrong levels, CHARTERER shall immediately
reimburse OWNER after the formers laboratory shall be able to determine that the
bottles were never opened after it left the Plant;
It appearing that Ouano was the employer of the captain and crew of the M/V Doa Roberta
during the term of the charter, he therefore had command and control over the vessel. His son,
Rico Ouano, even testified that during the period that the vessel was under charter to SMC, the
Captain thereof had control of the navigation of all voyages.31
Under the foregoing definitions, as well as the clear terms of the Charter Party Agreement
between the parties, the charterer, SMC, should be free from liability for any loss or damage
sustained during the voyage,32 unless it be shown that the same was due to its fault or
negligence.
The evidence does not show that SMC or its employees were amiss in their duties. The facts
indubitably establish that SMCs Radio Operator, Rogelio P. Moreno, who was tasked to monitor
every shipment of its cargo, contacted Captain Inguito as early as 7:00 a.m., one hour after the
M/V Doa Roberta departed from Mandaue, and advised him to take shelter from
typhoon Ruping. This advice was reiterated at 2:00 p.m. At that point, Moreno thought of calling
Ouanos son, Rico, but failed to find him. At 4:00 p.m., Moreno again advised Captain Inguito to
take shelter and stressed the danger of venturing into the open sea. The Captain insisted that he
can handle the situation.
That evening, Moreno tried in vain to contact the captain. Later at 1:15 a.m., Captain Inguito
himself radioed a distress signal and asked that the same be relayed to Rico Ouano.
In contrast to the care exercised by Moreno, Rico Ouano tried to communicate with the captain
only after receiving the S.O.S. message. Neither Ouano nor his son was available during the
entire time that the vessel set out and encountered foul weather. Considering that the charter
was a contract of affreightment, the shipowner had the clear duty to ensure the safe carriage
and arrival of goods transported on board its vessels. More specifically, Ouano expressly
warranted in the Time Charter Party that his vessel was seaworthy.
For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a
sufficient number of competent officers and crew.33 Seaworthiness is defined as the sufficiency
of the vessel in materials, construction, equipment, officers, men, and outfit, for the trade or
service in which it is employed.34 It includes the fitness of a ship for a particular voyage with
reference to its physical and mechanical condition, the extent of its fuel and provisions supply,
the quality of its officers and crew, and its adaptability for the time of voyage proposed. 35
In the assailed decision, the Court of Appeals found that the proximate cause of the sinking of
the vessel was the negligence of Captain Sabiniano Inguito, thus:
It appears that the proximate cause of the sinking of the vessel was the gross failure
of the captain of the vessel to observe due care and to heed SMCs advices to take
shelter. Gilbert Gonsaga, Chief Engineer of Doa Roberta, testified that the ship sank
at 2:30 in the early morning of November 13th. On the other hand, from the time the
vessel left the port of Mandaue at six oclock in the morning, Exh "15 SMC", Exh "16
SMC", Exh "17 SMC" and Exh "18 SMC" would show that Captain Sabiniano Inguito
was able to contact the radio operator of SMC. He was fully apprised of typhoon
"Ruping" and its strength. Due diligence dictates that at any time before the vessel
was in distress, he should have taken shelter in order to safeguard the vessel and its
crew. Gonsaga testified that at 7:00 a.m. of November 12, 1990, he was able to talk to
the captain and inquired from him what the message was of the radio operator of
SMC. The captain answered that they would take shelter in Tagbilaran if the wind
would grow stronger. But Gonsaga was surprised when they did not take shelter and,
instead, proceeded with the voyage.
in the early morning of November 13m, 1990 to seek help in saving his men and the
vessel. In any event, Capt. Inguito had full control and responsibility, whether to follow
a sailing order or to take shelter when already at sea. In fact, there was an incident
when a sailing order was issued by SMC to Inguito but he decided not to proceed with
the voyage because of a tropical storm.36
The foregoing factual conclusions are binding on us. Settled is the rule that findings of fact of the
Court of Appeals are conclusive and are not reviewable by this Court, 37 unless the case falls
under any of the recognized exceptions, such as: (1) when the conclusion is a finding grounded
entirely on speculation, surmises and conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting;
(6) when the Court of Appeals, in making its findings, went beyond the issues of the case and
the same is contrary to the admissions of both appellant and appellee; (7) when the findings are
contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of
specific evidence on which they are based; (9) when the facts set forth in the petition as well as
in the petitioners main and reply briefs are not disputed by the respondents; and (10) when the
findings of fact of the Court of Appeals are premised on the supposed absence of evidence and
contradicted by the evidence on record.38 None of these exceptions obtain in the case at bar.
We likewise agree with the Court of Appeals that Ouano is vicariously liable for the negligent
acts of his employee, Captain Inguito. Under Articles 2176 and 2180 of the Civil Code, owners
and managers are responsible for damages caused by the negligence of a servant or an
employee, the master or employer is presumed to be negligent either in the selection or in the
supervision of that employee. This presumption may be overcome only by satisfactorily showing
that the employer exercised the care and the diligence of a good father of a family in the
selection and the supervision of its employee.39
Ouano miserably failed to overcome the presumption of his negligence. He failed to present
proof that he exercised the due diligence of a bonus paterfamilias in the selection and
supervision of the captain of the M/V Doa Roberta. Hence, he is vicariously liable for the loss of
lives and property occasioned by the lack of care and negligence of his employee.
However, we cannot sustain the appellate courts finding that SMC was likewise liable for the
losses. The contention that it was the issuance of the sailing order by SMC which was the
proximate cause of the sinking is untenable. The fact that there was an approaching typhoon is
of no moment. It appears that on one previous occasion, SMC issued a sailing order to the
captain of the M/V Doa Roberta, but the vessel cancelled its voyage due to
typhoon.40 Likewise, it appears from the records that SMC issued the sailing order on November
11, 1990, before typhoon "Ruping" was first spotted at 4:00 a.m. of November 12, 1990.41
Gonsaga further testified that at 7:00 in the evening of November 12, 1990, he went
up to the office of the captain when the wind was getting stronger and asked him,
"What is this captain, the wind is already very strong and the waves are very big, what
is the message of SMC?" The captain plotted the position of the typhoon and said that
the typhoon is still very far per the data supplied by SMC.
Consequently, Ouano should answer for the loss of lives and damages suffered by the heirs of
the officers and crew members who perished on board the M/V Doa Roberta, except Captain
Sabiniano Inguito. The award of damages granted by the Court of Appeals is affirmed only
against Ouano, who should also indemnify SMC for the cost of the lost cargo, in the total amount
of P10,278,542.40.42
It is very clear that Captain Sabiniano Inguito had sufficient time within which to secure
his men and the vessel. But he waited until the vessel was already in distress at 1:15
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. CV No.
48296 isMODIFIED as follows: Julius C. Ouano is ordered to pay each of the deceased officers
and crew of the M/V Doa Roberta, except Captain Sabinano Inguito, death indemnity in the
amount of P50,000.00 and damages for loss of earnings in the amounts awarded by the trial
court. Further, Julius C. Ouano is ordered to pay each deceased officer and crew members,
except Captain Sabiniano Inguito, including Gilbert Gonzaga, P100,000.00 as moral damages,
P50,000.00 as exemplary damages and P300,000.00 as attorneys fees. Finally, Julius C.
Ouano is ordered to pay San Miguel Corporation the sums of P10,278,542.40 as actual
damages.
CARPIO, J.:
The Case
This petition for review1 assails the 11 May 2005 Decision2 and the 19 August 2005 Resolution of
the Court of Appeals in CA-G.R. CV No. 60669.
The Facts
SO ORDERED.
On 17 January 1995, petitioners Alfredo P. Pacis and Cleopatra D. Pacis (petitioners) filed with
the trial court a civil case for damages against respondent Jerome Jovanne Morales
(respondent). Petitioners are the parents of Alfred Dennis Pacis, Jr. (Alfred), a 17-year old
student who died in a shooting incident inside the Top Gun Firearms and Ammunitions Store
(gun store) in Baguio City. Respondent is the owner of the gun store.
The facts as found by the trial court are as follows:
On January 19, 1991, Alfred Dennis Pacis, then 17 years old and a first year student at the
Baguio Colleges Foundation taking up BS Computer Science, died due to a gunshot wound in
the head which he sustained while he was at the Top Gun Firearm[s] and Ammunition[s] Store
located at Upper Mabini Street, Baguio City. The gun store was owned and operated by
defendant Jerome Jovanne Morales.
With Alfred Pacis at the time of the shooting were Aristedes Matibag and Jason Herbolario. They
were sales agents of the defendant, and at that particular time, the caretakers of the gun store.
The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer of the
gun store for repair.
The gun, an AMT Automag II Cal. 22 Rimfire Magnum with Serial No. SN-H34194 (Exhibit "Q"),
was left by defendant Morales in a drawer of a table located inside the gun store.
Defendant Morales was in Manila at the time. His employee Armando Jarnague, who was the
regular caretaker of the gun store was also not around. He left earlier and requested sales
agents Matibag and Herbolario to look after the gun store while he and defendant Morales were
away. Jarnague entrusted to Matibag and Herbolario a bunch of keys used in the gun store
which included the key to the drawer where the fatal gun was kept.
G.R. No. 169467
February 25, 2010
ALFREDO P. PACIS and CLEOPATRA D. PACIS, Petitioners,

