Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 104408 June 21, 1993

METRO MANILA TRANSIT CORPORATION, petitioner,

vs.
THE COURT OF APPEALS AND NENITA CUSTODIA, respondents.

Office of the Government Corporate Counsel for petitioner.

Renato P. Decena and Restituto Abjero for private respondent.

REGALADO, J.:

This appeal calls for a review of the legal validity and sufficiency of petitioner's invocation of due diligence in
the selection and supervision of employees as its defense against liability resulting from a vehicular collision.
With the facility by which such a defense can be contrived and our country having reputedly the highest
traffic accident rate in its geographical region, it is indeed high time for us to once again address this matter
which poses not only a litigation issue for the courts but affects the very safety of our streets.

The facts of the case at bar are recounted for us by respondent court, thus —

At about six o'clock in the morning of August 28, 1979, plaintiff-appellant Nenita Custodio
boarded as a paying passenger a public utility jeepney with plate No. D7 305 PUJ Pilipinas
1979, then driven by defendant Agudo Calebag and owned by his co-defendant Victorino
Lamayo, bound for her work at Dynetics Incorporated located in Bicutan, Taguig, Metro
Manila, where she then worked as a machine operator earning P16.25 a day. While the
passenger jeepney was travelling at (a) fast clip along DBP Avenue, Bicutan, Taguig, Metro
Manila another fast moving vehicle, a Metro Manila Transit Corp. (MMTC, for short) bus
bearing plate no. 3Z 307 PUB (Philippines) "79 driven by defendant Godofredo C. Leonardo
was negotiating Honeydew Road, Bicutan, Taguig, Metro Manila bound for its terminal at
Bicutan. As both vehicles approached the intersection of DBP Avenue and Honeydew Road
they failed to slow down and slacken their speed; neither did they blow their horns to warn
approaching vehicles. As a consequence, a collision between them occurred, the passenger
jeepney ramming the left side portion of the MMTC bus. The collision impact caused plaintiff-
appellant Nenita Custodio to hit the front windshield of the passenger jeepney and (she) was
thrown out therefrom, falling onto the pavement unconscious with serious physical injuries.
She was brought to the Medical City Hospital where she regained consciousness only after
one (1) week. Thereat, she was confined for twenty-four (24) days, and as a consequence,
she was unable to work for three and one half months (31/2).1

A complaint for damages2 was filed by herein private respondent, who being then a minor was assisted by
her parents, against all of therein named defendants following their refusal to pay the expenses incurred by
the former as a result of the collision.

Said defendants denied all the material allegations in the complaint and pointed an accusing finger at each
other as being the party at fault. Further, herein petitioner Metro Manila Transit Corporation (MMTC), a
government-owned corporation and one of the defendants in the court a quo, along with its driver,
Godofredo Leonardo, contrarily averred in its answer with cross-claim and counterclaim3 that the MMTC bus
was driven in a prudent and careful manner by driver Leonardo and that it was the passenger jeepney which
was driven recklessly considering that it hit the left middle portion of the MMTC bus, and that it was
defendant Lamayo, the owner of the jeepney and employer of driver Calebag, who failed to exercise due
diligence in the selection and supervision of employees and should thus be held solidarily liable for damages
caused to the MMTC bus through the fault and negligence of its employees.

Defendant Victorino Lamayo, for his part, alleged in his answer with cross-claim and counterclaim4 that the
damages suffered by therein plaintiff should be borne by defendants MMTC and its driver, Godofredo
Leonardo, because the latter's negligence was the sole and proximate cause of the accident and that MMTC
failed to exercise due diligence in the selection and supervision of its employees.

By order of the trial court, defendant Calebag was declared in default for failure to file an
answer.5 Thereafter, as no amicable settlement was reached during the pre-trial conference,6 trial on the
merits ensued with the opposing parties presenting their respective witnesses and documentary evidence.

Herein private respondent Nenita Custodia, along with her parents, were presented as witnesses for the
prosecution. In addition, Dr. Edgardo del Mundo, the attending physician, testified on the cause, nature and
extent of the injuries she sustained as a result of the vehicular mishap.7 On the other hand, defendant MMTC
presented as witnesses Godofredo Leonardo, Christian Bautista and Milagros Garbo. Defendant Lamayo,
however, failed to present any witness.

Milagros Garbo testified that, as a training officer of MMTC, she was in charge of the selection of the
company's bus drivers, conducting for this purpose a series of training programs and examinations.
According to her, new applicants for job openings at MMTC are preliminarily required to submit certain
documents such as National Bureau of Investigation (NBI) clearance, birth or residence certificate, ID
pictures, certificate or diploma of highest educational attainment, professional driver's license, and work
experience certification. Re-entry applicants, aside from the foregoing requirements, are additionally
supposed to submit company clearance for shortages and damages and revenue performance for the
preceding year. Upon satisfactory compliance with said requisites, applicants are recommended for and
subjected to a Preliminary interview, followed by a record check to find out whether they are included in the
list of undesirable employees given by other companies.

Thereafter, she continued, if an applicant is found to be acceptable, a final interview by the Chief Supervisor
is scheduled and followed by a training program which consists of seminars and actual driving and Psycho-
physical tests and X-ray examinations. The seminars, which last for a total of eighteen (18) days, include
familiarization with assigned routes, existing traffic rules and regulations, Constabulary Highway Patrol
Group (CHPG) seminar on defensive driving, preventive maintenance, proper vehicle handling,
interpersonal relationship ,and administrative rules on discipline and on-the-job training. Upon completion of
all the seminars and tests, a final clearance is issued, an employment contract is executed and the driver is
ready to report for duty.8

MMTC's Transport Supervisor, Christian Bautista, testified that it was his duty to monitor the daily operation
of buses in the field, to countercheck the dispatcher on duty prior to the operation of the buses in the
morning and to see to it that the bus crew follow written guidelines of the company, which include seeing to it
that its employees are in proper uniform, briefed in traffic rules and regulations before the start of duty, fit to
drive and, in general, follow other rules and regulations of the Bureau of Land Transportation as well as of
the company.9

The reorganized trial court, in its decision of August 1, 1989, 10 found both drivers of the colliding vehicles
concurrently negligent for non-observance of appropriate traffic rules and regulations and for failure to take
the usual precautions when approaching an intersection. As joint tortfeasors, both drivers, as well as
defendant Lamayo, were held solidarily liable for damages sustained by plaintiff Custodio. Defendant
MMTC, on the bases of the evidence presented was, however, absolved from liability for the accident on the
ground that it was not only careful and diligent in choosing and screening applicants for job openings but
was also strict and diligent in supervising its employees by seeing to it that its employees were in proper
uniforms, briefed in traffic rules and regulations before the start of duty, and that it checked its employees to
determine whether or not they were positive for alcohol and followed other rules and regulations and
guidelines of the Bureau of Land Transportation and of the company.

The trial court accordingly ruled:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered dismissing the

complaint against the Metro Manila Transit Corporation and ordering defendants Agudo P.
Calebag, Victorino Lamayo and Godofredo C. Leonardo to pay plaintiffs, jointly and
severally, the following:

a) the sum of P10,000.00 by way of medical expenses;

b) the sum of P5,000.00 by way of expenses of litigation;

c) the sum of P15,000.00 by way of moral damages;

d) the sum of P2,672.00 by way of loss of earnings;

 e) the sum of P5,000.00 by way of exemplary damages;

f) the sum of P6,000.00 by way of attorney's fees; and

g) costs of suit.

SO ORDERED. 11

Plaintiff's motion to have that portion of the trial court's decision absolving MMTC from liability
reconsidered 12having been denied for lack of merit, 13 an appeal was filed by her with respondent appellate
court. After consideration of the appropriate pleadings on appeal and finding the appeal meritorious, the
Court of Appeals modified the trial court's decision by holding MMTC solidarily liable with the other
defendants for the damages awarded by the trial court because of their concurrent negligence, concluding
that while there is no hard and fast rule as to what constitutes sufficient evidence to prove that an employer
has exercised the due diligence required of it in the selection and supervision of its employees, based on the
quantum of evidence adduced the said appellate court was not disposed to say that MMTC had exercised
the diligence required of a good father of a family in the selection and supervision of its driver, Godofredo
Leonardo. 14

The Court of Appeals was resolute in its conclusion and denied the motions for reconsideration of appellee
Custodio and appellant MMTC in a resolution dated February 17, 1982, 15 thus prompting MMTC to file the
instant petition invoking the review powers of this Court over the decision of the Court of Appeals, raising as
issues for resolution whether or not (1) the documentary evidence to support the positive testimonies of
witnesses Garbo and Bautista are still necessary; (2) the testimonies of witnesses Garbo and Bautista may
still be disturbed on appeal; and (3) the evidence presented during the trial with respect to the proof of due
diligence of petitioner MMTC in the selection and supervision of its employees, particularly driver Leonardo,
is sufficient.

Prefatorily, private respondent questions the timeliness of the filing of the petition at bar in view of the
procedural stricture that the timely perfection of an appeal is both a mandatory and jurisdictional
requirement. This is a legitimate concern on the part of private respondent and presents an opportune
occasion to once again clarify this point as there appears to be some confusion in the application of the rules
and interpretative rulings regarding the computation of reglementary periods at this stage of the
proceedings.

The records of this case reveal that the decision of respondent Court of Appeals, dated October 31, 1991,
was received by MMTC on November 18, 1991 16 and it seasonably filed a motion for the reconsideration
thereof on November 28, 1991. 17 Said motion for reconsideration was denied by respondent court in its
resolution dated February 17, 1992, which in turn was received by MMTC on March 9, 1992. 18 Therefore, it
had, pursuant to Section 1, Rule 45 of the Rules of Court, fifteen (15) days therefrom or up to March 24,
1992 within which to file its petition, for review on certiorari. Anticipating, however, that it may not be able to
file said petition before the lapse of the reglementary period therefor, MMTC filed a motion on March 19,
1992 for an extension of thirty (30) days to file the present petition, with proof of service of copies thereof to
respondent court and the adverse parties. The Court granted said motion, with the extended period to be
counted from the expiration of the reglementary period. 19Consequently, private respondent had thirty (30)
days from March 24, 1992 within which to file its petition, or up to April 23, 1992, and the eventual filing of
said petition on April 14, 1992 was well within the period granted by the Court.

We digress to reiterate, in view of erroneous submissions that we continue to receive, that in the case of a
petition for review on certiorari from a decision rendered by the Court of Appeals, Section 1, Rule 45 of the
Rules of Court, which has long since been clarified in Lacsamana vs. The Hon. Second Special Cases
Division of the Intermediate Appellate Court, et al., 20 allows the same to be filed "within fifteen (15) days
from notice of judgment or of the denial of the motion for reconsideration filed in due time, and paying at the
same time to the corresponding docket fee." In other words, in the event a motion for reconsideration is filed
and denied, the period of fifteen (15) days begins to run all over again from notice of the denial resolution.
Otherwise put, if a motion for reconsideration is filed, the reglementary period within which to appeal the
decision of the Court of Appeals to the Supreme Court is reckoned from the date the party who intends to
appeal received the order denying the motion for reconsideration. 21Furthermore, a motion for extension of
time to file a petition for review may be filed with this Court within said reglementary period, paying at the
same time the corresponding docket fee.

1. The first two issues raised by petitioner shall be correlatively discussed in view of their interrelation.

In its present petition, MMTC insists that the oral testimonies of its employees were presented as witnesses
in its behalf sufficiently prove, even without the presentation documentary evidence, that driver Leonardo
had complied with all the hiring and clearance requirements and had undergone all trainings, tests and
examinations preparatory to actual employment, and that said positive testimonies spell out the rigid
procedure for screening of job applicants and the supervision of its employees in the field. It underscored the
fact that it had indeed complied with the measure of diligence in the selection and supervision of its
employees as enunciated in Campo, et al. vs. Camarote, et al. 22 requiring an employer, in the exercise of
the diligence of a good father of a family, to carefully examine the applicant for employment as to his
qualifications, experience and record service, and not merely be satisfied with the possession of a
professional driver's license.

It goes on to say since the testimonies of these witnesses were allegedly neither discredited nor impeached
by the adverse party, they should be believed and not arbitrarily disregarded or rejected nor disturbed on
appeal. It assiduously argues that inasmuch as there is no law requiring that facts alleged by petitioner be
established by documentary evidence, the probative force and weight of their testimonies should not be
discredited, with the further note that the lower court having passed upon the relevancy of the oral
testimonies and considered the same as unrebutted, its consideration should no longer be disturbed on
appeal. 23

Private respondent, on the other hand, retorts that the factual findings of respondent court are conclusive
upon the High Court which cannot be burdened with the task of analyzing and weighing the evidence all
over again. 24

At this juncture, it suffices to note that factual findings of the trial court may be reversed by the Court of
Appeals, which is vested by law with the power to review both legal and factual issues, if on the evidence of
record, it appears that the trial court may have been mistaken 25 particularly in the appreciation of evidence,
which is within the domain of the Court of Appeals. 26 The general rule laid down in a plethora of cases is that
such findings of fact by the Court of Appeals are conclusive upon and beyond the power of review of the
Supreme Court. 27 However, it is now well-settled that while the findings of fact of the Court of Appeals are
entitled to great respect, and even finality at times, that rule is not inflexible and is subject to well established
exceptions, to wit: (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
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 are contrary to the admissions of both appellant and appellee; (7) when the
findings of the Court of Appeals 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 petitioner's 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
are contradicted by the evidence on record. 28

When as in this case, the findings of the Court of Appeals and the trial court are contrary to each other, this
court may scrutinize the evidence on record, 29 in order to arrive at a correct finding based thereon. 30

A perusal of the same shows that since there is no dispute as to the finding of concurrent negligence on the
part of the defendant Calebag, the driver of the passenger jeepney, and co-defendant Leonardo, the bus
driver of petitioner MMTC, both of whom were solidarily held liable with defendant Lamayo, the owner of the
jeepney, we are spared the necessity of determining the sufficiency of evidence establishing the fact of
negligence. 31 The contrariety is in the findings of the two lower courts, and which is the subject of this
present controversy, with regard to the liability of MMTC as employer of one the erring drivers.

The trial court, in absolving MMTC from liability ruled that —

On the question as to whether defendant MMTC was successful in proving its defense that
indeed it had exercised the due diligence of a good father of a family in the selection and
supervision of defendant Leonardo, this Court finds that based on the evidence presented
during the trial, defendant MMTC was able to prove that it was not only careful and diligent in
choosing and screening applicants for job openings but also strict (and) diligent in
supervising its employees by seeing to it that its employees were in proper uniforms, briefed
in traffic rules and regulations before the start of duty, checked employees to determine
whether they were positive for alcohol and followed other rules and regulations and
guidelines of the Bureau of Land Transportation as well as its company. Having successfully
proven such defense, defendant MMTC therefore, cannot be held liable for the accident.

Having reached this conclusion, the Court now, holds that defendant MMTC be totally
absolved from liability and that the complaint against it be dismissed. . . . 32

whereas respondent court was of the opinion that —

 It is surprising though that witness Milagros Garbo did not testify nor present any evidence
that defendant-appellee's driver, defendant Godofredo Leonardo has complied with or has
undergone all clearances and trainings she referred to. The clearances, result of seminars
and tests which Godofredo Leonardo submitted and complied with, if any, were not
presented in court despite the fact that they are obviously in the possession and control of
defendant-appellee. Instead, it resorted to generalities. The Court has ruled that due
diligence in (the) selection and supervision of employee(s) are not proved by mere
testimonies to the effect that its applicant has complied with all the company requirements
before one is admitted as an employee but without proof thereof. . . .

On the part of Christian Bautista, the transport supervisor of defendant-appellee, he testified

that it is his duty to monitor the operation of buses in the field; to countercheck the
dispatchers' duty prior to the operation of the buses in the morning; to see to it that bus crew
follows written guidelines of the company (t.s.n., April 29, 1988, pp. 4-5), but when asked to
present in court the alleged written guidelines of the company he merely stated that he
brought with him a "wrong document" and defendant-appellee's counsel asked for
reservation to present such written guidelines in the next hearing but the same was (sic)
never presented in court. 33

A thorough and scrupulous review of the records of this case reveals that the conclusion of respondent
Court of Appeals is more firmly grounded on jurisprudence and amply supported by the evidence of record
than that of the court below.