vs.
JEROME JOVANNE MORALES, Respondent.
DECISION
It appears that Matibag and Herbolario later brought out the gun from the drawer and placed it
on top of the table. Attracted by the sight of the gun, the young Alfred Dennis Pacis got hold of
the same. Matibag asked Alfred Dennis Pacis to return the gun. The latter followed and handed
the gun to Matibag. It went off, the bullet hitting the young Alfred in the head.
A criminal case for homicide was filed against Matibag before branch VII of this Court. Matibag,
however, was acquitted of the charge against him because of the exempting circumstance of
"accident" under Art. 12, par. 4 of the Revised Penal Code.
By agreement of the parties, the evidence adduced in the criminal case for homicide against
Matibag was reproduced and adopted by them as part of their evidence in the instant case. 3
On 8 April 1998, the trial court rendered its decision in favor of petitioners. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs
[Spouses Alfredo P. Pacis and Cleopatra D. Pacis] and against the defendant [Jerome Jovanne
Morales] ordering the defendant to pay plaintiffs
(1) P30,000.00 as indemnity for the death of Alfred Pacis;
(2) P29,437.65 as actual damages for the hospitalization and burial expenses incurred
by the plaintiffs;
(3) P100,000.00 as compensatory damages;
(4) P100,000.00 as moral damages;
(5) P50,000.00 as attorneys fees.
SO ORDERED.4
Respondent appealed to the Court of Appeals. In its Decision5 dated 11 May 2005, the Court of
Appeals reversed the trial courts Decision and absolved respondent from civil liability under
Article 2180 of the Civil Code.6
Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its Resolution
dated 19 August 2005.
Hence, this petition.
The Trial Courts Ruling
The trial court held respondent civilly liable for the death of Alfred under Article 2180 in relation
to Article 2176 of the Civil Code.7 The trial court held that the accidental shooting of Alfred which
caused his death was partly due to the negligence of respondents employee Aristedes Matibag
(Matibag). Matibag and Jason Herbolario (Herbolario) were employees of respondent even if
they were only paid on a commission basis. Under the Civil Code, respondent is liable for the
damages caused by Matibag on the occasion of the performance of his duties, unless
respondent proved that he observed the diligence of a good father of a family to prevent the
damage. The trial court held that respondent failed to observe the required diligence when he
left the key to the drawer containing the loaded defective gun without instructing his employees
to be careful in handling the loaded gun.
The Court of Appeals Ruling
The Court of Appeals held that respondent cannot be held civilly liable since there was no
employer-employee relationship between respondent and Matibag. The Court of Appeals found
that Matibag was not under the control of respondent with respect to the means and methods in
the performance of his work. There can be no employer-employee relationship where the
element of control is absent. Thus, Article 2180 of the Civil Code does not apply in this case and
respondent cannot be held liable.
Furthermore, the Court of Appeals ruled that even if respondent is considered an employer of
Matibag, still respondent cannot be held liable since no negligence can be attributed to him. As
explained by the Court of Appeals:
Granting arguendo that an employer-employee relationship existed between Aristedes Matibag
and the defendant-appellant, we find that no negligence can be attributed to him.
Negligence is best exemplified in the case of Picart vs. Smith (37 Phil. 809). The test of
negligence is this:
"x x x. Could a prudent man, in the position of the person to whom negligence is attributed,
foresee harm to the person injured as a reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to refrain from that course or take precaution
against its mischievous results, and the failure to do so constitutes negligence. x x x."
Defendant-appellant maintains that he is not guilty of negligence and lack of due care as he did
not fail to observe the diligence of a good father of a family. He submits that he kept the firearm
in one of his table drawers, which he locked and such is already an indication that he took the
necessary diligence and care that the said gun would not be accessible to anyone. He puts [sic]
that his store is engaged in selling firearms and ammunitions. Such items which are per se
dangerous are kept in a place which is properly secured in order that the persons coming into
the gun store would not be able to take hold of it unless it is done intentionally, such as when a
customer is interested to purchase any of the firearms, ammunitions and other related items, in
which case, he may be allowed to handle the same.
We agree. Much as We sympathize with the family of the deceased, defendant-appellant is not
to be blamed. He exercised due diligence in keeping his loaded gun while he was on a business
trip in Manila. He placed it inside the drawer and locked it. It was taken away without his
knowledge and authority. Whatever happened to the deceased was purely accidental.8
The Issues
Petitioners raise the following issues:
I. THE APPELLATE COURT COMMITTED SERIOUS ERROR IN RENDERING THE DECISION
AND RESOLUTION IN QUESTION IN DISREGARD OF LAW AND JURISPRUDENCE BY
REVERSING THE ORDER OF THE REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO
CITY NOTWITHSTANDING CLEAR, AUTHENTIC RECORDS AND TESTIMONIES
PRESENTED DURING THE TRIAL WHICH NEGATE AND CONTRADICT ITS FINDINGS.
II. THE APPELLATE COURT COMMITTED GRAVE, REVERSIBLE ERROR IN RENDERING

THE DECISION AND RESOLUTION IN QUESTION BY DEPARTING FROM THE ACCEPTED
AND USUAL COURSE OF JUDICIAL PROCEEDINGS THEREBY IGNORING THE FACTUAL
FINDINGS OF THE REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO CITY SHOWING
PETITIONERS CLEAR RIGHTS TO THE AWARD OF DAMAGES.9
The Ruling of the Court
We find the petition meritorious.
This case for damages arose out of the accidental shooting of petitioners son. Under Article
116110 of the Civil Code, petitioners may enforce their claim for damages based on the civil
liability arising from the crime under Article 10011 of the Revised Penal Code or they may opt to
file an independent civil action for damages under the Civil Code. In this case, instead of
enforcing their claim for damages in the homicide case filed against Matibag, petitioners opted to
file an independent civil action for damages against respondent whom they alleged was
Matibags employer. Petitioners based their claim for damages under Articles 2176 and 2180 of
the Civil Code.
when he accepted the gun for repair and placed it inside the drawer without ensuring first that it
was not loaded. In the first place, the defective gun should have been stored in a vault. Before
accepting the defective gun for repair, respondent should have made sure that it was not loaded
to prevent any untoward accident. Indeed, respondent should never accept a firearm from
another person, until the cylinder or action is open and he has personally checked that the
weapon is completely unloaded.17 For failing to insure that the gun was not loaded, respondent
himself was negligent. Furthermore, it was not shown in this case whether respondent had a
License to Repair which authorizes him to repair defective firearms to restore its original
composition or enhance or upgrade firearms.18
Clearly, respondent did not exercise the degree of care and diligence required of a good father
of a family, much less the degree of care required of someone dealing with dangerous weapons,
as would exempt him from liability in this case.
WHEREFORE, we GRANT the petition. We SET ASIDE the 11 May 2005 Decision and the 19
August 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 60669. We REINSTATE the
trial courts Decision dated 8 April 1998.
SO ORDERED.
12
Unlike the subsidiary liability of the employer under Article 103 of the Revised Penal
Code,13 the liability of the employer, or any person for that matter, under Article 2176 of the Civil
Code is primary and direct, based on a persons own negligence. Article 2176 states:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called quasi-delict and is governed by the
provisions of this Chapter.
This case involves the accidental discharge of a firearm inside a gun store.1avvphi1 Under PNP
Circular No. 9, entitled the "Policy on Firearms and Ammunition Dealership/Repair," a person
who is in the business of purchasing and selling of firearms and ammunition must maintain basic
security and safety requirements of a gun dealer, otherwise his License to Operate Dealership
will be suspended or canceled.14
Indeed, a higher degree of care is required of someone who has in his possession or under his
control an instrumentality extremely dangerous in character, such as dangerous weapons or
substances. Such person in possession or control of dangerous instrumentalities has the duty to
take exceptional precautions to prevent any injury being done thereby.15 Unlike the ordinary
affairs of life or business which involve little or no risk, a business dealing with dangerous
weapons requires the exercise of a higher degree of care.
As a gun store owner, respondent is presumed to be knowledgeable about firearms safety and
should have known never to keep a loaded weapon in his store to avoid unreasonable risk of
harm or injury to others. Respondent has the duty to ensure that all the guns in his store are not
loaded. Firearms should be stored unloaded and separate from ammunition when the firearms
are not needed for ready-access defensive use.16With more reason, guns accepted by the store
for repair should not be loaded precisely because they are defective and may cause an
accidental discharge such as what happened in this case. Respondent was clearly negligent
G.R. No. 166869
February 16, 2010
PHILIPPINE HAWK CORPORATION, Petitioner,

vs.
VIVIAN TAN LEE, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari1 of the Decision of the Court of Appeals in CA-G.R. CV
No. 70860, promulgated on August 17, 2004, affirming with modification the Decision of the
Regional Trial Court (RTC) of Quezon City, Branch 102, dated March 16, 2001, in Civil Case No.
Q-91-9191, ordering petitioner Philippine Hawk Corporation and Margarito Avila to jointly and
severally pay respondent Vivian Tan Lee damages as a result of a vehicular accident.
The facts are as follows:
On March 15, 2005, respondent Vivian Tan Lee filed before the RTC of Quezon City a
Complaint2 against petitioner Philippine Hawk Corporation and defendant Margarito Avila for
damages based on quasi-delict, arising from a vehicular accident that occurred on March 17,
1991 in Barangay Buensoceso, Gumaca, Quezon. The accident resulted in the death of
respondents husband, Silvino Tan, and caused respondent physical injuries.
On June 18, 1992, respondent filed an Amended Complaint,3 in her own behalf and in behalf of
her children, in the civil case for damages against petitioner. Respondent sought the payment of
indemnity for the death of Silvino Tan, moral and exemplary damages, funeral and interment
expenses, medical and hospitalization expenses, the cost of the motorcycles repair, attorneys
fees, and other just and equitable reliefs.
fast speed coming toward them, and then the bus hit a jeep parked on the roadside, and their
motorcycle as well. She lost consciousness and was brought to the hospital in Gumaca,
Quezon, where she was confined for a week. She was later transferred to St. Lukes Hospital in
Quezon City, Manila. She suffered a fracture on her left chest, her left arm became swollen, she
felt pain in her bones, and had high blood pressure.8
The accident involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The bus
was owned by petitioner Philippine Hawk Corporation, and was then being driven by Margarito
Avila.
Respondents husband died due to the vehicular accident. The immediate cause of his death
was massive cerebral hemorrhage.9
In its Answer,4 petitioner denied liability for the vehicular accident, alleging that the immediate
and proximate cause of the accident was the recklessness or lack of caution of Silvino Tan.
Petitioner asserted that it exercised the diligence of a good father of the family in the selection
and supervision of its employees, including Margarito Avila.
On March 25, 1993, the trial court issued a Pre-trial Order5 stating that the parties manifested
that there was no possibility of amicable settlement between them. However, they agreed to
stipulate on the following facts:
1. On March 17, 1991, in Bgy. Buensoceso, Gumaca, Quezon, plaintiff Vivian Lee Tan
and her husband Silvino Tan, while on board a motorcycle with [P]late No. DA-5480
driven by the latter, and a Metro Bus with [P]late No. NXR-262 driven by Margarito
Avila, were involved in an accident;
Respondent further testified that her husband was leasing10 and operating a Caltex gasoline
station in Gumaca, Quezon that yielded one million pesos a year in revenue. They also had a
copra business, which gave them an income of P3,000.00 a month or P36,000.00 a year.11
Ernest Ovial, the driver of the passenger jeep involved in the accident, testified that in the
afternoon of March 17, 1991, his jeep was parked on the left side of the highway near the
Pasumbal Machine Shop. He did not notice the motorcycle before the accident. But he saw the
bus dragging the motorcycle along the highway, and then the bus bumped his jeep and sped
away.12
2. As a result of the accident, Silvino Tan died on the spot while plaintiff Vivian Lee Tan
suffered physical injuries which necessitated medical attention and hospitalization;
For the defense, Margarito Avila, the driver of petitioners bus, testified that on March 17, 1999,
at about 4:30 p.m., he was driving his bus at 60 kilometers per hour on the Maharlika Highway.
When they were at Barangay Buensoceso, Gumaca, Quezon, a motorcycle ran from his left side
of the highway, and as the bus came near, the motorcycle crossed the path of the bus, and so
he turned the bus to the right. He heard a loud banging sound. From his side mirror, he saw that
the motorcycle turned turtle ("bumaliktad"). He did not stop to help out of fear for his life, but
drove on and surrendered to the police. He denied that he bumped the motorcycle. 13
3. The deceased Silvino Tan is survived by his wife, plaintiff Vivian Lee Tan and four
children, three of whom are now residents of the United States; and
Avila further testified that he had previously been involved in sideswiping incidents, but he forgot
how many times.14
4. Defendant Margarito Avila is an employee of defendant Philippine Hawk. 6
Rodolfo Ilagan, the bus conductor, testified that the motorcycle bumped the left side of the bus
that was running at 40 kilometers per hour.15
The parties also agreed on the following issues:

1. Whether or not the proximate cause of the accident causing physical injuries upon
the plaintiff Vivian Lee Tan and resulting in the death of the latters husband was the
recklessness and negligence of Margarito Avila or the deceased Silvino Tan; and
2. Whether or not defendant Philippine Hawk Transport Corporation exercised the
diligence of a good father of the family in the selection and supervision of its driver
Margarito Avila.7
Respondent testified that on March 17, 1991, she was riding on their motorcycle in tandem with
her husband, who was on the wheel, at a place after a Caltex gasoline station in Barangay
Buensoceso, Gumaca, Quezon on the way to Lopez, Quezon. They came from the Pasumbal
Machine Shop, where they inquired about the repair of their tanker. They were on a stop position
at the side of the highway; and when they were about to make a turn, she saw a bus running at
Domingo S. Sisperes, operations officer of petitioner, testified that, like their other drivers, Avila
was subjected to and passed the following requirements:
(1) Submission of NBI clearance;
(2) Certification from his previous employer that he had no bad record;
(3) Physical examination to determine his fitness to drive;
(4) Test of his driving ability, particularly his defensive skill; and
(5) Review of his driving skill every six months.16
Efren Delantar, a Barangay Kagawad in Buensoceso, Gumaca, Quezon, testified that the bus
was running on the highway on a straight path when a motorcycle, with a woman behind its
driver, suddenly emerged from the left side of the road from a machine shop. The motorcycle
crossed the highway in a zigzag manner and bumped the side of the bus.17
In its Decision dated March 16, 2001, the trial court rendered judgment against petitioner and
defendant Margarito Avila, the dispositive portion of which reads:
ACCORDINGLY, MARGARITO AVILA is adjudged guilty of simple negligence, and judgment is
hereby rendered in favor of the plaintiff Vivian Lee Tan and h[er] husbands heirs ordering the
defendants Philippine Hawk Corporation and Margarito Avila to pay them jointly and solidarily
the sum of P745,575.00 representing loss of earnings and actual damages plus P50,000.00 as
moral damages.18
The trial court found that before the collision, the motorcycle was on the left side of the road, just
as the passenger jeep was. Prior to the accident, the motorcycle was in a running position
moving toward the right side of the highway. The trial court agreed with the bus driver that the
motorcycle was moving ahead of the bus from the left side of the road toward the right side of
the road, but disagreed that the motorcycle crossed the path of the bus while the bus was
running on the right side of the road.19
The trial court held that if the bus were on the right side of the highway, and Margarito Avila
turned his bus to the right in an attempt to avoid hitting the motorcyle, then the bus would not
have hit the passenger jeep, which was then parked on the left side of the road. The fact that the
bus also hit the passenger jeep showed that the bus must have been running from the right lane
to the left lane of the highway, which caused the collision with the motorcycle and the passenger
jeep parked on the left side of the road. The trial court stated that since Avila saw the motorcycle
before the collision, he should have stepped on the brakes and slowed down, but he just
maintained his speed and veered to the left.20 The trial court found Margarito Avila guilty of
simple negligence.
had, therefore, attained finality, in total disregard of the doctrine laid down by this
Court in Abubakar v. Abubakar, G.R. No. 134622, October 22, 1999.
2) The Court of Appeals committed reversible error in its finding that the petitioners
bus driver saw the motorcycle of private respondent executing a U-turn on the
highway "about fifteen (15) meters away" and thereafter held that the Doctrine of Last
Clear was applicable to the instant case. This was a palpable error for the simple
reason that the aforesaid distance was the distance of the witness to the bus and not
the distance of the bus to the respondents motorcycle, as clearly borne out by the
records.
3) The Court of Appeals committed reversible error in awarding damages in total
disregard of the established doctrine laid down in Danao v. Court of Appeals, 154
SCRA 447 and Viron Transportation Co., Inc. v. Delos Santos, G.R. No. 138296,
November 22, 2000.23
In short, the issues raised by petitioner are: (1) whether or not negligence may be attributed to
petitioners driver, and whether negligence on his part was the proximate cause of the accident,
resulting in the death of Silvino Tan and causing physical injuries to respondent; (2) whether or
not petitioner is liable to respondent for damages; and (3) whether or not the damages awarded
by respondent Court of Appeals are proper.
Petitioner seeks a review of the factual findings of the trial court, which were sustained by the
Court of Appeals, that petitioners driver was negligent in driving the bus, which caused physical
injuries to respondent and the death of respondents husband.
The rule is settled that the findings of the trial court, especially when affirmed by the Court of
Appeals, are conclusive on this Court when supported by the evidence on record.24 The Court
has carefully reviewed the records of this case, and found no cogent reason to disturb the
findings of the trial court, thus:
The trial court held petitioner bus company liable for failing to exercise the diligence of a good
father of the family in the selection and supervision of Avila, having failed to sufficiently inculcate
in him discipline and correct behavior on the road.21
The Court agree[s] with the bus driver Margarito that the motorcycle was moving ahead of the
bus towards the right side from the left side of the road, but disagrees with him that it crossed
the path of the bus while the bus was running on the right side of the highway.
On appeal, the Court of Appeals affirmed the decision of the trial court with modification in the
award of damages. The dispositive portion of the decision reads:
If the bus were on the right side of the highway and Margarito turned his bus to the right in an
attempt to avoid hitting it, then the bus would not have hit the passenger jeep vehicle which was
then parked on the left side of the road. The fact that the bus hit the jeep too, shows that the bus
must have been running to the left lane of the highway from right to the left, that the collision
between it and the parked jeep and the moving rightways cycle became inevitable. Besides,
Margarito said he saw the motorcycle before the collision ahead of the bus; that being so, an
extra-cautious public utility driver should have stepped on his brakes and slowed down. Here,
the bus never slowed down, it simply maintained its highway speed and veered to the left. This
is negligence indeed.25
WHEREFORE, foregoing premises considered, the appeal is DENIED. The assailed decision
dated March 16, 2001 is hereby AFFIRMED with MODIFICATION. Appellants Philippine Hawk
and Avila are hereby ordered to pay jointly and severally appellee the following amount:
(a) P168,019.55 as actual damages; (b) P10,000.00 as temperate damages; (c) P100,000.00 as
moral damages; (d) P590,000.00 as unearned income; and (e)P50,000.00 as civil indemnity.22
Petitioner filed this petition, raising the following issues:
1) The Court of Appeals committed grave abuse of discretion amounting to lack of
jurisdiction in passing upon an issue, which had not been raised on appeal, and which
Petitioner contends that the Court of Appeals was mistaken in stating that the bus driver saw
respondents motorcycle "about 15 meters away" before the collision, because the said distance,
as testified to by its witness Efren Delantar Ong, was Ongs distance from the bus, and not the
distance of the bus from the motorcycle. Petitioner asserts that this mistaken assumption of the
Court of Appeals made it conclude that the bus driver, Margarito Avila, had the last clear chance
to avoid the accident, which was the basis for the conclusion that Avila was guilty of simple
negligence.
A review of the records showed that it was petitioners witness, Efren Delantar Ong, who was
about 15 meters away from the bus when he saw the vehicular accident.26 Nevertheless, this
fact does not affect the finding of the trial court that petitioners bus driver, Margarito Avila, was
guilty of simple negligence as affirmed by the appellate court. Foreseeability is the fundamental
test of negligence.27 To be negligent, a defendant must have acted or failed to act in such a way
that an ordinary reasonable man would have realized that certain interests of certain persons
were unreasonably subjected to a general but definite class of risks.28
In this case, the bus driver, who was driving on the right side of the road, already saw the
motorcycle on the left side of the road before the collision. However, he did not take the
necessary precaution to slow down, but drove on and bumped the motorcycle, and also the
passenger jeep parked on the left side of the road, showing that the bus was negligent in
veering to the left lane, causing it to hit the motorcycle and the passenger jeep.
Whenever an employees negligence causes damage or injury to another, there instantly arises
a presumption that the employer failed to exercise the due diligence of a good father of the
family in the selection or supervision of its employees.29 To avoid liability for a quasi-delict
committed by his employee, an employer must overcome the presumption by presenting
convincing proof that he exercised the care and diligence of a good father of a family in the
selection and supervision of his employee.30
The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to
respondent, since it failed to exercise the diligence of a good father of the family in the selection
and supervision of its bus driver, Margarito Avila, for having failed to sufficiently inculcate in him
discipline and correct behavior on the road. Indeed, petitioners tests were concentrated on the
ability to drive and physical fitness to do so. It also did not know that Avila had been previously
involved in sideswiping incidents.
As regards the issue on the damages awarded, petitioner contends that it was the only one that