It is procedurally required for each party in a case to prove his own affirmative assertion by the degree of
evidence required by law. 34 In civil cases, the degree of evidence required of a party in order to support his
claim is preponderance of evidence, or that evidence adduced by one party which is more conclusive and
credible than that of the other party. It is, therefore, incumbent on the plaintiff who is claiming a right to prove
his case. Corollarily, defendant must likewise prove own allegation to buttress its claim that it is not liable. 35

In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of
presenting at the trial such amount of evidence required by law to obtain a favorable judgment. 36 It is entirely
within each of the parties discretion, consonant with the theory of the case it or he seeks to advance and
subject to such procedural strategy followed thereby, to present all available evidence at its or his disposal in
the manner which may be deemed necessary and beneficial to prove its or his position, provided only that
the same shall measure up to the quantum of evidence required by law. In making proof in its or his case, it
is paramount that the best and most complete evidence be formally entered. 37

Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway,
must be corroborated by documentary evidence, or even subject evidence for that matter, inasmuch as the
witnesses' testimonies dwelt on mere generalities, we cannot consider the same as sufficiently persuasive
proof that there was observance of due diligence in the selection and supervision of
employees. 38 Petitioner's attempt to prove its diligentissimi patris familias in the selection and supervision of
employees through oral evidence must fail as it was unable to buttress the same with any other evidence,
object or documentary, which might obviate the apparent biased nature of the testimony. 39

Our view that the evidence for petitioner MMTC falls short of the required evidentiary quantum as would
convincingly and undoubtedly prove its observance of the diligence of a good father of a family has its
precursor in the underlying rationale pronounced in the earlier case of Central Taxicab Corp. vs. Ex-Meralco
Employees Transportation Co., et al., 40 set amidst an almost identical factual setting, where we held that:

. . . . This witness spoke of an "affidavit of experience" which a driver-applicant must

accomplish before he is employed by the company, a written "time schedule" for each bus,
and a record of the inspections and thorough checks pertaining to each bus before it leaves
the car barn; yet no attempt was ever made to present in evidence any of these documents,
despite the fact that they were obviously in the possession and control of the defendant
company.

xxx xxx xxx

Albert also testified that he kept records of the preliminary and final tests given him as well
as a record of the qualifications and experience of each of the drivers of the company. It is
rather strange, therefore, that he failed to produce in court the all important record of
Roberto, the driver involved in this case.

The failure of the defendant company to produce in court any "record" or other documentary
proof tending to establish that it had exercised all the diligence of a good father of a family in
 the selection and supervision of its drivers and buses, notwithstanding the calls therefor by
both the trial court and the opposing counsel, argues strongly against its pretensions.

We are fully aware that there is no hard-and-fast rule on the quantum of evidence needed to
prove due observance of all the diligence of a good father of a family as would constitute a
valid defense to the legal presumption of negligence on the part of an employer or master
whose employee has by his negligence, caused damage to another. . . . (R)educing the
testimony of Albert to its proper proportions, we do not have enough trustworthy evidence left
to go by. We are of the considered opinion, therefore, that the believable evidence on the
degree of care and diligence that has been exercised in the selection and supervision of
Roberto Leon y Salazar, is not legally sufficient to overcome the presumption of negligence
against the defendant company.

Whether or not the diligence of a good father of a family has been observed by petitioner is a matter of proof
which under the circumstances in the case at bar has not been clearly established. It is not felt by the Court
that there is enough evidence on record as would overturn the presumption of negligence, and for failure to
submit all evidence within its control, assuming the putative existence thereof, petitioner MMTC must suffer
the consequences of its own inaction and indifference.

2. In any event, we do not find the evidence presented by petitioner sufficiently convincing to prove the
diligence of a good father of a family, which for an employer doctrinally translates into its observance of due
diligence in the selection and supervision of its employees but which mandate, to use an oft-quoted phrase,
is more often honored in the breach than in the observance.

Petitioner attempted to essay in detail the company's procedure for screening job applicants and supervising
its employees in the field, through the testimonies of Milagros Garbo, as its training officer, and Christian
Bautista, as its transport supervisor, both of whom naturally and expectedly testified for MMTC. It then
concluded with its sweeping pontifications that "thus, there is no doubt that considering the nature of the
business of petitioner, it would not let any applicant-drivers to be (sic) admitted without undergoing the rigid
selection and training process with the end (in) view of protecting the public in general and its passengers in
particular; . . . thus, there is no doubt that applicant had fully complied with the said requirements otherwise
Garbo should not have allowed him to undertake the next set of requirements . . . and the training conducted
consisting of seminars and actual driving tests were satisfactory otherwise he should have not been allowed
to drive the subject vehicle. 41

These statements strike us as both presumptuous and in the nature of petitio principii, couched in
generalities and shorn of any supporting evidence to boost their verity. As earlier observed, respondent
court could not but express surprise, and thereby its incredulity, that witness Garbo neither testified nor
presented any evidence that driver Leonardo had complied with or had undergone all the clearances and
trainings she took pains to recite and enumerate. The supposed clearances, results of seminars and tests
which Leonardo allegedly submitted and complied with were never presented in court despite the fact that, if
true, then they were obviously in the possession and control of petitioner. 42

The case at bar is clearly within the coverage of Article 2176 and 2177, in relation to Article 2180, of the Civil
Code provisions on quasi-delicts as all the elements thereof are present, to wit: (1) damages suffered by the
plaintiff, (2) fault or negligence of the defendant or some other person for whose act he must respond, and
(3) the connection of cause and effect between fault or negligence of the defendant and the damages
incurred by plaintiff. 43 It is to be noted that petitioner was originally sued as employer of driver Leonardo
under Article 2180, the pertinent parts of which provides that:

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

xxx xxx xxx

Employers shall be liable for damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.

xxx xxx xxx

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.

The basis of the employer's vicarious liability has been explained under this ratiocination:
 The responsibility imposed by this article arises by virtue of a presumption juris tantum of
negligence on the part of the persons made responsible under the article, derived from their
failure to exercise due care and vigilance over the acts of subordinates to prevent them from
causing damage. Negligence is imputed to them by law, unless they prove the contrary.
Thus, the last paragraph of the article says that such responsibility ceases if is proved that
the persons who might be held responsible under it exercised the diligence of a good father
of a family (diligentissimi patris familias) to prevent damage. It is clear, therefore, that it is not
representation, nor interest, nor even the necessity of having somebody else answer for the
damages caused by the persons devoid of personality, but it is the non-performance of
certain duties of precaution and prudence imposed upon the persons who become
responsible by civil bond uniting the actor to them, which forms the foundation of such
responsibility. 44

The above rule is, of course, applicable only where there is an employer-employee relationship, although it
is not necessary that the employer be engaged in business or industry. Whether or not engaged in any
business or industry, the employer under Article 2180 is liable for torts committed by his employees within
the scope of their assigned tasks. But, it is necessary first to establish the employment relationship. Once
this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the
scope of his assigned task when the tort complained of was committed. It is only then that the defendant, as
employer, may find it necessary to interpose the defense of due diligence in the selection and supervision of
employees. 45 The diligence of a good father of a family required to be observed by employers to prevent
damages under Article 2180 refers to due diligence in the selection and supervision of employees in order to
protect the public. 46

With the allegation and subsequent proof of negligence against the defendant driver and of an employer-
employee relation between him and his co-defendant MMTC in this instance, the case in undoubtedly based
on a quasi-delict under Article 2180 47 When the employee causes damage due to his own negligence while
performing his own duties, there arises the juris tantum presumption that the employer is
negligent, 48 rebuttable only by proof of observance of the diligence of a good father of a family. For failure to
rebut such legal presumption of negligence in the selection and supervision of employees, the employer is
likewise responsible for damages, 49 the basis of the liability being the relationship of pater familias or on the
employer's own negligence. 50

As early as the case of Gutierrez vs. Gutierrez, 51 and thereafter, we have consistently held that where the
injury is due to the concurrent negligence of the drivers of the colliding vehicles, the drivers and owners of
the said vehicles shall be primarily, directly and solidarily liable for damages and it is immaterial that one
action is based on quasi-delict and the other on culpa contractual, as the solidarily of the obligation is
justified by the very nature thereof. 52

It should be borne in mind that the legal obligation of employers to observe due diligence in the selection
and supervision of employees is not to be considered as an empty play of words or a mere formalism, as
appears to be the fashion of the times, since the non-observance thereof actually becomes the basis of their
vicarious liability under Article 2180.

On the matter of selection of employees, Campo vs. Camarote, supra, lays down this admonition:

. . . . In order tat the owner of a vehicle may be considered as having exercised all diligence
of a good father of a family, he should not have been satisfied with the mere possession of a
professional driver's license; he should have carefully examined the applicant for
employment as to his qualifications, his experience and record of service. These steps
appellant failed to observe; he has therefore, failed to exercise all due diligence required of a
good father of a family in the choice or selection of driver.

Due diligence in the supervision of employees, on the other hand, includes the formulation of suitable rules
and regulations for the guidance of employees and the issuance of proper instructions intended for the
protection of the public and persons with whom the employer has relations through his or its employees and
the imposition of necessary disciplinary measures upon employees in case of breach or as may be
warranted to ensure the performance of acts indispensable to the business of and beneficial to their
employer. 53 To this, we add that actual implementation and monitoring of consistent compliance with said
rules should be the constant concern of the employer, acting through dependable supervisors who should
regularly report on their supervisory functions.

In order that the defense of due diligence in the selection and supervision of employees may be deemed
sufficient and plausible, it is not enough to emptily invoke the existence of said company guidelines and
policies on hiring and supervision. As the negligence of the employee gives rise to the presumption of
negligence on the part of the employer, the latter has the burden of proving that it has been diligent not only
in the selection of employees but also in the actual supervision of their work. The mere allegation of the
existence of hiring procedures and supervisory policies, without anything more, is decidedly not sufficient to
overcome presumption.

We emphatically reiterate our holding, as a warning to all employers, that "(t)he mere formulation of various
company policies on safety without showing that they were being complied with is not sufficient to exempt
petitioner from liability arising from negligence of its employees. It is incumbent upon petitioner to show that
in recruiting and employing the erring driver the recruitment procedures and company policies on efficiency
and safety were followed." 54 Paying lip-service to these injunctions or merely going through the motions of
compliance therewith will warrant stern sanctions from the Court.

These obligations, imposed by the law and public policy in the interests and for the safety of the commuting
public, herein petitioner failed to perform. Respondent court was definitely correct in ruling that ". . . due
diligence in the selection and supervision of employee (is) not proved by mere testimonies to the effect that
its applicant has complied with all the company requirements before one is admitted as an employee but
without proof thereof." 55 It is further a distressing commentary on petitioner that it is a government-owned
public utility, maintained by public funds, and organized for the public welfare.

The Court it is necessary to once again stress the following rationale behind these all-important statutory
and jurisprudential mandates, for it has been observed that despite its pronouncement in Kapalaran Bus
Line vs. Coronado, et al., supra, there has been little improvement in the transport situation in the country:

In requiring the highest possible degree of diligence from common carriers and creating a
presumption of negligence against them, the law compels them to curb the recklessness of
their drivers. While the immediate beneficiaries of the standard of extraordinary diligence are,
of course, the passengers and owners of the cargo carried by a common carrier, they are not
the only persons that the law seeks to benefit. For if common carriers carefully observe the
statutory standard of extraordinary diligence in respect of their own passengers, they cannot
help but simultaneously benefit pedestrians and the owners and passengers of other
vehicles who are equally entitled to the safe and convenient use of our roads and highways.
The law seeks to stop and prevent the slaughter and maiming of people (whether
passengers or not) and the destruction of property (whether freight or not) on our highways
by buses, the very size and power of which seem often to inflame the minds of their drivers. .
..

Finally, we believe that respondent court acted in the exercise of sound discretion when it affirmed the trial
court's award, without requiring the payment of interest thereon as an item of damages just because of delay
in the determination thereof, especially since private respondent did not specifically pray therefor in her
complaint. Article 2211 of the Civil Code provides that in quasi-delicts, interest as a part of the damages may
be awarded in the discretion of the court, and not as a matter of right. We do not perceive that there have
been international dilatory maneuvers or any special circumstances which would justify that additional award
and, consequently, we find no reason to disturb said ruling.

WHEREFORE, the impugned decision of respondent Court of Appeals is hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J. and Nocon, JJ., concur.

Padilla, J., is on leave.

# Footnotes

1 Rollo, 24-25.

2 Civil Case No. C-8176, entitled "Nenita R. Custodio, assisted by her parents, Rodolfo A.
Custodio and Gloria R. Custodio vs. Agudo R. Calebag, Victorino Lamayo, Godofredo C.
Leonardo, and Metro Manila Transit Corporation," Court of First Instance of Rizal, Branch 35,
Caloocan City; Original Record, 1-4.

3 Ibid., 17-22.

4 Ibid., 36-41.

5 Ibid., 54.
6 Ibid., 57.

7 TSN, September 2, 1982, 4-16.

8 Ibid., June 10, 1988, 3-12.

9 Ibid., April 29, 1988, 2-8.

10 Civil Case No. 8176, Regional Trial Court, Branch 125, Caloocan City; Judge Geronimo
S. Mangay, presiding.

11 Original Record, 177.

12 Ibid., 178-181.

13 Ibid., 195.

14 Ca-G.R. CV No. 24680; per Justice Regina G. Ordoñez-Benitez, with Justices Jose A.R.
Melo and Emilio C. Cui, concurring; Rollo, 24-30.

15 Rollo, 33-34.

16 Ibid., 2.

17 Ibid., CA-G.R CV No. 24680, 63-72.

18 Rollo, 2.

19 Ibid., 7.

20 143 SCRA 643 (1986).

21 American General Insurance Co. vs. Intermediate Appellee Court, et al., 150 SCRA 133
(1987).

22 100 Phil. 459 (1956).

23 Memorandum for Petitioner, 11-15; Rollo, 16-21.

24 Comment of Private Respondent, 3-4; Rollo, 47-48.

25 San Miguel Corporation vs. Court of Appeals, et al., 185 SCRA 722 (1990).

26 Medina vs. Asistio, Jr., et al., 191 SCRA 218 (1990).

27 Cathay Insurance Co. vs. Court of Appeals, e al., 151 SCRA 710 (1987); Hernandez vs.
Court of Appeals, et al., 160 SCRA 821 (1988); Philippine National Bank vs. Court of
Appeals, et al., 183 SCRA 133 (1990); BA Finance Corporation vs. Court of Appeals, et al.,
201 SCRA 157 (1991).

28 Manlapaz vs. Court of Appeals, et al., 147 SCRA 236 (1987); Medina vs. Asistio,
Jr., supra; Calalang vs. Intermediate Appellate Court, et al., 194 SCRA 514 (1991).

29 Valenzuela, et al. vs. Court of Appeals, et al., 191 SCRA 1 (1991).

30 Roman Catholic Bishop of Malolos, et al. vs. Intermediate Appellate Court, et al., 191
SCRA 411 (1990).

31 Cea vs. Villanueva, 18 Phil. 538 (1911); Barcelo, etc. vs. The Manila Electric Railroad and
Light Company, 29 Phil. 351 (1915); De la Riva vs. Molina, 32 Phil. 277 (1915); Agdoro vs.
Philippine Mining Industrial Co., 45 Phil. 816 (1924).

32 Annex C, Petition; Rollo, 41-42.

33 Annex B, ibid.; id., 28-29.

34 Section 1, Rule 131, Rules of Court.

35 Stronghold Insurance Company, Inc. vs. Court of Appeals, et al., 173 SCRA 619 (1989).

36 Republic vs. Court of Appeals, et al., 182 SCRA 290 (1990), citing Tai Tong Chuache &
Co. vs. The Insurance Commission, et al., 158 SCRA 366 (1988); Republic vs. Court of
Appeals, et al., 204 SCRA 160 (1991).

37 U.S. vs. Tria, 17 Phil. 303 (1910).

38 See Pleno vs. Court of Appeals, et al., 161 SCRA 160 (1991).

39 See Garcia, et al. vs. Gonzales, et al., 183 SCRA 72 (1990).

40 54 O.G., No. 31, 7415 (1958).

41 Petition, 6-7; Rollo, 14-15.

42 Supra, Fn. 34.

43 Andamo, et al. vs. Intermediate Appellate Court, et al., 191 SCRA 195 (1990).

44 Tolentino, A., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol.
V, 1959 ed., 519.

45 Martin vs. Court of Appeals, et al., 205 SCRA 591 (1992).

46 Barredo vs. Garcia, 73 Phil. 607 (1942).

47 Lanuzo vs. Ping, et al., 100 SCRA 205 (1980).

48 Bahia vs. Litonjua, et al., 30 Phil. 624 (1915); Campo vs. Camarote, supra; Phoenix
Construction, Inc. vs. Intermediate Appellate Court, et al., 148 SCRA 353 (1987); McKee, et
al. vs. Intermediate Appellate Court, et al., 211 SCRA 517 (1992).

49 Lanuzo vs. Ping, et al., supra, and cases cited therein.

50 Bahia vs. Litonjua, et al., supra; Yamada vs. Manila Railroad Co., 33 Phil. 8 (1915);
McKee, et al. vs. Intermediate Appellate Court, et al., supra.

51 56 Phil. 177 (1913); Cf. Barredo vs. Garcia, supra; Viluan vs. Court of Appeals, et al., 16
SCRA 742, (1966); Anuran vs. Buño, 17 SCRA 224 (1966); Malipol vs. Tan, 55 SCRA 202
(1974); Poblete vs. Fabron, 93 SCRA 200 (1979); Pleno vs. Court of Appeals, et al., supra;
Kapalaran Bus Line vs. Coronado, 176 SCRA 792 (1989).

52 Art. 1207, Civil Code.

53 Filamer Christian Institute vs. Intermediate Appellate Court, et al., 212 SCRA 637 (1992).

54 Pantranco North Express Inc. vs. Baesa, 179 SCRA 384 (1989). See also Franco, et al.
vs. Intermediate Appellate Court, et al., 178 SCRA 331 (1989).

55 Rollo, 28.
 FIRST DIVISION

[G.R. No. 141538. March 23, 2004]

Hermana R. Cerezo, petitioner, vs. David Tuazon, respondent.

DECISION
CARPIO, J.:

The Case

This is a petition for review on certiorari[1] to annul the Resolution[2] dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20
January 2000 denying the motion for reconsideration. The Court of Appeals denied the petition
for annulment of the Decision[3] dated 30 May 1995 rendered by
the Regional Trial Court of AngelesCity, Branch 56 (trial court), in Civil Case No. 7415. The
trial court ordered petitioner Hermana R. Cerezo (Mrs. Cerezo) to pay respondent David
Tuazon (Tuazon) actual damages, loss of earnings, moral damages, and costs of suit.

Antecedent Facts

Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number
NYA 241 collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo
Street, Sta. Ines, Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a
complaint for damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney
Juan Cerezo (Atty. Cerezo), and bus driver Danilo A. Foronda (Foronda). The complaint
alleged that:

7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-
named defendant [Foronda], being then the driver and person in charge of the Country Bus
with plate number NYA 241, did then and there willfully, unlawfully, and feloniously
operate the said motor vehicle in a negligent, careless, and imprudent manner without due
regard to traffic rules and regulations, there being a Slow Down sign near the scene of the
incident, and without taking the necessary precaution to prevent loss of lives or injuries, his
negligence, carelessness and imprudence resulted to severe damage to the tricycle and
serious physical injuries to plaintiff thus making him unable to walk and becoming disabled,
with his thumb and middle finger on the left hand being cut[.] [4]

On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial
court issued summons against Atty. Cerezo and Mrs. Cerezo (the Cerezo spouses) at
the Makati address stated in the complaint. However, the summons was returned unserved
on 10 November 1993 as the Cerezo spouses no longer held office nor resided
in Makati. On 18 April 1994, the trial court issued alias summons against the Cerezo spouses
at their address in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a copy of
the complaint were finally served on 20 April 1994 at the office of Atty. Cerezo, who was then
working as Tarlac Provincial Prosecutor. Atty. Cerezo reacted angrily on learning of the service
of summons upon his person. Atty. Cerezo allegedly told Sheriff William Canlas: Punyeta, ano
ang gusto mong mangyari? Gusto mong hindi ka makalabas ng buhay dito? Teritoryo ko
ito. Wala ka sa teritoryo mo.[5]
 The records show that the Cerezo spouses participated in the proceedings before the trial
court. The Cerezo spouses filed a comment with motion for bill of particulars dated 29 April
1994 and a reply to opposition to comment with motion dated 13 June 1994.[6] On 1 August
1994, the trial court issued an order directing the Cerezo spouses to file a comment to the
opposition to the bill of particulars. Atty. Elpidio B. Valera (Atty. Valera) of Valera and Valera
Law Offices appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty. Valera filed
an urgent ex-parte motion praying for the resolution of Tuazons motion to litigate as a pauper
and for the issuance of new summons on the Cerezo spouses to satisfy proper service in
accordance with the Rules of Court.[7]
On 30 August 1994, the trial court issued an order resolving Tuazons motion to litigate as
a pauper and the Cerezo spouses urgent ex-parte motion. The order reads:

At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently
jobless; that at the time of the filing of this case, his son who is working in Malaysia helps
him and sends him once in a while P300.00 a month, and that he does not have any real
property. Attached to the Motion to Litigate as Pauper are his Affidavit that he is
unemployed; a Certification by the Barangay Captain of his poblacion that his income is not
enough for his familys subsistence; and a Certification by the Office of the Municipal
Assessor that he has no landholding in
the Municipality of Mabalacat, Province of Pampanga.

The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to
prosecute his complaint in this case as a pauper under existing rules.

On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte
Motion requiring new summons to be served to the defendants. The Court is of the opinion
that any infirmity in the service of the summons to the defendant before plaintiff was
allowed to prosecute his complaint in this case as a pauper has been cured by this Order.

If within 15 days from receipt of this Order, the defendants do not question on appeal this
Order of this Court, the Court shall proceed to resolve the Motion for Bill of Particulars. [8]

On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for
reconsideration. The trial court denied the motion for reconsideration.
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file
their answer within fifteen days from receipt of the order. The Cerezo spouses did not file an
answer. On 27 January 1995, Tuazon filed a motion to declare the Cerezo spouses in
default. On 6 February 1995, the trial court issued an order declaring the Cerezo spouses in
default and authorizing Tuazon to present his evidence. [9]
On 30 May 1995, after considering Tuazons testimonial and documentary evidence, the
trial court ruled in Tuazons favor. The trial court made no pronouncement on Forondas liability
because there was no service of summons on him. The trial court did not hold Atty. Cerezo
liable as Tuazon failed to show that Mrs. Cerezos business benefited the family, pursuant to
Article 121(3) of the Family Code. The trial court held Mrs. Cerezo solely liable for the
damages sustained by Tuazon arising from the negligence of Mrs. Cerezos employee,
pursuant to Article 2180 of the Civil Code. The dispositive portion of the trial courts decision
reads:

WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay
the plaintiff:

a) For Actual Damages

1) Expenses for operation and medical
Treatment - P69,485.35
2) Cost of repair of the tricycle - 39,921.00
 b) For loss of earnings - 43,300.00
c) For moral damages - 20,000.00
d) And to pay the cost of the suit.

The docket fees and other expenses in the filing of this suit shall be lien on whatever
judgment may be rendered in favor of the plaintiff.

SO ORDERED. [10]

Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs.
Cerezo filed before the trial court a petition for relief from judgment on the grounds of fraud,
mistake or excusable negligence. Testifying before the trial court, both Mrs. Cerezo and Atty.
Valera denied receipt of notices of hearings and of orders of the court. Atty. Valera added that
he received no notice before or during the 8 May 1995 elections, when he was a senatorial
candidate for the KBL Party, and very busy, using his office and residence as Party National
Headquarters. Atty. Valera claimed that he was able to read the decision of the trial court only
after Mrs. Cerezo sent him a copy.[11]
Tuazon did not testify but presented documentary evidence to prove the participation of
the Cerezo spouses in the case. Tuazon presented the following exhibits:
Exhibit 1 - Sheriffs return and summons;
Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendants counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendants counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Courts return slip addressed to Atty. Elpidio
Valera;
Exhibit 7-B - Courts return slip addressed to Spouses Juan
and Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Courts return slip addressed to defendant Hermana
Cerezo;
Exhibit 8-B - Courts return slip addressed to defendants counsel,
Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Courts return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Courts return slip addressed to plaintiffs counsel,
Atty. Norman Dick de Guzman. [12]

On 4 March 1998, the trial court issued an order[13] denying the petition for relief from
judgment. The trial court stated that having received the decision on 25 June 1995, the Cerezo
spouses should have filed a notice of appeal instead of resorting to a petition for relief from
judgment. The trial court refused to grant relief from judgment because the Cerezo spouses
could have availed of the remedy of appeal. Moreover, the Cerezo spouses not only failed to
prove fraud, accident, mistake or excusable negligence by conclusive evidence, they also
failed to prove that they had a good and substantial defense. The trial court noted that the
Cerezo spouses failed to appeal because they relied on an expected settlement of the case.
The Cerezo spouses subsequently filed before the Court of Appeals a petition
for certiorari under Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No.
48132.[14] The petition questioned whether the trial court acquired jurisdiction over the case
considering there was no service of summons on Foronda, whom the Cerezo spouses claimed
was an indispensable party. In a resolution[15] dated 21 January 1999, the Court of Appeals
denied the petition for certiorari and affirmed the trial courts order denying the petition for relief
from judgment. The Court of Appeals declared that the Cerezo spouses failure to file an
answer was due to their own negligence, considering that they continued to participate in the
proceedings without filing an answer. There was also nothing in the records to show that the
Cerezo spouses actually offered a reasonable settlement to Tuazon. The Court of Appeals
also denied Cerezo spouses motion for reconsideration for lack of merit.
The Cerezo spouses filed before this Court a petition for review on certiorari under Rule
45. Atty. Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999,
this Court rendered a resolution denying the petition for review on certiorari for failure to attach
an affidavit of service of copies of the petition to the Court of Appeals and to the adverse
parties. Even if the petition complied with this requirement, the Court would still have denied
the petition as the Cerezo spouses failed to show that the Court of Appeals committed a
reversible error. The Courts resolution was entered in the Book of Entries and Judgments
when it became final and executory on 28 June 1999.[16]
Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition
for annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera and
Atty. Dionisio S. Daga (Atty. Daga) represented Mrs. Cerezo in the petition, docketed as CA-
G.R. SP No. 53572.[17] The petition prayed for the annulment of the 30 May 1995 decision of the
trial court and for the issuance of a writ of preliminary injunction enjoining execution of the trial
courts decision pending resolution of the petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution
dated 21 October 1999. The resolution reads in part:

In this case, records show that the petitioner previously filed with the lower court a Petition
for Relief from Judgment on the ground that they were wrongfully declared in default while
waiting for an amicable settlement of the complaint for damages. The court a quo correctly
ruled that such petition is without merit. The defendant spouses admit that during the initial
hearing they appeared before the court and even mentioned the need for an amicable
settlement. Thus, the lower court acquired jurisdiction over the defendant spouses.

Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of
judgment is no longer available. The proper action for the petitioner is to appeal the order of
the lower court denying the petition for relief.

Wherefore, the instant petition could not be given due course and should accordingly be
dismissed.

SO ORDERED. [18]

On 20 January 2000, the Court of Appeals denied the Cerezo spouses motion for
reconsideration.[19] The Court of Appeals stated:

A distinction should be made between a courts jurisdiction over a person and its jurisdiction
over the subject matter of a case. The former is acquired by the proper service of summons
or by the parties voluntary appearance; while the latter is conferred by law.

Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas]
P[ambansa] 129 provides that Regional Trial Courts shall exercise exclusive original
jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary
estimation. Thus it was proper for the lower court to decide the instant case for damages.

Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law;
any defects [sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil
complaint or improper service of summons) may be waived by the voluntary appearance of
parties.

The lower court admits the fact that no summons was served on defendant Foronda. Thus,
jurisdiction over the person of defendant Foronda was not acquired, for which reason he was
not held liable in this case. However, it has been proven that jurisdiction over the other
defendants was validly acquired by the court a quo.

The defendant spouses admit to having appeared in the initial hearings and in the hearing for
plaintiffs motion to litigate as a pauper. They even mentioned conferences where attempts
were made to reach an amicable settlement with plaintiff. However, the possibility of
amicable settlement is not a good and substantial defense which will warrant the granting of
said petition.

xxx

Assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and
question the lower courts jurisdiction because petitioner and her husband have waived such
right by voluntarily appearing in the civil case for damages. Therefore, the findings and the
decision of the lower court may bind them.

Records show that the petitioner previously filed with the lower court a Petition for Relief
from Judgment on the ground that they were wrongfully declared in default while waiting for
an amicable settlement of the complaint for damages. The court a quo correctly ruled that
such petition is without merit, jurisdiction having been acquired by the voluntary appearance
of defendant spouses.

Once again, it bears stressing that having availed of a petition for relief, the remedy of
annulment of judgment is no longer available.

Based on the foregoing, the motion for reconsideration could not be given due course and is
hereby DENIED.

SO ORDERED. [20]

The Issues

On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed
the present petition for review on certiorari before this Court. Mrs. Cerezo claims that:
1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes that
the issues raised in the petition for annulment is based on extrinsic fraud related to the
denied petition for relief notwithstanding that the grounds relied upon involves questions of
lack of jurisdiction.
2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the allegation
that the lower court[s] findings of negligence against defendant-driver Danilo Foronda
[whom] the lower court did not summon is null and void for want of due process and
consequently, such findings of negligence which is [sic] null and void cannot become the
basis of the lower court to adjudge petitioner-employer liable for civil damages.
 3. In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation that
defendant-driver Danilo A. Foronda whose negligence is the main issue is an indispensable
party whose presence is compulsory but [whom] the lower court did not summon.
4. In dismissing the Petition for Annulment, the Court of Appeals ruled that
assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and
question the lower courts jurisdiction because petitioner [has] waived such right by
voluntarily appearing in the civil case for damages notwithstanding that lack of jurisdiction
cannot be waived.[21]

The Courts Ruling

The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available
to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and
signed pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty.
Cerezo.Despite their number, Mrs. Cerezos counsels failed to avail of the proper remedies. It
is either by sheer ignorance or by malicious manipulation of legal technicalities that they have
managed to delay the disposition of the present case, to the detriment of pauper litigant
Tuazon.
Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo
spouses in default. Mrs. Cerezo asserts that she only came to know of the default order on 25
June 1995, when she received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed
before the trial court a petition for relief from judgment under Rule 38, alleging fraud, mistake,
or excusable negligence as grounds. On 4 March 1998, the trial court denied Mrs. Cerezos
petition for relief from judgment. The trial court stated that Mrs. Cerezo could have availed of
appeal as a remedy and that she failed to prove that the judgment was entered through fraud,
accident, mistake, or excusable negligence. Mrs. Cerezo then filed before the Court of Appeals
a petition for certiorari under Section 1 of Rule 65 assailing the denial of the petition for relief
from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezos
petition. On 24 February 1999, the appellate court denied Mrs. Cerezos motion for
reconsideration. On 11 March 1999, Mrs. Cerezo filed before this Court a petition for review
on certiorariunder Rule 45, questioning the denial of the petition for relief from judgment. We
denied the petition and our resolution became final and executory on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs.
Cerezo filed before the Court of Appeals a petition for annulment of the judgment of the trial
court under Rule 47. Meanwhile, on 25 August 1999, the trial court issued over the objection of
Mrs. Cerezo an order of execution of the judgment in Civil Case No. 7415. On 21 October
1999, the Court of Appeals dismissed the petition for annulment of judgment. On 20 January
2000, the Court of Appeals denied Mrs. Cerezos motion for reconsideration. On 7 February
2000, Mrs. Cerezo filed the present petition for review on certiorari under Rule 45 challenging
the dismissal of her petition for annulment of judgment.
Lina v. Court of Appeals[22] enumerates the remedies available to a party declared in
default:
a) The defendant in default may, at any time after discovery thereof and before judgment, file
a motion under oath to set aside the order of default on the ground that his failure to
answer was due to fraud, accident, mistake or excusable negligence, and that he has a
meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default, but
before the same has become final and executory, he may file a motion for new trial under
Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory,
he may file a petition for relief under Section 2 [now Section 1] of Rule 38; and
 d) He may also appeal from the judgment rendered against him as contrary to the evidence or
to the law, even if no petition to set aside the order of default has been presented by him
(Sec. 2, Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or even if the trial court
properly declared a party in default, if grave abuse of discretion attended such declaration.[23]
Mrs. Cerezo admitted that she received a copy of the trial courts decision on 25 June
1995. Based on this admission, Mrs. Cerezo had at least three remedies at her disposal: an
appeal, a motion for new trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 41[24] from the default judgment within 15
days from notice of the judgment. She could have availed of the power of the Court of Appeals
to try cases and conduct hearings, receive evidence, and perform all acts necessary to resolve
factual issues raised in cases falling within its appellate jurisdiction.[25]
Mrs. Cerezo also had the option to file under Rule 37 [26] a motion for new trial within the
period for taking an appeal. If the trial court grants a new trial, the original judgment is vacated,
and the action will stand for trial de novo. The recorded evidence taken in the former trial, as
far as the same is material and competent to establish the issues, shall be used at the new trial
without retaking the same.[27]
Mrs. Cerezo also had the alternative of filing under Rule 65 [28] a petition
for certiorari assailing the order of default within 60 days from notice of the judgment. An order
of default is interlocutory, and an aggrieved party may file an appropriate special civil action
under Rule 65.[29] In a petition for certiorari, the appellate court may declare void both the order
of default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the
reglementary periods provided under the Rules of Court. However, Mrs. Cerezo opted to file a
petition for relief from judgment, which is available only in exceptional cases. A petition for
relief from judgment should be filed within the reglementary period of 60 days from knowledge
of judgment and six months from entry of judgment, pursuant to
Rule 38 of the Rules of Civil Procedure.[30] Tuason v. Court of Appeals[31] explained the
nature of a petition for relief from judgment:

When a party has another remedy available to him, which may either be a motion for new
trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud,
accident, mistake or excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks
avoidance from the effects of the judgment when the loss of the remedy at law was due to his
own negligence; otherwise the petition for relief can be used to revive the right to appeal
which has been lost thru inexcusable negligence.

Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented
Mrs. Cerezo from filing an appeal, a motion for new trial or a petition for certiorari. It was error
for her to avail of a petition for relief from judgment.
After our resolution denying Mrs. Cerezos petition for relief became final and executory,
Mrs. Cerezo, in her last ditch attempt to evade liability, filed before the Court of Appeals a
petition for annulment of the judgment of the trial court. Annulment is available only on the
grounds of extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, a party must file
the petition within four years from its discovery, and if based on lack of jurisdiction, before
laches or estoppel bars the petition. Extrinsic fraud is not a valid ground if such fraud was used
as a ground, or could have been used as a ground, in a motion for new trial or petition for relief
from judgment.[32]
Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the
petition for annulment of judgment. However, a party may avail of the remedy of annulment of
judgment under Rule 47 only if the ordinary remedies of new trial, appeal, petition for relief
from judgment, or other appropriate remedies are no longer available through no fault of the
party.[33] Mrs. Cerezo could have availed of a new trial or appeal but through her own fault she
erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus,
Mrs. Cerezo may no longer avail of the remedy of annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezos person. Mrs.
Cerezo actively participated in the proceedings before the trial court, submitting herself to the
jurisdiction of the trial court. The defense of lack of jurisdiction fails in light of her active
participation in the trial court proceedings. Estoppel or laches may also bar lack of jurisdiction
as a ground for nullity especially if raised for the first time on appeal by a party who
participated in the proceedings before the trial court, as what happened in this case.[34]
For these reasons, the present petition should be dismissed for utter lack of merit. The
extraordinary action to annul a final judgment is restricted to the grounds specified in the
rules.The reason for the restriction is to prevent this extraordinary action from being used by a
losing party to make a complete farce of a duly promulgated decision that has long become
final and executory. There would be no end to litigation if parties who have unsuccessfully
availed of any of the appropriate remedies or lost them through their fault could still bring an
action for annulment of judgment.[35] Nevertheless, we shall discuss the issues raised in the
present petition to clear any doubt about the correctness of the decision of the trial court.
Mrs. Cerezos Liability and the
Trial Courts Acquisition of Jurisdiction

Mrs. Cerezo contends that the basis of the present petition for annulment is lack of
jurisdiction. Mrs. Cerezo asserts that the trial court could not validly render judgment since it
failed to acquire jurisdiction over Foronda. Mrs. Cerezo points out that there was no service of
summons on Foronda. Moreover, Tuazon failed to reserve his right to institute a separate civil
action for damages in the criminal action. Such contention betrays a faulty foundation. Mrs.
Cerezos contention proceeds from the point of view of criminal law and not of civil law, while
the basis of the present action of Tuazon is quasi-delict under the Civil Code, not delict under
the Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of
the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of
the Civil Code. An aggrieved party may choose between the two remedies. An action based on
a quasi-delict may proceed independently from the criminal action.[36] There is, however, a
distinction between civil liability arising from a delict and civil liability arising from a quasi-
delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the
procedural and jurisdictional issues of the action.[37]
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint,
Tuazon alleged that Mrs. Cerezo, without exercising due care and diligence in the supervision
and management of her employees and buses, hired Foronda as her driver. Tuazon became
disabled because of Forondas recklessness, gross negligence and imprudence, aggravated by
Mrs. Cerezos lack of due care and diligence in the selection and supervision of her employees,
particularly Foronda.[38]
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article
2180 states in part:

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.

Contrary to Mrs. Cerezos assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the courts action in the litigation, and
without whom no final resolution of the case is possible. [39] However, Mrs. Cerezos liability as
an employer in an action for a quasi-delict is not only solidary, it is also primary and
direct.Foronda is not an indispensable party to the final resolution of Tuazons action for
damages against Mrs. Cerezo.
The responsibility of two or more persons who are liable for a quasi-delict is
solidary.[40] Where there is a solidary obligation on the part of debtors, as in this case, each
debtor is liable for the entire obligation. Hence, each debtor is liable to pay for the entire
obligation in full. There is no merger or renunciation of rights, but only mutual
representation.[41] Where the obligation of the parties is solidary, either of the parties is
indispensable, and the other is not even a necessary party because complete relief is available
from either.[42] Therefore, jurisdiction over Foronda is not even necessary as Tuazon may
collect damages from Mrs. Cerezo alone.
Moreover, an employers liability based on a quasi-delict is primary and direct, while the
employers liability based on a delict is merely subsidiary.[43] The words primary and direct, as
contrasted with subsidiary, refer to the remedy provided by law for enforcing the obligation
rather than to the character and limits of the obligation. [44] Although liability under Article 2180
originates from the negligent act of the employee, the aggrieved party may sue the employer
directly. When an employee causes damage, the law presumes that the employer has himself
committed an act of negligence in not preventing or avoiding the damage. This is the fault that
the law condemns. While the employer is civilly liable in a subsidiary capacity for the
employees criminal negligence, the employer is also civilly liable directly and separately for his
own civil negligence in failing to exercise due diligence in selecting and supervising his
employee. The idea that the employers liability is solely subsidiary is wrong.[45]

The action can be brought directly against the person responsible (for another), without
including the author of the act. The action against the principal is accessory in the sense that
it implies the existence of a prejudicial act committed by the employee, but it is not
subsidiary in the sense that it can not be instituted till after the judgment against the author of
the act or at least, that it is subsidiary to the principal action; the action for responsibility (of
the employer) is in itself a principal action.[46]

Thus, there is no need in this case for the trial court to acquire jurisdiction over
Foronda. The trial courts acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of
the present case on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Article 103 of the Revised
Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved
party must initiate a criminal action where the employees delict and corresponding primary
liability are established.[47] If the present action proceeds from a delict, then the trial courts
jurisdiction over Foronda is necessary. However, the present action is clearly for the quasi-
delict of Mrs. Cerezo and not for the delict of Foronda.
The Cerezo spouses contention that summons be served anew on them is untenable in
light of their participation in the trial court proceedings. To uphold the Cerezo spouses
contention would make a fetish of a technicality. [48] Moreover, any irregularity in the service of
summons that might have vitiated the trial courts jurisdiction over the persons of the Cerezo
spouses was deemed waived when the Cerezo spouses filed a petition for relief from
judgment.[49]
We hold that the trial court had jurisdiction and was competent to decide the case in favor
of Tuazon and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezos
contention, Foronda is not an indispensable party to the present case. It is not even necessary
for Tuazon to reserve the filing of a separate civil action because he opted to file a civil action
for damages against Mrs. Cerezo who is primarily and directly liable for her own civil
negligence. The words of Justice Jorge Bocobo in Barredo v. Garcia still hold true today as
much as it did in 1942:

x x x [T]o hold that there is only one way to make defendants liability effective, and that is,
to sue the driver and exhaust his (the latters) property first, would be tantamount to
compelling the plaintiff to follow a devious and cumbersome method of obtaining
relief. True, there is such a remedy under our laws, but there is also a more expeditious way,
which is based on the primary and direct responsibility of the defendant under article [2180]
of the Civil Code. Our view of the law is more likely to facilitate remedy for civil wrongs,
because the procedure indicated by the defendant is wasteful and productive of delay, it
being a matter of common knowledge that professional drivers of taxis and other similar
public conveyances do not have sufficient means with which to pay damages. Why, then,
should the plaintiff be required in all cases to go through this roundabout, unnecessary, and
probably useless procedure? In construing the laws, courts have endeavored to shorten and
facilitate the pathways of right and justice. [50]

Interest at the rate of 6% per annum is due on the amount of damages adjudged by the
trial court.[51] The 6% per annum interest shall commence from 30 May 1995, the date of the
decision of the trial court. Upon finality of this decision, interest at 12% per annum, in lieu of
6% per annum, is due on the amount of damages adjudged by the trial court until full payment.
WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20
January 2000 denying the motion for reconsideration, is AFFIRMED with
the MODIFICATION that the amount due shall earn legal interest at 6% per annum computed
from 30 May 1995, the date of the trial courts decision. Upon finality of this decision, the
amount due shall earn interest at 12% per annum, in lieu of 6% per annum, until full payment.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Azcuna, JJ., concur.
Panganiban, J., on official leave.

[1]
Under Rule 45 of the Rules of Court.
[2]
Penned by Associate Justice Elvi John S. Asuncion, with Associate Justices Eubulo G. Verzola and Artemio G.
Tuquero, concurring.
[3]
Penned by Judge Carlos D. Rustia.
[4]
CA Rollo, p. 8.
[5]
Ibid., pp. 13-17.
[6]
Rollo, p. 66.
[7]
CA Rollo, pp. 18-20.
[8]
Ibid., p. 21.
[9]
Rollo, p. 4.
[10]
CA Rollo, p. 23.
[11]
Ibid., pp. 24-33.
[12]
Ibid., pp. 35-36.
[13]
Penned by Judge Lourdes F. Gatbalite.
[14]
Captioned Hermana R. Cerezo and Juan D. Cerezo, as husband, petitioners, v. Hon. Lourdes Gatbalite and
David Tuazon, respondents.
[15]
Penned by Associate Justice Romeo A. Brawner, with Associate Justices Angelina Sandoval-Gutierrez and
Martin S. Villarama, Jr., concurring.
[16]
Rollo, pp. 60-61.
[17]
Captioned Hermana R. Cerezo and Juan D. Cerezo, as husband, petitioners, v. Lourdes Gatbalite, Presiding
Judge (incumbent), RTC Branch 56, Angeles City, and David Tuazon, respondents.
[18]
Rollo, pp. 36-37.
[19]
Ibid., pp. 33-34.
[20]
Ibid., pp. 18-19.
[21]
Ibid., pp. 6-7.
[22]
No. L-63397, 9 April 1985, 135 SCRA 637.
[23]
Pacete v. Cariaga, Jr., G.R. No. 53880, 17 March 1994, 231 SCRA 321. See also Matute v. Court of Appeals,
136 Phil. 162 (1969); Omico Mining and Industrial Corporation v. Vallejos, No. L-38974, 25 March 1975,
63 SCRA 285.
[24]
Section 3, Rule 41.
[25]
Section 9(3), Batas Pambansa Blg. 129, as amended.
[26]
Section 1. Grounds of and period for filing motion for new trial or reconsideration. Within the period for taking
an appeal, the aggrieved party may move the trial court to set aside the judgment or final order and grant
a new trial for one or more of the following causes materially affecting the substantial rights of said party:
(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not have guarded
against and by reason of which such aggrieved party has probably been impaired in his rights; or
(b) Newly discovered evidence, which he could not, with reasonable diligence, have discovered and
produced at the trial, and which if presented would probably alter the result.
xxx
[27]
Sections 1 and 6, Rule 37.
[28]
Section 1. Petition for certiorari. When any tribunal, board, or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.
xxx
Section 4. Where petition filed. The petition may be filed not later than sixty (60) days from notice of judgment,
order or resolution sought to be assailed in the Supreme Court; or, if it relates to the acts or omissions of
a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising
jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of
Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid
of its jurisdiction. If it involves acts or omissions of a quasi-judicial agency, and unless otherwise provided
by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals.
[29]
Section 1, Rule 41.
[30]
Section 1. Petition for relief from judgment, order, or other proceedings. When a judgment or final order is
entered, or any other proceeding is thereafter taken against a party in any court through fraud, accident,
mistake, or excusable negligence, he may file a petition in such court and in the same case praying that
the judgment, order or proceeding be set aside.
Section 3. Time for filing petition; contents and verification. A petition provided for in either of the preceding
sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the
judgment, final order, or other proceeding to be set aside, and not more than six (6) months after such
judgment or final order was entered, or such proceeding was taken; x x x.
See Turqueza v. Hernando, No. L-51626, 30 April 1980, 97 SCRA 483.
[31]
326 Phil. 169 (1996).
[32]
Sections 2 and 3, Rule 47.
[33]
Cipriano M. Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc. and The Register of Deeds of
Valenzuela City, G.R. No. 139895, 15 August 2003; Teresita Villasor Manipol, et al., v. Spouses Pablo
and Antonia Ricafort, G.R. No. 150159, 25 July 2003.
[34]
Tijam, et al. v. Sibonghanoy, et al., 181 Phil. 556 (1968).
[35]
See Ibabao v. Intermediate Appellate Court, No. L-74848, 20 May 1987, 150 SCRA 76.
[36]
See Article 2177, Civil Code of the Philippines. Compare Sections 1 and 3, Rule 111, 1988 Rules of Criminal
Procedure with Sections 1 and 3, Rule 111, 2000 Rules of Criminal Procedure.
[37]
See Barredo v. Garcia, 73 Phil. 607 (1942).
[38]
CA Rollo, pp. 8-9.
[39]
Imson v. Court of Appeals, G.R. No. 106436, 8 December 1994, 239 SCRA 59.
[40]
Article 2194, Civil Code of the Philippines.
[41]
Quiombing v. CA, G.R. No. 93219, 30 August 1990, 189 SCRA 331 (citing Tolentino, IV Civil Code of
the Philippines 218 (1985 ed.)).
[42]
Ibid., (citing Feria, Civil Procedure 153 (1969 ed.).
[43]
Poblete v. Fabros, No. L-29803, 14 September 1979, 93 SCRA 200.
[44]
33A Words and Phrases 215 (1971 ed.)
[45]
See Barredo v. Garcia, supra note 37 (1942) (citing Amandi, 4 Cuestionario del Cdigo Civil Reformado 429,
430).
[46]
Ibid., (citing Laurent, 20 Principles of French Civil Law 734-735 (Spanish translation)).
[47]
Poblete v. Fabros, supra note 43; Franco v. Intermediate Appellate Court, G.R. No. 71137, 5 October 1989,
178 SCRA 331.
[48]
Gumabay v. Baralin, No. L-30683, 77 SCRA 258, 31 May 1977; Rule 14, Section 20.
[49]
See J.M. Tuason & Co., Inc., v. Estabillo, No. L-20610, 9 January 1975, 62 SCRA 1.
[50]
Barredo v. Garcia, supra note 36, pp. 620-621.
[51]
Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, 12 July 1994, 234 SCRA 78; Reformina v.
Tomol, Jr., No. L-59096, 11 October 1985, 139 SCRA 260.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 85044 June 3, 1992

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,

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

FELICIANO, J.:

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

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

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

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

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

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

Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the trial
court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988, The Court of
Appeals dismissed the petition, ruling that petitioners had lost their right to appeal.

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

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

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

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

2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air rifle gave
rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil Code provides:

Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict . . .

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

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

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

xxx xxx xxx

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

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

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

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

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

In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental authority
was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. It would thus
follow that the natural parents who had then actual custody of the minor Adelberto, are the indispensable
parties to the suit for damages.

The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption was issued
by the adoption court in favor of the Rapisura spouses, parental authority was vested in the latter as
adopting parents as of the time of the filing of the petition for adoption that is, before Adelberto had shot
Jennifer which an air rifle. The Bundoc spouses contend that they were therefore free of any parental
responsibility for Adelberto's allegedly tortious conduct.

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

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

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

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

xxx xxx xxx

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

xxx xxx xxx

(Emphasis supplied)

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

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

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

Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the child, doer
of the tortious act, shall have beer in the actual custody of the parents sought to be held liable for the
ensuing damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children living
 in their companyand under their parental authority subject to the appropriate defenses
provided by law. (Emphasis supplied)

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

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

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

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

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

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

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Romero, concur.

Footnotes

1 Pojas v. Hon. Gozo-Dalole, 192 SCRA 575 (1990).

2 Fecundo v. Berjamen, 180 SCRA 235 (1989); Filipinas Fabricators and Sales, Inc. v.
Magsino, 157 SCRA 469 (1988).

3 72 SCRA 120 (1976).

4 Id., at 126.

5 See in this connection. Art. 311, 316. 357, Civil Code; Exconde v. Capuno, 101 Phil. 843
(1957).

6 38 Phil. 768 (1918).

7 Id., at 775-776.

8 Presidential Decree No. 603, dated 10 December 1974.

9 Executive Order No. 209, dated 6 July 1967.

 FIRST DIVISION

[G.R. No. 132266. December 21, 1999]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ,

JR. and LUISA SO VASQUEZ, and CEBU DOCTORS HOSPITAL,
INC., respondents.

DECISION
DAVIDE, JR., C.J.:

The pivotal issue in this petition is whether an employer may be held vicariously liable for the
death resulting from the negligent operation by a managerial employee of a company-issued
vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was
driving a Honda motorcycle around Fuente Osmea Rotunda. He was traveling counter-
clockwise, (the normal flow of traffic in a rotunda) but without any protective helmet or
goggles. He was also only carrying a Students Permit to Drive at the time. Upon the
other hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial
Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-
794. On the same date and time, Abad drove the said company car out of a parking lot
but instead of going around the Osmea rotunda he made a short cut against [the] flow of
the traffic in proceeding to his route to General Maxilom St. or to Belvic St.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each
other causing severe injuries to the former. Abad stopped his vehicle and brought
Vasquez to the Southern Islands Hospital and later to the Cebu Doctors Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital. It was there that
Abad signed an acknowledgment of Responsible Party (Exhibit K) wherein he agreed to
pay whatever hospital bills, professional fees and other incidental charges Vasquez may
incur.

After the police authorities had conducted the investigation of the accident, a Criminal Case was
filed against Abad but which was subsequently dismissed for failure to prosecute. So, the present
action for damages was commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the
deceased Romeo So Vasquez, against Jose Benjamin Abad and Castilex Industrial Corporation. In
the same action, Cebu Doctors Hospital intervened to collect unpaid balance for the medical
expense given to Romeo So Vasquez.[1]

The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered
Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter
CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for burial
expenses; P50,000.00 as moral damages; P10,000.00 as attorneys fees; and P778,752.00 for loss of
earning capacity; and (2) Cebu Doctors Hospital, the sum of P50,927.83 for unpaid medical and
hospital bills at 3% monthly interest from 27 July 1989 until fully paid, plus the costs of
litigation.[2]
CASTILEX and ABAD separately appealed the decision.
 In its decision[3] of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court
holding ABAD and CASTILEX liable but held that the liability of the latter is only vicarious and
not solidary with the former. It reduced the award of damages representing loss of earning capacity
from P778,752.00 to P214,156.80; and the interest on the hospital and medical bills, from 3% per
month to 12% per annum from 5 September 1988 until fully paid.
Upon CASTILEXs motion for reconsideration, the Court of Appeals modified its decision by
(1) reducing the award of moral damages from P50,000 to P30,000 in view of the deceaseds
contributory negligence; (b) deleting the award of attorneys fees for lack of evidence; and (c)
reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988 until
fully paid.[4]
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1)
applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth
paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have been always
acting within the scope of his assigned task even outside office hours because he was using a
vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to prove that the
employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on
the theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their sons death was caused by the
negligence of petitioners employee who was driving a vehicle issued by petitioner and who was on
his way home from overtime work for petitioner; and that petitioner is thus liable for the resulting
injury and subsequent death of their son on the basis of the fifth paragraph of Article 2180. Even if
the fourth paragraph of Article 2180 were applied, petitioner cannot escape liability therefor. They
moreover argue that the Court of Appeals erred in reducing the amount of compensatory damages
when the award made by the trial court was borne both by evidence adduced during the trial
regarding deceaseds wages and by jurisprudence on life expectancy. Moreover, they point out that
the petition is procedurally not acceptable on the following grounds: (1) lack of an explanation for
serving the petition upon the Court of Appeals by registered mail, as required under Section 11,
Rule 13 of the Rules of Civil Procedure; and (2) lack of a statement of the dates of the expiration of
the original reglementary period and of the filing of the motion for extension of time to file a
petition for review.
For its part, respondent Cebu Doctors Hospital maintains that petitioner CASTILEX is indeed
vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD, who
was on his way home from taking snacks after doing overtime work for petitioner. Although the
incident occurred when ABAD was not working anymore the inescapable fact remains that said
employee would not have been situated at such time and place had he not been required by
petitioner to do overtime work. Moreover, since petitioner adopted the evidence adduced by
ABAD, it cannot, as the latters employer, inveigle itself from the ambit of liability, and is thus
estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondents contention of petitioners violation of Section 11 of Rule 13 and Section 4
of Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Section 11 of Rule 13 provides:

SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the service
and filing of pleadings and other papers shall be done personally. Except with respect to
papers emanating from the court, a resort to other modes must be accompanied by a
written explanation why the service or filing was not done personally. A violation of
this Rule may be cause to consider the paper as not filed.

The explanation why service of a copy of the petition upon the Court of Appeals was done by
registered mail is found on Page 28 of the petition. Thus, there has been compliance with the
aforequoted provision.
 As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the
same is unfounded. The material dates required to be stated in the petition are the following: (1) the
date of receipt of the judgment or final order or resolution subject of the petition; (2) the date of
filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt of the notice of
the denial of the motion. Contrary to private respondents claim, the petition need not indicate the
dates of the expiration of the original reglementary period and the filing of a motion for extension
of time to file the petition. At any rate, aside from the material dates required under Section 4 of
Rule 45, petitioner CASTILEX also stated in the first page of the petition the date it filed the
motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said
negligence but claims that it is not vicariously liable for the injuries and subsequent death caused
by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply
to instances where the employer is not engaged in business or industry. Since it is engaged in the
business of manufacturing and selling furniture it is therefore not covered by said
provision. Instead, the fourth paragraph should apply.
Petitioners interpretation of the fifth paragraph is not accurate. The phrase even though the
former are not engaged in any business or industry found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.[5]
A distinction must be made between the two provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph, to owners and managers of an establishment
or enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any
business or industry. The fourth paragraph covers negligent acts of employees committed either in
the service of the branches or on the occasion of their functions, while the fifth paragraph
encompasses negligent acts of employees acting within the scope of their assigned task. The latter
is an expansion of the former in both employer coverage and acts included. Negligent acts of
employees, whether or not the employer is engaged in a business or industry, are covered so long
as they were acting within the scope of their assigned task, even though committed neither in the
service of the branches nor on the occasion of their functions. For, admittedly, employees
oftentimes wear different hats. They perform functions which are beyond their office, title or
designation but which, nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators[6] and banks.[7] The Court of Appeals cannot, therefore,
be faulted in applying the said paragraph of Article 2180 of the Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry,
an employer is liable for the torts committed by employees within the scope of his assigned
tasks. But it is necessary to establish the employer-employee relationship; once this is done, the
plaintiff must show, to hold the employer liable, that the employee was acting within the scope of
his assigned task when the tort complained of was committed. It is only then that the employer may
find it necessary to interpose the defense of due diligence in the selection and supervision of the
employee.[8]
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of
the tort occurrence. As to whether he was acting within the scope of his assigned task is a question
of fact, which the court a quo and the Court of Appeals resolved in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however, subject to
exceptions such as when the conclusion is grounded on speculations, surmises, or
conjectures.[9] Such exception obtain in the present case to warrant review by this Court of the
finding of the Court of Appeals that since ABAD was driving petitioners vehicle he was acting
within the scope of his duties as a manager.
 Before we pass upon the issue of whether ABAD was performing acts within the range of his
employment, we shall first take up the other reason invoked by the Court of Appeals in holding
petitioner CASTILEX vicariously liable for ABADs negligence, i.e., that the petitioner did not
present evidence that ABAD was not acting within the scope of his assigned tasks at the time of the
motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent upon
the petitioner to prove the same. It was enough for petitioner CASTILEX to deny that ABAD was
acting within the scope of his duties; petitioner was not under obligation to prove this negative
averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must
prove). The Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the
burden of proving his cause of action, fails to show in a satisfactory manner facts which he bases
his claim, the defendant is under no obligation to prove his exception or defense.[10]
Now on the issue of whether the private respondents have sufficiently established that ABAD
was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he
was driving a company-issued vehicle, registered under the name of petitioner. He was then
leaving the restaurant where he had some snacks and had a chat with his friends after having done
overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the
problem of whether at a given moment, an employee is engaged in his employers business in the
operation of a motor vehicle, so as to fix liability upon the employer because of the employees
action or inaction; but rather, the result varies with each state of facts.[11]
In Filamer Christian Institute v. Intermediate Appellate Court,[12] this Court had the occasion
to hold that acts done within the scope of the employees assigned tasks includes any act done by an
employee in furtherance of the interests of the employer or for the account of the employer at the
time of the infliction of the injury or damages.
The court a quo and the Court of Appeals were one in holding that the driving by a manager
of a company-issued vehicle is within the scope of his assigned tasks regardless of the time and
circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the course or
scope of his employment.
The following are principles in American Jurisprudence on the employers liability for the
injuries inflicted by the negligence of an employee in the use of an employers motor vehicle:

I. Operation of Employers Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employers vehicle in going from his work to a
place where he intends to eat or in returning to work from a meal is not ordinarily acting within the
scope of his employment in the absence of evidence of some special business benefit to the
employer. Evidence that by using the employers vehicle to go to and from meals, an employee is
enabled to reduce his time-off and so devote more time to the performance of his duties supports
the finding that an employee is acting within the scope of his employment while so driving the
vehicle.[13]

II. Operation of Employers Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or
concern of the employee, and not a part of his services to his employer. Hence, in the absence of
some special benefit to the employer other than the mere performance of the services available at
the place where he is needed, the employee is not acting within the scope of his employment even
though he uses his employers motor vehicle.[14]
 The employer may, however, be liable where he derives some special benefit from having the
employee drive home in the employers vehicle as when the employer benefits from having the
employee at work earlier and, presumably, spending more time at his actual duties. Where the
employees duties require him to circulate in a general area with no fixed place or hours of work, or
to go to and from his home to various outside places of work, and his employer furnishes him with
a vehicle to use in his work, the courts have frequently applied what has been called the special
errand or roving commission rule, under which it can be found that the employee continues in the
service of his employer until he actually reaches home. However, even if the employee be deemed
to be acting within the scope of his employment in going to or from work in his employers vehicle,
the employer is not liable for his negligence where at the time of the accident, the employee has
left the direct route to his work or back home and is pursuing a personal errand of his own.

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latters personal use outside
of regular working hours is generally not liable for the employees negligent operation of the
vehicle during the period of permissive use, even where the employer contemplates that a regularly
assigned motor vehicle will be used by the employee for personal as well as business purposes and
there is some incidental benefit to the employer. Even where the employees personal purpose in
using the vehicle has been accomplished and he has started the return trip to his house where the
vehicle is normally kept, it has been held that he has not resumed his employment, and the
employer is not liable for the employees negligent operation of the vehicle during the return trip.[15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on
the doctrine of respondeat superior, not on the principle of bonus pater familias as in
ours. Whether the fault or negligence of the employee is conclusive on his employer as in
American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence
on the part of the employer as in ours, it is indispensable that the employee was acting in his
employers business or within the scope of his assigned task.[16]
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioners office,
which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldies Restaurant in
Fuente Osmea, Cebu City, which is about seven kilometers away from petitioners place of
business.[17] A witness for the private respondents, a sidewalk vendor, testified that Fuente Osmea is
a lively place even at dawn because Goldies Restaurant and Back Street were still open and people
were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It was when
ABAD was leaving the restaurant that the incident in question occurred. That same witness for the
private respondents testified that at the time of the vehicular accident, ABAD was with a woman in
his car, who then shouted: Daddy, Daddy![19] This woman could not have been ABADs daughter,
for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident. It was
then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABADs working
day had ended; his overtime work had already been completed. His being at a place which, as
petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers and addicts, had no
connection to petitioners business; neither had it any relation to his duties as a manager. Rather,
using his service vehicle even for personal purposes was a form of a fringe benefit or one of the
perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require
that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in
driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the
Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial
Corporation be absolved of any liability for the damages caused by its employee, Jose Benjamin
Abad.
SO ORDERED.
Puno, Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

[1]
Rollo, 44-45.
[2]
Per Judge Pedro T. Garcia. Rollo, 58-75.
[3]
Per Vasquez, C. Jr., J., with De Pano, N., and Salas, B. Jr., JJ., concurring. Rollo, 44-51.
[4]
Rollo, 56.
[5]
V Arturo M. Tolentino, Civil Code of the Philippines 615 (1992).
[6]
Lanuzo v. Ping, 100 SCRA 205, 209-210 [1980]; Layugan v. Intermediate Appellate Court, 167 SCRA 363, 377 [1988].
[7]
Pacific Banking Corporation v. Court of Appeals, 173 SCRA 102, 117 [1989]; Go v. Intermediate Appellate Court, 197
SCRA 22, 31 [1991]
[8]
Martin v. Court of Appeals, 205 SCRA 591 [1992]; Metro Manila Transit Corp. v. Court of Appeals, 223 SCRA 521, 539
[1993].
[9]
Layugan v. IAC, supra note 6, at 370-371; Vda. de Alcantara v. Court of Appeals, 252 SCRA 457, 468 [1996]
[10]
Belen v. Belen, 13 Phil. 202, 206 [1909], cited in Martin v. Court of Appeals, supra note 8.
[11]
7A AM. JUR. 2D AUTOMOBILES AND HIGHWAY TRAFFIC 687 (1980).
[12]
212 SCRA 637, 643 [1992].
[13]
7A AM. JUR. 2D AUTOMOBILES AND HIGHWAY TRAFFIC 699.
[14]
Id., 700.
[15]
7A AM. JUR. 2D AUTOMOBILES AND HIGHWAY TRAFFIC 698.
[16]
2 Cezar S. Sangco, Philippine Law On Torts And Damages 573 (1993) [Hereafter 2 Sangco].
[17]
TSN, 9 July 1991, 2-3, 13.
[18]
TSN, 10 October 1989, 3; 7 August 1989, 8, 10.
[19]
TSN, 7 August 1989, 7-8.
[20]
2 SANGCO 573.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 82248 January 30, 1992

ERNESTO MARTIN, petitioner,

vs.
HON. COURT OF APPEALS and MANILA ELECTRIC COMPANY, respondents.

Roberto M. Cabangis for petitioner.

Benjamin R. Reonal for private respondent.

CRUZ, J.:

This case turns on the proper application of the familiar rule that he who alleges must prove his allegation.

Ernesto Martin was the owner of a private car bearing license plate No. NPA-930. At around 2 o'clock in the
morning of May 11, 1982, while being driven by Nestor Martin, it crashed into a Meralco electric post on
Valley Golf Road, in Antipolo, Rizal. The car was wrecked and the pole severely damaged. Meralco
subsequently demanded reparation from Ernesto Martin, but the demand was rejected. It thereupon sued
him for damages in the Regional Trial Court of Pasig, alleging inter alia that he was liable to it in the sum of
P17,352.00 plus attorney's fees and litigation costs as the employer of Nestor Martin. The petitioner's main
defense was that Nestor Martin was not his employee.

After the plaintiff had rested, the defendant moved to dismiss the complaint on the ground that no evidence
had been adduced to show that Nestor Martin was his employee. The motion was denied. The case was
considered submitted for decision with the express waiver by the defendant of his right to present his own
evidence. The defendant thus did not rebut the plaintiff's allegation that he was Nestor Martin's employer.

In the decision dated August 27, 1985, Judge Eutropio Migriño held in favor of the plaintiff, awarding him the
amount claimed, with 12% interest, and P4,000.00 attorney's fees, plus costs.1 The decision was seasonably
elevated to the Court of Appeals, which affirmed it in toto on February 22, 1988, 2 prompting this petition for
review.

The petition has merit.

It is important to stress that the complaint for damages was filed by the private respondent against only
Ernesto Martin as alleged employer of Nestor Martin, the driver of the car at the time of the accident. Nestor
Martin was not impleaded. The action was based on tort under Article 2180 of the Civil Code, providing in
part that:

Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.

The above rule is applicable only if there is an employer-employee relationship although it is not necessary
that the employer be engaged in any business or industry. It differs in this sense from Article 103 of the
Revised Penal Code, which requires that the employer be engaged in an industry to be subsidiarily liable for
the felony committed by his employee in the course of his employment.

Whether or not engaged in any business or industry, the employer under Article 2180 is liable for the torts
committed by his employees within the scope of their assigned task. But it is necessary first to establish the
employment relationship. Once this is done, the plaintiff must show, to hold the employer liable, that the
employee was acting within the scope of his assigned task when the tort complained of was committed. It is
only then that the defendant, as employer, may find it necessary to interpose the defense of due diligence in
the selection and supervision of the employee as allowed in that article. 3
In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the defendant was the
employer of Nestor Martin at the time of the accident. The trial court merely presumed the existence of the
employer-employee relationship and held that the petitioner had not refuted that presumption. It noted that
although the defendant alleged that he was not Nestor Martin's employer, "he did not present any proof to
substantiate his allegation."

As the trial court put it:

There is no need to stretch one's imagination to realize that a car owner entrusts his vehicle
only to his driver or to anyone whom he allows to drive it. Since neither plaintiff nor defendant
has presented any evidence on the status of Nestor Martin, the Court presumes that he was
at the time of the incident, an employee of the defendant. It is elementary that he who makes
an allegation is required to prove the same. Defendant alleges that Nestor Martin was not his
employee but he did not present any proof to substantiate his allegation. While it is true
plaintiff did not present evidence on its allegation that Nestor Martin was defendant's
employee, the Court believes and so holds, that there was no need for such evidence. As
above adverted to, the Court can proceed on the presumption that one who drives the motor
vehicle is an employee of the owner thereof.

A presumption is defined as an inference as to the existence of a fact not actually known, arising from its
usual connection with another which is known, 4 or a conjecture based on past experience as to what course
human affairs ordinarily take. 5 It is either a presumption juris, or of law, or a presumption hominis, or of
fact. 6

There is no law directing the deduction made by the courts below from the particular facts presented to them
by the parties. Such deduction is not among the conclusive presumptions under Section 2 or the disputable
presumptions under Section 3 of Rule 131 of the Rules of Court. In other words, it is not a presumption juris.

Neither is it a presumption hominis, which is a reasonable deduction from the facts proved without an
express direction of law to that effect. 7 The facts proved, or not denied, viz., the ownership of the car and
the circumstances of the accident, are not enough bases for the inference that the petitioner is the employer
of Nestor Martin.

In the modern urban society, most male persons know how to drive and do not have to employ others to
drive for them unless this is needed for business reasons. Many cannot afford this luxury, and even if they
could, may consider it an unnecessary expense and inconvenience. In the present case, the more plausible
assumption is that Nestor Martin is a close relative of Ernesto Martin and on the date in question borrowed
the car for some private purpose. Nestor would probably not have been accommodated if he were a mere
employee for employees do not usually enjoy the use of their employer's car at two o'clock in the morning.

As the employment relationship between Ernesto Martin and Nestor Martin could not be presumed, it was
necessary for the plaintiff to establish it by evidence. Meralco had the burden of proof, or the duty "to present
evidence on the fact in issue necessary to establish his claim" as required by Rule 131, Section 1 of the
Revised Rules of Court. Failure to do this was fatal to its action.

It was enough for the defendant to deny the alleged employment relationship, without more, for he was not
under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat. 8 This Court has
consistently applied the ancient rule that "if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory
manner the facts upon which he bases his claim, the defendant is under no obligation to prove his exception or defense." 9

The case of Amor v. Soberano, 10 a Court of Appeals decision not elevated to this Court, was misapplied by
the respondent court in support of the petitioner's position. The vehicle involved in that case was a six-by-six
truck, which reasonably raised the factual presumption that it was engaged in business and that its driver
was employed by the owner of the vehicle. The case at bar involves a private vehicle as its license plate
indicates. No evidence was ever offered that it was being used for business purposes or that, in any case,
its driver at the time of the accident was an employee of the petitioner.

It is worth mentioning in this connection that in Filamer Christian Institute v. Court of Appeals, 11 the owner of
the jeep involved in the accident was absolved from liability when it was shown that the driver of the vehicle
was not employed as such by the latter but was a "working scholar" as that term is defined by the Omnibus
Rules Implementing the Labor Code. 12 He was assigned to janitorial duties. Evidence was introduced to
establish the employment relationship but it failed nonetheless to hold the owner responsible. Significantly,
no similar evidence was even presented in the case at bar, the private respondent merely relying on its mere
allegation that Nestor Martin was the petitioner's employee. Allegation is not synonymous with proof.

The above observations make it unnecessary to examine the question of the driver's alleged negligence or
the lack of diligence on the part of the petitioner in the selection and supervision of his employee. These
questions have not arisen because the employment relationship contemplated in Article 1860 of the Civil
Code has not been established.

WHEREFORE, the petition is GRANTED. The decision of the respondent court is REVERSED, and Civil
Case No. 48045 in the Regional Trial Court of Pasig, Branch 151, is DISMISSED, with costs against the
respondent. It is so ordered.

Narvasa, C.J., Griño-Aquino and Medidialdea, JJ., concur.

Footnotes

1 Original Records, p. 103.

2 Penned by Herrera, O., J., with Ejercito and Torres, JJ., concurring.

3 Cerf v. Medel, 33 Phil. 37.

4 Moran, Comments on the Rules of Court, Vol. 6, 1980 ed., p. 12.

5 Perez v. Ysip, 81 Phil. 218.

6 Moran, supra.

7 Ibid.

8 "He who asserts, not he who denies, must prove."

9 Belen v. Belen, 13 Phil. 202.

10 63 O.G. No. 32. 6850.

11 190 SCRA 485.

12 Sec. 14, Rule X of Book III of the Omnibus Rules Implementing the Labor Code.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 82318 May 18, 1989

GILBERTO M. DUAVIT, petitioner,

vs.
THE HON. COURT OF APPEALS, Acting through the Third Division, as Public Respondent, and
ANTONIO SARMIENTO, SR. & VIRGILIO CATUAR respondents.

Rodolfo d. Dela Cruz for petitioner.

Bito, Lozada, Ortega & Castillo for respondents.

GUTIERREZ, JR., J.:

This petition raises the sole issue of whether or not the owner of a private vehicle which figured in an
accident can be held liable under Article 2180 of the Civil Code when the said vehicle was neither driven by
an employee of the owner nor taken with the consent of the latter.

The facts are summarized in the contested decision, as follows:

From the evidence adduced by the plaintiffs, consisting of the testimonies of witnesses
Virgilio Catuar, Antonio Sarmiento, Jr., Ruperto Catuar, Jr. and Norberto Bernarte it appears
that on July 28, 1971 plaintiffs Antonio Sarmiento, Sr. and Virgilio Catuar were aboard a jeep
with plate number 77-99-F-I Manila, 1971, owned by plaintiff, Ruperto Catuar was driving the
said jeep on Ortigas Avenue, San Juan, Rizal; that plaintiff's jeep, at the time, was running
moderately at 20 to 35 kilometers per hour and while approaching Roosevelt Avenue, Virgilio
Catuar slowed down; that suddenly, another jeep with plate number 99-97-F-J Manila 1971
driven by defendant Oscar Sabiniano hit and bumped plaintiff's jeep on the portion near the
left rear wheel, and as a result of the impact plaintiff's jeep fell on its right and skidded by
about 30 yards; that as a result plaintiffs jeep was damaged, particularly the windshield, the
differential, the part near the left rear wheel and the top cover of the jeep; that plaintiff Virgilio
Catuar was thrown to the middle of the road; his wrist was broken and he sustained
contusions on the head; that likewise plaintiff Antonio Sarmiento, Sr. was trapped inside the
fallen jeep, and one of his legs was fractured.

Evidence also shows that the plaintiff Virgilio Catuar spent a total of P2,464.00 for repairs of
the jeep, as shown by the receipts of payment of labor and spare parts (Exhs. H to H-7
Plaintiffs likewise tried to prove that plaintiff Virgilio Catuar, immediately after the accident
was taken to Immaculate Concepcion Hospital, and then was transferred to the National
Orthopedic Hospital; that while plaintiff Catuar was not confined in the hospital, his wrist was
in a plaster cast for a period of one month, and the contusions on his head were under
treatment for about two (2) weeks; that for hospitalization, medicine and allied expenses,
plaintiff Catuar spent P5,000.00.

Evidence also shows that as a result of the incident, plaintiff Antonio Sarmiento, Sr.
sustained injuries on his leg; that at first, he was taken to the National Orthopedic Hospital
(Exh. K but later he was confined at the Makati Medical Center from July 29, to August 29,
1971 and then from September 15 to 25, 1971; that his leg was in a plaster cast for a period
of eight (8) months; and that for hospitalization and medical attendance, plaintiff Antonio
Sarmiento, Sr. spent no less than P13,785.25 as evidenced by receipts in his possession.
(Exhs. N to N-1).

Proofs were adduced also to show that plaintiff Antonio sarmiento Sr. is employed as
Assistant Accountant of the Canlubang Sugar Estate with a salary of P1,200.00 a month;
that as sideline he also works as accountant of United Haulers Inc. with a salary of P500.00
a month; and that as a result of this incident, plaintiff Sarmiento was unable to perform his
normal work for a period of at least 8 months. On the other hand, evidence shows that the
other plaintiff Virgilio Catuar is a Chief Clerk in Canlubang Sugar Estate with a salary of
 P500.00 a month, and as a result of the incident, he was incapacitated to work for a period of
one (1) month.

The plaintiffs have filed this case both against Oscar Sabiniano as driver, and against
Gualberto Duavit as owner of the jeep.

Defendant Gualberto Duavit, while admitting ownership of the other jeep (Plate No. 99-07-F-
J Manila, 1971), denied that the other defendant (Oscar Sabiniano) was his employee.
Duavit claimed that he has not been an employer of defendant Oscar Sabiniano at any time
up to the present.

On the other hand documentary and testimonial evidence show that defendant Oscar
Sabiniano was an employee of the Board of Liquidators from November 14, 1966 up to
January 4, 1973 (Annex A of Answer).

Defendant Sabiniano, in his testimony, categorically admitted that he took the jeep from the
garage of defendant Duavit without the consent or authority of the latter (TSN, September 7,
1978, p. 8). He testified further, that Duavit even filed charges against him for theft of the
jeep, but which Duavit did not push through as his (Sabiniano's) parents apologized to Duavit
on his behalf.

Defendant Oscar Sabiniano, on the other hand in an attempt to exculpate himself from
liability, makes it appear that he was taking all necessary precaution while driving and the
accident occurred due to the negligence of Virgilio Catuar. Sabiniano claims that it was
plaintiffs vehicle which hit and bumped their jeep. (Reno, pp. 21-23)

The trial court found Oscar Sabiniano negligent in driving the vehicle but found no employer-employee
relationship between him and the petitioner because the latter was then a government employee and he
took the vehicle without the authority and consent of the owner. The petitioner was, thus, absolved from
liability under Article 2180 of the Civil Code.

The private respondents appealed the case.

On January 7, 1988, the Court of Appeals rendered the questioned decision holding the petitioner jointly and
severally liable with Sabiniano. The appellate court in part ruled:

We cannot go along with appellee's argument. It will be seen that in Vargas v. Langcay,
supra, it was held that it is immaterial whether or not the driver was actually employed by the
operator of record or registered owner, and it is even not necessary to prove who the actual
owner of the vehicle and who the employer of the driver is. When the Supreme Court ruled,
thus: 'We must hold and consider such owner-operator of record (registered owner) as the
employer in contemplation of law, of the driver,' it cannot be construed other than that the
registered owner is the employer of the driver in contemplation of law. It is a conclusive
presumption of fact and law, and is not subject to rebuttal of proof to the contrary. Otherwise,
as stated in the decision, we quote:

The purpose of the principles evolved by the decisions in these matters will be defeated and
thwarted if we entertain the argument of petitioner that she is not liable because the actual
owner and employer was established by the evidence. . . .

Along the same vein, the defendant-appellee Gualberto Duavit cannot be allowed to prove that the driver
Sabiniano was not his employee at the time of the vehicular accident.

The ruling laid down in Amar V. Soberano (1966), 63 O.G. 6850, by this Court to the effect
that the burden of proving the non-existence of an employer-employee relationship is upon
the defendant and this he must do by a satisfactory preponderance of evidence, has to defer
to the doctrines evolved by the Supreme Court in cases of damages arising from vehicular
mishaps involving registered motor vehicle. (See Tugade v. Court of Appeals, 85 SCRA 226,
230). (Rollo, pp. 26-27)

The appellate court also denied the petitioner's motion for reconsideration. Hence, this petition.

The petitioner contends that the respondent appellate court committed grave abuse of discretion in holding
him jointly and severally liable with Sabiniano in spite of the absence of an employer-employee relationship
between them and despite the fact that the petitioner's jeep was taken out of his garage and was driven by
Sabiniano without his consent.
As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable for an accident involving
the said vehicle if the same was driven without his consent or knowledge and by a person not employed by
him. Thus, in Duquillo v. Bayot (67 Phil. 131-133-134) [1939] we said:

Under the facts established, the defendant cannot be held liable for anything. At the time of
the accident, James McGurk was driving the truck, and he was not an employee of the
defendant, nor did he have anything to do with the latter's business; neither the defendant
nor Father Ayson, who was in charge of her business, consented to have any of her trucks
driven on the day of the accident, as it was a holy day, and much less by a chauffeur who
was not in charge of driving it; the use of the defendant's truck in the circumstances indicated
was done without her consent or knowledge; it may, therefore, be said, that there was not
the remotest contractual relation between the deceased Pio Duquillo and the defendant. It
necessarily follows from all this that articles 1101 and following of the Civil Code, cited by the
appellant, have no application in this case, and, therefore, the errors attributed to the inferior
court are without basis.

The Court upholds the above ruling as still relevant and better applicable to present day circumstances.

The respondent court's misplaced reliance on the cases of Erezo v. Jepte (102 Phil. 103 [1957] and Vargas
v. Langcay (6 SCRA 174 [1962]) cannot be sustained. In the Erezo case, Jepte, the registered owner of the
truck which collided with a taxicab, and which resulted in the killing of Erezo, claimed that at the time of the
accident, the truck belonged to the Port Brokerage in an arrangement with the corporation but the same was
not known to the Motor Vehicles Office. This Court sustained the trial court's ruling that since Jepte
represented himself to be the owner of the truck and the Motor Vehicles Office, relying on his representation,
registered the vehicle in his name, the Government and all persons affected by the representation had the
right to rely on his declaration of ownership and registration. Thus, even if Jepte were not the owner of the
truck at the time of the accident, he was still held liable for the death of Erezo significantly, the driver of the
truck was fully authorized to drive it.

Likewise, in the Vargas case, just before the accident occurred Vargas had sold her jeepney to a third
person, so that at the time of the accident she was no longer the owner of the jeepney. This court,
nevertheless, affirmed Vargas' liability since she failed to surrender to the Motor Vehicles Office the
corresponding AC plates in violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146. We
further ruled that the operator of record continues to be the operator of the vehicle in contemplation of law,
as regards the public and third persons, and as such is responsible for the consequences incident to its
operator. The vehicle involved was a public utility jeepney for hire. In such cases, the law does not only
require the surrender of the AC plates but orders the vendor operator to stop the operation of the jeepney as
a form of public transportation until the matter is reported to the authorities.

As can be seen, the circumstances of the above cases are entirely different from those in the present case.
Herein petitioner does not deny ownership of the vehicle involved in tire mishap but completely denies
having employed the driver Sabiniano or even having authorized the latter to drive his jeep. The jeep was
virtually stolen from the petitioner's garage. To hold, therefore, the petitioner liable for the accident caused
by the negligence of Sabiniano who was neither his driver nor employee would be absurd as it would be like
holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle. In
this regard, we cannot ignore the many cases of vehicles forcibly taken from their owners at gunpoint or
stolen from garages and parking areas and the instances of service station attendants or mechanics of auto
repair shops using, without the owner's consent, vehicles entrusted to them for servicing or repair.

We cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with
pending cases. Every case must be determined on its own peculiar factual circumstances. Where, as in this
case, the records of the petition fail to indicate the slightest indicia of an employer-employee relationship
between the owner and the erring driver or any consent given by the owner for the vehicle's use, we cannot
hold the owner liable.

We, therefore, find that the respondent appellate court committed reversible error in holding the petitioner
jointly and severally liable with Sabiniano to the private respondent.

WHEREFORE, the petition is GRANTED and the decision and resolution appealed from are hereby
ANNULLED and SET ASIDE. The decision of the then Court of First Instance (now Regional Trial Court) of
Laguna, 8th Judicial District, Branch 6, dated July 30, 1981 is REINSTATED.

SO ORDERED.

Fernan, C.J., (Chairman), Feliciano, Bidin and Cortes JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-55963 December 1, 1989

SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,

vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION
ADMINISTRATION, respondents.

G.R. No. L-61045 December 1, 1989

NATIONAL IRRIGATION ADMINISTRATION, appellant,

vs.
SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees.

Cecilio V. Suarez, Jr. for Spouses Fontanilla.

Felicisimo C. Villaflor for NIA.

PARAS, J.:

In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the decision dated March
20, 1980 of the then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose City and its modification
with respect to the denial of petitioner's claim for moral and exemplary damages and attorneys fees.

In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the aforesaid decision
of the lower court. The original appeal of this case before the Court of Appeals was certified to this Court
and in the resolution of July 7, 1982, it was docketed with the aforecited number. And in the resolution of
April 3, this case was consolidated with G.R. No. 55963.

It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by respondent
National Irrigation Administration, a government agency bearing Plate No. IN-651, then driven officially by
Hugo Garcia, an employee of said agency as its regular driver, bumped a bicycle ridden by Francisco
Fontanilla, son of herein petitioners, and Restituto Deligo, at Maasin, San Jose City along the Maharlika
Highway. As a result of the impact, Francisco Fontanilla and Restituto Deligo were injured and brought to
the San Jose City Emergency Hospital for treatment. Fontanilla was later transferred to the Cabanatuan
Provincial Hospital where he died.

Garcia was then a regular driver of respondent National Irrigation Administration who, at the time of the
accident, was a licensed professional driver and who qualified for employment as such regular driver of
respondent after having passed the written and oral examinations on traffic rules and maintenance of
vehicles given by National Irrigation Administration authorities.

The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by petitioners-spouses
on April 17, 1978 against respondent NIA before the then Court of First Instance of Nueva Ecija, Branch VIII
at San Jose City, for damages in connection with the death of their son resulting from the aforestated
accident.

After trial, the trial court rendered judgment on March 20, 1980 which directed respondent National Irrigation
Administration to pay damages (death benefits) and actual expenses to petitioners. The dispositive portion
of the decision reads thus:

. . . . . Judgment is here rendered ordering the defendant National Irrigation Administration to

pay to the heirs of the deceased P12,000.00 for the death of Francisco Fontanilla; P3,389.00
which the parents of the deceased had spent for the hospitalization and burial of the
deceased Francisco Fontanilla; and to pay the costs. (Brief for the petitioners spouses
Fontanilla, p. 4; Rollo, p. 132)
Respondent National Irrigation Administration filed on April 21, 1980, its motion for reconsideration of the
aforesaid decision which respondent trial court denied in its Order of June 13, 1980. Respondent National
Irrigation Administration thus appealed said decision to the Court of Appeals (C.A.-G.R. No. 67237- R)
where it filed its brief for appellant in support of its position.

Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed the instant petition
with this Court.

The sole issue for the resolution of the Court is: Whether or not the award of moral damages, exemplary
damages and attorney's fees is legally proper in a complaint for damages based on quasi-delict which
resulted in the death of the son of herein petitioners.

Petitioners allege:

1. The award of moral damages is specifically allowable. under paragraph 3 of Article 2206
of the New Civil Code which provides that the spouse, legitimate and illegitimate
descendants and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased. Should moral damages be granted, the
award should be made to each of petitioners-spouses individually and in varying amounts
depending upon proof of mental and depth of intensity of the same, which should not be less
than P50,000.00 for each of them.

2. The decision of the trial court had made an impression that respondent National Irrigation
Administration acted with gross negligence because of the accident and the subsequent
failure of the National Irrigation Administration personnel including the driver to stop in order
to give assistance to the, victims. Thus, by reason of the gross negligence of respondent,
petitioners become entitled to exemplary damages under Arts. 2231 and 2229 of the New
Civil Code.

3. Petitioners are entitled to an award of attorney's fees, the amount of which (20%) had
been sufficiently established in the hearing of May 23, 1979.

4. This petition has been filed only for the purpose of reviewing the findings of the lower court
upon which the disallowance of moral damages, exemplary damages and attorney's fees
was based and not for the purpose of disturbing the other findings of fact and conclusions of
law.

The Solicitor General, taking up the cudgels for public respondent National Irrigation Administration,
contends thus:

1. The filing of the instant petition is rot proper in view of the appeal taken by respondent
National Irrigation Administration to the Court of Appeals against the judgment sought to be
reviewed. The focal issue raised in respondent's appeal to the Court of Appeals involves the
question as to whether or not the driver of the vehicle that bumped the victims was negligent
in his operation of said vehicle. It thus becomes necessary that before petitioners' claim for
moral and exemplary damages could be resolved, there should first be a finding of
negligence on the part of respondent's employee-driver. In this regard, the Solicitor General
alleges that the trial court decision does not categorically contain such finding.

2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-Appellee's
Brief" dated December 28, 1981 by petitioners in the appeal (CA-G.R. No. 67237-R; and G.
R. No.61045) of the respondent National Irrigation Administration before the Court of
Appeals, is an explicit admission of said petitioners that the herein petition, is not proper.
Inconsistent procedures are manifest because while petitioners question the findings of fact
in the Court of Appeals, they present only the questions of law before this Court which
posture confirms their admission of the facts.

3. The fact that the parties failed to agree on whether or not negligence caused the vehicular
accident involves a question of fact which petitioners should have brought to the Court of
Appeals within the reglementary period. Hence, the decision of the trial court has become
final as to the petitioners and for this reason alone, the petition should be dismissed.

4. Respondent Judge acted within his jurisdiction, sound discretion and in conformity with the
law.
 5. Respondents do not assail petitioners' claim to moral and exemplary damages by reason
of the shock and subsequent illness they suffered because of the death of their son.
Respondent National Irrigation Administration, however, avers that it cannot be held liable for
the damages because it is an agency of the State performing governmental functions and
driver Hugo Garcia was a regular driver of the vehicle, not a special agent who was
performing a job or act foreign to his usual duties. Hence, the liability for the tortious act
should. not be borne by respondent government agency but by driver Garcia who should
answer for the consequences of his act.

6. Even as the trial court touched on the failure or laxity of respondent National Irrigation
Administration in exercising due diligence in the selection and supervision of its employee,
the matter of due diligence is not an issue in this case since driver Garcia was not its special
agent but a regular driver of the vehicle.

The sole legal question on whether or not petitioners may be entitled to an award of moral and exemplary
damages and attorney's fees can very well be answered with the application of Arts. 2176 and 2180 of
theNew Civil Code.

Art. 2176 thus provides:

Whoever by act omission causes damage to another, there being fault or negligence, is
obliged to pay for damage done. Such fault or negligence, if there is no pre-existing
cotractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter

Paragraphs 5 and 6 of Art. 21 80 read as follows:

Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even the though the former are not engaged
in any business or industry.

The State is responsible in like manner when it acts through a special agent.; but not when
the damage has been caused by the official to whom the task done properly pertains, in
which case what is provided in Art. 2176 shall be applicable.

The liability of the State has two aspects. namely:

1. Its public or governmental aspects where it is liable for the tortious acts of special agents
only.

2. Its private or business aspects (as when it engages in private enterprises) where it
becomes liable as an ordinary employer. (p. 961, Civil Code of the Philippines; Annotated,
Paras; 1986 Ed. ).

In this jurisdiction, the State assumes a limited liability for the damage caused by the tortious acts or conduct
of its special agent.

Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability for acts done
through special agents. The State's agent, if a public official, must not only be specially commissioned to do
a particular task but that such task must be foreign to said official's usual governmental functions. If the
State's agent is not a public official, and is commissioned to perform non-governmental functions, then the
State assumes the role of an ordinary employer and will be held liable as such for its agent's tort. Where the
government commissions a private individual for a special governmental task, it is acting through a special
agent within the meaning of the provision. (Torts and Damages, Sangco, p. 347, 1984 Ed.)

Certain functions and activities, which can be performed only by the government, are more or less generally
agreed to be "governmental" in character, and so the State is immune from tort liability. On the other hand, a
service which might as well be provided by a private corporation, and particularly when it collects revenues
from it, the function is considered a "proprietary" one, as to which there may be liability for the torts of agents
within the scope of their employment.

The National Irrigation Administration is an agency of the government exercising proprietary functions, by
express provision of Rep. Act No. 3601. Section 1 of said Act provides:

Section 1. Name and domicile.-A body corporate is hereby created which shall be known as
the National Irrigation Administration, hereinafter called the NIA for short, which shall be
 organized immediately after the approval of this Act. It shall have its principal seat of
business in the City of Manila and shall have representatives in all provinces for the proper
conduct of its business.

Section 2 of said law spells out some of the NIA's proprietary functions. Thus-

Sec. 2. Powers and objectives.-The NIA shall have the following powers and objectives:

(a) x x x x x x x x x x x x x x x x x x

(b) x x x x x x x x x x x x x x x x x x

(c) To collect from the users of each irrigation system constructed by it such fees as may be
necessary to finance the continuous operation of the system and reimburse within a certain
period not less than twenty-five years cost of construction thereof; and

(d) To do all such other tthings and to transact all such business as are directly or indirectly
necessary, incidental or conducive to the attainment of the above objectives.

Indubitably, the NIA is a government corporation with juridical personality and not a mere agency of the
government. Since it is a corporate body performing non-governmental functions, it now becomes liable for
the damage caused by the accident resulting from the tortious act of its driver-employee. In this particular
case, the NIA assumes the responsibility of an ordinary employer and as such, it becomes answerable for
damages.

This assumption of liability, however, is predicated upon the existence of negligence on the part of
respondent NIA. The negligence referred to here is the negligence of supervision.

At this juncture, the matter of due diligence on the part of respondent NIA becomes a crucial issue in
determining its liability since it has been established that respondent is a government agency performing
proprietary functions and as such, it assumes the posture of an ordinary employer which, under Par. 5 of Art.
2180, is responsible for the damages caused by its employees provided that it has failed to observe or
exercise due diligence in the selection and supervision of the driver.

It will be noted from the assailed decision of the trial court that "as a result of the impact, Francisco
Fontanilla was thrown to a distance 50 meters away from the point of impact while Restituto Deligo was
thrown a little bit further away. The impact took place almost at the edge of the cemented portion of the
road." (Emphasis supplied,) [page 26, Rollo]

The lower court further declared that "a speeding vehicle coming in contact with a person causes force and
impact upon the vehicle that anyone in the vehicle cannot fail to notice. As a matter of fact, the impact was
so strong as shown by the fact that the vehicle suffered dents on the right side of the radiator guard, the
hood, the fender and a crack on the radiator as shown by the investigation report (Exhibit "E"). (Emphasis
supplied) [page 29, Rollo]

It should be emphasized that the accident happened along the Maharlika National Road within the city limits
of San Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away from the
point of impact, there is a strong indication that driver Garcia was driving at a high speed. This is confirmed
by the fact that the pick-up suffered substantial and heavy damage as above-described and the fact that the
NIA group was then "in a hurry to reach the campsite as early as possible", as shown by their not stopping
to find out what they bumped as would have been their normal and initial reaction.

Evidently, there was negligence in the supervision of the driver for the reason that they were travelling at a
high speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution and make
the driver observe the proper and allowed speed limit within the city. Under the situation, such negligence is
further aggravated by their desire to reach their destination without even checking whether or not the vehicle
suffered damage from the object it bumped, thus showing imprudence and reckelessness on the part of both
the driver and the supervisor in the group.

Significantly, this Court has ruled that even if the employer can prove the diligence in the selection and
supervision (the latter aspect has not been established herein) of the employee, still if he ratifies the
wrongful acts, or take no step to avert further damage, the employer would still be liable. (Maxion vs. Manila
Railroad Co., 44 Phil. 597).

Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970, 34 SCRA 618),
this Court held that a driver should be especially watchful in anticipation of others who may be using the
highway, and his failure to keep a proper look out for reasons and objects in the line to be traversed
constitutes negligence.

Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-spouses the amounts
of P12,000.00 for the death of Francisco Fontanilla; P3,389.00 for hospitalization and burial expenses of the
aforenamed deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and attorney's
fees of 20% of the total award.

SO ORDERED.

Padilla, Sarmiento and Regalado, JJ., concur.

Melencio- Herrera (Chairperson,), J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23052 January 29, 1968

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.

City Fiscal Manuel T. Reyes for petitioner.

Sevilla, Daza and Associates for respondents.

CONCEPCION, C.J.:

Appeal by certiorari from a decision of the Court of Appeals.

On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P.
Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town.
After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped
down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted
catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking
his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom,
impairing his vision, several persons came to his assistance and pulled him out of the manhole. One of them
brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken
home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left
thigh, the left upper arm, the right leg and the upper lip apart from an abrasion on the right infra-patella
region. These injuries and the allergic eruption caused by anti-tetanus injections administered to him in the
hospital, required further medical treatment by a private practitioner who charged therefor P1,400.00.

As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a
complaint — which was, subsequently, amended — for damages against the City of Manila, its mayor, city
engineer, city health officer, city treasurer and chief of police. As stated in the decision of the trial court, and
quoted with approval by the Court of Appeals,

At the time of the incident, plaintiff was a practicing public accountant, a businessman and a
professor at the University of the East. He held responsible positions in various business firms like
the Philippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing
Company and the Sincere Packing Corporation. He was also associated with several civic
organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's
Men Club of Manila and the Knights of Rizal. As a result of the incident, plaintiff was prevented from
engaging in his customary occupation for twenty days. Plaintiff has lost a daily income of about
P50.00 during his incapacity to work. Because of the incident, he was subjected to humiliation and
ridicule by his business associates and friends. During the period of his treatment, plaintiff was under
constant fear and anxiety for the welfare of his minor children since he was their only support. Due to
the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.

On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm
Drain Section, Office of the City Engineer of Manila, received a report of the uncovered condition of
a catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but
the same was covered on the same day (Exhibit 4); that again the iron cover of the same catch
basin was reported missing on January 30, 1958, but the said cover was replaced the next day
(Exhibit 5); that the Office of the City Engineer never received any report to the effect that the
catchbasin in question was not covered between January 25 and 29, 1968; that it has always been a
policy of the said office, which is charged with the duty of installation, repair and care of storm drains
in the City of Manila, that whenever a report is received from whatever source of the loss of a
catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing
cover or covering the catchbasin with steel matting that because of the lucrative scrap iron business
then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer
has filed complaints in court resulting from theft of said iron covers; that in order to prevent such
thefts, the city government has changed the position and layout of catchbasins in the City by
constructing them under the sidewalks with concrete cement covers and openings on the side of the
gutter; and that these changes had been undertaken by the city from time to time whenever funds
were available.
After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision
sustaining the theory of the defendants and dismissing the amended complaint, without costs.

On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of
Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this
appeal by the City of Manila.

The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No.
409 (Charter of the City of Manila) reading:

The city shall not be liable or held for damages or injuries to persons or property arising from the
failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this
chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other
officers while enforcing or attempting to enforce said provisions.

or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered
by, any person by reason of defective conditions of road, streets, bridges, public buildings, and other
public works under their control or supervision.

Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is a
special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable
to the entire Philippines.

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its
territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general
legislation; but, as regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409
establishes a general rule regulating the liability of the City of Manila for: "damages or injury to persons or
property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or
ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a
particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or
injury suffered by any person by reason" — specifically — "of the defective condition of roads, streets,
bridges, public buildings, and other-public works under their control or supervision." In other words, said
section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas
Article 2189 governs liability due to "defective streets," in particular. Since the present action is based upon
the alleged defective condition of a road, said Article 2189 is decisive thereon.

It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident
involving him took place in a national highway; and 2) because the City of Manila has not been negligent in
connection therewith.

As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the
City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were
due to the defective condition of a street which is "under the supervision and control" of the City. In its
answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have
been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof
covered by the defendant City and the officers concerned" who "have been ever vigilant and zealous in the
performance of their respective functions and duties as imposed upon them by law." Thus, the City had, in
effect, admitted that P. Burgos Avenue was and is under its control and supervision.

Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time, in
its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a
question of fact, which had not been put in issue in the trial court, and cannot be set up, for the first time, on
appeal, much less after the rendition of the decision of the appellate court, in a motion for the
reconsideration thereof.

At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to
attach that the defective roads or streets belong to the province, city or municipality from which responsibility
is exacted. What said article requires is that the province, city or municipality have either "control or
supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, this
circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under
Republic Act 409. In fact Section 18(x) thereof provides:

Sec. 18. Legislative powers. — The Municipal Board shall have the following legislative powers:
 xxx xxx xxx

(x) Subject to the provisions of existing law to provide for the laying out,
construction and improvement, and to regulate the use of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and
sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees for and
regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building
and repair of tunnels, sewers, and drains, and all structures in and under the same and the erecting
of poles and the stringing of wires therein; to provide for and regulate cross-works, curbs, and
gutters therein, . . . to regulate traffic and sales upon the streets and other public places; to provide
for the abatement of nuisances in the same and punish the authors or owners thereof; to provide for
the construction and maintenance, and regulate the use, of bridges, viaducts and culverts; to prohibit
and regulate ball playing, kite-flying, hoop rolling, and other amusements which may annoy persons
using the streets and public places, or frighten horses or other animals; to regulate the speed of
horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the
city; to regulate the lights used on all vehicles, cars, and locomotives; . . . to provide for and change
the location, grade, and crossing of railroads, and compel any such railroad to raise or lower its
tracks to conform to such provisions or changes; and to require railroad companies to fence their
property, or any part thereof, to provide suitable protection against injury to persons or property, and
to construct and repair ditches, drains, sewers, and culverts along and under their tracks, so that the
natural drainage of the streets and adjacent property shall not be obstructed.

This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No.
113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the
highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of
roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the
provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds.
Moreover, it provides that "the construction, maintenance and improvement of national primary, national
secondary and national aid provincial and city roads shall be accomplished by the Highway District
Engineers and Highway City Engineers under the supervision of the Commissioner of Public Highways and
shall be financed from such appropriations as may be authorized by the Republic of the Philippines in
annual or special appropriation Acts."

Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the
City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road,
which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court
thereon are not subject to our review.

WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of
Manila. It is so ordered.
1äwphï1.ñët

Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.

Footnotes

1Medical fees — P1,400.00; Lost income — P350.00; Moral damages — P3,000.00; and Attorney's
fees — P2,000.00.
 FIRST DIVISION

G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,

vs.
ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing that the
latter had satisfied all the requirements for graduation when such is not the case? This is the issue in the
instant petition for review premised on the following undisputed facts as summarized by the trial court and
adopted by the Court of Appeals (CA),1 to wit:

Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first semester of
his last year (School year 1987-1988), he failed to take the regular final examination in Practice
Court I for which he was given an incomplete grade (Exhibits "2", also Exhibit "H"). He enrolled for
the second semester as fourth year law student (Exhibit "A") and on February 1, 1988 he filed an
application for the removal of the incomplete grade given him by Professor Carlos Ortega (Exhibits
"H-2", also Exhibit "2") which was approved by Dean Celedonio Tiongson after payment of the
required fee. He took the examination on March 28, 1988. On May 30, 1988, Professor Carlos
Ortega submitted his grade. It was a grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-N").
1âwphi1.nêt

In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who
among the fourth year students should be allowed to graduate. The plaintiff's name appeared in the
Tentative List of Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of Second
Semester (1987-1988) with the following annotation:

JADER ROMEO A.

Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with S.O.
(Exhibits "3", "3-C-1", "3-C-2").

The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was
scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the invitation for that
occasion the name of the plaintiff appeared as one of the candidates. (Exhibits "B", "B-6", "B-6-A").
At the foot of the list of the names of the candidates there appeared however the following
annotation:

This is a tentative list Degrees will be conferred upon these candidates who satisfactorily
complete requirements as stated in the University Bulletin and as approved of the
Department of Education, Culture and Sports (Exhibit "B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto Campus,
during the program of which he went up the stage when his name was called, escorted by her (sic)
mother and his eldest brother who assisted in placing the Hood, and his Tassel was turned from left
to right, and he was thereafter handed by Dean Celedonio a rolled white sheet of paper symbolical
of the Law Diploma. His relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to "D-
11").

He tendered a blow-out that evening which was attended by neighbors, friends and relatives who
wished him good luck in the forthcoming bar examination. There were pictures taken too during the
blow-out (Exhibits "D" to "D-1").

He thereafter prepared himself for the bar examination. He took a leave of absence without pay from
his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the pre-bar review
class in Far Eastern University. (Exhibits "F" to "F-2"). Having learned of the deficiency he dropped
his review class and was not able to take the bar examination.2

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental
anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not
able to take the 1988 bar examinations arising from the latter's negligence. He prayed for an award of moral
and exemplary damages, unrealized income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to
believe that he completed the requirements for a Bachelor of Laws degree when his name was included in
the tentative list of graduating students. After trial, the lower court rendered judgment as follows:

WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and
against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR
HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of the complaint
until fully paid, the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost
of suit.

Defendant's counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.3

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The dispositive
portion of the CA decision reads:

WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED with the
MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower court in favor
of plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND
(P50,000.00) PESOS for moral damages. Costs against defendant-appellee.

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a petition
for review under Rule 45 of the Rules of Court, arguing that it has no liability to respondent Romeo A. Jader,
considering that the proximate and immediate cause of the alleged damages incurred by the latter arose out
of his own negligence in not verifying from the professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is entered into
between said institution and the student. The professors, teachers or instructors hired by the school are
considered merely as agents and administrators tasked to perform the school's commitment under the
contract. Since the contracting parties are the school and the student, the latter is not duty-bound to deal
with the former's agents, such as the professors with respect to the status or result of his grades, although
nothing prevents either professors or students from sharing with each other such information. The Court
takes judicial notice of the traditional practice in educational institutions wherein the professor directly
furnishes his/her students their grades. It is the contractual obligation of the school to timely inform and
furnish sufficient notice and information to each and every student as to whether he or she had already
complied with all the requirements for the conferment of a degree or whether they would be included among
those who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless is
not an ordinary occasion, since such ceremony is the educational institution's way of announcing to the
whole world that the students included in the list of those who will be conferred a degree during the
baccalaureate ceremony have satisfied all the requirements for such degree. Prior or subsequent to the
ceremony, the school has the obligation to promptly inform the student of any problem involving the latter's
grades and performance and also most importantly, of the procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time
when he had already commenced preparing for the bar exams, cannot be said to have acted in good faith.
Absence of good faith must be sufficiently established for a successful prosecution by the aggrieved party in
a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes an honest intention to abstain
from taking undue advantage of another, even though the forms and technicalities of the law, together with
the absence of all information or belief of facts, would render the transaction unconscientious.5 It is the
school that has access to those information and it is only the school that can compel its professors to act
and comply with its rules, regulations and policies with respect to the computation and the prompt
submission of grades. Students do not exercise control, much less influence, over the way an educational
institution should run its affairs, particularly in disciplining its professors and teachers and ensuring their
compliance with the school's rules and orders. Being the party that hired them, it is the school that exercises
general supervision and exclusive control over the professors with respect to the submission of reports
involving the students' standing. Exclusive control means that no other person or entity had any control over
the instrumentality which caused the damage or injury.6

The college dean is the senior officer responsible for the operation of an academic program, enforcement of
rules and regulations, and the supervision of faculty and student services.7 He must see to it that his own
professors and teachers, regardless of their status or position outside of the university, must comply with the
rules set by the latter. The negligent act of a professor who fails to observe the rules of the school, for
instance by not promptly submitting a student's grade, is not only imputable to the professor but is an act of
the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is engaged in legal
education, it should have practiced what it inculcates in its students, more specifically the principle of good
dealings enshrined in Articles 19 and 20 of the Civil Code which states:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to provide specifically in statutory law.8 In
civilized society, men must be able to assume that others will do them no intended injury — that others will
commit no internal aggressions upon them; that their fellowmen, when they act affirmatively will do so with
due care which the ordinary understanding and moral sense of the community exacts and that those with
whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of
liability is justifiable reliance under conditions of civilized society.9 Schools and professors cannot just take
students for granted and be indifferent to them, for without the latter, the former are useless.

Educational institutions are duty-bound to inform the students of their academic status and not wait for the
latter to inquire from the former. The conscious indifference of a person to the rights or welfare of the
person/persons who may be affected by his act or omission can support a claim for damages.10 Want of care
to the conscious disregard of civil obligations coupled with a conscious knowledge of the cause naturally
calculated to produce them would make the erring party liable.11 Petitioner ought to have known that time
was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign
ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate
concern after graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its
student's grades at any time because a student has to comply with certain deadlines set by the Supreme
Court on the submission of requirements for taking the bar. Petitioner's liability arose from its failure to
promptly inform respondent of the result of an examination and in misleading the latter into believing that he
had satisfied all requirements for the course. Worth quoting is the following disquisition of the respondent
court:

It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been
informed during the deliberation that the professor in Practice Court I gave plaintiff-appellant a failing
grade. Yet, defendant-appellee still did not inform plaintiff-appellant of his failure to complete the
requirements for the degree nor did they remove his name from the tentative list of candidates for
graduation. Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant
failed in Practice Court I, again included plaintiff-appellant's name in the "tentative list of candidates
for graduation which was prepared after the deliberation and which became the basis for the
commencement rites program. Dean Tiongson reasons out that plaintiff-appellant's name was
allowed to remain in the tentative list of candidates for graduation in the hope that the latter would
still be able to remedy the situation in the remaining few days before graduation day. Dean
Tiongson, however, did not explain how plaintiff appellant Jader could have done something to
complete his deficiency if defendant-appellee university did not exert any effort to inform plaintiff-
appellant of his failing grade in Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed
relay of information to respondent. When one of two innocent parties must suffer, he through whose agency
the loss occurred must bear it.13 The modern tendency is to grant indemnity for damages in cases where
there is abuse of right, even when the act is not illicit.14 If mere fault or negligence in one's acts can make
him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him
liable. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he
acts with prudence and in good faith, but not when he acts with negligence or abuse.15

However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual
damages, we hold that respondent should not have been awarded moral damages. We do not agree with
the Court of Appeals' findings that respondent suffered shock, trauma and pain when he was informed that
he could not graduate and will not be allowed to take the bar examinations. At the very least, it behooved on
respondent to verify for himself whether he has completed all necessary requirements to be eligible for the
bar examinations. As a senior law student, respondent should have been responsible enough to ensure that
all his affairs, specifically those pertaining to his academic achievement, are in order. Given these
considerations, we fail to see how respondent could have suffered untold embarrassment in attending the
graduation rites, enrolling in the bar review classes and not being able to take the bar exams. If respondent
was indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if he has
satisfied all the requirements including his school records, before preparing himself for the bar examination.
Certainly, taking the bar examinations does not only entail a mental preparation on the subjects thereof;
there are also prerequisites of documentation and submission of requirements which the prospective
examinee must meet.

WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner
is ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy Pesos
(P35,470.00), with legal interest of 6% per annum computed from the date of filing of the complaint until fully
paid; the amount of Five Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The
award of moral damages is DELEIED. 1âwphi 1.nêt

SO ORDERED.

Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.

Puno, J., took no part.

Footnotes

1Court of Appeals (CA) Decision promulgated October 10, 1997 penned by Justice Barcelona, with
Justices Mabutas, Jr. and Aquino, concurring, pp. 5-6; Rollo, pp. 12-13.

2A check with the Attorney's List in the Court shows that private respondent is not a member of the
Philippine Bar. (http.//www.supremecourt.gov.ph).

3Decision of Regional Trial Court (RTC-Manila Branch IX) dated September 4, 1990 penned by
Judge Edilberto Sandoval, pp. 8-9; RTC Records, pp. 192-193; Rollo, pp. 8-9.

4 CA Decision, p. 24; Rollo, p. 31.

5Tolentino, New Civil Code of the Philippines, Vol. I, (1960 ed.) citing Wood v. Conrad, 2, S.B. 83,
50 N.W. 95.

6Mahowald v. Minnesota Gas Co. (Minn) 344 NW2d 856. See also Jackson v. H.H. Robertson Co.,
118 Ariz 29, 574 P2d 82; Cummins v. West Linn, 21 Or. App 643, 536 P2d 455.

7Hawes and Hawes, "The Concise Dictionary of Education," p. 62, 1982 ed. cited in Sarmiento,
Manual, p. 164.

8PNB v. CA, 83 SCRA 237 (1978) cited in Sea Commercial Company v. CA, G.R. No. 122823,
November 25, 1999.

9 Dean Roscoe Pound, Introduction to the Philosophy of Law.

10 Texas Pacific & Oil Co. v. Robertson, 125 Tex 4, 79 SW2d 830, 98 ALR 262.

11See Helms v. Universal Atlas Cement Co., (CA5 Tex) 202 F2d 421 cert de 346 US 858, 98 L ed
372, 74 S Ct 74; Otto Kuehne Preserving Co. v. Allen (CA8 Mo) 148 F 166; See also Alabama
G.S.R. Co. v. Hill, 93 Ala 514, 9 So 722; Richmond & P.R. Co. v. Vance, 93 Ala 144, 9 So 574.

12 CA Decision, pp. 222-23; Rollo, pp. 29-30.

13 Ohio Farmers, Ins. Co. v. Norman, (App) 122 Ariz 330, 594 P2d 1026.

14 Sea Commercial Company v. CA, G.R. No. 122823, November 25, 1999.

15 Tolentino, Civil Code, 1990 ed., Vol, I, p. 61.