appealed the decision of the trial court with respect to the award of actual and moral damages;
hence, the Court of Appeals erred in awarding other kinds of damages in favor of respondent,
who did not appeal from the trial courts decision.
Petitioners contention is unmeritorious.
Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides:
SEC. 8. Questions that may be decided. -- No error which does not affect the jurisdiction over
the subject matter or the validity of the judgment appealed from or the proceedings therein will
be considered unless stated in the assignment of errors, or closely related to or dependent on
an assigned error and properly argued in the brief, save as the court pass upon plain errors and
clerical errors.
Philippine National Bank v. Rabat31 cited the book32 of Justice Florenz D. Regalado to explain the
section above, thus:
In his book, Mr. Justice Florenz D. Regalado commented on this section, thus:
1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes
some substantial changes in the rules on assignment of errors. The basic procedural
rule is that only errors claimed and assigned by a party will be considered by the
court, except errors affecting its jurisdiction over the subject matter. To this exception
has now been added errors affecting the validity of the judgment appealed from or the
proceedings therein.
Also, even if the error complained of by a party is not expressly stated in his
assignment of errors but the same is closely related to or dependent on an assigned
error and properly argued in his brief, such error may now be considered by the court.
These changes are of jurisprudential origin.
2. The procedure in the Supreme Court being generally the same as that in the Court
of Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has been held
that the latter is clothed with ample authority to review matters, even if they are not
assigned as errors on appeal, if it finds that their consideration is necessary in arriving
at a just decision of the case. Also, an unassigned error closely related to an error
properly assigned (PCIB vs. CA, et al., L-34931, Mar. 18, 1988), or upon which the
determination of the question raised by error properly assigned is dependent, will be
considered by the appellate court notwithstanding the failure to assign it as error
(Ortigas, Jr. vs. Lufthansa German Airlines, L-28773, June 30, 1975; Soco vs.
Militante, et al., G.R. No. 58961, June 28, 1983).
It may also be observed that under Sec. 8 of this Rule, the appellate court is
authorized to consider a plain error, although it was not specifically assigned by the
appellant (Dilag vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it would be
sacrificing substance for technicalities.33
In this case for damages based on quasi-delict, the trial court awarded respondent the sum
of P745,575.00, representing loss of earning capacity (P590,000.00) and actual damages
(P155,575.00 for funeral expenses), plus P50,000.00 as moral damages. On appeal to the Court
of Appeals, petitioner assigned as error the award of damages by the trial court on the ground
that it was based merely on suppositions and surmises, not the admissions made by respondent
during the trial.
In its Decision, the Court of Appeals sustained the award by the trial court for loss of earning
capacity of the deceased Silvino Tan, moral damages for his death, and actual damages,
although the amount of the latter award was modified.
The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 of the
Civil Code.34Compensation of this nature is awarded not for loss of earnings, but for loss of
capacity to earn money.35
As a rule, documentary evidence should be presented to substantiate the claim for damages for
loss of earning capacity.36 By way of exception, damages for loss of earning capacity may be
awarded despite the absence of documentary evidence when: (1) the deceased is selfemployed and earning less than the minimum wage under current labor laws, in which case,
judicial notice may be taken of the fact that in the deceased's line of work no documentary
evidence is available; or (2) the deceased is employed as a daily wage worker earning less than
the minimum wage under current labor laws.37
In this case, the records show that respondents husband was leasing and operating a Caltex
gasoline station in Gumaca, Quezon. Respondent testified that her husband earned an annual
income of one million pesos. Respondent presented in evidence a Certificate of Creditable
Income Tax Withheld at Source for the Year 1990,38 which showed that respondents husband
earned a gross income of P950,988.43 in 1990. It is reasonable to use the Certificate and
respondents testimony as bases for fixing the gross annual income of the deceased at one
million pesos before respondents husband died on March 17, 1999. However, no documentary
evidence was presented regarding the income derived from their copra business; hence, the
testimony of respondent as regards such income cannot be considered.
In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be
considered; that is, the total of the earnings less expenses necessary for the creation of such
earnings or income, less living and other incidental expenses.39 In the absence of documentary
evidence, it is reasonable to peg necessary expenses for the lease and operation of the gasoline
station at 80 percent of the gross income, and peg living expenses at 50 percent of the net
income (gross income less necessary expenses).
In this case, the computation for loss of earning capacity is as follows:
Life Expectancy
[2/3 (80-age at the
time of death)]
Gross Annual
Income (GAI)
Reasonable and
Necessary Expenses
(80% of GAI)
[2/3 (80-65)]
P1,000,000.00
P800,000.00
2/3 (15)
P200,000.00
P100,000.00(Living
Expenses)
30/3
P100,000.00
10
P100,000.00
P1,000,000.00
Net Earning
Capacity
The Court of Appeals also awarded actual damages for the expenses incurred in connection
with the death, wake, and interment of respondents husband in the amount of P154,575.30, and
the medical expenses of respondent in the amount of P168,019.55.
Actual damages must be substantiated by documentary evidence, such as receipts, in order to
prove expenses incurred as a result of the death of the victim40 or the physical injuries sustained
by the victim. A review of the valid receipts submitted in evidence showed that the funeral and
related expenses amounted only toP114,948.60, while the medical expenses of respondent
amounted only to P12,244.25, yielding a total ofP127,192.85 in actual damages.
Moreover, the Court of Appeals correctly sustained the award of moral damages in the amount
of P50,000.00 for the death of respondents husband. Moral damages are not intended to enrich
a plaintiff at the expense of the defendant.41 They are awarded to allow the plaintiff to obtain
means, diversions or amusements that will serve to alleviate the moral suffering he/she has
undergone due to the defendants culpable action and must, perforce, be proportional to the
suffering inflicted.42
In addition, the Court of Appeals correctly awarded temperate damages in the amount
of P10,000.00 for the damage caused on respondents motorcycle. Under Art. 2224 of the Civil
Code, temperate damages "may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot, from the nature of the case, be proved with certainty."
The cost of the repair of the motorcycle was prayed for by respondent in her Complaint.
However, the evidence presented was merely a job estimate43 of the cost of the motorcycles
repair amounting to P17, 829.00. The Court of Appeals aptly held that there was no doubt that
the damage caused on the motorcycle was due to the negligence of petitioners driver. In the
absence of competent proof of the actual damage caused on the motorcycle or the actual cost of
its repair, the award of temperate damages by the appellate court in the amount of P10,000.00
was reasonable under the circumstances.44
The Court of Appeals also correctly awarded respondent moral damages for the physical injuries
she sustained due to the vehicular accident. Under Art. 2219 of the Civil Code,45 moral damages
may be recovered in quasi-delicts causing physical injuries. However, the award of P50,000.00
should be reduced to P30,000.00 in accordance with prevailing jurisprudence.46
Further, the Court of Appeals correctly awarded respondent civil indemnity for the death of her
husband, which has been fixed by current jurisprudence at P50,000.00.47 The award is proper
under Art. 2206 of the Civil Code.48
In fine, the Court of Appeals correctly awarded civil indemnity for the death of respondents
husband, temperate damages, and moral damages for the physical injuries sustained by
respondent in addition to the damages granted by the trial court to respondent. The trial court
overlooked awarding the additional damages, which were prayed for by respondent in her
Amended Complaint. The appellate court is clothed with ample authority to review matters, even
if they are not assigned as errors in the appeal, if it finds that their consideration is necessary in
arriving at a just decision of the case.49
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated August 17,
2004 in CA-G.R. CV No. 70860 is hereby AFFIRMED with MODIFICATION. Petitioner Philippine
Hawk Corporation and Margarito Avila are hereby ordered to pay jointly and severally
respondent Vivian Lee Tan: (a) civil indemnity in the amount of Fifty Thousand Pesos
(P50,000.00); (b) actual damages in the amount of One Hundred Twenty-Seven Thousand One
Hundred Ninety-Two Pesos and Eighty-Five Centavos ( P127,192.85); (c) moral damages in the
amount of Eighty Thousand Pesos (P80,000.00); (d) indemnity for loss of earning capacity in the
amount of One Million Pesos (P1,000,000.00); and (e) temperate damages in the amount of Ten
Thousand Pesos (P10,000.00).
Costs against petitioner.
respondent Stephen Huang is paralyzed for life from his chest down and requires continuous
medical and rehabilitation treatment.
SO ORDERED.
Respondents fault petitioner Del Rosario for committing gross negligence and reckless
imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence of a
good father of a family in the selection and supervision of its driver.
G.R. No. 172122
June 22, 2007
MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO, petitioners,

vs.
SPOUSES RICHARD HUANG and CARMEN HUANG, and STEPHEN HUANG, respondents.
DECISION
PUNO, C.J.:
On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 83981,
dated February 16, 2006 and March 30, 2006, respectively which affirmed with modification the
Decision3 of the Regional Trial Court (RTC) of Makati City, dated September 29, 2004. The trial
court found petitioners jointly and severally liable to pay respondents damages for the injuries
sustained by respondent Stephen Huang, son of respondent spouses Richard and Carmen
Huang.
In contrast, petitioners allege that the immediate and proximate cause of the accident was
respondent Stephen Huangs recklessness. According to petitioner Del Rosario, he was driving
on the left innermost lane when the car bumped the trucks front right tire. The truck then
swerved to the left, smashed into an electric post, crossed the center island, and stopped on the
other side of the highway. The car likewise crossed over the center island and landed on the
same portion of C-5. Further, petitioner Mercury Drug claims that it exercised due diligence of a
good father of a family in the selection and supervision of all its employees.
The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug and
Del Rosario jointly and severally liable to pay respondents actual, compensatory, moral and
exemplary damages, attorneys fees, and litigation expenses. The dispositive portion reads:
WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc. and
Rolando del Rosario, jointly and severally liable to pay plaintiffs Spouses Richard Y. Huang and
Carmen G. Huang, and Stephen Huang the following amounts:
1. Two Million Nine Hundred Seventy Three Thousand Pesos (P2,973,000.00) actual damages;
First, the facts:

2. As compensatory damages:
Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six-wheeler
1990 Mitsubishi Truck with plate number PRE 641 (truck). It has in its employ petitioner Rolando
J. del Rosario as driver. Respondent spouses Richard and Carmen Huang are the parents of
respondent Stephen Huang and own the red 1991 Toyota Corolla GLI Sedan with plate number
PTT 775 (car).
These two vehicles figured in a road accident on December 20, 1996 at around 10:30 p.m.
within the municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving the car,
weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing 14,058 kg. Both
were traversing the C-5 Highway, north bound, coming from the general direction of Alabang
going to Pasig City. The car was on the left innermost lane while the truck was on the next lane
to its right, when the truck suddenly swerved to its left and slammed into the front right side of
the car. The collision hurled the car over the island where it hit a lamppost, spun around and
landed on the opposite lane. The truck also hit a lamppost, ran over the car and zigzagged
towards, and finally stopped in front of Buellah Land Church.
At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt (TVR). His
drivers license had been confiscated because he had been previously apprehended for reckless
driving.
The car, valued at P300,000.00, was a total wreck. Respondent Stephen Huang sustained
massive injuries to his spinal cord, head, face, and lung. Despite a series of operations,
a. Twenty Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(P23,461,062.00) for life care cost of Stephen;
b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen;
3. Four Million Pesos (P4,000,000.00) as moral damages;
4. Two Million Pesos (P2,000,000.00) as exemplary damages; and
5. One Million Pesos (P1,000,000.00) as attorneys fees and litigation expense.4
On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but reduced
the award of moral damages to P1,000,000.00. The appellate court also denied the motion for
reconsideration filed by petitioners.
Hence, this appeal.
Petitioners cite the following grounds for their appeal:
1. That the subject Decision which dismissed the appeal of petitioners herein but AFFIRMED
WITH MODIFICATION the decision of the Regional Trial Court, Branch 64, Makati City, in that
the award of moral damages was reduced to P1,000,000.00 and its Resolution dated March 30,
2006, which dismissed outright the Motion for Reconsideration must be set aside because the
Honorable Court of Appeals committed reversible error:
A. IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON ALLEGEDLY
BEING FILED OUT OF TIME FOR ONE DAY;
B. IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE
INTERPOSED BY THE PETITIONERS HEREIN;
C. IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE PETITIONERS
HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON PRESUMPTIONS AND
PERSONAL OPINIONS OF PEOPLE WHO ARE NOT WITNESSES TO THE ACCIDENT;
D. IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN;
E. IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE THE
DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE OVERWHELMING
EVIDENCE PRESENTED BY PETITIONER COMPANY;
F. IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS NEGLIGENT IN DRIVING
THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY DISREGARDING THE EVIDENCES
PRESENTED DURING THE TRIAL OF THE CASE.
G. IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO THE
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE EVIDENCES
PRESENTED BY THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH
TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS WELL AS
DOCUMENTARY EVIDENCES.5
2. One vehicle is ten times heavier, more massive than the other;
3. Both vehicles were moving in the same direction and at the same speed of about 85 to 90
kilometers per hour;
4. The heavier vehicle was driving at the innermost left lane, while the lighter vehicle was at its
right.
Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right front
portion of the heavier vehicle, the general direction of the light vehicle after the impact would be
to the right side of the heavy vehicle, not the other way around. The truck, he opined, is more
difficult to move as it is heavier. It is the car, the lighter vehicle, which would move to the right of,
and away from the truck. Thus, there is very little chance that the car will move towards the
opposite side, i.e., to the left of the truck.
Dr. Daza also gave a further study on the basis of the same assumptions except that the car is
on the left side of the truck, in accordance with the testimony of respondent Stephen Huang. Dr.
Daza concluded that the general direction of the car after impact would be to the left of the truck.
In this situation, the middle island against which the car was pinned would slow down the car,
and enable the truck to catch up and hit the car again, before running over it. 8
To support their thesis, petitioners tried to show the damages that the truck sustained at its front
right side. The attempt does not impress. The photographs presented were taken a month after
the accident, and Rogelio Pantua, the automechanic who repaired the truck and authenticated
the photographs, admitted that there were damages also on the left side of the truck.9
Worse still, petitioner Del Rosario further admitted that after the impact, he lost control of the
truck and failed to apply his brakes. Considering that the car was smaller and lighter than the
six-wheeler truck, the impact allegedly caused by the car when it hit the truck could not possibly
be so great to cause petitioner to lose all control that he failed to even step on the brakes. He
testified, as follows:
ATTY. DIAZ:
We affirm the findings of the trial court and the appellate court that petitioner Del Rosario was
negligent. The evidence does not support petitioners claim that at the time of the accident, the
truck was at the left inner lane and that it was respondent Stephen Huangs car, at its right,
which bumped the right front side of the truck. Firstly, petitioner Del Rosario could not precisely
tell which part of the truck was hit by the car,6 despite the fact that the truck was snub-nosed and
a lot higher than the car. Petitioner Del Rosario could not also explain why the car landed on the
opposite lane of C-5 which was on its left side. He said that "the car did not pass in front of him
after it hit him or under him or over him or behind him."7 If the truck were really at the left lane
and the car were at its right, and the car hit the truck at its front right side, the car would not have
landed on the opposite side, but would have been thrown to the right side of the C-5 Highway.
Noteworthy on this issue is the testimony of Dr. Marlon Rosendo H. Daza, an expert in the field
of physics. He conducted a study based on the following assumptions provided by respondents:
1. Two vehicles collided;
May I proceed, Your Honor. You were able to apply the brakes, were you sir?
WITNESS:
No more, sir, because I went over the island.
ATTY. DIAZ:
Because as you said you lost control, correct sir?
WITNESS:
Yes, sir.
ATTY. DIAZ:
In other words, sir from the time your truck was hit according to you up to the time you rested on
the shoulder, you traveled fifty meters?
WITNESS:
Yes, sir, about that distance.
The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is not
conditioned on a prior recourse against the negligent employee, or a prior showing of insolvency
of such employee. It is also joint and solidary with the employee. 11
To be relieved of liability, petitioner Mercury Drug should show that it exercised the diligence of a
good father of a family, both in the selection of the employee and in the supervision of the
performance of his duties. Thus, in the selection of its prospective employees, the employer is
required to examine them as to their qualifications, experience, and service records.12 With
respect to the supervision of its employees, the employer should formulate standard operating
procedures, monitor their implementation, and impose disciplinary measures for their breach. To
establish compliance with these requirements, employers must submit concrete proof, including
documentary evidence.13
ATTY. DIAZ:
And this was despite the fact that you were only traveling at the speed of seventy five kilometers
per hour, jumped over the island, hit the lamppost, and traveled the three lanes of the opposite
lane of C-5 highway, is that what you want to impress upon this court?
WITNESS:
Yes, sir.10
We therefore find no cogent reason to disturb the findings of the RTC and the Court of Appeals.
The evidence proves petitioner Del Rosarios negligence as the direct and proximate cause of
the injuries suffered by respondent Stephen Huang. Petitioner Del Rosario failed to do what a
reasonable and prudent man would have done under the circumstances.
We now come to the liability of petitioner Mercury Drug as employer of Del Rosario. Articles
2176 and 2180 of the Civil Code provide:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
Art. 2180. The obligation imposed by article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring
procedure. According to Mrs. Merlie Caamic, the Recruitment and Training Manager of petitioner
Mercury Drug, applicants are required to take theoretical and actual driving tests, and
psychological examination. In the case of petitioner Del Rosario, however, Mrs. Caamic admitted
that he took the driving tests and psychological examination when he applied for the position of
Delivery Man, but not when he applied for the position of Truck Man. Mrs. Caamic also admitted
that petitioner Del Rosario used a Galant which is a light vehicle, instead of a truck during the
driving tests. Further, no tests were conducted on the motor skills development, perceptual
speed, visual attention, depth visualization, eye and hand coordination and steadiness of
petitioner Del Rosario. No NBI and police clearances were also presented. Lastly, petitioner Del
Rosario attended only three driving seminars on June 30, 2001, February 5, 2000 and July 7,
1984. In effect, the only seminar he attended before the accident which occurred in 1996 was
held twelve years ago in 1984.
It also appears that petitioner Mercury Drug does not provide for a back-up driver for long trips.
At the time of the accident, petitioner Del Rosario has been out on the road for more than
thirteen hours, without any alternate. Mrs. Caamic testified that she does not know of any
company policy requiring back-up drivers for long trips.14
Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the supervision
and discipline over its employees. In fact, on the day of the accident, petitioner Del Rosario was
driving without a license. He was holding a TVR for reckless driving. He testified that he reported
the incident to his superior, but nothing was done about it. He was not suspended or
reprimanded.15 No disciplinary action whatsoever was taken against petitioner Del Rosario. We
therefore affirm the finding that petitioner Mercury Drug has failed to discharge its burden of
proving that it exercised due diligence in the selection and supervision of its employee, petitioner
Del Rosario.
xxx
We now consider the damages which respondents should recover from the petitioners.
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.
xxx
The trial court awarded the following amounts:

1. Two Million Nine Hundred Seventy-Three Thousand Pesos (P2,973,000.00) actual damages;
2. As compensatory damages:
a. Twenty-Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(P23,461,062.00) for life care cost of Stephen;
has ever hired a person suffering with

the kind of disability as Stephen Huangs.19
b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen;
We likewise uphold the award of moral and exemplary damages and attorneys fees.
3. Four Million Pesos (P4,000,000.00) as moral damages;
"The award of moral damages is aimed at a restoration, within the limits of the possible, of the
spiritual status quo ante."20 Moral damages 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 caused a person.
Although incapable of pecuniary computation, they must be proportionate to the suffering
inflicted.21 The amount of the award bears no relation whatsoever with the wealth or means of
the offender.
4. Two Million Pesos (P2,000,000.00) as exemplary damages; and

5. One Million Pesos (P1,000,000.00) as attorneys fees and litigation expense.
The Court of Appeals affirmed the decision of the trial court but reduced the award of moral
damages toP1,000,000.00.
With regard to actual damages, Art. 2199 of the Civil Code provides that "[E]xcept as provided
by law or by stipulation one is entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved x x x." In the instant case, we uphold the finding that the
actual damages claimed by respondents were supported by receipts. The amount
of P2,973,000.00 represented cost of hospital expenses, medicines, medical services and
supplies, and nursing care services provided respondent Stephen from December 20, 1996, the
day of the accident, until December 1998.
Petitioners are also liable for all damages which are the natural and probable consequences of
the act or omission complained of.16 The doctors who attended to respondent Stephen are one
in their prognosis that his chances of walking again and performing basic body functions are nil.
For the rest of his life, he will need continuous rehabilitation and therapy to prevent further
complications such as pneumonia, bladder and rectum
infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other
spinal cord injury-related conditions. He will be completely dependent on the care and support of
his family. We thus affirm the award of P23,461,062.00 for the life care cost of respondent
Stephen Huang, based on his average monthly expense and the actuarial computation of the
remaining years that he is expected to live; and the conservative amount of P10,000,000.00, as
reduced by the trial court, for the loss or impairment of his earning capacity,17considering his
age, probable life expectancy, the state of his health, and his mental and physical condition
before the accident. He was only seventeen years old, nearly six feet tall and weighed 175
pounds. He was in fourth year high school, and a member of the school varsity basketball team.
He was also class president and editor-in-chief of the school annual. He had shown very good
leadership qualities. He was looking forward to his college life, having just passed the entrance
examinations of the University of the Philippines, De La Salle University, and the University of
Asia and the Pacific. The University of Sto. Tomas even offered him a chance to obtain an
athletic scholarship, but the accident prevented him from attending the basketball try-outs.
Without doubt, he was an exceptional student. He excelled both in his academics and
extracurricular undertakings. He is intelligent and motivated, a go-getter, as testified by
Francisco Lopez, respondent Stephen Huangs godfather and a bank executive.18 Had the
accident not happened, he had a rosy future ahead of him. He wanted to embark on a banking
career, get married and raise children. Taking into account his outstanding abilities, he would
have enjoyed a successful professional career in banking. But, as Mr. Lopez stated, it is highly
unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no bank
In the instant case, respondent Stephen Huang and respondent spouses Richard and Carmen
Huang testified to the intense suffering they continue to experience as a result of the accident.
Stephen recounted the nightmares and traumas he suffers almost every night when he relives
the accident. He also gets depression when he thinks of his bleak future. He feels frustration and
embarrassment in needing to be helped with almost everything and in his inability to do simple
things he used to do. Similarly, respondent spouses and the rest of the family undergo their own
private suffering. They live with the day-to-day uncertainty of respondent Stephen Huangs
condition. They know that the chance of full recovery is nil. Moreover, respondent Stephen
Huangs paralysis has made him prone to many other illnesses. His family, especially
respondent spouses, have to make themselves available for Stephen twenty-four hours a day.
They have patterned their daily life around taking care of him, ministering to his daily needs,
altering the lifestyle to which they had been accustomed.
Respondent Carmen Huangs brother testified on the insensitivity of petitioner Mercury Drug
towards the plight of respondent. Stephen, viz.:
Maybe words cannot describe the anger that we feel towards the defendants. All the time that
we were going through the crisis, there was none (sic) a single sign of nor offer of help, any
consolation or anything whatsoever. It is funny because, you know, I have many colleagues,
business associates, people even as far as United States, Japan, that I probably met only once,
when they found out, they make a call, they sent card, they write small notes, but from the
defendant, absolute silence. They didnt care, and worst, you know, this is a company that have
(sic) all the resources to help us. They were (sic) on our part, it was doubly painful because we
have no choice but to go back to them and buy the medicines that we need for Stephen. So, I
dont know how someone will really have no sense of decency at all to at least find out what
happened to my son, what is his condition, or if there is anything that they can do to help us. 22
On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of
quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.
The records show that at the time of the accident, petitioner Del Rosario was driving without a
license because he was previously ticketed for reckless driving. The evidence also shows that
he failed to step on his brakes immediately after the impact. Had petitioner Del Rosario done so,
the injuries which respondent Stephen sustained could have been greatly reduced. Wanton acts
such as that committed by petitioner Del Rosario need be suppressed; and employers like
petitioner Mercury Drug should be more circumspect in the observance of due diligence in the
selection and supervision of their employees. The award of exemplary damages in favor of the
respondents is therefore justified.
With the award of exemplary damages, we also affirm the grant of attorneys fees to
respondents.23 In addition, attorneys fees may be granted when a party is compelled to litigate
or incur expenses to protect his interest by reason of an unjustified act of the other party.24
Cost against petitioners.IN VIEW THEREOF, the petition is DENIED. The Decision and
Resolution of the Court of Appeals dated February 16, 2006 and March 30, 2006, respectively, in
CA-G.R. CV No. 83981, are AFFIRMED.
SO ORDERED.
REYNATO S. PUNO
Chief Justice

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SUPREME COURT

July 24, 2013

ASIAN TERMINALS, INC., Petitioner,

G.R. No. 181319

VILLARAMA, JR., J.:

July 24, 2013

ASIAN TERMINALS, INC., Petitioner,

Q How were you able to get hold of this subrogation receipt?

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

A Our surveyor and our checker the foreman of ATI.

G.R. No. 181163

ASIAN TERMINALS, INC., Petitioner,

G.R. No. 181262

(a) By anyone who saw the document executed or written; or

Q How were you able to get hold of this subrogation receipt?

A Our surveyor and our checker the foreman of ATI.

Q Are you aware of how they made that selection?

DELSAN TRANSPORT LINES, INC., petitioner,

Azcuna, J., on leave.

G.R. No. 141716

SAN MIGUEL CORPORATION, petitioner,

9. There shall be no employer-employee relations between the OWNER and/or its

BON VOYAGE AND GOOD LUCK.2

Total loss of earnings

1. Sabiniano, Inguito (sic)

P1,740,000 (50% x P3,480,000)

P 1,200,000 (50% x P2,400,000)

P 825,000 (50% x P 1,650,000)

P 600,000 (50% x P1,200,000)

P 930,000 (50% x P 1,860,000)

13. Dayondon, Isagani

C. P300,000.00 for moral damages and P200,000.00 for exemplary

10. Suscano, Renato

11. Du, Antonio

12. Basilgo, George

P 660,000 (50% x P 1,320,000)

P 500,000 (50% x P1,000,000)

P 550,000 (50% x P 1,100,000)

2. Under the cross-claim of defendant, Ouano, San Miguel Corporation is further

P 460,000 (50% x P 920,000)

2) P1,833,300.00 for unrealized rental earnings (P3,666,600.00 less 50%

P 460,000 (50% x P 920,000)

3) P21,000,000.00 for unrealized earnings of M/V Doa Roberta based on

P 480,000 (50% x P 960,000)

4) P250,000.00 for and as attorneys fees and P 10,000.00 as expenses of

With costs against defendant San Miguel Corporation.

SMC COULD NOT BE A TORTFEASOR CONSIDERING THE UNDISPUTED FACT

f. The cross-claims of defendants-appellants SMC and Julius Ouano against each

G.R. No. 169467

February 25, 2010

ALFREDO P. PACIS and CLEOPATRA D. PACIS, Petitioners,

II. THE APPELLATE COURT COMMITTED GRAVE, REVERSIBLE ERROR IN RENDERING

G.R. No. 166869

February 16, 2010

PHILIPPINE HAWK CORPORATION, Petitioner,

4. Defendant Margarito Avila is an employee of defendant Philippine Hawk. 6

The parties also agreed on the following issues:

Costs against petitioner.

June 22, 2007

MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO, petitioners,

First, the facts:

The trial court awarded the following amounts: