G.R. No.

171636 April 7, 2009

NORMAN A. GAID, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

TINGA, J.:

Before the Court is a petition for review on certiorari1 assailing the 12 July 2005 Decision2 of the
Court of Appeals and its subsequent Resolution3 denying petitioner’s motion for reconsideration.

Petitioner Norman A. Gaid was charged with the crime of reckless imprudence resulting in
homicide in an information which reads as follow:

That on or about 12:00 high noon of October 25, 2001, infront of the Laguindingan National High
School, Poblacion, Laguindingan, Misamis Oriental, Philippines and within the jurisdiction of this
Honorable Court, the said accused mentioned above while driving a passenger’s jeepney color
white bearing plate no. KVG-771 owned by barangay captain Levy Etom has no precautionary
measure to preempt the accident, did then and there willfully, unlawfully and feloniously ran [sic]
over Michael Dayata resulting of [sic] his untimely death as pronounced by the attending
physician of Northern Mindanao Medical Center Hospital, Cagayan de Oro City.

CONTRARY TO LAW.4

Petitioner entered a not guilty plea. Thereafter, trial ensued.

The antecedent facts are undisputed.

At around 12:00 noon on 25 October 2001, petitioner was driving his passenger jeepney along a
two-lane road where the Laguindingan National High School is located toward the direction of
Moog in Misamis Oriental. His jeepney was filled to seating capacity.5 At the time several
students were coming out of the school premises.6 Meanwhile, a fourteen year-old student,
Michael Dayata (Dayata), was seen by eyewitness Artman Bongolto (Bongolto) sitting near a
store on the left side of the road. From where he was at the left side of the road, Dayata raised
his left hand to flag down petitioner’s jeepney7 which was traveling on the right lane of the
road.8 However, neither did petitioner nor the conductor, Dennis Mellalos (Mellalos), saw
anybody flagging down the jeepney to ride at that point.9

The next thing Bongalto saw, Dayata’s feet was pinned to the rear wheel of the jeepney, after
which, he laid flat on the ground behind the jeepney.10 Another prosecution witness, Usaffe Actub
(Actub), who was also situated on the left side of the street but directly in front of the school gate,
heard "a strong impact coming from the jeep sounding as if the driver forced to accelerate in
order to hurdle an obstacle."11 Dayata was then seen lying on the ground12and caught in between
the rear tires.13 Petitioner felt that the left rear tire of the jeepney had bounced and the vehicle
tilted to the right side.14

Mellalos heard a shout that a boy was run over, prompting him to jump off the jeepney to help the
victim. Petitioner stopped and saw Mellalos carrying the body of the victim.15 Mellalos loaded the
victim on a motorcycle and brought him to the hospital. Dayata was first brought to the
Laguindingan Health Center, but it was closed. Mellalos then proceeded to the El Salvador
Hospital. Upon advice of its doctors, however, Dayata was brought to the Northern Mindanao
Medical Center where he was pronounced dead on arrival.16
Dr. Tammy Uy issued an autopsy report stating cranio-cerebral injuries as the cause of
death.17 She testified that the head injuries of Dayata could have been caused by having run over
by the jeepney.18

The Municipal Circuit Trial Court (MCTC) of Laguindingan19 found petitioner guilty beyond
reasonable doubt of the crime charged. The lower court held petitioner negligent in his driving
considering that the victim was dragged to a distance of 5.70 meters from the point of impact. He
was also scored for "not stopping his vehicle after noticing that the jeepney’s left rear tire jolted
causing the vehicle to tilt towards the right."20 On appeal, the Regional Trial Court
(RTC)21 affirmed in toto the decision of the MCTC.

The Court of Appeals affirmed the trial court’s judgment with modification in that it found
petitioner guilty only of simple negligence resulting in homicide. 1avvphi1.zw+

The Court of Appeals exonerated petitioner from the charge of reckless imprudence resulting to
homicide on the ground that he was not driving recklessly at the time of the accident. However,
the appellate court still found him to be negligent when he failed "to promptly stop his vehicle to
check what caused the sudden jotting of its rear tire."22

In its 6 February 2006 Resolution, the Court of Appeals denied petitioner’s motion for
reconsideration.23

Hence, the instant petition.

Petitioner submits that the Court of Appeals erred in finding that "there is (sic) absolutely lack of
precaution on the part of the petitioner when he continued even after he had noticed that the left
rear tire and the jeep tilted to its right side."24 Petitioner stressed that he, in fact, stopped his jeep
when its left rear tire bounced and upon hearing that somebody had been ran over.

Moreover, petitioner asserts that the Court of Appeals committed a grave abuse of discretion in
convicting him of the offense of simple negligence resulting in homicide. Assuming arguendo that
he failed to promptly stop his vehicle, petitioner maintains that no prudent man placed in the
same situation could have foreseen the vehicular accident or could have stopped his vehicle in
time when its left rear tire bounced due to the following reasons: (1) the victim was only a
trespasser; (2) petitioner’s attention was focused on the road and the students outside the
school’s gate; and (3) the jeepney was fully loaded with passengers and cargoes and it was
impossible for the petitioner to promptly stop his vehicle.25

The Office of the Solicitor-General (OSG) maintained that petitioner was negligent when he
continued to run towards the direction of Moog, Laguindingan, dragging the victim a few meters
from the point of impact, despite hearing that a child had been run over.26

The presence or absence of negligence on the part of petitioner is determined by the operative
events leading to the death of Dayata which actually comprised of two phases or stages. The first
stage began when Dayata flagged down the jeepney while positioned on the left side of the road
and ended when he was run over by the jeepney. The second stage covered the span between
the moment immediately after the victim was run over and the point when petitioner put the
jeepney to a halt.

During the first stage, petitioner was not shown to be negligent.

Reckless imprudence consists of voluntarily doing or failing to do, without malice, an act from
which material damage results by reason of an inexcusable lack of precaution on the part of the
person performing or failing to perform such act.27
In Manzanares v. People,28 this Court convicted petitioner of the crime of reckless imprudence
resulting in multiple homicide and serious physical injuries when he was found driving the Isuzu
truck very fast before it smashed into a jeepney.29 Likewise, in Pangonorom v. People,30 a public
utility driver, who was driving very fast, failed to slow down and hit a swerving car. He was found
negligent by this Court.

In the instant case, petitioner was driving slowly at the time of the accident, as testified to by two
eyewitnesses. Prosecution witness Actub affirmed this fact on cross-examination, thus:

ATTY. MACUA:

(to the witness)

Q Mr. Witness, when the passenger jeepney passed by the gate of the Laguindingan
National High School, is it running slowly, am I correct?

A Yes, he was running slowly.31

The slow pace of the jeepney was seconded by Mellalos:

Q You testified that you heard somebody outside from the vehicle shouting that a boy
was ran over, am I correct?

A Yes, Sir.

Q Now, before you heard that shouting, did you observe any motion from the vehicle?

A The jeep was moving slowly and I noticed that there was something that [sic] the jeep a
little bit bounced up as if a hump that’s the time I heard a shout from outside.32

Petitioner stated that he was driving at no more than 15 kilometers per hour.33

It appears from the evidence Dayata came from the left side of the street. Petitioner, who was
driving the jeepney on the right lane, did not see the victim flag him down. He also failed to see
him go near the jeepney at the left side. Understandably, petitioner was focused on the road
ahead. In Dayata’s haste to board the jeep which was then running, his feet somehow got pinned
to the left rear tire, as narrated by Bongolto. Actub only saw Dayata after he heard a strong
impact coming from the jeep.

With the foregoing facts, petitioner can not be held liable during the first stage. Specifically, he
cannot be held liable for reckless imprudence resulting in homicide, as found by the trial court.
The proximate cause of the accident and the death of the victim was definitely his own
negligence in trying to catch up with the moving jeepney to get a ride.

In the instant case, petitioner had exercised extreme precaution as he drove slowly upon
reaching the vicinity of the school. He cannot be faulted for not having seen the victim who came
from behind on the left side.

However, the Court of Appeals found petitioner guilty of simple negligence resulting in homicide
for failing to stop driving at the time when he noticed the bouncing of his vehicle. Verily, the
appellate court was referring to the second stage of the incident.

Negligence has been defined as the failure to observe for the protection of the interests of
another person that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury.34
The elements of simple negligence: are (1) that there is lack of precaution on the part of the
offender; and (2) that the damage impending to be caused is not immediate or the danger is not
clearly manifest.35

The standard test in determining whether a person is negligent in doing an act whereby injury or
damage results to the person or property of another is this: could a prudent man, in the position
of the person to whom negligence is attributed, foresee harm to the person injured as a
reasonable consequence of the course actually pursued? If so, the law imposes a duty on the
actor to refrain from that course or to take precautions to guard against its mischievous results,
and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the
ignoring of the admonition born of this provision, is always necessary before negligence can be
held to exist.36

In Philippine National Construction Corporation v. Court of Appeals,37 the petitioner was the
franchisee that operates and maintains the toll facilities in the North and South Luzon Toll
Expressways. It failed to exercise the requisite diligence in maintaining the NLEX safe for
motorists. The lighted cans and lane dividers on the highway were removed even as flattened
sugarcanes lay scattered on the ground. The highway was still wet from the juice and sap of the
flattened sugarcanes. The petitioner should have foreseen that the wet condition of the highway
would endanger motorists passing by at night or in the wee hours of the
morning.38 Consequently, it was held liable for damages.

In an American case, Hernandez v. Lukas,39 a motorist traveling within the speed limit and did all
was possible to avoid striking a child who was then six years old only. The place of the incident
was a neighborhood where children were playing in the parkways on prior occasions. The court
ruled that it must be still proven that the driver did not exercise due care. The evidence showed
that the driver was proceeding in lawful manner within the speed limit when the child ran into the
street and was struck by the driver’s vehicle. Clearly, this was an emergency situation thrust
upon the driver too suddenly to avoid.

In this case, the courts below zeroed in on the fact that petitioner did not stop the jeepney when
he felt the bouncing of his vehicle, a circumstance which the appellate court equates with
negligence. Petitioner contends that he did not immediately stop because he did not see
anybody go near his vehicle at the time of the incident.40

Assuming arguendo that petitioner had been negligent, it must be shown that his negligence was
the proximate cause of the accident. Proximate cause is defined as that which, in the natural and
continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and
without which the result would not have

occurred.41 In order to establish a motorist's liability for the negligent operation of a vehicle, it
must be shown that there was a direct causal connection between such negligence and the
injuries or damages complained of. Thus, negligence that is not a substantial contributing factor
in the causation of the accident is not the proximate cause of an injury.42

The head injuries sustained by Dayata at the point of impact proved to be the immediate cause
of his death, as indicated in the post-mortem findings.43 His skull was crushed as a result of the
accident. Had petitioner immediately stopped the jeepney, it would still not have saved the life of
the victim as the injuries he suffered were fatal.

The evidence on record do not show that the jeepney dragged the victim after he was hit and run
over by the jeepney. Quite the contrary, the evidence discloses that the victim was not dragged
at all. In fact, it is the other way around. Bongolto narrated that after the impact, he saw Dayata
left behind the jeepney.44 Actub saw Dayata in a prone position and bleeding within seconds after
impact.45 Right after the impact, Mellalos immediately jumped out of the jeepney and saw the
victim lying on the ground.46 The distance of 5.70 meters is the length of space between the spot
where the victim fell to the ground and the spot where the jeepney stopped as observed by the
trial judge during the ocular inspection at the scene of the accident.47

Moreover, mere suspicions and speculations that the victim could have lived had petitioner
stopped can never be the basis of a conviction in a criminal case.48 The Court must be satisfied
that the guilt of the accused had been proven beyond reasonable doubt.49 Conviction must rest
on nothing less than a moral certainty of the guilt of the accused. The overriding consideration is
not whether the court doubts the innocence of the accused but whether it entertains doubt as to
his guilt.50

Clearly then, the prosecution was not able to establish that the proximate cause of the victim’s
death was petitioner’s alleged negligence, if at all, even during the second stage of the incident.

If at all again, petitioner’s failure to render assistance to the victim would constitute abandonment
of one’s victim punishable under Article 275 of the Revised Penal Code. However, the omission
is not covered by the information. Thus, to hold petitioner criminally liable under the provision
would be tantamount to a denial of due process.

Therefore, petitioner must be acquitted at least on reasonable doubt. The award of damages
must also be deleted pursuant to Article 2179 of the Civil Code which states that when the
plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot
recover damages.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated 12 July
2005 is REVERSED and SET ASIDE. Petitioner Norman A. Gaid is ACQUITTED of the crime of
Simple Negligence Resulting in Homicide as found by the Court of Appeals and of the charge of
Reckless Imprudence Resulting in Homicide in Criminal Case No. 1937 of the MCTC of
Laguindingan, Misamis Oriental.

SO ORDERED.
G.R. No. 169467 February 25, 2010

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

vs.
JEROME JOVANNE MORALES, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the 11 May 2005 Decision2 and the 19 August 2005 Resolution of
the Court of Appeals in CA-G.R. CV No. 60669.

The Facts

On 17 January 1995, petitioners Alfredo P. Pacis and Cleopatra D. Pacis (petitioners) filed with
the trial court a civil case for damages against respondent Jerome Jovanne Morales
(respondent). Petitioners are the parents of Alfred Dennis Pacis, Jr. (Alfred), a 17-year old
student who died in a shooting incident inside the Top Gun Firearms and Ammunitions Store
(gun store) in Baguio City. Respondent is the owner of the gun store.

The facts as found by the trial court are as follows:

On January 19, 1991, Alfred Dennis Pacis, then 17 years old and a first year student at the
Baguio Colleges Foundation taking up BS Computer Science, died due to a gunshot wound in
the head which he sustained while he was at the Top Gun Firearm[s] and Ammunition[s] Store
located at Upper Mabini Street, Baguio City. The gun store was owned and operated by
defendant Jerome Jovanne Morales.

With Alfred Pacis at the time of the shooting were Aristedes Matibag and Jason Herbolario. They
were sales agents of the defendant, and at that particular time, the caretakers of the gun store.

The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer of the
gun store for repair.

The gun, an AMT Automag II Cal. 22 Rimfire Magnum with Serial No. SN-H34194 (Exhibit "Q"),
was left by defendant Morales in a drawer of a table located inside the gun store.

Defendant Morales was in Manila at the time. His employee Armando Jarnague, who was the
regular caretaker of the gun store was also not around. He left earlier and requested sales
agents Matibag and Herbolario to look after the gun store while he and defendant Morales were
away. Jarnague entrusted to Matibag and Herbolario a bunch of keys used in the gun store
which included the key to the drawer where the fatal gun was kept.

It appears that Matibag and Herbolario later brought out the gun from the drawer and placed it on
top of the table. Attracted by the sight of the gun, the young Alfred Dennis Pacis got hold of the
same. Matibag asked Alfred Dennis Pacis to return the gun. The latter followed and handed the
gun to Matibag. It went off, the bullet hitting the young Alfred in the head.

A criminal case for homicide was filed against Matibag before branch VII of this Court. Matibag,
however, was acquitted of the charge against him because of the exempting circumstance of
"accident" under Art. 12, par. 4 of the Revised Penal Code.
By agreement of the parties, the evidence adduced in the criminal case for homicide against
Matibag was reproduced and adopted by them as part of their evidence in the instant case.3

On 8 April 1998, the trial court rendered its decision in favor of petitioners. The dispositive portion
of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs

[Spouses Alfredo P. Pacis and Cleopatra D. Pacis] and against the defendant [Jerome Jovanne
Morales] ordering the defendant to pay plaintiffs —

(1) ₱30,000.00 as indemnity for the death of Alfred Pacis;

(2) ₱29,437.65 as actual damages for the hospitalization and burial expenses incurred by
the plaintiffs;

(3) ₱100,000.00 as compensatory damages;

(4) ₱100,000.00 as moral damages;

(5) ₱50,000.00 as attorney’s fees.

SO ORDERED.4

Respondent appealed to the Court of Appeals. In its Decision5 dated 11 May 2005, the Court of
Appeals reversed the trial court’s Decision and absolved respondent from civil liability under
Article 2180 of the Civil Code.6

Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its Resolution
dated 19 August 2005.

Hence, this petition.

The Trial Court’s Ruling

The trial court held respondent civilly liable for the death of Alfred under Article 2180 in relation to
Article 2176 of the Civil Code.7 The trial court held that the accidental shooting of Alfred which
caused his death was partly due to the negligence of respondent’s employee Aristedes Matibag
(Matibag). Matibag and Jason Herbolario (Herbolario) were employees of respondent even if
they were only paid on a commission basis. Under the Civil Code, respondent is liable for the
damages caused by Matibag on the occasion of the performance of his duties, unless
respondent proved that he observed the diligence of a good father of a family to prevent the
damage. The trial court held that respondent failed to observe the required diligence when he left
the key to the drawer containing the loaded defective gun without instructing his employees to be
careful in handling the loaded gun.

The Court of Appeals’ Ruling

The Court of Appeals held that respondent cannot be held civilly liable since there was no
employer-employee relationship between respondent and Matibag. The Court of Appeals found
that Matibag was not under the control of respondent with respect to the means and methods in
the performance of his work. There can be no employer-employee relationship where the
element of control is absent. Thus, Article 2180 of the Civil Code does not apply in this case and
respondent cannot be held liable.
Furthermore, the Court of Appeals ruled that even if respondent is considered an employer of
Matibag, still respondent cannot be held liable since no negligence can be attributed to him. As
explained by the Court of Appeals:

Granting arguendo that an employer-employee relationship existed between Aristedes Matibag

and the defendant-appellant, we find that no negligence can be attributed to him.

Negligence is best exemplified in the case of Picart vs. Smith (37 Phil. 809). The test of
negligence is this:

"x x x. Could a prudent man, in the position of the person to whom negligence is attributed,
foresee harm to the person injured as a reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to refrain from that course or take precaution
against its mischievous results, and the failure to do so constitutes negligence. x x x."

Defendant-appellant maintains that he is not guilty of negligence and lack of due care as he did
not fail to observe the diligence of a good father of a family. He submits that he kept the firearm
in one of his table drawers, which he locked and such is already an indication that he took the
necessary diligence and care that the said gun would not be accessible to anyone. He puts [sic]
that his store is engaged in selling firearms and ammunitions. Such items which are per se
dangerous are kept in a place which is properly secured in order that the persons coming into the
gun store would not be able to take hold of it unless it is done intentionally, such as when a
customer is interested to purchase any of the firearms, ammunitions and other related items, in
which case, he may be allowed to handle the same.

We agree. Much as We sympathize with the family of the deceased, defendant-appellant is not to
be blamed. He exercised due diligence in keeping his loaded gun while he was on a business trip
in Manila. He placed it inside the drawer and locked it. It was taken away without his knowledge
and authority. Whatever happened to the deceased was purely accidental.8

The Issues

Petitioners raise the following issues:

I. THE APPELLATE COURT COMMITTED SERIOUS ERROR IN RENDERING

THE DECISION AND RESOLUTION IN QUESTION IN DISREGARD OF LAW
AND JURISPRUDENCE BY REVERSING THE ORDER OF THE REGIONAL
TRIAL COURT (BRANCH 59) OF BAGUIO CITY NOTWITHSTANDING CLEAR,
AUTHENTIC RECORDS AND TESTIMONIES PRESENTED DURING THE
TRIAL WHICH NEGATE AND CONTRADICT ITS FINDINGS.

II. THE APPELLATE COURT COMMITTED GRAVE, REVERSIBLE ERROR IN

RENDERING THE DECISION AND RESOLUTION IN QUESTION BY
DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS THEREBY IGNORING THE FACTUAL FINDINGS OF THE
REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO CITY SHOWING
PETITIONER’S CLEAR RIGHTS TO THE AWARD OF DAMAGES.9

The Ruling of the Court

We find the petition meritorious.

This case for damages arose out of the accidental shooting of petitioners’ son. Under Article
116110 of the Civil Code, petitioners may enforce their claim for damages based on the civil
liability arising from the crime under Article 10011 of the Revised Penal Code or they may opt to
file an independent civil action for damages under the Civil Code. In this case, instead of
enforcing their claim for damages in the homicide case filed against Matibag, petitioners opted to
file an independent civil action for damages against respondent whom they alleged was
Matibag’s employer. Petitioners based their claim for damages under Articles 2176 and 2180 of
the Civil Code.

Unlike the subsidiary liability of the employer under Article 10312 of the Revised Penal Code,13 the
liability of the employer, or any person for that matter, under Article 2176 of the Civil Code is
primary and direct, based on a person’s own negligence. Article 2176 states:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called quasi-delict and is governed by the
provisions of this Chapter.

This case involves the accidental discharge of a firearm inside a gun store. Under PNP Circular
1avvphi1

No. 9, entitled the "Policy on Firearms and Ammunition Dealership/Repair," a person who is in
the business of purchasing and selling of firearms and ammunition must maintain basic security
and safety requirements of a gun dealer, otherwise his License to Operate Dealership will be
suspended or canceled.14

Indeed, a higher degree of care is required of someone who has in his possession or under his
control an instrumentality extremely dangerous in character, such as dangerous weapons or
substances. Such person in possession or control of dangerous instrumentalities has the duty to
take exceptional precautions to prevent any injury being done thereby.15 Unlike the ordinary
affairs of life or business which involve little or no risk, a business dealing with dangerous
weapons requires the exercise of a higher degree of care.

As a gun store owner, respondent is presumed to be knowledgeable about firearms safety and
should have known never to keep a loaded weapon in his store to avoid unreasonable risk of
harm or injury to others. Respondent has the duty to ensure that all the guns in his store are not
loaded. Firearms should be stored unloaded and separate from ammunition when the firearms
are not needed for ready-access defensive use.16 With more reason, guns accepted by the store
for repair should not be loaded precisely because they are defective and may cause an
accidental discharge such as what happened in this case. Respondent was clearly negligent
when he accepted the gun for repair and placed it inside the drawer without ensuring first that it
was not loaded. In the first place, the defective gun should have been stored in a vault. Before
accepting the defective gun for repair, respondent should have made sure that it was not loaded
to prevent any untoward accident. Indeed, respondent should never accept a firearm from
another person, until the cylinder or action is open and he has personally checked that the
weapon is completely unloaded.17 For failing to insure that the gun was not loaded, respondent
himself was negligent. Furthermore, it was not shown in this case whether respondent had a
License to Repair which authorizes him to repair defective firearms to restore its original
composition or enhance or upgrade firearms.18

Clearly, respondent did not exercise the degree of care and diligence required of a good father of
a family, much less the degree of care required of someone dealing with dangerous weapons, as
would exempt him from liability in this case.

WHEREFORE, we GRANT the petition. We SET ASIDE the 11 May 2005 Decision and the 19
August 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 60669. We REINSTATE the
trial court’s Decision dated 8 April 1998.

SO ORDERED.
G.R. No. L-51806 November 8, 1988

CIVIL AERONAUTICS ADMINISTRATION, petitioner,

vs.
COURT OF APPEALS and ERNEST E. SIMKE, respondents

CORTES, J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals affirming
the trial court decision which reads as follows:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff

the amount of P15,589.55 as full reimbursement of his actual medical and
hospital expenses, with interest at the legal rate from the commencement of the
suit; the amount of P20,200.00 as consequential damages; the amount of
P30,000.00 as moral damages; the amount of P40,000.00 as exemplary
damages; the further amount of P20,000.00 as attorney's fees and the costs
[Rollo, p. 24].

The facts of the case are as follows:

Private respondent is a naturalized Filipino citizen and at the time of the incident was the
Honorary Consul Geileral of Israel in the Philippines.

In the afternoon of December 13, 1968, private respondent with several other persons went to
the Manila International Airport to meet his future son-in-law. In order to get a better view of the
incoming passengers, he and his group proceeded to the viewing deck or terrace of the airport.

While walking on the terrace, then filled with other people, private respondent slipped over an
elevation about four (4) inches high at the far end of the terrace. As a result, private respondent
fell on his back and broke his thigh bone.

The next day, December 14, 1968, private respondent was operated on for about three hours.

Private respondent then filed an action for damages based on quasi-delict with the Court of First
Instance of Rizal, Branch VII against petitioner Civil Aeronautics Administration or CAA as the
entity empowered "to administer, operate, manage, control, maintain and develop the Manila
International Airport ... ." [Sec. 32 (24), R.A. 776].

Said claim for damages included, aside from the medical and hospital bills, consequential
damages for the expenses of two lawyers who had to go abroad in private respondent's stead to
finalize certain business transactions and for the publication of notices announcing the
postponement of private respondent's daughter's wedding which had to be cancelled because of
his accident [Record on Appeal, p. 5].

Judgment was rendered in private respondent's favor prompting petitioner to appeal to the Court
of Appeals. The latter affirmed the trial court's decision. Petitioner then filed with the same court
a Motion for, Reconsideration but this was denied.

Petitioner now comes before this Court raising the following assignment of errors:
 1. The Court of Appeals gravely erred in not holding that the present the CAA is
really a suit against the Republic of the Philippines which cannot be sued without
its consent, which was not given in this case.

2. The Court of Appeals gravely erred in finding that the injuries of respondent
Ernest E. Simke were due to petitioner's negligence — although there was no
substantial evidence to support such finding; and that the inference that the hump
or elevation the surface of the floor area of the terrace of the fold) MIA building is
dangerous just because said respondent tripped over it is manifestly mistaken —
circumstances that justify a review by this Honorable Court of the said finding of
fact of respondent appellate court (Garcia v. Court of Appeals, 33 SCRA 622;
Ramos v. CA, 63 SCRA 331.)

3. The Court of Appeals gravely erred in ordering petitioner to pay actual,

consequential, moral and exemplary damages, as well as attorney's fees to
respondent Simke — although there was no substantial and competent proof to
support said awards I Rollo, pp. 93-94 1.

Invoking the rule that the State cannot be sued without its consent, petitioner contends that being
an agency of the government, it cannot be made a party-defendant in this case.

This Court has already held otherwise in the case of National Airports Corporation v. Teodoro,
Sr. [91 Phil. 203 (1952)]. Petitioner contends that the said ruling does not apply in this case
because: First, in the Teodoro case, the CAA was sued only in a substituted capacity, the
National Airports Corporation being the original party. Second, in the Teodoro case, the cause of
action was contractual in nature while here, the cause of action is based on a quasi-delict. Third,
there is no specific provision in Republic Act No. 776, the law governing the CAA, which would
justify the conclusion that petitioner was organized for business and not for governmental
purposes. [Rollo, pp. 94-97].

Such arguments are untenable.

First, the Teodoro case, far from stressing the point that the CAA was only substituted for the
National Airports Corporation, in fact treated the CAA as the real party in interest when it stated
that:

xxx xxx xxx

... To all legal intents and practical purposes, the National Airports Corporation is
dead and the Civil Aeronautics Administration is its heir or legal representative,
acting by the law of its creation upon its own rights and in its own name. The
better practice there should have been to make the Civil Aeronautics
Administration the third party defendant instead of the National Airports
Corporation. [National Airports Corp. v. Teodoro, supra, p. 208.]

xxx xxx xxx

Second, the Teodoro case did not make any qualification or limitation as to whether or not the
CAA's power to sue and be sued applies only to contractual obligations. The Court in the
Teodoro case ruled that Sections 3 and 4 of Executive Order 365 confer upon the CAA, without
any qualification, the power to sue and be sued, albeit only by implication. Accordingly, this
Court's pronouncement that where such power to sue and be sued has been granted without any
qualification, it can include a claim based on tort or quasi-delict [Rayo v. Court of First Instance of
Bulacan, G.R. Nos. 55273-83, December 19,1981, 1 1 0 SCRA 4561 finds relevance and
applicability to the present case.

Third, it has already been settled in the Teodoro case that the CAA as an agency is not immune
from suit, it being engaged in functions pertaining to a private entity.

xxx xxx xxx

The Civil Aeronautics Administration comes under the category of a private entity.
Although not a body corporate it was created, like the National Airports
Corporation, not to maintain a necessary function of government, but to run what
is essentially a business, even if revenues be not its prime objective but rather
the promotion of travel and the convenience of the travelling public. It is engaged
in an enterprise which, far from being the exclusive prerogative of state, may,
more than the construction of public roads, be undertaken by private concerns.
[National Airports Corp. v. Teodoro, supra, p. 207.]

xxx xxx xxx

True, the law prevailing in 1952 when the Teodoro case was promulgated was Exec. Order 365
(Reorganizing the Civil Aeronautics Administration and Abolishing the National Airports
Corporation). Republic Act No. 776 (Civil Aeronautics Act of the Philippines), subsequently
enacted on June 20, 1952, did not alter the character of the CAA's objectives under Exec, Order
365. The pertinent provisions cited in the Teodoro case, particularly Secs. 3 and 4 of Exec. Order
365, which led the Court to consider the CAA in the category of a private entity were retained
substantially in Republic Act 776, Sec. 32 (24) and (25). Said Act provides:
<äre|| anº• 1àw>

Sec. 32. Powers and Duties of the Administrator. Subject to the general —
control and supervision of the Department Head, the Administrator shall have
among others, the following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government-owned aerodromes except those
controlled or operated by the Armed Forces of the Philippines including such
powers and duties as: (a) to plan, design, construct, equip, expand, improve,
repair or alter aerodromes or such structures, improvement or air navigation
facilities; (b) to enter into, make and execute contracts of any kind with any
person, firm, or public or private corporation or entity; ... .

(25) To determine, fix, impose, collect and receive landing fees, parking space
fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of
aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools,
other royalties, fees or rentals for the use of any of the property under its
management and control.

xxx xxx xxx

From the foregoing, it can be seen that the CAA is tasked with private or non-governmental
functions which operate to remove it from the purview of the rule on State immunity from suit. For
the correct rule as set forth in the Tedoro case states:

xxx xxx xxx

 Not all government entities, whether corporate or non-corporate, are immune
from suits. Immunity functions suits is determined by the character of the objects
for which the entity was organized. The rule is thus stated in Corpus Juris:

Suits against State agencies with relation to matters in which they

have assumed to act in private or non-governmental capacity, and
various suits against certain corporations created by the state for
public purposes, but to engage in matters partaking more of the
nature of ordinary business rather than functions of a
governmental or political character, are not regarded as suits
against the state. The latter is true, although the state may own
stock or property of such a corporation for by engaging in
business operations through a corporation, the state divests itself
so far of its sovereign character, and by implication consents to
suits against the corporation. (59 C.J., 313) [National Airport
Corporation v. Teodoro, supra, pp. 206-207; Emphasis supplied.]

This doctrine has been reaffirmed in the recent case of Malong v. Philippine National
Railways [G.R. No. L-49930, August 7, 1985, 138 SCRA 631, where it was held that the
Philippine National Railways, although owned and operated by the government, was not immune
from suit as it does not exercise sovereign but purely proprietary and business functions.
Accordingly, as the CAA was created to undertake the management of airport operations which
primarily involve proprietary functions, it cannot avail of the immunity from suit accorded to
government agencies performing strictly governmental functions.

II

Petitioner tries to escape liability on the ground that there was no basis for a finding of
negligence. There can be no negligence on its part, it alleged, because the elevation in question
"had a legitimate purpose for being on the terrace and was never intended to trip down people
and injure them. It was there for no other purpose but to drain water on the floor area of the
terrace" [Rollo, P. 99].

To determine whether or not the construction of the elevation was done in a negligent manner,
the trial court conducted an ocular inspection of the premises.

xxx xxx xxx

... This Court after its ocular inspection found the elevation shown in Exhs. A or 6-
A where plaintiff slipped to be a step, a dangerous sliding step, and the proximate
cause of plaintiffs injury...

xxx xxx xxx

This Court during its ocular inspection also observed the dangerous and
defective condition of the open terrace which has remained unrepaired through
the years. It has observed the lack of maintenance and upkeep of the MIA
terrace, typical of many government buildings and offices. Aside from the litter
allowed to accumulate in the terrace, pot holes cause by missing tiles remained
unrepaired and unattented. The several elevations shown in the exhibits
presented were verified by this Court during the ocular inspection it undertook.
Among these elevations is the one (Exh. A) where plaintiff slipped. This Court
also observed the other hazard, the slanting or sliding step (Exh. B) as one
passes the entrance door leading to the terrace [Record on Appeal, U.S., pp. 56
and 59; Emphasis supplied.]
The Court of Appeals further noted that:

The inclination itself is an architectural anomaly for as stated by the said witness,
it is neither a ramp because a ramp is an inclined surface in such a way that it will
prevent people or pedestrians from sliding. But if, it is a step then it will not serve
its purpose, for pedestrian purposes. (tsn, p. 35, Id.) [rollo, p. 29.]

These factual findings are binding and conclusive upon this Court. Hence, the CAA cannot
disclaim its liability for the negligent construction of the elevation since under Republic Act No.
776, it was charged with the duty of planning, designing, constructing, equipping, expanding,
improving, repairing or altering aerodromes or such structures, improvements or air navigation
facilities [Section 32, supra, R.A. 776]. In the discharge of this obligation, the CAA is duty-bound
to exercise due diligence in overseeing the construction and maintenance of the viewing deck or
terrace of the airport.

It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he fault or negligence
of the obligor consists in the omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the person, of the time and of the place."
Here, the obligation of the CAA in maintaining the viewing deck, a facility open to the public,
requires that CAA insure the safety of the viewers using it. As these people come to the viewing
deck to watch the planes and passengers, their tendency would be to look to where the planes
and the incoming passengers are and not to look down on the floor or pavement of the viewing
deck. The CAA should have thus made sure that no dangerous obstructions or elevations exist
on the floor of the deck to prevent any undue harm to the public.

The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of the Civil
Code which provides that "(w)hoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done... As the CAA knew of the existence of
the dangerous elevation which it claims though, was made precisely in accordance with the plans
and specifications of the building for proper drainage of the open terrace [See Record on Appeal,
pp. 13 and 57; Rollo, p. 391, its failure to have it repaired or altered in order to eliminate the
existing hazard constitutes such negligence as to warrant a finding of liability based on quasi-
delict upon CAA.

The Court finds the contention that private respondent was, at the very least, guilty of
contributory negligence, thus reducing the damages that plaintiff may recover, unmeritorious.
Contributory negligence under Article 2179 of the Civil Code contemplates a negligent act or
omission on the part of the plaintiff, which although not the proximate cause of his
injury, contributed to his own damage, the proximate cause of the plaintiffs own injury being the
defendant's lack of due care. In the instant case, no contributory negligence can be imputed to
the private respondent, considering the following test formulated in the early case of Picart v.
Smith, 37 Phil. 809 (1918):

The test by which to determine the existence of negligence in a particular case

may be stated as follows: Did the defendant in doing the alleged negligent act
use that reasonable care and caution which an ordinarily prudent man would
have used in the same situation? If not, then he is guilty of negligence. The law
here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of the
negligence in a given case is not determined by reference to the personal
judgment of the actor in the situation before him. The law considers what would
be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of human experience
 and in view of the facts involved in the particular case. Abstract speculations
cannot be here of much value but this much can be profitably said: Reasonable
men-overn their conduct by the circumstances which are before them or known to
them. They are not, and are not supposed to be omniscient of the future. Hence
they can be expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued' If so, it
was the duty of the actor to take precautions to guard against that harm.
Reasonable foresight of harm, followed by the ignoring of the suggestion born of
this prevision, is always necessary before negligence can be held to exist....
[Picart v. Smith, supra, p. 813; Emphasis supplied.]

The private respondent, who was the plaintiff in the case before the lower court, could not have
reasonably foreseen the harm that would befall him, considering the attendant factual
circumstances. Even if the private respondent had been looking where he was going, the step in
question could not easily be noticed because of its construction. As the trial court found:

In connection with the incident testified to, a sketch, Exhibit O, shows a section of
the floorings oil which plaintiff had tripped, This sketch reveals two pavements
adjoining each other, one being elevated by four and one-fourth inches than the
other. From the architectural standpoint the higher, pavement is a step. However,
unlike a step commonly seen around, the edge of the elevated pavement slanted
outward as one walks to one interior of the terrace. The length of the inclination
between the edges of the two pavements is three inches. Obviously, plaintiff had
stepped on the inclination because had his foot landed on the lower pavement he
would not have lost his balance. The same sketch shows that both pavements
including the inclined portion are tiled in red cement, and as shown by the
photograph Exhibit A, the lines of the tilings are continuous. It would therefore be
difficult for a pedestrian to see the inclination especially where there are plenty of
persons in the terrace as was the situation when plaintiff fell down. There was no
warning sign to direct one's attention to the change in the elevation of the
floorings. [Rollo, pp. 2829.]

III

Finally, petitioner appeals to this Court the award of damages to private respondent. The liability
of CAA to answer for damages, whether actual, moral or exemplary, cannot be seriously doubted
in view of one conferment of the power to sue and be sued upon it, which, as held in the case
of Rayo v. Court of First Instance, supra, includes liability on a claim for quasi-dilict. In the
aforestated case, the liability of the National Power Corporation to answer for damages resulting
from its act of sudden, precipitate and simultaneous opening of the Angat Dam, which caused
the death of several residents of the area and the destruction of properties, was upheld since the
o,rant of the power to sue and be sued upon it necessarily implies that it can be held answerable
for its tortious acts or any wrongful act for that matter.

With respect to actual or compensatory damages, the law mandates that the same be proven.

Art. 2199. Except as provided by law or by stipulation, one are entitled to an

adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Such compensation is referred to as actual on compensatory
damages [New Civil Code].

Private respondent claims P15,589.55 representing medical and hospitalization bills. This Court
finds the same to have been duly proven through the testimony of Dr. Ambrosio Tangco, the
physician who attended to private respondent (Rollo, p. 26) and who Identified Exh. "H" which
was his bill for professional services [Rollo, p. 31].
Concerning the P20,200.00 alleged to have been spent for other expenses such as the
transportation of the two lawyers who had to represent private respondent abroad and the
publication of the postponement notices of the wedding, the Court holds that the same had also
been duly proven. Private respondent had adequately shown the existence of such losses and
the amount thereof in the testimonies before the trial court [CA decision, p. 81. At any rate, the
findings of the Court of Appeals with respect to this are findings of facts [One Heart Sporting
Club, Inc. v. Court of Appeals, G.R. Nos. 5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as
had been held time and again, are, as a general rule, conclusive before this Court [Sese v.
Intermediate Appellate Court, G.R. No. 66186, July 31, 1987,152 SCRA 585].

With respect to the P30,000.00 awarded as moral damages, the Court holds private respondent
entitled thereto because of the physical suffering and physical injuries caused by the negligence
of the CAA [Arts. 2217 and 2219 (2), New Civil Code].

With respect to the award of exemplary damages, the Civil Code explicitly, states:

Art. 2229. Exemplary or corrective damages, are imposed, by way of example or

correction for the public good, in addition to the moral, liquidated or
compensatory

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant

acted with gross negligence.

Gross negligence which, according to the Court, is equivalent to the term "notorious negligence"
and consists in the failure to exercise even slight care [Caunan v. Compania General de
Tabacos, 56 Phil. 542 (1932)] can be attributed to the CAA for its failure to remedy the
dangerous condition of the questioned elevation or to even post a warning sign directing the
attention of the viewers to the change in the elevation of the floorings notwithstanding its
knowledge of the hazard posed by such elevation [Rollo, pp. 28-29; Record oil Appeal, p. 57].
The wanton disregard by the CAA of the safety of the people using the viewing deck, who are
charged an admission fee, including the petitioner who paid the entrance fees to get inside the
vantage place [CA decision, p. 2; Rollo, p. 25] and are, therefore, entitled to expect a facility that
is properly and safely maintained — justifies the award of exemplary damages against the CAA,
as a deterrent and by way of example or correction for the public good. The award of P40,000.00
by the trial court as exemplary damages appropriately underscores the point that as an entity
changed with providing service to the public, the CAA. like all other entities serving the public.
has the obligation to provide the public with reasonably safe service.

Finally, the award of attorney's fees is also upheld considering that under Art. 2208 (1) of the
Civil Code, the same may be awarded whenever exemplary damages are awarded, as in this
case, and,at any rate, under Art. 2208 (11), the Court has the discretion to grant the same when
it is just and equitable.

However, since the Manila International Airport Authority (MIAA) has taken over the management
and operations of the Manila International Airport [renamed Ninoy Aquino International Airport
under Republic Act No. 6639] pursuant to Executive Order No. 778 as amended by executive
Orders Nos. 903 (1983), 909 (1983) and 298 (1987) and under Section 24 of the said Exec.
Order 778, the MIAA has assumed all the debts, liabilities and obligations of the now defunct
Civil Aeronautics Administration (CAA), the liabilities of the CAA have now been transferred to
the MIAA.

WHEREFORE, finding no reversible error, the Petition for review on certiorari is DENIED and the
decision of the Court of Appeals in CA-G.R. No. 51172-R is AFFIRMED.

SO ORDERED.
G.R. No. 189998 August 29, 2012

MAKATI SHANGRI-LA HOTEL AND RESORT, INC., Petitioner,

vs.
ELLEN JOHANNE HARPER, JONATHAN CHRISTOPHER HARPER, and RIGOBERTO
GILLERA, Respondents.

DECISION

BERSAMIN, J.:

The hotel owner is liable for civil damages to the surviving heirs of its hotel guest whom strangers
murder inside his hotel room.

The Case

Petitioner, the owner and operator of the 5-star Shangri-La Hotel in Makati City (Shangri-La
Hotel), appeals the decision promulgated on October 21, 2009,1 whereby the Court of Appeals
(CA) affirmed with modification the judgment rendered on October 25, 2005 by the Regional Trial
Court (RTC) in Quezon City holding petitioner liable for damages for the murder of Christian
Fredrik Harper, a Norwegian national.2 Respondents Ellen Johanne Harper and Jonathan
Christopher Harper are the widow and son of Christian Harper, while respondent Rigoberto
Gillera is their authorized representative in the Philippines.

Antecedents

In the first week of November 1999, Christian Harper came to Manila on a business trip as the
Business Development Manager for Asia of ALSTOM Power Norway AS, an engineering firm
with worldwide operations. He checked in at the Shangri-La Hotel and was billeted at Room
1428. He was due to check out on November 6, 1999. In the early morning of that date, however,
he was murdered inside his hotel room by still unidentified malefactors. He was then 30 years
old.

How the crime was discovered was a story in itself. A routine verification call from the American
Express Card Company to cardholder Harper’s residence in Oslo, Norway (i.e., Bygdoy Terasse
16, 0287 Oslo, Norway) led to the discovery. It appears that at around 11:00 am of November 6,
1999, a Caucasian male of about 30–32 years in age, 5’4" in height, clad in maroon long
sleeves, black denims and black shoes, entered the Alexis Jewelry Store in Glorietta, Ayala
Center, Makati City and expressed interest in purchasing a Cartier lady’s watch valued at ₱
320,000.00 with the use of two Mastercard credit cards and an American Express credit card
issued in the name of Harper. But the customer’s difficulty in answering the queries phoned in by
a credit card representative sufficiently aroused the suspicion of saleslady Anna Liza Lumba
(Lumba), who asked for the customer’s passport upon suggestion of the credit card
representative to put the credit cards on hold. Probably sensing trouble for himself, the customer
hurriedly left the store, and left the three credit cards and the passport behind.

In the meanwhile, Harper’s family in Norway must have called him at his hotel room to inform him
about the attempt to use his American Express card. Not getting any response from the room, his
family requested Raymond Alarcon, the Duty Manager of the Shangri-La Hotel, to check on
Harper’s room. Alarcon and a security personnel went to Room 1428 at 11:27 a.m., and were
shocked to discover Harper’s lifeless body on the bed.

Col. Rodrigo de Guzman (de Guzman), the hotel’s Security Manager, initially investigated the
murder. In his incident report, he concluded from the several empty bottles of wine in the trash
can and the number of cigarette butts in the toilet bowl that Harper and his visitors had drunk that
much and smoked that many cigarettes the night before.3
The police investigation actually commenced only upon the arrival in the hotel of the team of PO3
Carmelito Mendoza4 and SPO4 Roberto Hizon. Mendoza entered Harper’s room in the company
of De Guzman, Alarcon, Gami Holazo (the hotel’s Executive Assistant Manager), Norge Rosales
(the hotel’s Executive Housekeeper), and Melvin Imperial (a security personnel of the hotel).
They found Harper’s body on the bed covered with a blanket, and only the back of the head
could be seen. Lifting the blanket, Mendoza saw that the victim’s eyes and mouth had been
bound with electrical and packaging tapes, and his hands and feet tied with a white rope. The
body was identified to be that of hotel guest Christian Fredrik Harper.

Mendoza subsequently viewed the closed circuit television (CCTV) tapes, from which he found
that Harper had entered his room at 12:14 a.m. of November 6, 1999, and had been followed into
the room at 12:17 a.m. by a woman; that another person, a Caucasian male, had entered
Harper’s room at 2:48 a.m.; that the woman had left the room at around 5:33 a.m.; and that the
Caucasian male had come out at 5:46 a.m.

On November 10, 1999, SPO1 Ramoncito Ocampo, Jr. interviewed Lumba about the incident in
the Alexis Jewelry Shop. During the interview, Lumba confirmed that the person who had
attempted to purchase the Cartier lady’s watch on November 6, 1999 had been the person
whose picture was on the passport issued under the name of Christian Fredrik Harper and the
Caucasian male seen on the CCTV tapes entering Harper’s hotel room.

Sr. Insp. Danilo Javier of the Criminal Investigation Division of the Makati City Police reflected in
his Progress Report No. 25 that the police investigation showed that Harper’s passport, credit
cards, laptop and an undetermined amount of cash had been missing from the crime scene; and
that he had learned during the follow-up investigation about an unidentified Caucasian male’s
attempt to purchase a Cartier lady’s watch from the Alexis Jewelry Store in Glorietta, Ayala
Center, Makati City with the use of one of Harper’s credit cards.

On August 30, 2002, respondents commenced this suit in the RTC to recover various damages
from petitioner,6pertinently alleging:

xxx

7. The deceased was to check out and leave the hotel on November 6, 1999, but
in the early morning of said date, while he was in his hotel room, he was stabbed
to death by an (sic) still unidentified male who had succeeded to intrude into his
room.

8. The murderer succeeded to trespass into the area of the hotel’s private rooms
area and into the room of the said deceased on account of the hotel’s gross
negligence in providing the most basic security system of its guests, the lack of
which owing to the acts or omissions of its employees was the immediate cause
of the tragic death of said deceased.

xxx

10. Defendant has prided itself to be among the top hotel chains in the East
claiming to provide excellent service, comfort and security for its guests for which
reason ABB Alstom executives and their guests have invariably chosen this hotel
to stay.7

xxx

Ruling of the RTC

On October 25, 2005, the RTC rendered judgment after trial,8 viz:

WHEREFORE, finding the defendant hotel to be remiss in its duties and thus
liable for the death of Christian Harper, this Court orders the defendant to pay
plaintiffs the amount of:

PhP 43,901,055.00 as and by way of actual and compensatory damages;

PhP 739,075.00 representing the expenses of transporting the remains of

Harper to Oslo, Norway;

PhP 250,000.00 attorney’s fees;

and to pay the cost of suit.

SO ORDERED.

Ruling of the CA

Petitioner appealed, assigning to the RTC the following errors, to wit:

THE TRIAL COURT ERRED IN RULING THAT THE PLAINTIFFS-APPELLEES

ARE THE HEIRS OF THE LATE CHRISTIAN HARPER, AS THERE IS NO
COMPETENT EVIDENCE ON RECORD SUPPORTING SUCH RULING.

II

THE TRIAL COURT ERRED IN RULING THAT THE DEFENDANT-

APPELLANT’SNEGLIGENCE WAS THE PROXIMATE CAUSE OF THE DEATH
OF MR. HARPER, OR IN NOT RULING THAT IT WAS MR. CHRISTIAN
HARPER’S OWN NEGLIGENCE WHICH WAS THE SOLE, PROXIMATE
CAUSE OF HIS DEATH.

III

THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES

THE AMOUNTOF PH₱ 43,901,055.00, REPRESENTING THE ALLEGED LOST
EARNING OF THE LATE CHRISTIAN HARPER, THERE BEING NO
COMPETENT PROOF OF THE EARNING OF MR. HARPER DURING HIS
LIFETIME AND OF THE ALLEGATION THAT THE PLAINTIFFS-APPELLEES
ARE MR. HARPER’S HEIRS.

IV

THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES

THE AMOUNT OF PH₱ 739,075.00, REPRESENTING THE ALLEGED COST
OF TRANSPORTING THE REMAINS OF MR. CHRISTIAN HARPER TO OSLO,
NORWAY, THERE BEING NO PROOF ON RECORD THAT IT WAS
PLAINTIFFS-APPELLEES WHO PAID FOR SAID COST.

V
 THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES AND COST
OF SUIT TO THE PLAINTIFFS-APPELLEES, THERE BEING NO PROOF ON
RECORD SUPPORTING SUCH AWARD.

On October 21, 2009, the CA affirmed the judgment of the RTC with modification,9 as follows:

WHEREFORE, the assailed Decision of the Regional Trial Court dated October
25, 2005 is hereby AFFIRMED with MODIFICATION. Accordingly, defendant-
appellant is ordered to pay plaintiffs-appellees the amounts of ₱ 52,078,702.50,
as actual and compensatory damages; ₱ 25,000.00, as temperate damages; ₱
250,000.00, as attorney’s fees; and to pay the costs of the suit.

SO ORDERED.10

Issues

Petitioner still seeks the review of the judgment of the CA, submitting the following issues for
consideration and determination, namely:

I.

WHETHER OR NOT THE PLAINTIFFS-APPELLEES WERE ABLE TO PROVE

WITH COMPETENT EVIDENCE THE AFFIRMATIVE ALLEGATIONS IN THE
COMPLAINT THAT THEY ARE THE WIDOW AND SON OF MR. CHRISTIAN
HARPER.

II.

WHETHER OR NOT THE APPELLEES WERE ABLE TO PROVE WITH

COMPETENT EVIDENCE THE AFFIRMATIVE ALLEGATIONS IN THE
COMPLAINT THAT THERE WAS NEGLIGENCE ON THE PART OF THE
APPELLANT AND ITS SAID NEGLIGENCE WAS THE PROXIMATE CAUSE OF
THE DEATH OF MR. CHRISTIAN HARPER.

III.

WHETHER OR NOT THE PROXIMATE CAUSE OF THE DEATH OF MR.

CHRISTIAN HARPER WAS HIS OWN NEGLIGENCE.

Ruling

The appeal lacks merit.

I.
Requirements for authentication of documents
establishing respondents’ legal relationship
with the victim as his heirs were complied with

As to the first issue, the CA pertinently held as follows:

The documentary evidence that plaintiffs-appellees offered relative to their

heirship consisted of the following –

1. Exhibit "Q" - Birth Certificate of Jonathan Christopher Harper, son of

Christian Fredrik Harper and Ellen Johanne Harper;
 2. Exhibit "Q-1" - Marriage Certificate of Ellen Johanne Clausen and
Christian Fredrik Harper;

3. Exhibit "R" - Birth Certificate of Christian Fredrick Harper, son of

Christopher Shaun Harper and Eva Harper; and

4. Exhibit "R-1" - Certificate from the Oslo Probate Court stating that Ellen
Harper was married to the deceased, Christian Fredrick Harper and listed
Ellen Harper and Jonathan Christopher Harper as the heirs of Christian
Fredrik Harper.

Defendant-appellant points out that plaintiffs-appellees committed several

mistakes as regards the above documentary exhibits, resultantly making them
incompetent evidence, to wit, (a) none of the plaintiffs-appellees or any of the
witnesses who testified for the plaintiffs gave evidence that Ellen Johanne Harper
and Jonathan Christopher Harper are the widow and son of the deceased
Christian Fredrik Harper; (b) Exhibit "Q" was labeled as Certificate of Marriage in
plaintiffs-appellees’ Formal Offer of Evidence, when it appears to be the Birth
Certificate of the late Christian Harper; (c) Exhibit "Q-1" is a translation of the
Marriage Certificate of Ellen Johanne Harper and Christian Fredrik Harper, the
original of which was not produced in court, much less, offered in evidence. Being
a mere translation, it cannot be a competent evidence of the alleged fact that
Ellen Johanne Harper is the widow of Christian Fredrik Harper, pursuant to the
Best Evidence Rule. Even assuming that it is an original Marriage Certificate, it is
not a public document that is admissible without the need of being identified or
authenticated on the witness stand by a witness, as it appears to be a document
issued by the Vicar of the Parish of Ullern and, hence, a private document; (d)
Exhibit "R" was labeled as Probate Court Certificate in plaintiffs-appellees’ Formal
Offer of Evidence, when it appears to be the Birth Certificate of the deceased,
Christian Fredrik Harper; and (e) Exhibit "R-1" is a translation of the supposed
Probate Court Certificate, the original of which was not produced in court, much
less, offered in evidence. Being a mere translation, it is an incompetent evidence
of the alleged fact that plaintiffs-appellees are the heirs of Christian Fredrik
Harper, pursuant to the Best Evidence Rule.

Defendant-appellant further adds that Exhibits "Q-1" and "R-1" were not duly
attested by the legal custodians (by the Vicar of the Parish of Ullern for Exhibit
"Q-1" and by the Judge or Clerk of the Probate Court for Exhibit "R-1") as
required under Sections 24 and 25, Rule 132 of the Revised Rules of Court.
Likewise, the said documents are not accompanied by a certificate that such
officer has the custody as also required under Section 24 of Rule 132.
Consequently, defendant-appellant asseverates that Exhibits "Q-1" and "R-1" as
private documents, which were not duly authenticated on the witness stand by a
competent witness, are essentially hearsay in nature that have no probative
value. Therefore, it is obvious that plaintiffs-appellees failed to prove that they are
the widow and son of the late Christian Harper.

Plaintiffs-appellees make the following counter arguments, viz, (a) Exhibit "Q-1",
the Marriage Certificate of Ellen Johanne Harper and Christian Fredrik Harper,
was issued by the Office of the Vicar of Ullern with a statement that "this
certificate is a transcript from the Register of Marriage of Ullern Church." The
contents of Exhibit "Q-1" were translated by the Government of the Kingdom of
Norway, through its authorized translator, into English and authenticated by the
Royal Ministry of Foreign Affairs of Norway, which in turn, was also authenticated
by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden;
(b) Exhibit "Q", the Birth Certificate of Jonathan Christopher Harper, was issued
and signed by the Registrar of the Kingdom of Norway, as authenticated by the
Royal Ministry of Foreign Affairs of Norway, whose signature was also
authenticated by the Consul, Embassy of the Republic of the Philippines in
Stockholm, Sweden; and (c) Exhibit "R-1", the Probate Court Certificate was also
authenticated by the Royal Ministry of Foreign Affairs of Norway, whose signature
was also authenticated by the Consul, Embassy of the Republic of the Philippines
in Stockholm, Sweden.

They further argue that since Exhibit "Q-1", Marriage Certificate, was issued by
the vicar or parish priest, the legal custodian of parish records, it is considered as
an exception to the hearsay rule. As for Exhibit "R-1", the Probate Court
Certificate, while the document is indeed a translation of the certificate, it is an
official certification, duly confirmed by the Government of the Kingdom of Norway;
its contents were lifted by the Government Authorized Translator from the official
record and thus, a written official act of a foreign sovereign country.

WE rule for plaintiffs-appellees.

The Revised Rules of Court provides that public documents may be evidenced by
a copy attested by the officer having the legal custody of the record. The
attestation must state, in substance, that the copy is a correct copy of the original,
or a specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.

If the record is not kept in the Philippines, the attested copy must be
accompanied with a certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice consul, or
consular agent or by any officer in the foreign service of the Philippines stationed
in the foreign country in which the record is kept, and authenticated by the seal of
his office.

The documents involved in this case are all kept in Norway. These documents
have been authenticated by the Royal Norwegian Ministry of Foreign Affairs; they
bear the official seal of the Ministry and signature of one, Tanja Sorlie. The
documents are accompanied by an Authentication by the Consul, Embassy of the
Republic of the Philippines in Stockholm, Sweden to the effect that, Tanja Sorlie
is duly authorized to legalize official documents for the Ministry.

Exhibits "Q" and "R" are extracts of the register of births of both Jonathan
Christopher Harper and the late Christian Fredrik Harper, respectively, wherein
the former explicitly declares that Jonathan Christopher is the son of Christian
Fredrik and Ellen Johanne Harper. Said documents bear the signature of the
keeper, Y. Ayse B. Nordal with the official seal of the Office of the Registrar of
Oslo, and the authentication of Tanja Sorlie of the Royal Ministry of Foreign
Affairs, Oslo, which were further authenticated by Philippine Consul Marian
Jocelyn R. Tirol. In addition, the latter states that said documents are the birth
certificates of Jonathan Christopher Harper and Christian Fredrik Harper issued
by the Registrar Office of Oslo, Norway on March 23, 2004.

Exhibits "Q-1", on the other hand, is the Marriage Certificate of Christian Fredrik
Harper and Ellen Johanne Harper issued by the vicar of the Parish of Ullern while
Exhibit "R-1" is the Probate Court Certificate from the Oslo Probate Court,
naming Ellen Johanne Harper and Jonathan Christopher Harper as the heirs of
the deceased Christian Fredrik Harper. The documents are certified true
translations into English of the transcript of the said marriage certificate and the
 probate court certificate. They were likewise signed by the authorized
government translator of Oslo with the seal of his office; attested by Tanja Sorlie
and further certified by our own Consul.

In view of the foregoing, WE conclude that plaintiffs-appellees had substantially

complied with the requirements set forth under the rules. WE would also like to
stress that plaintiffs-appellees herein are residing overseas and are litigating
locally through their representative. While they are not excused from complying
with our rules, WE must take into account the attendant reality that these
overseas litigants communicate with their representative and counsel via long
distance communication. Add to this is the fact that compliance with the
requirements on attestation and authentication or certification is no easy process
and completion thereof may vary depending on different factors such as the
location of the requesting party from the consulate and the office of the record
custodian, the volume of transactions in said offices and even the mode of
sending these documents to the Philippines. With these circumstances under
consideration, to OUR minds, there is every reason for an equitable and relaxed
application of the rules on the issuance of the required attestation from the
custodian of the documents to plaintiffs-appellees’ situation. Besides, these
questioned documents were duly signed by the officers having custody of the
same.11

Petitioner assails the CA’s ruling that respondents substantially complied with the rules on the
authentication of the proofs of marriage and filiation set by Section 24 and Section 25 of Rule
132 of the Rules of Court when they presented Exhibit Q, Exhibit Q-1, Exhibit R and Exhibit R-1,
because the legal custodian did not duly attest that Exhibit Q-1 and Exhibit R-1 were the correct
copies of the originals on file, and because no certification accompanied the documents stating
that "such officer has custody of the originals." It contends that respondents did not competently
prove their being Harper’s surviving heirs by reason of such documents being hearsay and
incompetent.

Petitioner’s challenge against respondents’ documentary evidence on marriage and heirship is

not well-taken.

Section 24 and Section 25 of Rule 132 provide:

Section 24. Proof of official record. — The record of public documents referred to
in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.

Section 25. What attestation of copy must state. — Whenever a copy of a

document or record is attested for the purpose of evidence, the attestation must
state, in substance, that the copy is a correct copy of the original, or a specific
part thereof, as the case may be. The attestation must be under the official seal
of the attesting officer, if there be any, or if he be the clerk of a court having a
seal, under the seal of such court.

Although Exhibit Q,12 Exhibit Q-1,13 Exhibit R14 and Exhibit R-115 were not attested by the officer
having the legal custody of the record or by his deputy in the manner required in Section 25 of
Rule 132, and said documents did not comply with the requirement under Section 24 of Rule 132
to the effect that if the record was not kept in the Philippines a certificate of the person having
custody must accompany the copy of the document that was duly attested stating that such
person had custody of the documents, the deviation was not enough reason to reject the utility of
the documents for the purposes they were intended to serve.

Exhibit Q and Exhibit R were extracts from the registry of births of Oslo, Norway issued on March
23, 2004 and signed by Y. Ayse B. Nordal, Registrar, and corresponded to respondent Jonathan
Christopher Harper and victim Christian Fredrik Harper, respectively.16 Exhibit Q explicitly stated
that Jonathan was the son of Christian Fredrik Harper and Ellen Johanne Harper, while Exhibit R
attested to the birth of Christian Fredrik Harper on December 4, 1968. Exhibit Q and Exhibit R
were authenticated on March 29, 2004 by the signatures of Tanja Sorlie of the Royal Ministry of
Foreign Affairs of Norway as well as by the official seal of that office. In turn, Consul Marian
Jocelyn R. Tirol of the Philippine Consulate in Stockholm, Sweden authenticated the signatures
of Tanja Sorlie and the official seal of the Royal Ministry of Foreign Affairs of Norway on Exhibit
Q and Exhibit R, explicitly certifying to the authority of Tanja Sorlie "to legalize official documents
for the Royal Ministry of Foreign Affairs of Norway."17

Exhibit Q-1,18 the Marriage Certificate of Ellen Johanne Clausen Harper and Christian Fredrik
Harper, contained the following data, namely: (a) the parties were married on June 29, 1996 in
Ullern Church; and (b) the certificate was issued by the Office of the Vicar of Ullern on June 29,
1996.

Exhibit Q-1 was similarly authenticated by the signature of Tanja Sorlie of the Royal Ministry of
Foreign Affairs of Norway, with the official seal of that office. Philippine Consul Tirol again
expressly certified to the capacity of Sorlie "to legalize official documents for the Royal Ministry of
Foreign Affairs of Norway,"19 and further certified that the document was a true translation into
English of a transcript of a Marriage Certificate issued to Christian Frederik Harper and Ellen
Johanne Clausen by the Vicar of the Parish of Ullern on June 29, 1996.

Exhibit R-1,20 a Probate Court certificate issued by the Oslo Probate Court on February 18, 2000
through Morten Bolstad, its Senior Executive Officer, was also authenticated by the signature of
Tanja Sorlie and with the official seal of the Royal Ministry of Foreign Affairs of Norway. As with
the other documents, Philippine Consul Tirol explicitly certified to the capacity of Sorlie "to
legalize official documents for the Royal Ministry of Foreign Affairs of Norway," and further
certified that the document was a true translation into English of the Oslo Probate Court
certificate issued on February 18, 2000 to the effect that Christian Fredrik Harper, born on
December 4, 1968, had reportedly died on November 6, 1999.21

The Oslo Probate Court certificate recited that both Ellen Johanne Harper and Christopher S.
Harper were Harper’s heirs, to wit:

The above names surviving spouse has accepted responsibility for the
commitments of the deceased in accordance with the provisions of Section 78 of
the Probate Court Act (Norway), and the above substitute guardian has agreed to
the private division of the estate.

The following heir and substitute guardian will undertake the private division of
the estate:

Ellen Johanne Harper

Christopher S. Harper

This probate court certificate relates to the entire estate.

Oslo Probate Court, 18 February 2000.22

The official participation in the authentication process of Tanja Sorlie of the Royal Ministry of
Foreign Affairs of Norway and the attachment of the official seal of that office on each
authentication indicated that Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 were documents of
a public nature in Norway, not merely private documents. It cannot be denied that based on
Philippine Consul Tirol’s official authentication, Tanja Sorlie was "on the date of signing, duly
authorized to legalize official documents for the Royal Ministry of Foreign Affairs of Norway."
Without a showing to the contrary by petitioner, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1
should be presumed to be themselves official documents under Norwegian law, and admissible
as prima facie evidence of the truth of their contents under Philippine law.

At the minimum, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 substantially met the
requirements of Section 24 and Section 25 of Rule 132 as a condition for their admission as
evidence in default of a showing by petitioner that the authentication process was tainted with
bad faith. Consequently, the objective of ensuring the authenticity of the documents prior to their
admission as evidence was substantially achieved. In Constantino-David v. Pangandaman-
Gania,23 the Court has said that substantial compliance, by its very nature, is actually inadequate
observance of the requirements of a rule or regulation that are waived under equitable
circumstances in order to facilitate the administration of justice, there being no damage or injury
caused by such flawed compliance.

The Court has further said in Constantino-David v. Pangandaman-Gania that the focus in every
inquiry on whether or not to accept substantial compliance is always on the presence of equitable
conditions to administer justice effectively and efficiently without damage or injury to the spirit of
the legal obligation.24 There are, indeed, such equitable conditions attendant here, the foremost of
which is that respondents had gone to great lengths to submit the documents. As the CA
observed, respondents’ compliance with the requirements on attestation and authentication of
the documents had not been easy; they had to contend with many difficulties (such as the
distance of Oslo, their place of residence, from Stockholm, Sweden, where the Philippine
Consulate had its office; the volume of transactions in the offices concerned; and the safe
transmission of the documents to the Philippines).25 Their submission of the documents should be
presumed to be in good faith because they did so in due course. It would be inequitable if the
sincerity of respondents in obtaining and submitting the documents despite the difficulties was
ignored.

The principle of substantial compliance recognizes that exigencies and situations do occasionally
demand some flexibility in the rigid application of the rules of procedure and the laws.26 That rules
of procedure may be mandatory in form and application does not forbid a showing of substantial
compliance under justifiable circumstances,27because substantial compliance does not equate to
a disregard of basic rules. For sure, substantial compliance and strict adherence are not always
incompatible and do not always clash in discord. The power of the Court to suspend its own rules
or to except any particular case from the operation of the rules whenever the purposes of justice
require the suspension cannot be challenged.28 In the interest of substantial justice, even
procedural rules of the most mandatory character in terms of compliance are frequently relaxed.
Similarly, the procedural rules should definitely be liberally construed if strict adherence to their
letter will result in absurdity and in manifest injustice, or where the merits of a party’s cause are
apparent and outweigh considerations of non-compliance with certain formal requirements.29 It is
more in accord with justice that a party-litigant is given the fullest opportunity to establish the
merits of his claim or defense than for him to lose his life, liberty, honor or property on mere
technicalities. Truly, the rules of procedure are intended to promote substantial justice, not to
defeat it, and should not be applied in a very rigid and technical sense.30

Petitioner urges the Court to resolve the apparent conflict between the rulings in Heirs of Pedro
Cabais v. Court of Appeals31 (Cabais) and in Heirs of Ignacio Conti v. Court of
Appeals32 (Conti) establishing filiation through a baptismal certificate.33

Petitioner’s urging is not warranted, both because there is no conflict between the rulings
in Cabais and Conti, and because neither Cabais nor Conti is relevant herein.
In Cabais, the main issue was whether or not the CA correctly affirmed the decision of the RTC
that had relied mainly on the baptismal certificate of Felipa C. Buesa to establish the parentage
and filiation of Pedro Cabais. The Court held that the petition was meritorious, stating:

A birth certificate, being a public document, offers prima facie evidence of filiation
and a high degree of proof is needed to overthrow the presumption of truth
contained in such public document. This is pursuant to the rule that entries in
official records made in the performance of his duty by a public officer are prima
facie evidence of the facts therein stated. The evidentiary nature of such
document must, therefore, be sustained in the absence of strong, complete and
conclusive proof of its falsity or nullity.

On the contrary, a baptismal certificate is a private document, which, being

hearsay, is not a conclusive proof of filiation. It does not have the same probative
value as a record of birth, an official or public document. In US v. Evangelista,
this Court held that church registers of births, marriages, and deaths made
subsequent to the promulgation of General Orders No. 68 and the passage of Act
No. 190 are no longer public writings, nor are they kept by duly authorized public
officials. Thus, in this jurisdiction, a certificate of baptism such as the one herein
controversy is no longer regarded with the same evidentiary value as official
records of birth. Moreover, on this score, jurisprudence is consistent and uniform
in ruling that the canonical certificate of baptism is not sufficient to prove
recognition.34

The Court sustained the Cabais petitioners’ stance that the RTC had apparently erred in relying
on the baptismal certificate to establish filiation, stressing the baptismal certificate’s limited
evidentiary value as proof of filiation inferior to that of a birth certificate; and declaring that the
baptismal certificate did not attest to the veracity of the statements regarding the kinsfolk of the
one baptized. Nevertheless, the Court ultimately ruled that it was respondents’ failure to present
the birth certificate, more than anything else, that lost them their case, stating that: "The
unjustified failure to present the birth certificate instead of the baptismal certificate now under
consideration or to otherwise prove filiation by any other means recognized by law weigh heavily
against respondents."35

In Conti, the Court affirmed the rulings of the trial court and the CA to the effect that the Conti
respondents were able to prove by preponderance of evidence their being the collateral heirs of
deceased Lourdes Sampayo. The Conti petitioners disagreed, arguing that baptismal certificates
did not prove the filiation of collateral relatives of the deceased. Agreeing with the CA, the Court
said:

We are not persuaded. Altogether, the documentary and testimonial evidence

submitted xxx are competent and adequate proofs that private respondents are
collateral heirs of Lourdes Sampayo.

xxx

Under Art. 172 of the Family Code, the filiation of legitimate children shall be
proved by any other means allowed by the Rules of Court and special laws, in the
absence of a record of birth or a parent’s admission of such legitimate filiation in
a public or private document duly signed by the parent. Such other proof of one’s
filiation may be a baptismal certificate, a judicial admission, a family Bible in
which his name has been entered, common reputation respecting his pedigree,
admission by silence, the testimonies of witnesses and other kinds of proof
admissible under Rule 130 of the Rules of Court. By analogy, this method of
proving filiation may also be utilized in the instant case.
 Public documents are the written official acts, or records of the official act of the
sovereign authority, official bodies and tribunals, and public officers, whether of
the Philippines, or a foreign country. The baptismal certificates presented in
evidence by private respondents are public documents. Parish priests continue to
be the legal custodians of the parish records and are authorized to issue true
copies, in the form of certificates, of the entries contained therein.

The admissibility of baptismal certificates offered by Lydia S. Reyes, absent the

testimony of the officiating priest or the official recorder, was settled in People v.
Ritter, citing U.S. v. de Vera (28 Phil. 105 1914, thus:

.... The entries made in the Registry Book may be considered as

entries made in the course of business under Section 43 of Rule
130, which is an exception to the hearsay rule. The baptisms
administered by the church are one of its transactions in the
exercise of ecclesiastical duties and recorded in the book of the
church during this course of its business.

It may be argued that baptismal certificates are evidence only of the

administration of the sacrament, but in this case, there were four (4) baptismal
certificates which, when taken together, uniformly show that Lourdes, Josefina,
Remedios and Luis had the same set of parents, as indicated therein.
Corroborated by the undisputed testimony of Adelaida Sampayo that with the
demise of Lourdes and her brothers Manuel, Luis and sister Remedios, the only
sibling left was Josefina Sampayo Reyes, such baptismal certificates have
acquired evidentiary weight to prove filiation.36

Obviously, Conti did not treat a baptismal certificate, standing alone, as sufficient to prove
filiation; on the contrary, Conti expressly held that a baptismal certificate had evidentiary value to
prove filiation if considered alongside other evidence of filiation. As such, a baptismal certificate
alone is not sufficient to resolve a disputed filiation.

Unlike Cabais and Conti, this case has respondents presenting several documents, like the birth
certificates of Harper and respondent Jonathan Harper, the marriage certificate of Harper and
Ellen Johanne Harper, and the probate court certificate, all of which were presumably regarded
as public documents under the laws of Norway. Such documentary evidence sufficed to
competently establish the relationship and filiation under the standards of our Rules of Court.

II
Petitioner was liable due to its own negligence

Petitioner argues that respondents failed to prove its negligence; that Harper’s own negligence in
allowing the killers into his hotel room was the proximate cause of his own death; and that hotels
were not insurers of the safety of their guests.

The CA resolved petitioner’s arguments thuswise:

Defendant-appellant contends that the pivotal issue is whether or not it had

committed negligence and corollarily, whether its negligence was the immediate
cause of the death of Christian Harper. In its defense, defendant-appellant mainly
avers that it is equipped with adequate security system as follows: (1) keycards
or vingcards for opening the guest rooms, (2) two CCTV monitoring cameras on
each floor of the hotel and (3) roving guards with handheld radios, the number of
which depends on the occupancy rate of the hotel. Likewise, it reiterates that the
proximate cause of Christian Harper’s death was his own negligence in inviting to
his room the two (2) still unidentified suspects.
Plaintiffs-appellees in their Brief refute, in that, the liability of defendant-appellant
is based upon the fact that it was in a better situation than the injured person,
Christian Harper, to foresee and prevent the happening of the injurious
occurrence. They maintain that there is no dispute that even prior to the untimely
demise of Christian Harper, defendant-appellant was duly forewarned of its
security lapses as pointed out by its Chief Security Officer, Col. Rodrigo De
Guzman, who recommended that one roving guard be assigned on each floor of
the hotel considering the length and shape of the corridors. They posit that
defendant-appellant’s inaction constitutes negligence.

This Court finds for plaintiffs-appellees.

As the action is predicated on negligence, the relevant law is Article 2176 of the
Civil Code, which states that –

"Whoever by act or omission causes damage to another, there

being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there was no pre-existing contractual
relation between the parties, is called quasi-delict and is governed
by the provisions of this chapter."

Negligence is defined as the omission to do something which a reasonable man,

guided by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and reasonable man
would not do. The Supreme Court likewise ruled that negligence is want of care
required by the circumstances. It is a relative or comparative, not an absolute,
term and its application depends upon the situation of the parties and the degree
of care and vigilance which the circumstances reasonably require. In determining
whether or not there is negligence on the part of the parties in a given situation,
jurisprudence has laid down the following test: Did defendant, in doing the
alleged negligent act, use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, the person is guilty
of negligence. The law, in effect, adopts the standard supposed to be supplied by
the imaginary conduct of the discreet pater familias of the Roman law.

The test of negligence is objective. WE measure the act or omission of the

tortfeasor with a perspective as that of an ordinary reasonable person who is
similarly situated. The test, as applied to the extant case, is whether or not
defendant-appellant, under the attendant circumstances, used that reasonable
care and caution which an ordinary reasonable person would have used in the
same situation.

WE rule in the negative.

In finding defendant-appellant remiss in its duty of exercising the required

reasonable care under the circumstances, the court a quo reasoned-out, to wit:

"Of the witnesses presented by plaintiffs to prove its (sic) case,

the only one with competence to testify on the issue of adequacy
or inadequacy of security is Col. Rodrigo De Guzman who was
then the Chief Security Officer of defendant hotel for the year
1999. He is a retired police officer and had vast experience in
security jobs. He was likewise a member of the elite Presidential
Security Group.
He testified that upon taking over the job as the chief of the
security force of the hotel, he made an assessment of the security
situation. Col. De Guzman was not satisfied with the security set-
up and told the hotel management of his desire to improve it. In
his testimony, De Guzman testified that at the time he took over,
he noticed that there were few guards in the elevated portion of
the hotel where the rooms were located. The existing security
scheme then was one guard for 3 or 4 floors. He likewise testified
that he recommended to the hotel management that at least one
guard must be assigned per floor especially considering that the
hotel has a long "L-shaped" hallway, such that one cannot see
both ends of the hallway. He further opined that "even one guard
in that hallway is not enough because of the blind portion of the
hallway."

On cross-examination, Col. De Guzman testified that the security

of the hotel was adequate at the time the crime occurred because
the hotel was not fully booked. He qualified his testimony on direct
in that his recommendation of one guard per floor is the "ideal"
set-up when the hotel is fully-booked.

Be that as it may, it must be noted that Col. De Guzman also

testified that the reason why the hotel management disapproved
his recommendation was that the hotel was not doing well. It is for
this reason that the hotel management did not heed the
recommendation of Col. De Guzman, no matter how sound the
recommendation was, and whether the hotel is fully-booked or
not. It was a business judgment call on the part of the defendant.

Plaintiffs anchor its (sic) case on our law on quasi-delicts.

Article 2176. Whoever by act or omission causes

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

Liability on the part of the defendant is based upon the fact that
he was in a better situation than the injured person to foresee and
prevent the happening of the injurious occurrence.

There is no dispute that even prior to the untimely demise of Mr.

Harper, defendant was duly forewarned of the security lapses in
the hotel. Col. De Guzman was particularly concerned with the
security of the private areas where the guest rooms are. He
wanted not just one roving guard in every three or four floors. He
insisted there must be at least one in each floor considering the
length and the shape of the corridors. The trained eyes of a
security officer was (sic) looking at that deadly scenario resulting
from that wide security breach as that which befell Christian
Harper.

The theory of the defense that the malefactor/s was/were known

to Harper or was/were visitors of Harper and that there was a
shindig among [the] three deserves scant consideration.
The NBI Biology Report (Exh. "C" & "D") and the Toxicology
Report (Exh. "E") belie the defense theory of a joyous party
between and among Harper and the unidentified malefactor/s.
Based on the Biology Report, Harper was found negative of
prohibited and regulated drugs. The Toxicology Report likewise
revealed that the deceased was negative of the presence of
alcohol in his blood.

The defense even suggests that the malefactor/s gained entry

into the private room of Harper either because Harper allowed
them entry by giving them access to the vingcard or because
Harper allowed them entry by opening the door for them, the
usual gesture of a room occupant to his visitors.

While defendant’s theory may be true, it is more likely, under the

circumstances obtaining that the malefactor/s gained entry into
his room by simply knocking at Harper’s door and the latter
opening it probably thinking it was hotel personnel, without an
inkling that criminal/s could be in the premises.

The latter theory is more attuned to the dictates of reason. If

indeed the female "visitor" is known to or a visitor of Harper, she
should have entered the the room together with Harper. It is quite
unlikely that a supposed "visitor" would wait three minutes to be
with a guest when he/she could go with the guest directly to the
room. The interval of three minutes in Harper’s entry and that of
the alleged female visitor belies the "theory of acquaintanceship".
It is most likely that the female "visitor" was the one who opened
the door to the male "visitor", undoubtedly, a co-conspirator.

In any case, the ghastly incident could have been prevented had
there been adequate security in each of the hotel floors. This,
coupled with the earlier recommendation of Col. De Guzman to
the hotel management to act on the security lapses of the hotel,
raises the presumption that the crime was foreseeable.

Clearly, defendant’s inaction constitutes negligence or want of the

reasonable care demanded of it in that particular situation.

In a case, the Supreme Court defined negligence

as:

The failure to observe for the protection of the

interests of another person that degree of care,
precaution and vigilance, which the circumstances
justly demand, whereby such person suffers
injury.

Negligence is want of care required by the

circumstances. It is a relative or comparative, not
an absolute term, and its application depends
upon the situation of the parties, and the degree of
care and vigilance which the circumstances
reasonably impose. Where the danger is great, a
high degree of care is necessary.
 Moreover, in applying the premises liability rule in the instant case
as it is applied in some jurisdiction (sic) in the United States, it is
enough that guests are injured while inside the hotel premises to
make the hotelkeeper liable. With great caution should the liability
of the hotelkeeper be enforced when a guest died inside the hotel
premises.

It also bears stressing that there were prior incidents that

occurred in the hotel which should have forewarned the hotel
management of the security lapses of the hotel. As testified to by
Col. De Guzman, "there were ‘minor’ incidents" (loss of items)
before the happening of the instant case.

These "minor" incidents may be of little significance to the hotel,

yet relative to the instant case, it speaks volume. This should
have served as a caveat that the hotel security has lapses.

Makati Shangri-La Hotel, to stress, is a five-star hotel. The

"reasonable care" that it must exercise for the safety and comfort
of its guests should be commensurate with the grade and quality
of the accommodation it offers. If there is such a thing as "five-star
hotel security", the guests at Makati Shangri-La surely deserves
just that!

When one registers (as) a guest of a hotel, he makes the

establishment the guardian of his life and his personal belongings
during his stay. It is a standard procedure of the management of
the hotel to screen visitors who call on their guests at their rooms.
The murder of Harper could have been avoided had the security
guards of the Shangri-La Hotel in Makati dutifully observed this
standard procedure."

WE concur.

Well settled is the doctrine that "the findings of fact by the trial court are accorded
great respect by appellate courts and should not be disturbed on appeal unless
the trial court has overlooked, ignored, or disregarded some fact or
circumstances of sufficient weight or significance which, if considered, would alter
the situation." After a conscientious sifting of the records, defendant-appellant
fails to convince US to deviate from this doctrine.

It could be gleaned from findings of the trial court that its conclusion of negligence
on the part of defendant-appellant is grounded mainly on the latter’s inadequate
hotel security, more particularly on the failure to deploy sufficient security
personnel or roving guards at the time the ghastly incident happened.

A review of the testimony of Col. De Guzman reveals that on direct examination

he testified that at the time he assumed his position as Chief Security Officer of
defendant-appellant, during the early part of 1999 to the early part of 2000, he
noticed that some of the floors of the hotel were being guarded by a few guards,
for instance, 3 or 4 floors by one guard only on a roving manner. He then made a
recommendation that the ideal-set up for an effective security should be one
guard for every floor, considering that the hotel is L-shaped and the ends of the
hallways cannot be seen. At the time he made the recommendation, the same
was denied, but it was later on considered and approved on December 1999
because of the Centennial Celebration.
On cross-examination, Col. De Guzman confirmed that after he took over as
Chief Security Officer, the number of security guards was increased during the
first part of December or about the last week of November, and before the
incident happened, the security was adequate. He also qualified that as to his
direct testimony on "ideal-set up", he was referring to one guard for every floor if
the hotel is fully booked. At the time he made his recommendation in the early
part of 1999, it was disapproved as the hotel was not doing well and it was not
fully booked so the existing security was adequate enough. He further explained
that his advice was observed only in the late November 1999 or the early part of
December 1999.

It could be inferred from the foregoing declarations of the former Chief Security
Officer of defendant-appellant that the latter was negligent in providing adequate
security due its guests. With confidence, it was repeatedly claimed by defendant-
appellant that it is a five-star hotel. Unfortunately, the record failed to show that at
the time of the death of Christian Harper, it was exercising reasonable care to
protect its guests from harm and danger by providing sufficient security
commensurate to it being one of the finest hotels in the country. In so concluding,
WE are reminded of the Supreme Court’s enunciation that the hotel business like
the common carrier’s business is imbued with public interest. Catering to the
public, hotelkeepers are bound to provide not only lodging for hotel guests but
also security to their persons and belongings. The twin duty constitutes the
essence of the business.

It is clear from the testimony of Col. De Guzman that his recommendation was
initially denied due to the fact that the business was then not doing well. The "one
guard, one floor" recommended policy, although ideal when the hotel is fully-
booked, was observed only later in November 1999 or in the early part of
December 1999, or needless to state, after the murder of Christian Harper. The
apparent security lapses of defendant-appellant were further shown when the
male culprit who entered Christian Harper’s room was never checked by any of
the guards when he came inside the hotel. As per interview conducted by the
initial investigator, PO3 Cornelio Valiente to the guards, they admitted that
nobody know that said man entered the hotel and it was only through the monitor
that they became aware of his entry. It was even evidenced by the CCTV that
before he walked to the room of the late Christian Harper, said male suspect
even looked at the monitoring camera. Such act of the man showing wariness,
added to the fact that his entry to the hotel was unnoticed, at an unholy hour,
should have aroused suspicion on the part of the roving guard in the said floor,
had there been any. Unluckily for Christian Harper, there was none at that time.

Proximate cause is defined as that cause, which, in natural and continuous

sequence, unbroken by any efficient intervening cause, produces, the injury, and
without which the result would not have occurred. More comprehensively,
proximate cause is that cause acting first and producing the injury, either
immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its
immediate predecessor, the final event in the chain immediately effecting the
injury as natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an
ordinarily prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result
therefrom.

Defendant-appellant’s contention that it was Christian Harper’s own negligence in

allowing the malefactors to his room that was the proximate cause of his death, is
untenable. To reiterate, defendant-appellant is engaged in a business imbued
 with public interest, ergo, it is bound to provide adequate security to its guests. As
previously discussed, defendant-appellant failed to exercise such reasonable
care expected of it under the circumstances. Such negligence is the proximate
cause which set the chain of events that led to the eventual demise of its guest.
Had there been reasonable security precautions, the same could have saved
Christian Harper from a brutal death.

The Court concurs entirely with the findings and conclusions of the CA, which the Court regards
to be thorough and supported by the records of the trial. Moreover, the Court cannot now review
and pass upon the uniform findings of negligence by the CA and the RTC because doing so
would require the Court to delve into and revisit the factual bases for the finding of negligence,
something fully contrary to its character as not a trier of facts. In that regard, the factual findings
of the trial court that are supported by the evidence on record, especially when affirmed by the
CA, are conclusive on the Court.37 Consequently, the Court will not review unless there are
exceptional circumstances for doing so, such as the following:

(a) When the findings are grounded entirely on speculation, surmises or

conjectures;

(b) When the inference made is manifestly mistaken, absurd or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the appellant and
the appellee;

(g) When the findings are contrary to the trial court;

(h) When the findings are conclusions without citation of specific evidence on
which they are based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; and

(k) When the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a different
conclusion.38

None of the exceptional circumstances obtains herein. Accordingly, the Court cannot depart from
or disturb the factual findings on negligence of petitioner made by both the RTC and the CA.39

Even so, the Court agrees with the CA that petitioner failed to provide the basic and adequate
security measures expected of a five-star hotel; and that its omission was the proximate cause of
Harper’s death.

The testimony of Col. De Guzman revealed that the management practice prior to the murder of
Harper had been to deploy only one security or roving guard for every three or four floors of the
building; that such ratio had not been enough considering the L-shape configuration of the hotel
that rendered the hallways not visible from one or the other end; and that he had recommended
to management to post a guard for each floor, but his recommendation had been disapproved
because the hotel "was not doing well" at that particular time.40

Probably realizing that his testimony had weakened petitioner’s position in the case, Col. De
Guzman soon clarified on cross-examination that petitioner had seen no need at the time of the
incident to augment the number of guards due to the hotel being then only half-booked. Here is
how his testimony went:

ATTY MOLINA:

I just forgot one more point, Your Honor please. Was there ever a time, Mr.
Witness, that your recommendation to post a guard in every floor ever considered
and approved by the hotel?

A: Yes, Sir.

Q: When was this?

A: That was on December 1999 because of the Centennial Celebration when the
hotel accepted so many guests wherein most of the rooms were fully booked and
I recommended that all the hallways should be guarded by one guard.41

xxx

ATTY COSICO:

Q: So at that time that you made your recommendation, the hotel was half-filled.

A: Maybe.

Q: And even if the hotel is half-filled, your recommendation is that each floor shall
be maintained by one security guard per floors?

A: Yes sir.

Q: Would you agree with me that even if the hotel is half-filled, there is no need to
increase the guards because there were only few customers?

A: I think so.

Q: So you will agree with me that each floor should be maintained by one security
guard if the rooms are filled up or occupied?

A: Yes sir.

Q: Now, you even testified that from January 1999 to November 1999 thereof,
only minor incidents were involved?

A: Yes sir.

Q: So it would be correct to say that the security at that time in February was
adequate?
 A: I believe so.

Q: Even up to November when the incident happened for that same reason,
security was adequate?

A: Yes, before the incident.

Q: Now, you testified on direct that the hotel posted one guard each floor?

A: Yes sir.

Q: And it was your own recommendation?

A: Yes, because we are expecting that the hotel will be filled up.

Q: In fact, the hotel was fully booked?

A: Yes sir.42

Petitioner would thereby have the Court believe that Col. De Guzman’s initial recommendation
had been rebuffed due to the hotel being only half-booked; that there had been no urgency to
adopt a one-guard-per-floor policy because security had been adequate at that time; and that he
actually meant by his statement that "the hotel was not doing well" that the hotel was only half-
booked.

We are not convinced.

The hotel business is imbued with public interest. Catering to the public, hotelkeepers are bound
to provide not only lodging for their guests but also security to the persons and belongings of
their guests. The twin duty constitutes the essence of the business.43 Applying by analogy Article
2000,44 Article 200145 and Article 200246 of the Civil Code (all of which concerned the hotelkeepers’
degree of care and responsibility as to the personal effects of their guests), we hold that there is
much greater reason to apply the same if not greater degree of care and responsibility when the
lives and personal safety of their guests are involved. Otherwise, the hotelkeepers would simply
stand idly by as strangers have unrestricted access to all the hotel rooms on the pretense of
being visitors of the guests, without being held liable should anything untoward befall the unwary
guests. That would be absurd, something that no good law would ever envision.

In fine, the Court sees no reversible-error on the part of the CA.

WHEREFORE, the Court AFFIRMS the judgment of the Court of Appeals;

and ORDERS petitioner to pay the costs of suit.

SO ORDERED.
G.R. No. 161803 February 4, 2008

DY TEBAN TRADING, INC., petitioner,

vs.
JOSE CHING AND/OR LIBERTY FOREST, INC. and CRESILITO M. LIMBAGA, respondents.

DECISION

REYES, R.T., J.:

THE vehicular collision resulting in damages and injuries in this case could have been avoided if
the stalled prime mover with trailer were parked properly and equipped with an early warning
device. It is high time We sounded the call for strict enforcement of the law and regulation on
traffic and vehicle registration. Panahon na para mahigpit na ipatupad ang batas at
regulasyon sa trapiko at pagpapatala ng sasakyan.

Before Us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA)
modifying that2 of the Regional Trial Court (RTC) in Butuan City finding private respondents
Liberty Forest, Inc. and Cresilito Limbaga liable to petitioner Dy Teban Trading, Inc. for damages.

Facts

On July 4, 1995, at around 4:45 a.m., Rogelio Ortiz, with helper Romeo Catamora, was driving a
Nissan van owned by petitioner Dy Teban Trading, Inc. along the National Highway
in Barangay Sumilihon, Butuan City, going to Surigao City. They were delivering commercial ice
to nearby barangays and municipalities. A Joana Paula passenger bus was cruising on the
opposite lane towards the van. In between the two vehicles was a parked prime mover with a
trailer, owned by private respondent Liberty Forest, Inc.3

The night before, at around 10:00 p.m., the prime mover with trailer suffered a tire blowout. The
driver, private respondent Cresilito Limbaga, parked the prime mover askew occupying a
substantial portion of the national highway, on the lane of the passenger bus. He parked the
prime mover with trailer at the shoulder of the road with the left wheels still on the cemented
highway and the right wheels on the sand and gravel shoulder of the highway.4The prime mover
was not equipped with triangular, collapsible reflectorized plates, the early warning device
required under Letter of Instruction No. 229. As substitute, Limbaga placed a banana trunk with
leaves on the front and the rear portion of the prime mover to warn incoming motorists. It is
alleged that Limbaga likewise placed kerosene lighted tin cans on the front and rear of the
trailer.5

To avoid hitting the parked prime mover occupying its lane, the incoming passenger bus swerved
to the right, onto the lane of the approaching Nissan van. Ortiz saw two bright and glaring
headlights and the approaching passenger bus. He pumped his break slowly, swerved to the left
to avoid the oncoming bus but the van hit the front of the stationary prime mover. The passenger
bus hit the rear of the prime mover.6

Ortiz and Catamora only suffered minor injuries. The Nissan van, however, became inoperable
as a result of the incident. After the collision, SPO4 Teofilo Pame conducted an investigation and
submitted a police traffic incident investigation report.7

On October 31, 1995, petitioner Nissan van owner filed a complaint for damages8 against private
respondents prime mover owner and driver with the RTC in Butuan City. The Joana Paula
passenger bus was not impleaded as defendant in the complaint.

RTC Disposition
On August 7, 2001, the RTC rendered a decision in favor of petitioner Dy Teban Trading, Inc.
with a fallo reading:

WHEREFORE, judgment is hereby rendered directing, ordaining and ordering:

a) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga pay, jointly and
solidarily, plaintiff Dy Teban Trading, Inc. the amounts of P279,832.00 as actual and
compensatory damages, P30,000.00 as attorney’s fees and P5,000.00 as expenses of
litigation;

b) That all money claims of plaintiff Rogelio C. Ortiz are dismissed;

c) That defendant Jose Ching is absolved from any civil liability or the case against him
dismissed;

d) That the counterclaim of all the defendants is dismissed; and

e) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga to pay, jointly and
solidarily, the costs.

SO ORDERED.9

The RTC held that the proximate cause of the three-way vehicular collision was improper parking
of the prime mover on the national highway and the absence of an early warning device on the
vehicle, thus:

The court finds that the proximate cause of the incidents is the negligence and
carelessness attributable to the defendants. When the trailer being pulled by the prime
mover suffered two (2) flat tires at Sumilihon, the prime mover and trailer were parked
haphazardly, as the right tires of the prime mover were the only ones on the sand and
gravel shoulder of the highway while the left tires and all the tires of the trailer were on
the cemented pavement of the highway, occupying almost the whole of the right lane on
the direction the prime mover and trailer were traveling. The statement of Limbaga that
he could not park the prime mover and trailer deeper into the sand and gravel shoulder of
the highway to his right because there were banana plants is contradicted by the picture
marked Exhibit "F." The picture shows that there was ample space on the shoulder. If
defendant Limbaga was careful and prudent enough, he should have the prime mover
and trailer traveled more distance forward so that the bodies of the prime mover and
trailer would be far more on the shoulder rather than on the cemented highway when
they were parked. x x x The court has some doubts on the statement of witness-driver
Limbaga that there were banana trunks with leaves and lighted tin cans with crude oil
placed 3 strides in front of the prime mover and behind the trailer because the
testimonies of witnesses Rogelio C. Ortiz, driver of the ice van, Romeo D. Catamora,
helper of the ice van, and Police Traffic Investigator SPO3 Teofilo M. Pame show that
there were no banana trunks with leaves and lighted tin cans at the scene of the incident.
But even assuming that there were banana trunks with leaves but they were placed close
to the prime mover and trailer as they were placed 3 strides away which to the mind of
the court is equivalent approximately to 3 meters and with this distance, approaching
vehicles would have no sufficient time and space to make a complete stop, especially if
the vehicles are heavy and loaded. If there were lighted tin cans, it was not explained by
the defendants why the driver, especially driver witness Ortiz, did not see them.

xxxx

Defendant Liberty Forest, Inc. did not exercise the diligence of a good father of a family in
managing and running its business. The evidence on record shows that it failed to
 provide its prime mover and trailer with the required "early warning devices" with
reflectors and it did not keep proper maintenance and condition of the prime mover and
the trailer. The circumstances show that the trailer were provided with wornout tires and
with only one (1) piece of spare tire. The pictures marked Exhibit "3" and "4" show that
two (2) flat tires suffered by the trailer and these two (2) tires were attached to one of the
two (2) I-beams or axles attached to the rear of the trailer which axle is very near but
behind the other axle and with the location of the 2 I-beams, it would have the other I-
beam that would have suffered the flat tires as it has to bear the brunt of weight of the D-
8 bulldozer. The bulldozer was not loaded directly above the two (2) I-beams as 2 I-
beams, as a pair, were attached at the far rear end of the trailer.

xxxx

However, defendant Jose Ching should be absolved of any liability as there is no

showing that he is the manager or CEO of defendant Liberty Forest, Inc. Although in the
answer, it is admitted that he is an officer of the defendant corporation, but it is not
clarified what kind of position he is holding, as he could be an officer as one of the
members of the Board of Directors or a cashier and treasurer of the corporation. Witness
Limbaga in his testimony mentioned a certain Boy Ching as the Manager but it was never
clarified whether or not Boy Ching and defendant Jose Ching is one and the same
person.10

Private respondents appealed to the CA.

CA Disposition

On August 28, 2003, the CA reversed the RTC decision, disposing as follows:

WHEREFORE, premises considered, the decision dated August 7, 2001 of the Regional
Trial Court, Branch 2, Butuan City in Civil Case No. 4360 is hereby PARTLY
MODIFIED by absolving the defendants-appellants/appellees of any liability to plaintiffs-
appellants/appellees by reason of the incident on July 4, 1995.

The dismissal of the case against Jose Ching, the counterclaim of defendants-
appellants/appellees and the money claim of Rogelio Ortiz STANDS.

SO ORDERED.11

In partly reversing or partly modifying the RTC decision, the CA held that the proximate cause of
the vehicular collision was the failure of the Nissan van to give way or yield to the right of way of
the passenger bus, thus:

It was stated that the Joana Paula bus in trying to avoid a head-on collision with the
truck, sideswept the parked trailer loaded with bulldozer.

Evidently, the driver of the Joana Paula bus was aware of the presence on its lane of the
parked trailer with bulldozer. For this reason, it proceeded to occupy what was left of its
lane and part of the opposite lane. The truck occupying the opposite lane failed to give
way or yield the right of way to the oncoming bus by proceeding with the same
speed. The two vehicles were, in effect, trying to beat each other in occupying a single
lane. The bus was the first to occupy the said lane but upon realizing that the truck
refused to give way or yield the right of way, the bus, as a precaution, geared to its right
where the trailer was parked. Unfortunately, the bus miscalculated its distance from the
parked trailer and its rear right side hit the protruding blade of the bulldozer then on the
top of the parked trailer. The impact of the collision on its right rear side with the blade of
 the bulldozer threw the bus further to the opposite lane, landing its rear portion on the
shoulder of the opposite lane.

xxxx

Facts of the case reveal that when Ortiz, the driver of the truck, failed to give the Joana
Paula bus the space on the road it needed, the latter vehicle scraped its rear right side on
the protruded bulldozer blade and the impact threw the bus directly on the path of the
oncoming truck. This made plaintiffs-appellants/appellees conclude that the Joana Paula
bus occupied its lane which forced Ortiz, the driver of the truck, to swerve to its left and
ram the front of the parked trailer.

xxxx

The trailer was parked because its two (2) rear-left tires were blown out. With a bulldozer
on top of the trailer and two (2) busted tires, it would be dangerous and quite impossible
for the trailer to further park on the graveled shoulder of the road. To do so will cause the
flat car to tilt and may cause the bulldozer to fall from where it was mounted. In fact, it
appeared that the driver of the trailer tried its best to park on the graveled shoulder since
the right-front tires were on the graveled shoulder of the road.

The lower court erred in stating that the Joana Paula bus swerved to the left of the truck
because it did not see the parked trailer due to lack of warning sign of danger of any kind
that can be seen from a distance. The damage suffered by the Joana Paula bus belied
this assessment. As stated before, the Joana Paula bus, with the intention of passing first
which it did, first approached the space beside the parked trailer, veered too close to the
parked trailer thereby hitting its rear right side on the protruding bulldozer blade. Since
the damage was on the rear right most of the bus, it was clearly on the space which was
wide enough for a single passing vehicle but not sufficient for two (2) passing vehicles.
The bus was thrown right to the path of the truck by the impact of the collision of its rear
right side with the bulldozer blade.12

The CA disagreed with the RTC that the prime mover did not have an early warning device. The
appellate court accepted the claim of private respondent that Limbaga placed kerosene lighted
tin cans on the front and rear of the trailer which, in Baliwag Transit, Inc. v. Court of
Appeals,13 may act as substitute early warning device. The CA stated:

Likewise, it was incorrect for the lower court to state that there was no warning sign of
danger of any kind, most probably referring to the absence of the triangular reflectorized
plates. The police sketch clearly indicated the stack of banana leaves placed at the rear
of the parked trailer. The trailer’s driver testified that they placed kerosene lighted tin can
at the back of the parked trailer.

A pair of triangular reflectorized plates is not the only early warning device allowed by
law. The Supreme Court (in Baliwag Transit, Inc. v. Court of Appeals) held that:

"x x x Col. Dela Cruz and Romano testified that they did not see any early
warning device at the scene of the accident. They were referring to the triangular
reflectorized plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and Ecala placed a
kerosene lamp or torch at the edge of the road, near the rear portion of the truck
to serve as an early warning device. This substantially complies with Section
34(g) of the Land Transportation and Traffic Code x x x

Baliwag’s argument that the kerosene lamp or torch does not substantially
comply with the law is untenable. The aforequoted law clearly allows the use not
 only of an early warning device of the triangular reflectorized plates’ variety but
also parking lights or flares visible one hundred meters away. x x x."

This Court holds that the defendants-appellants/appellees were not negligent in parking
the trailer on the scene of the accident. It would have been different if there was only one
flat tire and defendant-appellant/appellee Limbaga failed to change the same and left
immediately.

As such, defendants-appellants/appellees are not liable for the damages suffered by

plaintiffs-appellants/appellees. Whatever damage plaintiffs-appellants/appellees suffered,
they alone must bear them.14

Issues

Petitioner raises two issues15 for Our consideration, to wit:

I.

THE HONORABLE COURT OF APPEALS, WITHOUT ANY AVAILABLE CONCRETE

EVIDENCE, ERRONEOUSLY DETERMINED THAT THERE WERE EARLY WARNING
DEVICES PLACED IN FRONT OF THE DEFENDANT-APPELLANTS/APPELLEES’
TRUCK AND FLAT CAR TO WARN PLAINTIFF-APPELLANT/APPELLEE ROGELIO
ORTIZ OF THEIR PRESENCE.

II.

WITH DUE RESPECT, IT IS HIGH TIME TO ENFORCE THE LAW ON EARLY

WARNING DEVICES IN THE PUBLIC INTEREST.

Our Ruling

The petition is meritorious.

The meat of the petition is whether or not the prime mover is liable for the damages suffered by
the Nissan van. The RTC ruled in the affirmative holding that the proximate cause of the
vehicular collision was the negligence of Limbaga in parking the prime mover on the national
highway without an early warning device on the vehicle. The CA reversed the RTC decision,
holding that the proximate cause of the collision was the negligence of Ortiz in not yielding to the
right of way of the passenger bus.

Article 2176 of the Civil Code provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-
delict. To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage
suffered by plaintiff; (b) fault or negligence of defendant; and (c) connection of cause and effect
between the fault or negligence of defendant and the damage incurred by plaintiff.16

There is no dispute that the Nissan van suffered damage. That is borne by the records and
conceded by the parties. The outstanding issues are negligence and proximate cause. Tersely
put, the twin issues are: (a) whether or not prime mover driver Limbaga was negligent in parking
the vehicle; and (b) whether or not his negligence was the proximate cause of the damage to the
Nissan van.

Limbaga was negligent in parking the prime mover on the national highway; he failed to
prevent or minimize the risk to oncoming motorists.
Negligence is defined as the failure to observe for the protection of the interests of another
person that degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury.17The Supreme Court stated the test of negligence in
the landmark case Picart v. Smith18 as follows:

The test by which to determine the existence or negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinary person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias
of the Roman law. The existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that. (Underscoring supplied)

The test of negligence is objective. We measure the act or omission of the tortfeasor with that of
an ordinary reasonable person in the same situation. The test, as applied to this case, is whether
Limbaga, in parking the prime mover, used that reasonable care and caution which an ordinary
reasonable person would have used in the same situation.

We find that Limbaga was utterly negligent in parking the prime mover askew on the right side of
the national highway. The vehicle occupied a substantial portion of the national road on the lane
of the passenger bus. It was parked at the shoulder of the road with its left wheels still on the
cemented highway and the right wheels on the sand and gravel shoulder of the highway. It is
common sense that the skewed parking of the prime mover on the national road posed a serious
risk to oncoming motorists. It was incumbent upon Limbaga to take some measures to prevent
that risk, or at least minimize it.

We are unable to agree with the CA conclusion "it would have been dangerous and quite
impossible to further park the prime mover on the graveled shoulder of the road because the
prime mover may tilt and the bulldozer may fall off." The photographs taken after the incident
show that it could have been possible for Limbaga to park the prime mover completely on the
shoulder of the national road without risk to oncoming motorists. We agree with the RTC
observation on this point, thus:

x x x The statement of Limbaga that he could not park the prime mover and trailer deeper
into the sand and gravel shoulder of the highway to his right because there were banana
plants is contradicted by the picture marked Exhibit "F." The picture shows that there was
ample space on the shoulder. If defendant Limbaga was careful and prudent enough, he
should have the prime mover and trailer traveled more distance forward so that the
bodies of the prime mover and trailer would be far more on the shoulder rather than on
the cemented highway when they were parked. Although at the time of the incident, it
was about 4:45 in the morning and it was drizzling but there is showing that it was pitch
dark that whoever travels along the highway must be extra careful. If the Joana Paula
bus swerved to the lane on which the "Nissan" ice van was properly traveling, as
prescribed by Traffic Rules and Regulations, it is because the driver of the bus did not
see at a distance the parked prime mover and trailer on the bus’ proper lane because
there was no warning signs of danger of any kind that can be seen from a distance.19

Limbaga also failed to take proper steps to minimize the risk posed by the improperly parked
prime mover. He did not immediately inform his employer, private respondent Liberty Forest, Inc.,
that the prime mover suffered two tire blowouts and that he could not have them fixed because
he had only one spare tire. Instead of calling for help, Limbaga took it upon himself to simply
place banana leaves on the front and rear of the prime mover to serve as warning to oncoming
motorists. Worse, Limbaga slept on the prime mover instead of standing guard beside the
vehicle. By his own account, Limbaga was sleeping on the prime mover at the time of the
collision and that he was only awakened by the impact of the Nissan van and the passenger bus
on the prime mover.20

Limbaga also admitted on cross-examination that it was his first time to drive the prime mover
with trailer loaded with a D-8 caterpillar bulldozer.21 We find that private respondent Liberty
Forest, Inc. was utterly negligent in allowing a novice driver, like Limbaga, to operate a vehicle,
such as a truck loaded with a bulldozer, which required highly specialized driving skills.
Respondent employer clearly failed to properly supervise Limbaga in driving the prime mover.

The RTC noted that private respondent Liberty Forest, Inc. also failed to keep the prime mover in
proper condition at the time of the collision. The prime mover had worn out tires. It was only
equipped with one spare tire. It was for this reason that Limbaga was unable to change the two
blown out tires because he had only one spare. The bulldozer was not even loaded properly on
the prime mover, which caused the tire blowouts.

All told, We agree with the RTC that private respondent Limbaga was negligent in parking the
prime mover on the national highway. Private respondent Liberty Forest, Inc. was also negligent
in failing to supervise Limbaga and in ensuring that the prime mover was in proper condition.

The case of Baliwag Transit, Inc. v. Court of Appeals is inapplicable; Limbaga did not put
lighted kerosene tin cans on the front and rear of the prime mover.

Anent the absence of an early warning device on the prime mover, the CA erred in accepting the
bare testimony of Limbaga that he placed kerosene lighted tin cans on the front and rear of the
prime mover. The evidence on records belies such claim. The CA reliance on Baliwag Transit,
Inc. v. Court of Appeals22 as authority for the proposition that kerosene lighted tin cans may act
as substitute early warning device is misplaced.

First, the traffic incident report did not mention any lighted tin cans on the prime mover or within
the immediate vicinity of the accident. Only banana leaves were placed on the prime mover. The
report reads:

VIII – RESULT OF INVESTIGATION: A Joana Pa_ula Bus, with Body No. 7788, with
Plate No. LVA-137, driven by one Temestocles Relova v. Antero, of legal age, married
and a resident of San Roque, Kitcharao, Agusan del Norte, while traveling along the
National Highway, coming from the east going to the west direction, as it moves along
the way and upon reaching Brgy. Sumilihon, Butuan City to evade bumping to the
approaching Nissan Ice Van with Plate No. PNT-247, driven by one Rogelio Cortez y
Ceneza. As the result, the Joana Paula Bus accidentally busideswept (sic) to the parked
Prime Mover with Trailer loaded with Bulldozer without early warning device, instead
placing only dry banana leaves three (3) meters at the rear portion of the Trailer, while
failure to place at the front portion, and the said vehicle occupied the whole lane. As the
result, the Joana Paula Bus hit to the left edge blade of the Bulldozer. Thus, causing the
said bus swept to the narrow shouldering, removing the rear four (4) wheels including the
differential and injuring the above-stated twelve (12) passengers and damaged to the
right side fender above the rear wheel. Thus, causing damage on it. While the Nissan Ice
Van in evading, accidentally swerved to the left lane and accidentally bumped to the front
bumper of the parked Prime Mover with Trailer loaded with Bulldozer. Thus, causing
heavy damage to said Nissan Ice Van including the cargoes of the said van.23

Second, SPO4 Pame, who investigated the collision, testified24 that only banana leaves were
placed on the front and rear of the prime mover. He did not see any lighted tin cans in the
immediate vicinity of the collision.

Third, the claim of Limbaga that he placed lighted tin cans on the front and rear of the prime
mover belatedly surfaced only during his direct examination. No allegation to this effect was
made by private respondents in their Answer to the complaint for damages. Petitioner’s counsel
promptly objected to the testimony of Limbaga, thus:

ATTY. ROSALES:

Q. Now you mentioned about placing some word signs in front and at the rear of the
prime mover with trailer, will you please describe to us what this word signs are?

A. We placed a piece of cloth on tin cans and filled them with crude oil. And these tin
cans were lighted and they are like torches. These two lights or torches were placed in
front and at the rear side of the prime mover with trailer. After each torch, we
placed banana trunk. The banana trunk is placed between the two (2) torches and the
prime mover, both on the rear and on the front portion of the prime mover.

Q. How far was the lighted tin cans with wick placed in front of the prime mover.

ATTY. ASIS:

At this point, we will be objecting to questions particularly referring to the alleged tin cans
as some of the warning-sign devices, considering that there is no allegation to that effect
in the answer of the defendants. The answer was just limited to the numbers 4 & 5 of the
answer. And, therefore, if we follow the rule of the binding effect of an allegation in the
complaint, then the party will not be allowed to introduce evidence to attack jointly or
rather the same, paragraph 5 states, warning device consisting of 3 banana trunks,
banana items and leaves were filed. He can be cross-examined in the point, Your Honor.

COURT:

Q. Put that on record that as far as this tin cans are concerned, the plaintiffs are
interposing continuing objections. But the Court will allow the question.25

We thus agree with the RTC that Limbaga did not place lighted tin cans on the front and rear of
the prime mover. We give more credence to the traffic incident report and the testimony of SPO4
Pame that only banana leaves were placed on the vehicle. Baliwag Transit, Inc. v. Court of
Appeals26 thus finds no application to the case at bar.

The skewed parking of the prime mover was the proximate cause of the collision.

Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken
by any efficient intervening cause, produces the injury, and without which the result would not
have occurred. More comprehensively, proximate cause is that cause acting first and producing
the injury, either immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury as natural and probable
result of the cause which first acted, under such circumstances that the person responsible for
the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to
expect at the moment of his act or default that an injury to some person might probably result
therefrom.27

There is no exact mathematical formula to determine proximate cause. It is based upon mixed
considerations of logic, common sense, policy and precedent.28 Plaintiff must, however, establish
a sufficient link between the act or omission and the damage or injury. That link must not be
remote or far-fetched; otherwise, no liability will attach. The damage or injury must be a natural
and probable result of the act or omission. In the precedent-setting Vda. de Bataclan v.
Medina,29 this Court discussed the necessary link that must be established between the act or
omission and the damage or injury, viz.:

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger,
merely causing him physical injuries, if through some event, unexpected and
extraordinary, the overturned bus is set on fire, say, by lightning, or if some highwaymen
after looting the vehicle sets it on fire, and the passenger is burned to death, one might
still contend that the proximate cause of his death was the fire and not the overturning of
the vehicle. But in the present case and under the circumstances obtaining in the same,
we do not hesitate to hold that the proximate cause of the death of Bataclan was the
overturning of the bus, this for the reason that when the vehicle turned not only on its
side but completely on its back, the leaking of the gasoline from the tank was not
unnatural or unexpected; that the coming of the men with a lighted torch was in response
to the call for help, made not only by the passengers, but most probably, by the driver
and the conductor themselves, and that because it was very dark (about 2:30 in the
morning), the rescuers had to carry a light with them; and coming as they did from a rural
area where lanterns and flashlights were not available, they had to use a torch, the most
handy and available; and what was more natural than that said rescuers should
innocently approach the overturned vehicle to extend the aid and effect the rescue
requested from them. In other words, the coming of the men with the torch was to be
expected and was natural sequence of the overturning of the bus, the trapping of some of
its passengers’ bus, the trapping of some of its passengers and the call for outside help.

The ruling in Bataclan has been repeatedly cited in subsequent cases as authority for the
proposition that the damage or injury must be a natural or probable result of the act or omission.
Here, We agree with the RTC that the damage caused to the Nissan van was a natural and
probable result of the improper parking of the prime mover with trailer. As discussed, the skewed
parking of the prime mover posed a serious risk to oncoming motorists. Limbaga failed to prevent
or minimize that risk. The skewed parking of the prime mover triggered the series of events that
led to the collision, particularly the swerving of the passenger bus and the Nissan van.

Private respondents Liberty Forest, Inc. and Limbaga are liable for all damages that resulted
from the skewed parking of the prime mover. Their liability includes those damages resulting
from precautionary measures taken by other motorist in trying to avoid collision with the parked
prime mover. As We see it, the passenger bus swerved to the right, onto the lane of the Nissan
van, to avoid colliding with the improperly parked prime mover. The driver of the Nissan van,
Ortiz, reacted swiftly by swerving to the left, onto the lane of the passenger bus, hitting the
parked prime mover. Ortiz obviously would not have swerved if not for the passenger bus
abruptly occupying his van’s lane. The passenger bus, in turn, would not have swerved to the
lane of the Nissan van if not for the prime mover improperly parked on its lane. The skewed
parking is the proximate cause of the damage to the Nissan van.

In Phoenix Construction, Inc. v. Intermediate Appellate Court,30 this Court held that a similar
vehicular collision was caused by the skewed parking of a dump truck on the national road, thus:

The conclusion we draw from the factual circumstances outlined above is that private
respondent Dionisio was negligent the night of the accident. He was hurrying home that
night and driving faster than he should have been. Worse, he extinguished his headlights
at or near the intersection of General Lacuna and General Santos Streets and thus did
not see the dump truck that was parked askew and sticking out onto the road lane.

Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate
Court that the legal and proximate cause of the accident and of Dionisio’s injuries was
the wrongful or negligent manner in which the dump truck was parked – in other words,
the negligence of petitioner Carbonel. That there was a reasonable relationship between
petitioner Carbonel’s negligence on the one hand and the accident and respondent’s
 injuries on the other hand, is quite clear. Put in a slightly different manner, the collision of
Dionisio’s car with the dump truck was a natural and foreseeable consequence of the
truck driver’s negligence.

xxxx

We believe, secondly, that the truck driver’s negligence far from being a "passive and
static condition" was rather an indispensable and efficient cause. The collision between
the dump truck and the private respondent’s car would in all probability not have occurred
had the dump truck not been parked askew without any warning lights or reflector
devices. The improper parking of the dump truck created an unreasonable risk of injury
for anyone driving down General Lacuna Street and for having so created this risk, the
truck driver must be held responsible. In our view, Dionisio’s negligence, although later in
point of time than the truck driver’s negligence and, therefore, closer to the accident, was
not an efficient intervening or independent cause. What the Petitioner describes as an
"intervening cause" was no more than a foreseeable consequence of the risk created by
the negligent manner in which the truck driver had parked the dump truck. In other words,
the petitioner truck driver owed a duty to private respondent Dionisio and others similarly
situated not to impose upon them the very risk the truck driver had created. Dionisio’s
negligence was not of an independent and overpowering nature as to cut, as it were, the
chain of causation in fact between the improper parking of the dump truck and the
accident, nor to sever the juris vinculum of liability. x x x (Underscoring supplied)

We cannot rule on the proportionate or contributory liability of the passenger bus, if any,
because it was not a party to the case; joint tortfeasors are solidarily liable.

The CA also faults the passenger bus for the vehicular collision. The appellate court noted that
the passenger bus was "aware" of the presence of the prime mover on its lane, but it still
proceeded to occupy the lane of the Nissan van. The passenger bus also miscalculated its
distance from the prime mover when it hit the vehicle.

We cannot definitively rule on the proportionate or contributory liability of the Joana Paula
passenger bus vis-à-visthe prime mover because it was not a party to the complaint for
damages. Due process dictates that the passenger bus must be given an opportunity to present
its own version of events before it can be held liable. Any contributory or proportionate liability of
the passenger bus must be litigated in a separate action, barring any defense of prescription or
laches. Insofar as petitioner is concerned, the proximate cause of the collision was the improper
parking of the prime mover. It was the improper parking of the prime mover which set in motion
the series of events that led to the vehicular collision.

Even granting that the passenger bus was at fault, it’s fault will not necessarily absolve private
respondents from liability. If at fault, the passenger bus will be a joint tortfeasor along with private
respondents. The liability of joint tortfeasors is joint and solidary. This means that petitioner may
hold either of them liable for damages from the collision. In Philippine National Construction
Corporation v. Court of Appeals,31 this Court held:

According to the great weight of authority, where the concurrent or successive negligent
acts or omission of two or more persons, although acting independently of each other,
are, in combination, the direct and proximate cause of a single injury to a third person
and it is impossible to determine in what proportion each contributed to the injury, either
is responsible for the whole injury, even though his act alone might not have caused the
entire injury, or the same damage might have resulted from the acts of the other tort-
feasor x x x.

In Far Eastern Shipping Company v. Court of Appeals, the Court declared that the liability of joint
tortfeasors is joint and solidary, to wit:
 It may be said, as a general rule, that negligence in order to render a person liable need
not be the sole cause of an injury. It is sufficient that his negligence, concurring with one
or more efficient causes other than plaintiff’s, is the proximate cause of the injury.
Accordingly, where several causes combine to produce injuries, a person is not relieved
from liability because he is responsible for only one of them, it being sufficient that the
negligence of the person charged with injury is an efficient cause without which the injury
would not have resulted to as great an extent, and that such cause is not attributable to
the person injured. It is no defense to one of the concurrent tortfeasors that the injury
would not have resulted from his negligence alone, without the negligence or wrongful
acts of the other concurrent tortfeasors. Where several causes producing an injury are
concurrent and each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and recovery may be
had against any or all of the responsible persons although under the circumstances of
the case, it may appear that one of them was more culpable, and that the duty owed by
them to the injured person was not the same. No actor’s negligence ceases to be a
proximate cause merely because it does not exceed the negligence of other actors. Each
wrongdoer is responsible for the entire result and is liable as though his acts were the
sole cause of the injury.

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

All told, all the elements of quasi delict have been proven by clear and convincing evidence. The
CA erred in absolving private respondents from liability for the vehicular collision.

Final Note

It is lamentable that the vehicular collision in this case could have been easily avoided by
following basic traffic rules and regulations and road safety standards. In hindsight, private
respondent Limbaga could have prevented the three-way vehicular collision if he had properly
parked the prime mover on the shoulder of the national road. The improper parking of vehicles,
most especially along the national highways, poses a serious and unnecessary risk to the lives
and limbs of other motorists and passengers. Drivers owe a duty of care to follow basic traffic
rules and regulations and to observe road safety standards. They owe that duty not only for their
own safety, but also for that of other motorists. We can prevent most vehicular accidents by
simply following basic traffic rules and regulations.

We also note a failure of implementation of basic safety standards, particularly the law on early
warning devices. This applies even more to trucks and big vehicles, which are prone to
mechanical breakdown on the national highway. The law, as crafted, requires vehicles to be
equipped with triangular reflectorized plates.32 Vehicles without the required early warning
devices are ineligible for registration.33 Vehicle owners may also be arrested and fined for non-
compliance with the law.34

The Land Transportation Office (LTO) owes a duty to the public to ensure that all vehicles on the
road meet basic and minimum safety features, including that of early warning devices. It is most
unfortunate that We still see dilapidated and rundown vehicles on the road with substandard
safety features. These vehicles not only pose a hazard to the safety of their occupants but that of
other motorists. The prime mover truck in this case should not have been granted registration
because it failed to comply with the minimum safety features required for vehicles on the road.
It is, indeed, time for traffic enforcement agencies and the LTO to strictly enforce all pertinent
laws and regulations within their mandate.

WHEREFORE, the petition is GRANTED. The Court of Appeals decision dated August 28, 2003
is hereby SET ASIDE. The RTC decision dated August 7, 2001 is REINSTATED IN FULL.

SO ORDERED.
G.R. No. 156940 December 14, 2004

ASSOCIATED BANK (Now WESTMONT BANK), petitioner,

vs.
VICENTE HENRY TAN, respondent.

DECISION

PANGANIBAN, J.:

While banks are granted by law the right to debit the value of a dishonored check from a
depositor’s account, they must do so with the highest degree of care, so as not to prejudice the
depositor unduly.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27,
2003 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56292. The CA disposed as
follows:

"WHEREFORE, premises considered, the Decision dated December 3, 1996, of the

Regional Trial Court of Cabanatuan City, Third Judicial Region, Branch 26, in Civil Case
No. 892-AF is hereby AFFIRMED. Costs against the [petitioner]."3

The Facts

The CA narrated the antecedents as follows:

"Vicente Henry Tan (hereafter TAN) is a businessman and a regular depositor-creditor of

the Associated Bank (hereinafter referred to as the BANK). Sometime in September
1990, he deposited a postdated UCPB check with the said BANK in the amount
of P101,000.00 issued to him by a certain Willy Cheng from Tarlac. The check was duly
entered in his bank record thereby making his balance in the amount of P297,000.00, as
of October 1, 1990, from his original deposit of P196,000.00. Allegedly, upon advice and
instruction of the BANK that the P101,000.00 check was already cleared and backed up
by sufficient funds, TAN, on the same date, withdrew the sum of P240,000.00, leaving a
balance of P57,793.45. A day after, TAN deposited the amount of P50,000.00 making his
existing balance in the amount of P107,793.45, because he has issued several checks to
his business partners, to wit:

CHECK NUMBERS DATE AMOUNT

a. 138814 Sept. 29, 1990 P9,000.00
b. 138804 Oct. 8, 1990 9,350.00
c. 138787 Sept. 30, 1990 6,360.00
d. 138847 Sept. 29, 1990 21,850.00
e. 167054 Sept. 29, 1990 4,093.40
f. 138792 ` Sept. 29, 1990 3,546.00
 g. 138774 Oct. 2, 1990 6,600.00
h. 167072 Oct. 10, 1990 9,908.00
i. 168802 Oct. 10, 1990 3,650.00

"However, his suppliers and business partners went back to him alleging that the checks
he issued bounced for insufficiency of funds. Thereafter, TAN, thru his lawyer, informed
the BANK to take positive steps regarding the matter for he has adequate and sufficient
funds to pay the amount of the subject checks. Nonetheless, the BANK did not bother nor
offer any apology regarding the incident. Consequently, TAN, as plaintiff, filed a
Complaint for Damages on December 19, 1990, with the Regional Trial Court of
Cabanatuan City, Third Judicial Region, docketed as Civil Case No. 892-AF, against the
BANK, as defendant.

"In his [C]omplaint, [respondent] maintained that he ha[d] sufficient funds to pay the
subject checks and alleged that his suppliers decreased in number for lack of trust. As he
has been in the business community for quite a time and has established a good record
of reputation and probity, plaintiff claimed that he suffered embarrassment, humiliation,
besmirched reputation, mental anxieties and sleepless nights because of the said
unfortunate incident. [Respondent] further averred that he continuously lost profits in the
amount of P250,000.00. [Respondent] therefore prayed for exemplary damages and that
[petitioner] be ordered to pay him the sum of P1,000,000.00 by way of moral
damages, P250,000.00 as lost profits, P50,000.00 as attorney’s fees plus 25% of the
amount claimed including P1,000.00 per court appearance.

"Meanwhile, [petitioner] filed a Motion to Dismiss on February 7, 1991, but the same was
denied for lack of merit in an Order dated March 7, 1991. Thereafter, [petitioner] BANK
on March 20, 1991 filed its Answer denying, among others, the allegations of
[respondent] and alleged that no banking institution would give an assurance to any of its
client/depositor that the check deposited by him had already been cleared and backed up
by sufficient funds but it could only presume that the same has been honored by the
drawee bank in view of the lapse of time that ordinarily takes for a check to be cleared.
For its part, [petitioner] alleged that on October 2, 1990, it gave notice to the [respondent]
as to the return of his UCPB check deposit in the amount of P101,000.00, hence, on
even date, [respondent] deposited the amount of P50,000.00 to cover the returned
check.

"By way of affirmative defense, [petitioner] averred that [respondent] had no cause of
action against it and argued that it has all the right to debit the account of the
[respondent] by reason of the dishonor of the check deposited by the [respondent] which
was withdrawn by him prior to its clearing. [Petitioner] further averred that it has no
liability with respect to the clearing of deposited checks as the clearing is being
undertaken by the Central Bank and in accepting [the] check deposit, it merely obligates
itself as depositor’s collecting agent subject to actual payment by the drawee bank.
[Petitioner] therefore prayed that [respondent] be ordered to pay it the amount
of P1,000,000.00 by way of loss of goodwill, P7,000.00 as acceptance fee plus P500.00
per appearance and by way of attorney’s fees.

"Considering that Westmont Bank has taken over the management of the
affairs/properties of the BANK, [respondent] on October 10, 1996, filed an Amended
Complaint reiterating substantially his allegations in the original complaint, except that the
name of the previous defendant ASSOCIATED BANK is now WESTMONT BANK.

"Trial ensured and thereafter, the court rendered its Decision dated December 3, 1996 in favor of
the [respondent] and against the [petitioner], ordering the latter to pay the [respondent] the sum
of P100,000.00 by way of moral damages, P75,000.00 as exemplary damages, P25,000.00 as
attorney’s fees, plus the costs of this suit. In making said ruling, it was shown that [respondent]
was not officially informed about the debiting of the P101,000.00 [from] his existing balance and
that the BANK merely allowed the [respondent] to use the fund prior to clearing merely for
accommodation because the BANK considered him as one of its valued clients. The trial court
ruled that the bank manager was negligent in handling the particular checking account of the
[respondent] stating that such lapses caused all the inconveniences to the [respondent]. The trial
court also took into consideration that [respondent’s] mother was originally maintaining with the x
x x BANK [a] current account as well as [a] time deposit, but [o]n one occasion, although his
mother made a deposit, the same was not credited in her favor but in the name of another."4

Petitioner appealed to the CA on the issues of whether it was within its rights, as collecting bank,
to debit the account of its client for a dishonored check; and whether it had informed respondent
about the dishonor prior to debiting his account.

Ruling of the Court of Appeals

Affirming the trial court, the CA ruled that the bank should not have authorized the withdrawal of
the value of the deposited check prior to its clearing. Having done so, contrary to its obligation to
treat respondent’s account with meticulous care, the bank violated its own policy. It thereby took
upon itself the obligation to officially inform respondent of the status of his account before
unilaterally debiting the amount of P101,000. Without such notice, it is estopped from blaming
him for failing to fund his account.

The CA opined that, had the P101,000 not been debited, respondent would have had sufficient
funds for the postdated checks he had issued. Thus, the supposed accommodation accorded by
petitioner to him is the proximate cause of his business woes and shame, for which it is liable for
damages.

Because of the bank’s negligence, the CA awarded respondent moral damages of P100,000. It
also granted him exemplary damages of P75,000 and attorney’s fees of P25,000.

Hence this Petition.5

Issue

In its Memorandum, petitioner raises the sole issue of "whether or not the petitioner, which is
acting as a collecting bank, has the right to debit the account of its client for a check deposit
which was dishonored by the drawee bank."6

The Court’s Ruling

The Petition has no merit.

Sole Issue:

Debit of Depositor’s Account

Petitioner-bank contends that its rights and obligations under the present set of facts were
misappreciated by the CA. It insists that its right to debit the amount of the dishonored check
from the account of respondent is clear and unmistakable. Even assuming that it did not give him
notice that the check had been dishonored, such right remains immediately enforceable.

In particular, petitioner argues that the check deposit slip accomplished by respondent on
September 17, 1990, expressly stipulated that the bank was obligating itself merely as the
depositor’s collecting agent and -- until such time as actual payment would be made to it -- it was
reserving the right to charge against the depositor’s account any amount previously credited.
Respondent was allowed to withdraw the amount of the check prior to clearing, merely as an act
of accommodation, it added.

At the outset, we stress that the trial court’s factual findings that were affirmed by the CA are not
subject to review by this Court.7 As petitioner itself takes no issue with those findings, we need
only to determine the legal consequence, based on the established facts.

Right of Setoff

A bank generally has a right of setoff over the deposits therein for the payment of any
withdrawals on the part of a depositor.8 The right of a collecting bank to debit a client’s account
for the value of a dishonored check that has previously been credited has fairly been established
by jurisprudence. To begin with, Article 1980 of the Civil Code provides that "[f]ixed, savings, and
current deposits of money in banks and similar institutions shall be governed by the provisions
concerning simple loan."

Hence, the relationship between banks and depositors has been held to be that of creditor and
debtor.9 Thus, legal compensation under Article 127810 of the Civil Code may take place "when all
the requisites mentioned in Article 1279 are present,"11 as follows:

"(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are consumable, they
be of the same kind, and also of the same quality if the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor."12

Nonetheless, the real issue here is not so much the right of petitioner to debit respondent’s
account but, rather, the manner in which it exercised such right. The Court has held that even
while the right of setoff is conceded, separate is the question of whether that remedy has
properly been exercised.13

The liability of petitioner in this case ultimately revolves around the issue of whether it properly
exercised its right of setoff. The determination thereof hinges, in turn, on the bank’s role and
obligations, first, as respondent’s depositary bank; and second, as collecting agent for the check
in question.

Obligation as
Depositary Bank

In BPI v. Casa Montessori,14 the Court has emphasized that the banking business is impressed
with public interest. "Consequently, the highest degree of diligence is expected, and high
standards of integrity and performance are even required of it. By the nature of its functions, a
bank is under obligation to treat the accounts of its depositors with meticulous care."15

Also affirming this long standing doctrine, Philippine Bank of Commerce v. Court of Appeals16 has
held that "the degree of diligence required of banks is more than that of a good father of a family
where the fiduciary nature of their relationship with their depositors is concerned."17 Indeed, the
banking business is vested with the trust and confidence of the public; hence the "appropriate
standard of diligence must be very high, if not the highest, degree of diligence."18 The standard
applies, regardless of whether the account consists of only a few hundred pesos or of millions.19

The fiduciary nature of banking, previously imposed by case law,20 is now enshrined in Republic
Act No. 8791 or the General Banking Law of 2000. Section 2 of the law specifically says that the
State recognizes the "fiduciary nature of banking that requires high standards of integrity and
performance."

Did petitioner treat respondent’s account with the highest degree of care? From all indications, it
did not.

It is undisputed -- nay, even admitted -- that purportedly as an act of accommodation to a valued

client, petitioner allowed the withdrawal of the face value of the deposited check prior to its
clearing. That act certainly disregarded the clearance requirement of the banking system. Such a
practice is unusual, because a check is not legal tender or money;21 and its value can properly be
transferred to a depositor’s account only after the check has been cleared by the drawee bank.22

Under ordinary banking practice, after receiving a check deposit, a bank either immediately credit
the amount to a depositor’s account; or infuse value to that account only after the drawee bank
shall have paid such amount.23Before the check shall have been cleared for deposit, the
collecting bank can only "assume" at its own risk -- as herein petitioner did -- that the check
would be cleared and paid out.

Reasonable business practice and prudence, moreover, dictated that petitioner should not have
authorized the withdrawal by respondent of P240,000 on October 1, 1990, as this amount was
over and above his outstanding cleared balance of P196,793.45.24 Hence, the lower courts
correctly appreciated the evidence in his favor.

Obligation as
Collecting Agent

Indeed, the bank deposit slip expressed this reservation:

"In receiving items on deposit, this Bank obligates itself only as the Depositor’s Collecting
agent, assuming no responsibility beyond carefulness in selecting correspondents, and
until such time as actual payments shall have come to its possession, this Bank reserves
the right to charge back to the Depositor’s account any amounts previously credited
whether or not the deposited item is returned. x x x."25

However, this reservation is not enough to insulate the bank from any liability. In the past, we
have expressed doubt about the binding force of such conditions unilaterally imposed by a bank
without the consent of the depositor.26 It is indeed arguable that "in signing the deposit slip, the
depositor does so only to identify himself and not to agree to the conditions set forth at the back
of the deposit slip."27

Further, by the express terms of the stipulation, petitioner took upon itself certain obligations as
respondent’s agent, consonant with the well-settled rule that the relationship between the payee
or holder of a commercial paper and the collecting bank is that of principal and agent.28 Under
Article 190929 of the Civil Code, such bank could be held liable not only for fraud, but also for
negligence.

As a general rule, a bank is liable for the wrongful or tortuous acts and declarations of its officers
or agents within the course and scope of their employment.30 Due to the very nature of their
business, banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.31 Jurisprudence has established that the lack of diligence of a
servant is imputed to the negligence of the employer, when the negligent or wrongful act of the
former proximately results in an injury to a third person;32 in this case, the depositor.

The manager of the bank’s Cabanatuan branch, Consorcia Santiago, categorically admitted that
she and the employees under her control had breached bank policies. They admittedly breached
those policies when, without clearance from the drawee bank in Baguio, they allowed respondent
to withdraw on October 1, 1990, the amount of the check deposited. Santiago testified that
respondent "was not officially informed about the debiting of the P101,000 from his existing
balance of P170,000 on October 2, 1990 x x x."33

Being the branch manager, Santiago clearly acted within the scope of her authority in authorizing
the withdrawal and the subsequent debiting without notice. Accordingly, what remains to be
determined is whether her actions proximately caused respondent’s injury. Proximate cause is
that which -- in a natural and continuous sequence, unbroken by any efficient intervening cause -
-produces the injury, and without which the result would not have occurred.34

Let us go back to the facts as they unfolded. It is undeniable that the bank’s premature
authorization of the withdrawal by respondent on October 1, 1990, triggered -- in rapid
succession and in a natural sequence -- the debiting of his account, the fall of his account
balance to insufficient levels, and the subsequent dishonor of his own checks for lack of funds.
The CA correctly noted thus:

"x x x [T]he depositor x x x withdrew his money upon the advice by [petitioner] that his
money was already cleared. Without such advice, [respondent] would not have
withdrawn the sum of P240,000.00. Therefore, it cannot be denied that it was
[petitioner’s] fault which allowed [respondent] to withdraw a huge sum which he believed
was already his.

"To emphasize, it is beyond cavil that [respondent] had sufficient funds for the check.
Had the P101,000.00 not [been] debited, the subject checks would not have been
dishonored. Hence, we can say that [respondent’s] injury arose from the dishonor of his
well-funded checks. x x x."35

Aggravating matters, petitioner failed to show that it had immediately and duly informed
respondent of the debiting of his account. Nonetheless, it argues that the giving of notice was
discernible from his act of depositing P50,000 on October 2, 1990, to augment his account and
allow the debiting. This argument deserves short shrift.

First, notice was proper and ought to be expected. By the bank manager’s account, respondent
was considered a "valued client" whose checks had always been sufficiently funded from 1987 to
1990,36 until the October imbroglio. Thus, he deserved nothing less than an official notice of the
precarious condition of his account.

Second, under the provisions of the Negotiable Instruments Law regarding the liability of a
general indorser37 and the procedure for a notice of dishonor,38 it was incumbent on the bank to
give proper notice to respondent. In Gullas v. National Bank,39 the Court emphasized:

"x x x [A] general indorser of a negotiable instrument engages that if the instrument – the
check in this case – is dishonored and the necessary proceedings for its dishonor are
duly taken, he will pay the amount thereof to the holder (Sec. 66) It has been held by a
long line of authorities that notice of dishonor is necessary to charge an indorser and that
the right of action against him does not accrue until the notice is given.

"x x x. The fact we believe is undeniable that prior to the mailing of notice of dishonor,
and without waiting for any action by Gullas, the bank made use of the money standing in
his account to make good for the treasury warrant. At this point recall that Gullas was
 merely an indorser and had issued checks in good faith. As to a depositor who has funds
sufficient to meet payment of a check drawn by him in favor of a third party, it has been
held that he has a right of action against the bank for its refusal to pay such a check in
the absence of notice to him that the bank has applied the funds so deposited in
extinguishment of past due claims held against him. (Callahan vs. Bank of Anderson
[1904], 2 Ann. Cas., 203.) However this may be, as to an indorser the situation is
different, and notice should actually have been given him in order that he might protect
his interests."40

Third, regarding the deposit of P50,000 made by respondent on October 2, 1990, we fully
subscribe to the CA’s observations that it was not unusual for a well-reputed businessman like
him, who "ordinarily takes note of the amount of money he takes and releases," to immediately
deposit money in his current account to answer for the postdated checks he had issued.41

Damages

Inasmuch as petitioner does not contest the basis for the award of damages and attorney’s fees,
we will no longer address these matters.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.

SO ORDERED.
G.R. No. 156940 December 14, 2004

ASSOCIATED BANK (Now WESTMONT BANK), petitioner,

vs.
VICENTE HENRY TAN, respondent.

DECISION

PANGANIBAN, J.:

While banks are granted by law the right to debit the value of a dishonored check from a
depositor’s account, they must do so with the highest degree of care, so as not to prejudice the
depositor unduly.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27,
2003 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56292. The CA disposed as
follows:

"WHEREFORE, premises considered, the Decision dated December 3, 1996, of the

Regional Trial Court of Cabanatuan City, Third Judicial Region, Branch 26, in Civil Case
No. 892-AF is hereby AFFIRMED. Costs against the [petitioner]."3

The Facts

The CA narrated the antecedents as follows:

"Vicente Henry Tan (hereafter TAN) is a businessman and a regular depositor-creditor of

the Associated Bank (hereinafter referred to as the BANK). Sometime in September
1990, he deposited a postdated UCPB check with the said BANK in the amount
of P101,000.00 issued to him by a certain Willy Cheng from Tarlac. The check was duly
entered in his bank record thereby making his balance in the amount of P297,000.00, as
of October 1, 1990, from his original deposit of P196,000.00. Allegedly, upon advice and
instruction of the BANK that the P101,000.00 check was already cleared and backed up
by sufficient funds, TAN, on the same date, withdrew the sum of P240,000.00, leaving a
balance of P57,793.45. A day after, TAN deposited the amount of P50,000.00 making his
existing balance in the amount of P107,793.45, because he has issued several checks to
his business partners, to wit:

CHECK NUMBERS DATE AMOUNT

a. 138814 Sept. 29, 1990 P9,000.00
b. 138804 Oct. 8, 1990 9,350.00
c. 138787 Sept. 30, 1990 6,360.00
d. 138847 Sept. 29, 1990 21,850.00
e. 167054 Sept. 29, 1990 4,093.40
f. 138792 ` Sept. 29, 1990 3,546.00
 g. 138774 Oct. 2, 1990 6,600.00
h. 167072 Oct. 10, 1990 9,908.00
i. 168802 Oct. 10, 1990 3,650.00

"However, his suppliers and business partners went back to him alleging that the checks
he issued bounced for insufficiency of funds. Thereafter, TAN, thru his lawyer, informed
the BANK to take positive steps regarding the matter for he has adequate and sufficient
funds to pay the amount of the subject checks. Nonetheless, the BANK did not bother nor
offer any apology regarding the incident. Consequently, TAN, as plaintiff, filed a
Complaint for Damages on December 19, 1990, with the Regional Trial Court of
Cabanatuan City, Third Judicial Region, docketed as Civil Case No. 892-AF, against the
BANK, as defendant.

"In his [C]omplaint, [respondent] maintained that he ha[d] sufficient funds to pay the
subject checks and alleged that his suppliers decreased in number for lack of trust. As he
has been in the business community for quite a time and has established a good record
of reputation and probity, plaintiff claimed that he suffered embarrassment, humiliation,
besmirched reputation, mental anxieties and sleepless nights because of the said
unfortunate incident. [Respondent] further averred that he continuously lost profits in the
amount of P250,000.00. [Respondent] therefore prayed for exemplary damages and that
[petitioner] be ordered to pay him the sum of P1,000,000.00 by way of moral
damages, P250,000.00 as lost profits, P50,000.00 as attorney’s fees plus 25% of the
amount claimed including P1,000.00 per court appearance.

"Meanwhile, [petitioner] filed a Motion to Dismiss on February 7, 1991, but the same was
denied for lack of merit in an Order dated March 7, 1991. Thereafter, [petitioner] BANK
on March 20, 1991 filed its Answer denying, among others, the allegations of
[respondent] and alleged that no banking institution would give an assurance to any of its
client/depositor that the check deposited by him had already been cleared and backed up
by sufficient funds but it could only presume that the same has been honored by the
drawee bank in view of the lapse of time that ordinarily takes for a check to be cleared.
For its part, [petitioner] alleged that on October 2, 1990, it gave notice to the [respondent]
as to the return of his UCPB check deposit in the amount of P101,000.00, hence, on
even date, [respondent] deposited the amount of P50,000.00 to cover the returned
check.

"By way of affirmative defense, [petitioner] averred that [respondent] had no cause of
action against it and argued that it has all the right to debit the account of the
[respondent] by reason of the dishonor of the check deposited by the [respondent] which
was withdrawn by him prior to its clearing. [Petitioner] further averred that it has no
liability with respect to the clearing of deposited checks as the clearing is being
undertaken by the Central Bank and in accepting [the] check deposit, it merely obligates
itself as depositor’s collecting agent subject to actual payment by the drawee bank.
[Petitioner] therefore prayed that [respondent] be ordered to pay it the amount
of P1,000,000.00 by way of loss of goodwill, P7,000.00 as acceptance fee plus P500.00
per appearance and by way of attorney’s fees.

"Considering that Westmont Bank has taken over the management of the
affairs/properties of the BANK, [respondent] on October 10, 1996, filed an Amended
Complaint reiterating substantially his allegations in the original complaint, except that the
name of the previous defendant ASSOCIATED BANK is now WESTMONT BANK.

"Trial ensured and thereafter, the court rendered its Decision dated December 3, 1996 in favor of
the [respondent] and against the [petitioner], ordering the latter to pay the [respondent] the sum
of P100,000.00 by way of moral damages, P75,000.00 as exemplary damages, P25,000.00 as
attorney’s fees, plus the costs of this suit. In making said ruling, it was shown that [respondent]
was not officially informed about the debiting of the P101,000.00 [from] his existing balance and
that the BANK merely allowed the [respondent] to use the fund prior to clearing merely for
accommodation because the BANK considered him as one of its valued clients. The trial court
ruled that the bank manager was negligent in handling the particular checking account of the
[respondent] stating that such lapses caused all the inconveniences to the [respondent]. The trial
court also took into consideration that [respondent’s] mother was originally maintaining with the x
x x BANK [a] current account as well as [a] time deposit, but [o]n one occasion, although his
mother made a deposit, the same was not credited in her favor but in the name of another."4

Petitioner appealed to the CA on the issues of whether it was within its rights, as collecting bank,
to debit the account of its client for a dishonored check; and whether it had informed respondent
about the dishonor prior to debiting his account.

Ruling of the Court of Appeals

Affirming the trial court, the CA ruled that the bank should not have authorized the withdrawal of
the value of the deposited check prior to its clearing. Having done so, contrary to its obligation to
treat respondent’s account with meticulous care, the bank violated its own policy. It thereby took
upon itself the obligation to officially inform respondent of the status of his account before
unilaterally debiting the amount of P101,000. Without such notice, it is estopped from blaming
him for failing to fund his account.

The CA opined that, had the P101,000 not been debited, respondent would have had sufficient
funds for the postdated checks he had issued. Thus, the supposed accommodation accorded by
petitioner to him is the proximate cause of his business woes and shame, for which it is liable for
damages.

Because of the bank’s negligence, the CA awarded respondent moral damages of P100,000. It
also granted him exemplary damages of P75,000 and attorney’s fees of P25,000.

Hence this Petition.5

Issue

In its Memorandum, petitioner raises the sole issue of "whether or not the petitioner, which is
acting as a collecting bank, has the right to debit the account of its client for a check deposit
which was dishonored by the drawee bank."6

The Court’s Ruling

The Petition has no merit.

Sole Issue:

Debit of Depositor’s Account

Petitioner-bank contends that its rights and obligations under the present set of facts were
misappreciated by the CA. It insists that its right to debit the amount of the dishonored check
from the account of respondent is clear and unmistakable. Even assuming that it did not give him
notice that the check had been dishonored, such right remains immediately enforceable.

In particular, petitioner argues that the check deposit slip accomplished by respondent on
September 17, 1990, expressly stipulated that the bank was obligating itself merely as the
depositor’s collecting agent and -- until such time as actual payment would be made to it -- it was
reserving the right to charge against the depositor’s account any amount previously credited.
Respondent was allowed to withdraw the amount of the check prior to clearing, merely as an act
of accommodation, it added.

At the outset, we stress that the trial court’s factual findings that were affirmed by the CA are not
subject to review by this Court.7 As petitioner itself takes no issue with those findings, we need
only to determine the legal consequence, based on the established facts.

Right of Setoff

A bank generally has a right of setoff over the deposits therein for the payment of any
withdrawals on the part of a depositor.8 The right of a collecting bank to debit a client’s account
for the value of a dishonored check that has previously been credited has fairly been established
by jurisprudence. To begin with, Article 1980 of the Civil Code provides that "[f]ixed, savings, and
current deposits of money in banks and similar institutions shall be governed by the provisions
concerning simple loan."

Hence, the relationship between banks and depositors has been held to be that of creditor and
debtor.9 Thus, legal compensation under Article 127810 of the Civil Code may take place "when all
the requisites mentioned in Article 1279 are present,"11 as follows:

"(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are consumable, they
be of the same kind, and also of the same quality if the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor."12

Nonetheless, the real issue here is not so much the right of petitioner to debit respondent’s
account but, rather, the manner in which it exercised such right. The Court has held that even
while the right of setoff is conceded, separate is the question of whether that remedy has
properly been exercised.13

The liability of petitioner in this case ultimately revolves around the issue of whether it properly
exercised its right of setoff. The determination thereof hinges, in turn, on the bank’s role and
obligations, first, as respondent’s depositary bank; and second, as collecting agent for the check
in question.

Obligation as
Depositary Bank

In BPI v. Casa Montessori,14 the Court has emphasized that the banking business is impressed
with public interest. "Consequently, the highest degree of diligence is expected, and high
standards of integrity and performance are even required of it. By the nature of its functions, a
bank is under obligation to treat the accounts of its depositors with meticulous care."15

Also affirming this long standing doctrine, Philippine Bank of Commerce v. Court of Appeals16 has
held that "the degree of diligence required of banks is more than that of a good father of a family
where the fiduciary nature of their relationship with their depositors is concerned."17 Indeed, the
banking business is vested with the trust and confidence of the public; hence the "appropriate
standard of diligence must be very high, if not the highest, degree of diligence."18 The standard
applies, regardless of whether the account consists of only a few hundred pesos or of millions.19

The fiduciary nature of banking, previously imposed by case law,20 is now enshrined in Republic
Act No. 8791 or the General Banking Law of 2000. Section 2 of the law specifically says that the
State recognizes the "fiduciary nature of banking that requires high standards of integrity and
performance."

Did petitioner treat respondent’s account with the highest degree of care? From all indications, it
did not.

It is undisputed -- nay, even admitted -- that purportedly as an act of accommodation to a valued

client, petitioner allowed the withdrawal of the face value of the deposited check prior to its
clearing. That act certainly disregarded the clearance requirement of the banking system. Such a
practice is unusual, because a check is not legal tender or money;21 and its value can properly be
transferred to a depositor’s account only after the check has been cleared by the drawee bank.22

Under ordinary banking practice, after receiving a check deposit, a bank either immediately credit
the amount to a depositor’s account; or infuse value to that account only after the drawee bank
shall have paid such amount.23Before the check shall have been cleared for deposit, the
collecting bank can only "assume" at its own risk -- as herein petitioner did -- that the check
would be cleared and paid out.

Reasonable business practice and prudence, moreover, dictated that petitioner should not have
authorized the withdrawal by respondent of P240,000 on October 1, 1990, as this amount was
over and above his outstanding cleared balance of P196,793.45.24 Hence, the lower courts
correctly appreciated the evidence in his favor.

Obligation as
Collecting Agent

Indeed, the bank deposit slip expressed this reservation:

"In receiving items on deposit, this Bank obligates itself only as the Depositor’s Collecting
agent, assuming no responsibility beyond carefulness in selecting correspondents, and
until such time as actual payments shall have come to its possession, this Bank reserves
the right to charge back to the Depositor’s account any amounts previously credited
whether or not the deposited item is returned. x x x."25

However, this reservation is not enough to insulate the bank from any liability. In the past, we
have expressed doubt about the binding force of such conditions unilaterally imposed by a bank
without the consent of the depositor.26 It is indeed arguable that "in signing the deposit slip, the
depositor does so only to identify himself and not to agree to the conditions set forth at the back
of the deposit slip."27

Further, by the express terms of the stipulation, petitioner took upon itself certain obligations as
respondent’s agent, consonant with the well-settled rule that the relationship between the payee
or holder of a commercial paper and the collecting bank is that of principal and agent.28 Under
Article 190929 of the Civil Code, such bank could be held liable not only for fraud, but also for
negligence.

As a general rule, a bank is liable for the wrongful or tortuous acts and declarations of its officers
or agents within the course and scope of their employment.30 Due to the very nature of their
business, banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.31 Jurisprudence has established that the lack of diligence of a
servant is imputed to the negligence of the employer, when the negligent or wrongful act of the
former proximately results in an injury to a third person;32 in this case, the depositor.

The manager of the bank’s Cabanatuan branch, Consorcia Santiago, categorically admitted that
she and the employees under her control had breached bank policies. They admittedly breached
those policies when, without clearance from the drawee bank in Baguio, they allowed respondent
to withdraw on October 1, 1990, the amount of the check deposited. Santiago testified that
respondent "was not officially informed about the debiting of the P101,000 from his existing
balance of P170,000 on October 2, 1990 x x x."33

Being the branch manager, Santiago clearly acted within the scope of her authority in authorizing
the withdrawal and the subsequent debiting without notice. Accordingly, what remains to be
determined is whether her actions proximately caused respondent’s injury. Proximate cause is
that which -- in a natural and continuous sequence, unbroken by any efficient intervening cause -
-produces the injury, and without which the result would not have occurred.34

Let us go back to the facts as they unfolded. It is undeniable that the bank’s premature
authorization of the withdrawal by respondent on October 1, 1990, triggered -- in rapid
succession and in a natural sequence -- the debiting of his account, the fall of his account
balance to insufficient levels, and the subsequent dishonor of his own checks for lack of funds.
The CA correctly noted thus:

"x x x [T]he depositor x x x withdrew his money upon the advice by [petitioner] that his
money was already cleared. Without such advice, [respondent] would not have
withdrawn the sum of P240,000.00. Therefore, it cannot be denied that it was
[petitioner’s] fault which allowed [respondent] to withdraw a huge sum which he believed
was already his.

"To emphasize, it is beyond cavil that [respondent] had sufficient funds for the check.
Had the P101,000.00 not [been] debited, the subject checks would not have been
dishonored. Hence, we can say that [respondent’s] injury arose from the dishonor of his
well-funded checks. x x x."35

Aggravating matters, petitioner failed to show that it had immediately and duly informed
respondent of the debiting of his account. Nonetheless, it argues that the giving of notice was
discernible from his act of depositing P50,000 on October 2, 1990, to augment his account and
allow the debiting. This argument deserves short shrift.

First, notice was proper and ought to be expected. By the bank manager’s account, respondent
was considered a "valued client" whose checks had always been sufficiently funded from 1987 to
1990,36 until the October imbroglio. Thus, he deserved nothing less than an official notice of the
precarious condition of his account.

Second, under the provisions of the Negotiable Instruments Law regarding the liability of a
general indorser37 and the procedure for a notice of dishonor,38 it was incumbent on the bank to
give proper notice to respondent. In Gullas v. National Bank,39 the Court emphasized:

"x x x [A] general indorser of a negotiable instrument engages that if the instrument – the
check in this case – is dishonored and the necessary proceedings for its dishonor are
duly taken, he will pay the amount thereof to the holder (Sec. 66) It has been held by a
long line of authorities that notice of dishonor is necessary to charge an indorser and that
the right of action against him does not accrue until the notice is given.

"x x x. The fact we believe is undeniable that prior to the mailing of notice of dishonor,
and without waiting for any action by Gullas, the bank made use of the money standing in
his account to make good for the treasury warrant. At this point recall that Gullas was
 merely an indorser and had issued checks in good faith. As to a depositor who has funds
sufficient to meet payment of a check drawn by him in favor of a third party, it has been
held that he has a right of action against the bank for its refusal to pay such a check in
the absence of notice to him that the bank has applied the funds so deposited in
extinguishment of past due claims held against him. (Callahan vs. Bank of Anderson
[1904], 2 Ann. Cas., 203.) However this may be, as to an indorser the situation is
different, and notice should actually have been given him in order that he might protect
his interests."40

Third, regarding the deposit of P50,000 made by respondent on October 2, 1990, we fully
subscribe to the CA’s observations that it was not unusual for a well-reputed businessman like
him, who "ordinarily takes note of the amount of money he takes and releases," to immediately
deposit money in his current account to answer for the postdated checks he had issued.41

Damages

Inasmuch as petitioner does not contest the basis for the award of damages and attorney’s fees,
we will no longer address these matters.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.

SO ORDERED.
G.R. No. 193577 September 7, 2011

ANTONIO FRANCISCO, substituted by his heirs: NELIA E.S. FRANCISCO, EMILIA F.

BERTIZ, REBECCA E.S. FRANCISCO, ANTONIO E.S. FRANCISCO, JR., SOCORRO F.
FONTANILLA, and JOVITO E.S. FRANCISCO, Petitioners,
vs.
CHEMICAL BULK CARRIERS, INCORPORATED, Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the 31 May 2010 Decision2 and 31 August 2010 Resolution3 of the
Court of Appeals in CA G.R. CV No. 63591. In its 31 May 2010 Decision, the Court of Appeals
set aside the 21 August 1998 Decision4of the Regional Trial of Pasig City, Branch 71 (trial court),
and ordered petitioner Antonio Francisco (Francisco) to pay respondent Chemical Bulk Carriers,
Incorporated (CBCI) ₱1,119,905 as actual damages. In its 31 August 2010 Resolution, the Court
of Appeals denied Francisco’s motion for reconsideration.

The Facts

Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal.
Sometime in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to Francisco’s
Caltex station and introduced themselves as employees of CBCI. Bacsa offered to sell to
Francisco a certain quantity of CBCI’s diesel fuel.

After checking Bacsa’s identification card, Francisco agreed to purchase CBCI’s diesel fuel.
Francisco imposed the following conditions for the purchase: (1) that Petron Corporation (Petron)
should deliver the diesel fuel to Francisco at his business address which should be properly
indicated in Petron’s invoice; (2) that the delivery tank is sealed; and (3) that Bacsa should issue
a separate receipt to Francisco.

The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January
1994.5 There were 17 deliveries to Francisco and all his conditions were complied with.

In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel delivered to
him but which had been paid for by CBCI.6 CBCI demanded that Francisco pay CBCI ₱1,053,527
for the diesel fuel or CBCI would file a complaint against him in court. Francisco rejected CBCI’s
demand.

On 16 April 1996, CBCI filed a complaint for sum of money and damages against Francisco and
other unnamed defendants.7 According to CBCI, Petron, on various dates, sold diesel fuel to
CBCI but these were delivered to and received by Francisco. Francisco then sold the diesel fuel
to third persons from whom he received payment. CBCI alleged that Francisco acquired
possession of the diesel fuel without authority from CBCI and deprived CBCI of the use of the
diesel fuel it had paid for. CBCI demanded payment from Francisco but he refused to pay. CBCI
argued that Francisco should have known that since only Petron, Shell and Caltex are authorized
to sell and distribute petroleum products in the Philippines, the diesel fuel came from illegitimate,
if not illegal or criminal, acts. CBCI asserted that Francisco violated Articles 19,8 20,9 21,10 and
2211 of the Civil Code and that he should be held liable. In the alternative, CBCI claimed that
Francisco, in receiving CBCI’s diesel fuel, entered into an innominate contract of do ut des (I give
and you give) with CBCI for which Francisco is obligated to pay CBCI ₱1,119,905, the value of
the diesel fuel. CBCI also prayed for exemplary damages, attorney’s fees and other expenses of
litigation.
On 20 May 1996, Francisco filed a Motion to Dismiss on the ground of forum shopping.12 CBCI
filed its Opposition.13 In an Order dated 15 November 1996, the trial court denied Francisco’s
motion.14

Thereafter, Francisco filed his Answer.15 Francisco explained that he operates the Caltex station
with the help of his family because, in February 1978, he completely lost his eyesight due to
sickness. Francisco claimed that he asked Jovito, his son, to look into and verify the identity of
Bacsa, who introduced himself as a radio operator and confidential secretary of a certain Mr.
Inawat (Inawat), CBCI’s manager for operations. Francisco said he was satisfied with the proof
presented by Bacsa. When asked to explain why CBCI was selling its fuel, Bacsa allegedly
replied that CBCI was in immediate need of cash for the salary of its daily paid workers and for
petty cash. Francisco maintained that Bacsa assured him that the diesel fuel was not stolen
property and that CBCI enjoyed a big credit line with Petron. Francisco agreed to purchase the
diesel fuel offered by Bacsa on the following conditions:

1) Defendant [Francisco] will not accept any delivery if it is not company (Petron)
delivered, with his name and address as shipping point properly printed and indicated in
the invoice of Petron, and that the product on the delivery tank is sealed; [and]

2) Although the original invoice is sufficient evidence of delivery and payment, under
ordinary course of business, defendant still required Mr. Bacsa to issue a separate
receipt duly signed by him acknowledging receipt of the amount stated in the invoice, for
and in behalf of CBCI.16

During the first delivery on 5 April 1993, Francisco asked one of his sons to verify whether the
delivery truck’s tank was properly sealed and whether Petron issued the invoice. Francisco said
all his conditions were complied with. There were 17 deliveries made from 5 April 1993 to 25
January 1994 and each delivery was for 10,000 liters of diesel fuel at ₱65,865.17 Francisco
maintained that he acquired the diesel fuel in good faith and for value. Francisco also filed a
counterclaim for exemplary damages, moral damages and attorney’s fees.

In its 21 August 1998 Decision, the trial court ruled in Francisco’s favor and dismissed CBCI’s
complaint. The dispositive portion of the trial court’s 21 August 1998 Decision reads:

WHEREFORE, Judgment is hereby rendered:

1. Dismissing the complaint dated March 13, 1996 with costs.

2. Ordering plaintiff (CBCI), on the counterclaim, to pay defendant the amount of

₱100,000.00 as moral damages and ₱50,000.00 as and by way of attorney’s fees.

SO ORDERED.18

CBCI appealed to the Court of Appeals.19 CBCI argued that Francisco acquired the diesel fuel
from Petron without legal ground because Bacsa was not authorized to deliver and sell CBCI’s
diesel fuel. CBCI added that Francisco acted in bad faith because he should have inquired
further whether Bacsa’s sale of CBCI’s diesel fuel was legitimate.

In its 31 May 2010 Decision, the Court of Appeals set aside the trial court’s 21 August 1998
Decision and ruled in CBCI’s favor. The dispositive portion of the Court of Appeals’ 31 May 2010
Decision reads:

IN VIEW OF THE FOREGOING, the assailed decision is hereby REVERSED and SET ASIDE.
Antonio Francisco is ordered to pay Chemical Bulk Carriers, Incorporated the amount of
₱1,119,905.00 as actual damages.
SO ORDERED.20

On 15 January 2001, Francisco died.21 Francisco’s heirs, namely: Nelia E.S. Francisco, Emilia F.
Bertiz, Rebecca E.S. Francisco, Antonio E.S. Francisco, Jr., Socorro F. Fontanilla, and Jovito
E.S. Francisco (heirs of Francisco) filed a motion for substitution.22 The heirs of Francisco also
filed a motion for reconsideration.23 In its 31 August 2010 Resolution, the Court of Appeals
granted the motion for substitution but denied the motion for reconsideration.

Hence, this petition.

The Ruling of the Trial Court

The trial court ruled that Francisco was not liable for damages in favor of CBCI because the 17
deliveries were covered by original and genuine invoices. The trial court declared that Bacsa, as
confidential secretary of Inawat, was CBCI’s authorized representative who received Francisco’s
full payment for the diesel fuel. The trial court stated that if Bacsa was not authorized, CBCI
should have sued Bacsa and not Francisco. The trial court also considered Francisco a buyer in
good faith who paid in full for the merchandise without notice that some other person had a right
to or interest in such diesel fuel. The trial court pointed out that good faith affords protection to a
purchaser for value. Finally, since CBCI was bound by the acts of Bacsa, the trial court ruled that
CBCI is liable to pay damages to Francisco.

The Ruling of the Court of Appeals

The Court of Appeals set aside the trial court’s 21 August 1998 Decision and ruled that Bacsa’s
act of selling the diesel fuel to Francisco was his personal act and, even if Bacsa connived with
Inawat, the sale does not bind CBCI.

The Court of Appeals declared that since Francisco had been in the business of selling
petroleum products for a considerable number of years, his blindness was not a hindrance for
him to transact business with other people. With his condition and experience, Francisco should
have verified whether CBCI was indeed selling diesel fuel and if it had given Bacsa authority to
do so. Moreover, the Court of Appeals stated that Francisco cannot feign good faith since he had
doubts as to the authority of Bacsa yet he did not seek confirmation from CBCI and contented
himself with an improvised receipt. Francisco’s failure to verify Bacsa’s authority showed that he
had an ulterior motive. The receipts issued by Bacsa also showed his lack of authority because it
was on a plain sheet of bond paper with no letterhead or any indication that it came from CBCI.
The Court of Appeals ruled that Francisco cannot invoke estoppel because he was at fault for
choosing to ignore the tell-tale signs of petroleum diversion and for not exercising prudence.

The Court of Appeals also ruled that CBCI was unlawfully deprived of the diesel fuel which, as
indicated in the invoices, CBCI had already paid for. Therefore, CBCI had the right to recover the
diesel fuel or its value from Francisco. Since the diesel fuel can no longer be returned, the Court
of Appeals ordered Francisco to give back the actual amount paid by CBCI for the diesel fuel.

The Issues

The heirs of Francisco raise the following issues:

I. WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING THAT

DEFENDANT ANTONIO FRANCISCO EXERCISED THE REQUIRED DILIGENCE OF A
BLIND PERSON IN THE CONDUCT OF HIS BUSINESS; and

II. WHETHER ON THE BASIS OF THE FACTUAL FINDINGS OF THE COURT OF

APPEALS AND THE TRIAL COURT AND ADMITTED FACTS, IT CAN BE
 CONCLUDED THAT THE PLAINTIFF APPROVED EXPRESSLY OR TACITLY THE
TRANSACTIONS.24

The Ruling of the Court

The petition has no merit.

Required Diligence of a Blind Person

The heirs of Francisco argue that the Court of Appeals erred when it ruled that Francisco was
liable to CBCI because he failed to exercise the diligence of a good father of a family when he
bought the diesel fuel. They argue that since Francisco was blind, the standard of conduct that
was required of him was that of a reasonable person under like disability. Moreover, they insist
that Francisco exercised due care in purchasing the diesel fuel by doing the following: (1)
Francisco asked his son to check the identity of Bacsa; (2) Francisco required direct delivery
from Petron; (3) Francisco required that he be named as the consignee in the invoice; and (4)
Francisco required separate receipts from Bacsa to evidence actual payment.

Standard of conduct is the level of expected conduct that is required by the nature of the
obligation and corresponding to the circumstances of the person, time and place.25 The most
common standard of conduct is that of a good father of a family or that of a reasonably prudent
person.26 To determine the diligence which must be required of all persons, we use as basis the
abstract average standard corresponding to a normal orderly person.27

However, one who is physically disabled is required to use the same degree of care that a
reasonably careful person who has the same physical disability would use.28 Physical handicaps
and infirmities, such as blindness or deafness, are treated as part of the circumstances under
which a reasonable person must act. Thus, the standard of conduct for a blind person becomes
that of a reasonable person who is blind.

We note that Francisco, despite being blind, had been managing and operating the Caltex station
for 15 years and this was not a hindrance for him to transact business until this time. In this
instance, however, we rule that Francisco failed to exercise the standard of conduct expected of
a reasonable person who is blind. First, Francisco merely relied on the identification card of
Bacsa to determine if he was authorized by CBCI. Francisco did not do any other background
check on the identity and authority of Bacsa. Second, Francisco already expressed his
misgivings about the diesel fuel, fearing that they might be stolen property,29 yet he did not verify
with CBCI the authority of Bacsa to sell the diesel fuel. Third, Francisco relied on the receipts
issued by Bacsa which were typewritten on a half sheet of plain bond paper.30 If Francisco
exercised reasonable diligence, he should have asked for an official receipt issued by CBCI.
Fourth, the delivery to Francisco, as indicated in Petron’s invoice, does not show that CBCI
authorized Bacsa to sell the diesel fuel to Francisco. Clearly, Francisco failed to exercise the
standard of conduct expected of a reasonable person who is blind.

Express or Tacit Approval of the Transaction

The heirs of Francisco argue that CBCI approved expressly or tacitly the transactions. According
to them, there was apparent authority for Bacsa to enter into the transactions. They argue that
even if the agent has exceeded his authority, the principal is solidarily liable with the agent if the
former allowed the later to act as though he had full powers.31 They insist CBCI was not
unlawfully deprived of its property because Inawat gave Bacsa the authority to sell the diesel fuel
and that CBCI is bound by such action. Lastly, they argue that CBCI should be considered in
estoppel for failure to act during the ten month period that deliveries were being made to
Francisco.
The general principle is that a seller without title cannot transfer a better title than he has.32 Only
the owner of the goods or one authorized by the owner to sell can transfer title to the
buyer.33 Therefore, a person can sell only what he owns or is authorized to sell and the buyer
can, as a consequence, acquire no more than what the seller can legally transfer.34

Moreover, the owner of the goods who has been unlawfully deprived of it may recover it even
from a purchaser in good faith.35 Thus, the purchaser of property which has been stolen from the
owner has been held to acquire no title to it even though he purchased for value and in good
faith.

The exception from the general principle is the doctrine of estoppel where the owner of the goods
is precluded from denying the seller’s authority to sell.36 But in order that there may be estoppel,
the owner must, by word or conduct, have caused or allowed it to appear that title or authority to
sell is with the seller and the buyer must have been misled to his damage.37 1avvphi1

In this case, it is clear that Bacsa was not the owner of the diesel fuel. Francisco was aware of
1âwphi 1

this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel. However,
Francisco’s claim that Bacsa was authorized is not supported by any evidence except his self-
serving testimony. First, Francisco did not even confirm with CBCI if it was indeed selling its
diesel fuel since it is not one of the oil companies known in the market to be selling petroleum
products. This fact alone should have put Francisco on guard. Second, it does not appear that
CBCI, by some direct and equivocal act, has clothed Bacsa with the indicia of ownership or
apparent authority to sell CBCI’s diesel fuel. Francisco did not state if the identification card
presented by Bacsa indicated that he was CBCI’s agent or a mere employee. Third, the receipt
issued by Bacsa was typewritten on a half sheet of plain bond paper. There was no letterhead or
any indication that it came from CBCI. We agree with the Court of Appeals that this was a
personal receipt issued by Bacsa and not an official receipt issued by CBCI. Consequently, CBCI
is not precluded by its conduct from denying Bacsa’s authority to sell. CBCI did not hold out
Bacsa or allow Bacsa to appear as the owner or one with apparent authority to dispose of the
diesel fuel.

Clearly, Bacsa cannot transfer title to Francisco as Bacsa was not the owner of the diesel fuel
nor was he authorized by CBCI to sell its diesel fuel. CBCI did not commit any act to clothe
Bacsa with apparent authority to sell the diesel fuel that would have misled Francisco. Francisco,
therefore, did not acquire any title over the diesel fuel. Since CBCI was unlawfully deprived of its
property, it may recover from Francisco, even if Francisco pleads good faith.

WHEREFORE, we DENY the petition. We AFFIRM the 31 May 2010 Decision and 31 August
2010 Resolution of the Court of Appeals.

SO ORDERED.
G.R. No. 166869 February 16, 2010

PHILIPPINE HAWK CORPORATION, Petitioner,

vs.
VIVIAN TAN LEE, Respondent.

DECISION

PERALTA, J.:

This is a Petition for Review on Certiorari1 of the Decision of the Court of Appeals in CA-G.R. CV
No. 70860, promulgated on August 17, 2004, affirming with modification the Decision of the
Regional Trial Court (RTC) of Quezon City, Branch 102, dated March 16, 2001, in Civil Case No.
Q-91-9191, ordering petitioner Philippine Hawk Corporation and Margarito Avila to jointly and
severally pay respondent Vivian Tan Lee damages as a result of a vehicular accident.

The facts are as follows:

On March 15, 2005, respondent Vivian Tan Lee filed before the RTC of Quezon City a
Complaint2 against petitioner Philippine Hawk Corporation and defendant Margarito Avila for
damages based on quasi-delict, arising from a vehicular accident that occurred on March 17,
1991 in Barangay Buensoceso, Gumaca, Quezon. The accident resulted in the death of
respondent’s husband, Silvino Tan, and caused respondent physical injuries.

On June 18, 1992, respondent filed an Amended Complaint,3 in her own behalf and in behalf of
her children, in the civil case for damages against petitioner. Respondent sought the payment of
indemnity for the death of Silvino Tan, moral and exemplary damages, funeral and interment
expenses, medical and hospitalization expenses, the cost of the motorcycle’s repair, attorney’s
fees, and other just and equitable reliefs.

The accident involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The bus
was owned by petitioner Philippine Hawk Corporation, and was then being driven by Margarito
Avila.

In its Answer,4 petitioner denied liability for the vehicular accident, alleging that the immediate
and proximate cause of the accident was the recklessness or lack of caution of Silvino Tan.
Petitioner asserted that it exercised the diligence of a good father of the family in the selection
and supervision of its employees, including Margarito Avila.

On March 25, 1993, the trial court issued a Pre-trial Order5 stating that the parties manifested
that there was no possibility of amicable settlement between them. However, they agreed to
stipulate on the following facts:

1. On March 17, 1991, in Bgy. Buensoceso, Gumaca, Quezon, plaintiff Vivian Lee Tan
and her husband Silvino Tan, while on board a motorcycle with [P]late No. DA-5480
driven by the latter, and a Metro Bus with [P]late No. NXR-262 driven by Margarito Avila,
were involved in an accident;

2. As a result of the accident, Silvino Tan died on the spot while plaintiff Vivian Lee Tan
suffered physical injuries which necessitated medical attention and hospitalization;

3. The deceased Silvino Tan is survived by his wife, plaintiff Vivian Lee Tan and four
children, three of whom are now residents of the United States; and

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

The parties also agreed on the following issues:

1. Whether or not the proximate cause of the accident causing physical injuries upon the
plaintiff Vivian Lee Tan and resulting in the death of the latter’s husband was the
recklessness and negligence of Margarito Avila or the deceased Silvino Tan; and

2. Whether or not defendant Philippine Hawk Transport Corporation exercised the

diligence of a good father of the family in the selection and supervision of its driver
Margarito Avila.7

Respondent testified that on March 17, 1991, she was riding on their motorcycle in tandem with
her husband, who was on the wheel, at a place after a Caltex gasoline station in Barangay
Buensoceso, Gumaca, Quezon on the way to Lopez, Quezon. They came from the Pasumbal
Machine Shop, where they inquired about the repair of their tanker. They were on a stop position
at the side of the highway; and when they were about to make a turn, she saw a bus running at
fast speed coming toward them, and then the bus hit a jeep parked on the roadside, and their
motorcycle as well. She lost consciousness and was brought to the hospital in Gumaca, Quezon,
where she was confined for a week. She was later transferred to St. Luke’s Hospital in Quezon
City, Manila. She suffered a fracture on her left chest, her left arm became swollen, she felt pain
in her bones, and had high blood pressure.8

Respondent’s husband died due to the vehicular accident. The immediate cause of his death
was massive cerebral hemorrhage.9

Respondent further testified that her husband was leasing10 and operating a Caltex gasoline
station in Gumaca, Quezon that yielded one million pesos a year in revenue. They also had a
copra business, which gave them an income of ₱3,000.00 a month or ₱36,000.00 a year.11

Ernest Ovial, the driver of the passenger jeep involved in the accident, testified that in the
afternoon of March 17, 1991, his jeep was parked on the left side of the highway near the
Pasumbal Machine Shop. He did not notice the motorcycle before the accident. But he saw the
bus dragging the motorcycle along the highway, and then the bus bumped his jeep and sped
away.12

For the defense, Margarito Avila, the driver of petitioner’s bus, testified that on March 17, 1999,
at about 4:30 p.m., he was driving his bus at 60 kilometers per hour on the Maharlika Highway.
When they were at Barangay Buensoceso, Gumaca, Quezon, a motorcycle ran from his left side
of the highway, and as the bus came near, the motorcycle crossed the path of the bus, and so he
turned the bus to the right. He heard a loud banging sound. From his side mirror, he saw that the
motorcycle turned turtle ("bumaliktad"). He did not stop to help out of fear for his life, but drove on
and surrendered to the police. He denied that he bumped the motorcycle.13

Avila further testified that he had previously been involved in sideswiping incidents, but he forgot
how many times.14

Rodolfo Ilagan, the bus conductor, testified that the motorcycle bumped the left side of the bus
that was running at 40 kilometers per hour.15

Domingo S. Sisperes, operations officer of petitioner, testified that, like their other drivers, Avila
was subjected to and passed the following requirements:

(1) Submission of NBI clearance;

(2) Certification from his previous employer that he had no bad record;
 (3) Physical examination to determine his fitness to drive;

(4) Test of his driving ability, particularly his defensive skill; and

(5) Review of his driving skill every six months.16

Efren Delantar, a Barangay Kagawad in Buensoceso, Gumaca, Quezon, testified that the bus
was running on the highway on a straight path when a motorcycle, with a woman behind its
driver, suddenly emerged from the left side of the road from a machine shop. The motorcycle
crossed the highway in a zigzag manner and bumped the side of the bus.17

In its Decision dated March 16, 2001, the trial court rendered judgment against petitioner and
defendant Margarito Avila, the dispositive portion of which reads:

ACCORDINGLY, MARGARITO AVILA is adjudged guilty of simple negligence, and judgment is

hereby rendered in favor of the plaintiff Vivian Lee Tan and h[er] husband’s heirs ordering the
defendants Philippine Hawk Corporation and Margarito Avila to pay them jointly and solidarily the
sum of ₱745,575.00 representing loss of earnings and actual damages plus ₱50,000.00 as moral
damages.18

The trial court found that before the collision, the motorcycle was on the left side of the road, just
as the passenger jeep was. Prior to the accident, the motorcycle was in a running position
moving toward the right side of the highway. The trial court agreed with the bus driver that the
motorcycle was moving ahead of the bus from the left side of the road toward the right side of the
road, but disagreed that the motorcycle crossed the path of the bus while the bus was running on
the right side of the road.19

The trial court held that if the bus were on the right side of the highway, and Margarito Avila
turned his bus to the right in an attempt to avoid hitting the motorcyle, then the bus would not
have hit the passenger jeep, which was then parked on the left side of the road. The fact that the
bus also hit the passenger jeep showed that the bus must have been running from the right lane
to the left lane of the highway, which caused the collision with the motorcycle and the passenger
jeep parked on the left side of the road. The trial court stated that since Avila saw the motorcycle
before the collision, he should have stepped on the brakes and slowed down, but he just
maintained his speed and veered to the left.20 The trial court found Margarito Avila guilty of
simple negligence.

The trial court held petitioner bus company liable for failing to exercise the diligence of a good
father of the family in the selection and supervision of Avila, having failed to sufficiently inculcate
in him discipline and correct behavior on the road.21

On appeal, the Court of Appeals affirmed the decision of the trial court with modification in the
award of damages. The dispositive portion of the decision reads:

WHEREFORE, foregoing premises considered, the appeal is DENIED. The assailed decision
dated March 16, 2001 is hereby AFFIRMED with MODIFICATION. Appellants Philippine Hawk
and Avila are hereby ordered to pay jointly and severally appellee the following amount: (a)
₱168,019.55 as actual damages; (b) ₱10,000.00 as temperate damages; (c) ₱100,000.00 as
moral damages; (d) ₱590,000.00 as unearned income; and (e) ₱50,000.00 as civil indemnity.22

Petitioner filed this petition, raising the following issues:

1) The Court of Appeals committed grave abuse of discretion amounting to lack of

jurisdiction in passing upon an issue, which had not been raised on appeal, and which
 had, therefore, attained finality, in total disregard of the doctrine laid down by this Court in
Abubakar v. Abubakar, G.R. No. 134622, October 22, 1999.

2) The Court of Appeals committed reversible error in its finding that the petitioner’s bus
driver saw the motorcycle of private respondent executing a U-turn on the highway
"about fifteen (15) meters away" and thereafter held that the Doctrine of Last Clear was
applicable to the instant case. This was a palpable error for the simple reason that the
aforesaid distance was the distance of the witness to the bus and not the distance of the
bus to the respondent’s motorcycle, as clearly borne out by the records.

3) The Court of Appeals committed reversible error in awarding damages in total

disregard of the established doctrine laid down in Danao v. Court of Appeals, 154 SCRA
447 and Viron Transportation Co., Inc. v. Delos Santos, G.R. No. 138296, November 22,
2000.23

In short, the issues raised by petitioner are: (1) whether or not negligence may be attributed to
petitioner’s driver, and whether negligence on his part was the proximate cause of the accident,
resulting in the death of Silvino Tan and causing physical injuries to respondent; (2) whether or
not petitioner is liable to respondent for damages; and (3) whether or not the damages awarded
by respondent Court of Appeals are proper.

Petitioner seeks a review of the factual findings of the trial court, which were sustained by the
Court of Appeals, that petitioner’s driver was negligent in driving the bus, which caused physical
injuries to respondent and the death of respondent’s husband.

The rule is settled that the findings of the trial court, especially when affirmed by the Court of
Appeals, are conclusive on this Court when supported by the evidence on record.24 The Court
has carefully reviewed the records of this case, and found no cogent reason to disturb the
findings of the trial court, thus:

The Court agree[s] with the bus driver Margarito that the motorcycle was moving ahead of the
bus towards the right side from the left side of the road, but disagrees with him that it crossed the
path of the bus while the bus was running on the right side of the highway.

If the bus were on the right side of the highway and Margarito turned his bus to the right in an
attempt to avoid hitting it, then the bus would not have hit the passenger jeep vehicle which was
then parked on the left side of the road. The fact that the bus hit the jeep too, shows that the bus
must have been running to the left lane of the highway from right to the left, that the collision
between it and the parked jeep and the moving rightways cycle became inevitable. Besides,
Margarito said he saw the motorcycle before the collision ahead of the bus; that being so, an
extra-cautious public utility driver should have stepped on his brakes and slowed down. Here, the
bus never slowed down, it simply maintained its highway speed and veered to the left. This is
negligence indeed.25

Petitioner contends that the Court of Appeals was mistaken in stating that the bus driver saw
respondent’s motorcycle "about 15 meters away" before the collision, because the said distance,
as testified to by its witness Efren Delantar Ong, was Ong’s distance from the bus, and not the
distance of the bus from the motorcycle. Petitioner asserts that this mistaken assumption of the
Court of Appeals made it conclude that the bus driver, Margarito Avila, had the last clear chance
to avoid the accident, which was the basis for the conclusion that Avila was guilty of simple
negligence.

A review of the records showed that it was petitioner’s witness, Efren Delantar Ong, who was
about 15 meters away from the bus when he saw the vehicular accident.26 Nevertheless, this fact
does not affect the finding of the trial court that petitioner’s bus driver, Margarito Avila, was guilty
of simple negligence as affirmed by the appellate court. Foreseeability is the fundamental test of
negligence.27 To be negligent, a defendant must have acted or failed to act in such a way that an
ordinary reasonable man would have realized that certain interests of certain persons were
unreasonably subjected to a general but definite class of risks.28

In this case, the bus driver, who was driving on the right side of the road, already saw the
motorcycle on the left side of the road before the collision. However, he did not take the
necessary precaution to slow down, but drove on and bumped the motorcycle, and also the
passenger jeep parked on the left side of the road, showing that the bus was negligent in veering
to the left lane, causing it to hit the motorcycle and the passenger jeep.

Whenever an employee’s negligence causes damage or injury to another, there instantly arises a
presumption that the employer failed to exercise the due diligence of a good father of the family
in the selection or supervision of its employees.29 To avoid liability for a quasi-delict committed by
his employee, an employer must overcome the presumption by presenting convincing proof that
he exercised the care and diligence of a good father of a family in the selection and supervision
of his employee.30

The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to
respondent, since it failed to exercise the diligence of a good father of the family in the selection
and supervision of its bus driver, Margarito Avila, for having failed to sufficiently inculcate in him
discipline and correct behavior on the road. Indeed, petitioner’s tests were concentrated on the
ability to drive and physical fitness to do so. It also did not know that Avila had been previously
involved in sideswiping incidents.

As regards the issue on the damages awarded, petitioner contends that it was the only one that
appealed the decision of the trial court with respect to the award of actual and moral damages;
hence, the Court of Appeals erred in awarding other kinds of damages in favor of respondent,
who did not appeal from the trial court’s decision.

Petitioner’s contention is unmeritorious.

Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides:

SEC. 8. Questions that may be decided. -- No error which does not affect the jurisdiction over the
subject matter or the validity of the judgment appealed from or the proceedings therein will be
considered unless stated in the assignment of errors, or closely related to or dependent on an
assigned error and properly argued in the brief, save as the court pass upon plain errors and
clerical errors.

Philippine National Bank v. Rabat31 cited the book32 of Justice Florenz D. Regalado to explain the
section above, thus:

In his book, Mr. Justice Florenz D. Regalado commented on this section, thus:

1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes some
substantial changes in the rules on assignment of errors. The basic procedural rule is
that only errors claimed and assigned by a party will be considered by the court, except
errors affecting its jurisdiction over the subject matter. To this exception has now been
added errors affecting the validity of the judgment appealed from or the proceedings
therein.

Also, even if the error complained of by a party is not expressly stated in his assignment
of errors but the same is closely related to or dependent on an assigned error and
properly argued in his brief, such error may now be considered by the court. These
changes are of jurisprudential origin.
 2. The procedure in the Supreme Court being generally the same as that in the Court of
Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has been held that
the latter is clothed with ample authority to review matters, even if they are not assigned
as errors on appeal, if it finds that their consideration is necessary in arriving at a just
decision of the case. Also, an unassigned error closely related to an error properly
assigned (PCIB vs. CA, et al., L-34931, Mar. 18, 1988), or upon which the determination
of the question raised by error properly assigned is dependent, will be considered by the
appellate court notwithstanding the failure to assign it as error (Ortigas, Jr. vs. Lufthansa
German Airlines, L-28773, June 30, 1975; Soco vs. Militante, et al., G.R. No. 58961,
June 28, 1983).

It may also be observed that under Sec. 8 of this Rule, the appellate court is authorized
to consider a plain error, although it was not specifically assigned by the appellant (Dilag
vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it would be sacrificing substance for
technicalities.33

In this case for damages based on quasi-delict, the trial court awarded respondent the sum of
₱745,575.00, representing loss of earning capacity (₱590,000.00) and actual damages
(₱155,575.00 for funeral expenses), plus ₱50,000.00 as moral damages. On appeal to the Court
of Appeals, petitioner assigned as error the award of damages by the trial court on the ground
that it was based merely on suppositions and surmises, not the admissions made by respondent
during the trial.

In its Decision, the Court of Appeals sustained the award by the trial court for loss of earning
capacity of the deceased Silvino Tan, moral damages for his death, and actual damages,
although the amount of the latter award was modified.

The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 of the
Civil Code.34Compensation of this nature is awarded not for loss of earnings, but for loss of
capacity to earn money.35

As a rule, documentary evidence should be presented to substantiate the claim for damages for
loss of earning capacity.36 By way of exception, damages for loss of earning capacity may be
awarded despite the absence of documentary evidence when: (1) the deceased is self-employed
and earning less than the minimum wage under current labor laws, in which case, judicial notice
may be taken of the fact that in the deceased's line of work no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker earning less than the
minimum wage under current labor laws.37

In this case, the records show that respondent’s husband was leasing and operating a Caltex
gasoline station in Gumaca, Quezon. Respondent testified that her husband earned an annual
income of one million pesos. Respondent presented in evidence a Certificate of Creditable
Income Tax Withheld at Source for the Year 1990,38which showed that respondent’s husband
earned a gross income of P950,988.43 in 1990. It is reasonable to use the Certificate and
respondent’s testimony as bases for fixing the gross annual income of the deceased at one
million pesos before respondent’s husband died on March 17, 1999. However, no documentary
evidence was presented regarding the income derived from their copra business; hence, the
testimony of respondent as regards such income cannot be considered.

In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be
considered; that is, the total of the earnings less expenses necessary for the creation of such
earnings or income, less living and other incidental expenses.39 In the absence of documentary
evidence, it is reasonable to peg necessary expenses for the lease and operation of the gasoline
station at 80 percent of the gross income, and peg living expenses at 50 percent of the net
income (gross income less necessary expenses).
In this case, the computation for loss of earning capacity is as follows:

Life Expectancy Reasonable and

Net Earning Gross Annual
= [2/3 (80-age at the x – Necessary Expenses
Capacity Income (GAI)
time of death)] (80% of GAI)

X = [2/3 (80-65)] x ₱1,000,000.00 - ₱800,000.00

X = 2/3 (15) x ₱200,000.00 - ₱100,000.00(Living

Expenses)

X = 30/3 x ₱100,000.00

X = 10 x ₱100,000.00

X = ₱1,000,000.00

The Court of Appeals also awarded actual damages for the expenses incurred in connection with
the death, wake, and interment of respondent’s husband in the amount of ₱154,575.30, and the
medical expenses of respondent in the amount of ₱168,019.55.

Actual damages must be substantiated by documentary evidence, such as receipts, in order to

prove expenses incurred as a result of the death of the victim40 or the physical injuries sustained
by the victim. A review of the valid receipts submitted in evidence showed that the funeral and
related expenses amounted only to ₱114,948.60, while the medical expenses of respondent
amounted only to ₱12,244.25, yielding a total of ₱127,192.85 in actual damages.

Moreover, the Court of Appeals correctly sustained the award of moral damages in the amount of
₱50,000.00 for the death of respondent’s husband. Moral damages are not intended to enrich a
plaintiff at the expense of the defendant.41 They are awarded to allow the plaintiff to obtain
means, diversions or amusements that will serve to alleviate the moral suffering he/she has
undergone due to the defendant’s culpable action and must, perforce, be proportional to the
suffering inflicted.42

In addition, the Court of Appeals correctly awarded temperate damages in the amount of
₱10,000.00 for the damage caused on respondent’s motorcycle. Under Art. 2224 of the Civil
Code, temperate damages "may be recovered when the court finds that some pecuniary loss has
been suffered but its amount cannot, from the nature of the case, be proved with certainty." The
cost of the repair of the motorcycle was prayed for by respondent in her Complaint. However, the
evidence presented was merely a job estimate43 of the cost of the motorcycle’s repair amounting
to ₱17, 829.00. The Court of Appeals aptly held that there was no doubt that the damage caused
on the motorcycle was due to the negligence of petitioner’s driver. In the absence of competent
proof of the actual damage caused on the motorcycle or the actual cost of its repair, the award of
temperate damages by the appellate court in the amount of ₱10,000.00 was reasonable under
the circumstances.44

The Court of Appeals also correctly awarded respondent moral damages for the physical injuries
she sustained due to the vehicular accident. Under Art. 2219 of the Civil Code,45 moral damages
may be recovered in quasi-delicts causing physical injuries. However, the award of ₱50,000.00
should be reduced to ₱30,000.00 in accordance with prevailing jurisprudence.46
Further, the Court of Appeals correctly awarded respondent civil indemnity for the death of her
husband, which has been fixed by current jurisprudence at ₱50,000.00.47 The award is proper
under Art. 2206 of the Civil Code.48

In fine, the Court of Appeals correctly awarded civil indemnity for the death of respondent’s
husband, temperate damages, and moral damages for the physical injuries sustained by
respondent in addition to the damages granted by the trial court to respondent. The trial court
overlooked awarding the additional damages, which were prayed for by respondent in her
Amended Complaint. The appellate court is clothed with ample authority to review matters, even
if they are not assigned as errors in the appeal, if it finds that their consideration is necessary in
arriving at a just decision of the case.49

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated August 17,
2004 in CA-G.R. CV No. 70860 is hereby AFFIRMED with MODIFICATION. Petitioner Philippine
Hawk Corporation and Margarito Avila are hereby ordered to pay jointly and severally respondent
Vivian Lee Tan: (a) civil indemnity in the amount of Fifty Thousand Pesos (₱50,000.00); (b)
actual damages in the amount of One Hundred Twenty-Seven Thousand One Hundred Ninety-
Two Pesos and Eighty-Five Centavos ( ₱127,192.85); (c) moral damages in the amount of Eighty
Thousand Pesos (₱80,000.00); (d) indemnity for loss of earning capacity in the amount of One
Million Pesos (₱1,000,000.00); and (e) temperate damages in the amount of Ten Thousand
Pesos (₱10,000.00).

Costs against petitioner.

SO ORDERED.
G.R. No. 165279 June 7, 2011

DR. RUBI LI, Petitioner,

vs.
SPOUSES REYNALDO and LINA SOLIMAN, as parents/heirs of deceased Angelica
Soliman, Respondents.

DECISION

VILLARAMA, JR., J.:

Challenged in this petition for review on certiorari is the Decision1 dated June 15, 2004 as well as
the Resolution2dated September 1, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 58013
which modified the Decision3 dated September 5, 1997 of the Regional Trial Court of Legazpi
City, Branch 8 in Civil Case No. 8904.

The factual antecedents:

On July 7, 1993, respondents’ 11-year old daughter, Angelica Soliman, underwent a biopsy of
the mass located in her lower extremity at the St. Luke’s Medical Center (SLMC). Results
showed that Angelica was suffering from osteosarcoma, osteoblastic type,4 a high-grade (highly
malignant) cancer of the bone which usually afflicts teenage children. Following this diagnosis
and as primary intervention, Angelica’s right leg was amputated by Dr. Jaime Tamayo in order to
remove the tumor. As adjuvant treatment to eliminate any remaining cancer cells, and hence
minimize the chances of recurrence and prevent the disease from spreading to other parts of the
patient’s body (metastasis), chemotherapy was suggested by Dr. Tamayo. Dr. Tamayo referred
Angelica to another doctor at SLMC, herein petitioner Dr. Rubi Li, a medical oncologist.

On August 18, 1993, Angelica was admitted to SLMC. However, she died on September 1, 1993,
just eleven (11) days after the (intravenous) administration of the first cycle of the chemotherapy
regimen. Because SLMC refused to release a death certificate without full payment of their
hospital bill, respondents brought the cadaver of Angelica to the Philippine National Police (PNP)
Crime Laboratory at Camp Crame for post-mortem examination. The Medico-Legal Report
issued by said institution indicated the cause of death as "Hypovolemic shock secondary to
multiple organ hemorrhages and Disseminated Intravascular Coagulation."5

On the other hand, the Certificate of Death6 issued by SLMC stated the cause of death as
follows:

Immediate cause : a. Osteosarcoma, Status Post AKA

Antecedent cause : b. (above knee amputation)

Underlying cause : c. Status Post Chemotherapy

On February 21, 1994, respondents filed a damage suit7 against petitioner, Dr. Leo Marbella, Mr.
Jose Ledesma, a certain Dr. Arriete and SLMC. Respondents charged them with negligence and
disregard of Angelica’s safety, health and welfare by their careless administration of the
chemotherapy drugs, their failure to observe the essential precautions in detecting early the
symptoms of fatal blood platelet decrease and stopping early on the chemotherapy, which
bleeding led to hypovolemic shock that caused Angelica’s untimely demise. Further, it was
specifically averred that petitioner assured the respondents that Angelica would recover in view
of 95% chance of healing with chemotherapy ("Magiging normal na ang anak nyo basta ma-
chemo. 95% ang healing") and when asked regarding the side effects, petitioner mentioned only
slight vomiting, hair loss and weakness ("Magsusuka ng kaunti. Malulugas ang buhok.
Manghihina"). Respondents thus claimed that they would not have given their consent to
chemotherapy had petitioner not falsely assured them of its side effects.

In her answer,8 petitioner denied having been negligent in administering the chemotherapy drugs
to Angelica and asserted that she had fully explained to respondents how the chemotherapy will
affect not only the cancer cells but also the patient’s normal body parts, including the lowering of
white and red blood cells and platelets. She claimed that what happened to Angelica can be
attributed to malignant tumor cells possibly left behind after surgery. Few as they may be, these
have the capacity to compete for nutrients such that the body becomes so weak structurally
(cachexia) and functionally in the form of lower resistance of the body to combat infection. Such
infection becomes uncontrollable and triggers a chain of events (sepsis or septicemia) that may
lead to bleeding in the form of Disseminated Intravascular Coagulation (DIC), as what the
autopsy report showed in the case of Angelica.

Since the medical records of Angelica were not produced in court, the trial and appellate courts
had to rely on testimonial evidence, principally the declarations of petitioner and respondents
themselves. The following chronology of events was gathered:

On July 23, 1993, petitioner saw the respondents at the hospital after Angelica’s surgery and
discussed with them Angelica’s condition. Petitioner told respondents that Angelica should be
given two to three weeks to recover from the operation before starting chemotherapy.
Respondents were apprehensive due to financial constraints as Reynaldo earns only from
₱70,000.00 to ₱150,000.00 a year from his jewelry and watch repairing business.9Petitioner,
however, assured them not to worry about her professional fee and told them to just save up for
the medicines to be used.

Petitioner claimed that she explained to respondents that even when a tumor is removed, there
are still small lesions undetectable to the naked eye, and that adjuvant chemotherapy is needed
to clean out the small lesions in order to lessen the chance of the cancer to recur. She did not
give the respondents any assurance that chemotherapy will cure Angelica’s cancer. During these
consultations with respondents, she explained the following side effects of chemotherapy
treatment to respondents: (1) falling hair; (2) nausea and vomiting; (3) loss of appetite; (4) low
count of white blood cells [WBC], red blood cells [RBC] and platelets; (5) possible sterility due to
the effects on Angelica’s ovary; (6) damage to the heart and kidneys; and (7) darkening of the
skin especially when exposed to sunlight. She actually talked with respondents four times, once
at the hospital after the surgery, twice at her clinic and the fourth time when Angelica’s mother
called her through long distance.10 This was disputed by respondents who countered that
petitioner gave them assurance that there is 95% chance of healing for Angelica if she
undergoes chemotherapy and that the only side effects were nausea, vomiting and hair
loss.11 Those were the only side-effects of chemotherapy treatment mentioned by petitioner.12

On July 27, 1993, SLMC discharged Angelica, with instruction from petitioner that she be
readmitted after two or three weeks for the chemotherapy.

On August 18, 1993, respondents brought Angelica to SLMC for chemotherapy, bringing with
them the results of the laboratory tests requested by petitioner: Angelica’s chest x-ray, ultrasound
of the liver, creatinine and complete liver function tests.13 Petitioner proceeded with the
chemotherapy by first administering hydration fluids to Angelica.14

The following day, August 19, petitioner began administering three chemotherapy drugs –
Cisplatin,15 Doxorubicin16and Cosmegen17 – intravenously. Petitioner was supposedly assisted by
her trainees Dr. Leo Marbella18 and Dr. Grace Arriete.19 In his testimony, Dr. Marbella denied
having any participation in administering the said chemotherapy drugs.20

On the second day of chemotherapy, August 20, respondents noticed reddish discoloration on
Angelica’s face.21They asked petitioner about it, but she merely quipped, "Wala yan. Epekto ng
gamot."22 Petitioner recalled noticing the skin rashes on the nose and cheek area of Angelica. At
that moment, she entertained the possibility that Angelica also had systemic lupus and consulted
Dr. Victoria Abesamis on the matter.23

On the third day of chemotherapy, August 21, Angelica had difficulty breathing and was thus
provided with oxygen inhalation apparatus. This time, the reddish discoloration on Angelica’s
face had extended to her neck, but petitioner dismissed it again as merely the effect of
medicines.24 Petitioner testified that she did not see any discoloration on Angelica’s face, nor did
she notice any difficulty in the child’s breathing. She claimed that Angelica merely complained of
nausea and was given ice chips.25 1avvphi 1

On August 22, 1993, at around ten o’clock in the morning, upon seeing that their child could not
anymore bear the pain, respondents pleaded with petitioner to stop the chemotherapy. Petitioner
supposedly replied: "Dapat 15 Cosmegen pa iyan. Okay, let’s observe. If pwede na, bigyan uli ng
chemo." At this point, respondents asked petitioner’s permission to bring their child home. Later
in the evening, Angelica passed black stool and reddish urine.26 Petitioner countered that there
was no record of blackening of stools but only an episode of loose bowel movement (LBM).
Petitioner also testified that what Angelica complained of was carpo-pedal spasm, not convulsion
or epileptic attack, as respondents call it (petitioner described it in the vernacular as "naninigas
ang kamay at paa"). She then requested for a serum calcium determination and stopped the
chemotherapy. When Angelica was given calcium gluconate, the spasm and numbness
subsided.27

The following day, August 23, petitioner yielded to respondents’ request to take Angelica home.
But prior to discharging Angelica, petitioner requested for a repeat serum calcium determination
and explained to respondents that the chemotherapy will be temporarily stopped while she
observes Angelica’s muscle twitching and serum calcium level. Take-home medicines were also
prescribed for Angelica, with instructions to respondents that the serum calcium test will have to
be repeated after seven days. Petitioner told respondents that she will see Angelica again after
two weeks, but respondents can see her anytime if any immediate problem arises.28

However, Angelica remained in confinement because while still in the premises of SLMC, her
"convulsions" returned and she also had LBM. Angelica was given oxygen and administration of
calcium continued.29

The next day, August 24, respondents claimed that Angelica still suffered from convulsions. They
also noticed that she had a fever and had difficulty breathing.30 Petitioner insisted it was carpo-
pedal spasm, not convulsions. She verified that at around 4:50 that afternoon, Angelica
developed difficulty in breathing and had fever. She then requested for an electrocardiogram
analysis, and infused calcium gluconate on the patient at a "stat dose." She further ordered that
Angelica be given Bactrim,31 a synthetic antibacterial combination drug,32 to combat any infection
on the child’s body.33

By August 26, Angelica was bleeding through the mouth. Respondents also saw blood on her
anus and urine. When Lina asked petitioner what was happening to her daughter, petitioner
replied, "Bagsak ang platelets ng anak mo." Four units of platelet concentrates were then
transfused to Angelica. Petitioner prescribed Solucortef. Considering that Angelica’s fever was
high and her white blood cell count was low, petitioner prescribed Leucomax. About four to eight
bags of blood, consisting of packed red blood cells, fresh whole blood, or platelet concentrate,
were transfused to Angelica. For two days (August 27 to 28), Angelica continued bleeding, but
petitioner claimed it was lesser in amount and in frequency. Petitioner also denied that there
were gadgets attached to Angelica at that time.34

On August 29, Angelica developed ulcers in her mouth, which petitioner said were blood clots
that should not be removed. Respondents claimed that Angelica passed about half a liter of
blood through her anus at around seven o’clock that evening, which petitioner likewise denied.
On August 30, Angelica continued bleeding. She was restless as endotracheal and nasogastric
tubes were inserted into her weakened body. An aspiration of the nasogastric tube inserted to
Angelica also revealed a bloody content. Angelica was given more platelet concentrate and fresh
whole blood, which petitioner claimed improved her condition. Petitioner told Angelica not to
remove the endotracheal tube because this may induce further bleeding.35She was also
transferred to the intensive care unit to avoid infection.

The next day, respondents claimed that Angelica became hysterical, vomited blood and her body
turned black. Part of Angelica’s skin was also noted to be shredding by just rubbing cotton on it.
Angelica was so restless she removed those gadgets attached to her, saying "Ayaw ko na"; there
were tears in her eyes and she kept turning her head. Observing her daughter to be at the point
of death, Lina asked for a doctor but the latter could not answer her anymore.36 At this time, the
attending physician was Dr. Marbella who was shaking his head saying that Angelica’s platelets
were down and respondents should pray for their daughter. Reynaldo claimed that he was
introduced to a pediatrician who took over his daughter’s case, Dr. Abesamis who also told him
to pray for his daughter. Angelica continued to have difficulty in her breathing and blood was
being suctioned from her stomach. A nurse was posted inside Angelica’s room to assist her
breathing and at one point they had to revive Angelica by pumping her chest. Thereafter,
Reynaldo claimed that Angelica already experienced difficulty in urinating and her bowel
consisted of blood-like fluid. Angelica requested for an electric fan as she was in pain. Hospital
staff attempted to take blood samples from Angelica but were unsuccessful because they could
not even locate her vein. Angelica asked for a fruit but when it was given to her, she only smelled
it. At this time, Reynaldo claimed he could not find either petitioner or Dr. Marbella. That night,
Angelica became hysterical and started removing those gadgets attached to her. At three o’clock
in the morning of September 1, a priest came and they prayed before Angelica expired.
Petitioner finally came back and supposedly told respondents that there was "malfunction" or
bogged-down machine.37

By petitioner’s own account, Angelica was merely irritable that day (August 31). Petitioner noted
though that Angelica’s skin was indeed sloughing off.38 She stressed that at 9:30 in the evening,
Angelica pulled out her endotracheal tube.39 On September 1, exactly two weeks after being
admitted at SLMC for chemotherapy, Angelica died.40 The cause of death, according to
petitioner, was septicemia, or overwhelming infection, which caused Angelica’s other organs to
fail.41 Petitioner attributed this to the patient’s poor defense mechanism brought about by the
cancer itself.42

While he was seeking the release of Angelica’s cadaver from SLMC, Reynaldo claimed that
petitioner acted arrogantly and called him names. He was asked to sign a promissory note as he
did not have cash to pay the hospital bill.43

Respondents also presented as witnesses Dr. Jesusa Nieves-Vergara, Medico-Legal Officer of

the PNP-Crime Laboratory who conducted the autopsy on Angelica’s cadaver, and Dr. Melinda
Vergara Balmaceda who is a Medical Specialist employed at the Department of Health (DOH)
Operations and Management Services.

Testifying on the findings stated in her medico-legal report, Dr. Vergara noted the following: (1)
there were fluids recovered from the abdominal cavity, which is not normal, and was due to
hemorrhagic shock secondary to bleeding; (2) there was hemorrhage at the left side of the heart;
(3) bleeding at the upper portion of and areas adjacent to, the esophagus; (4) lungs were heavy
with bleeding at the back and lower portion, due to accumulation of fluids; (4) yellowish
discoloration of the liver; (5) kidneys showed appearance of facial shock on account of
hemorrhages; and (6) reddishness on external surface of the spleen. All these were the end
result of "hypovolemic shock secondary to multiple organ hemorrhages and disseminated
intravascular coagulation." Dr. Vergara opined that this can be attributed to the chemical agents
in the drugs given to the victim, which caused platelet reduction resulting to bleeding sufficient to
cause the victim’s death. The time lapse for the production of DIC in the case of Angelica (from
the time of diagnosis of sarcoma) was too short, considering the survival rate of about 3 years.
The witness conceded that the victim will also die of osteosarcoma even with amputation or
chemotherapy, but in this case Angelica’s death was not caused by osteosarcoma. Dr. Vergara
admitted that she is not a pathologist but her statements were based on the opinion of an
oncologist whom she had interviewed. This oncologist supposedly said that if the victim already
had DIC prior to the chemotherapy, the hospital staff could have detected it.44

On her part, Dr. Balmaceda declared that it is the physician’s duty to inform and explain to the
patient or his relatives every known side effect of the procedure or therapeutic agents to be
administered, before securing the consent of the patient or his relatives to such procedure or
therapy. The physician thus bases his assurance to the patient on his personal assessment of
the patient’s condition and his knowledge of the general effects of the agents or procedure that
will be allowed on the patient. Dr. Balmaceda stressed that the patient or relatives must be
informed of all known side effects based on studies and observations, even if such will aggravate
the patient’s condition.45

Dr. Jaime Tamayo, the orthopaedic surgeon who operated on Angelica’s lower extremity,
testified for the defendants. He explained that in case of malignant tumors, there is no guarantee
that the ablation or removal of the amputated part will completely cure the cancer. Thus, surgery
is not enough. The mortality rate of osteosarcoma at the time of modern chemotherapy and early
diagnosis still remains at 80% to 90%. Usually, deaths occur from metastasis, or spread of the
cancer to other vital organs like the liver, causing systemic complications. The modes of therapy
available are the removal of the primary source of the cancerous growth and then the residual
cancer cells or metastasis should be treated with chemotherapy. Dr. Tamayo further explained
that patients with osteosarcoma have poor defense mechanism due to the cancer cells in the
blood stream. In the case of Angelica, he had previously explained to her parents that after the
surgical procedure, chemotherapy is imperative so that metastasis of these cancer cells will
hopefully be addressed. He referred the patient to petitioner because he felt that petitioner is a
competent oncologist. Considering that this type of cancer is very aggressive and will
metastasize early, it will cause the demise of the patient should there be no early intervention (in
this case, the patient developed sepsis which caused her death). Cancer cells in the blood
cannot be seen by the naked eye nor detected through bone scan. On cross-examination, Dr.
Tamayo stated that of the more than 50 child patients who had osteogenic sarcoma he had
handled, he thought that probably all of them died within six months from amputation because he
did not see them anymore after follow-up; it is either they died or had seen another doctor.46

In dismissing the complaint, the trial court held that petitioner was not liable for damages as she
observed the best known procedures and employed her highest skill and knowledge in the
administration of chemotherapy drugs on Angelica but despite all efforts said patient died. It cited
the testimony of Dr. Tamayo who testified that he considered petitioner one of the most proficient
in the treatment of cancer and that the patient in this case was afflicted with a very aggressive
type of cancer necessitating chemotherapy as adjuvant treatment. Using the standard of
negligence laid down in Picart v. Smith,47 the trial court declared that petitioner has taken the
necessary precaution against the adverse effect of chemotherapy on the patient, adding that a
wrong decision is not by itself negligence. Respondents were ordered to pay their unpaid hospital
bill in the amount of ₱139,064.43.48

Respondents appealed to the CA which, while concurring with the trial court’s finding that there
was no negligence committed by the petitioner in the administration of chemotherapy treatment
to Angelica, found that petitioner as her attending physician failed to fully explain to the
respondents all the known side effects of chemotherapy. The appellate court stressed that since
the respondents have been told of only three side effects of chemotherapy, they readily
consented thereto. Had petitioner made known to respondents those other side effects which
gravely affected their child -- such as carpo-pedal spasm, sepsis, decrease in the blood platelet
count, bleeding, infections and eventual death -- respondents could have decided differently or
adopted a different course of action which could have delayed or prevented the early death of
their child.
The CA thus declared:

Plaintiffs-appellants’ child was suffering from a malignant disease. The attending physician
recommended that she undergo chemotherapy treatment after surgery in order to increase her
chances of survival. Appellants consented to the chemotherapy treatment because they believed
in Dr. Rubi Li’s representation that the deceased would have a strong chance of survival after
chemotherapy and also because of the representation of appellee Dr. Rubi Li that there were
only three possible side-effects of the treatment. However, all sorts of painful side-effects
resulted from the treatment including the premature death of Angelica. The appellants were
clearly and totally unaware of these other side-effects which manifested only during the
chemotherapy treatment. This was shown by the fact that every time a problem would take place
regarding Angelica’s condition (like an unexpected side-effect manifesting itself), they would
immediately seek explanation from Dr. Rubi Li. Surely, those unexpected side-effects culminating
in the loss of a love[d] one caused the appellants so much trouble, pain and suffering.

On this point therefore, [w]e find defendant-appellee Dr. Rubi Li negligent which would entitle
plaintiffs-appellants to their claim for damages.

xxxx

WHEREFORE, the instant appeal is hereby GRANTED. Accordingly, the assailed decision is
hereby modified to the extent that defendant-appellee Dr. Rubi Li is ordered to pay the plaintiffs-
appellants the following amounts:

1. Actual damages of P139,064.43, plus P9,828.00 for funeral expenses;

2. Moral damages of P200,000.00;

3. Exemplary damages of P50,000.00;

4. Attorney’s fee of P30,000.00.

SO ORDERED.49 (Emphasis supplied.)

Petitioner filed a motion for partial reconsideration which the appellate court denied.

Hence, this petition.

Petitioner assails the CA in finding her guilty of negligence in not explaining to the respondents
all the possible side effects of the chemotherapy on their child, and in holding her liable for
actual, moral and exemplary damages and attorney’s fees. Petitioner emphasized that she was
not negligent in the pre-chemotherapy procedures and in the administration of chemotherapy
treatment to Angelica.

On her supposed non-disclosure of all possible side effects of chemotherapy, including death,
petitioner argues that it was foolhardy to imagine her to be all-knowing/omnipotent. While the
theoretical side effects of chemotherapy were explained by her to the respondents, as these
should be known to a competent doctor, petitioner cannot possibly predict how a particular
patient’s genetic make-up, state of mind, general health and body constitution would respond to
the treatment. These are obviously dependent on too many known, unknown and immeasurable
variables, thus requiring that Angelica be, as she was, constantly and closely monitored during
the treatment. Petitioner asserts that she did everything within her professional competence to
attend to the medical needs of Angelica.
Citing numerous trainings, distinctions and achievements in her field and her current position as
co-director for clinical affairs of the Medical Oncology, Department of Medicine of SLMC,
petitioner contends that in the absence of any clear showing or proof, she cannot be charged
with negligence in not informing the respondents all the side effects of chemotherapy or in the
pre-treatment procedures done on Angelica.

As to the cause of death, petitioner insists that Angelica did not die of platelet depletion but of
sepsis which is a complication of the cancer itself. Sepsis itself leads to bleeding and death. She
explains that the response rate to chemotherapy of patients with osteosarcoma is high, so much
so that survival rate is favorable to the patient. Petitioner then points to some probable
consequences if Angelica had not undergone chemotherapy. Thus, without chemotherapy, other
medicines and supportive treatment, the patient might have died the next day because of
massive infection, or the cancer cells might have spread to the brain and brought the patient into
a coma, or into the lungs that the patient could have been hooked to a respirator, or into her
kidneys that she would have to undergo dialysis. Indeed, respondents could have spent as much
because of these complications. The patient would have been deprived of the chance to survive
the ailment, of any hope for life and her "quality of life" surely compromised. Since she had not
been shown to be at fault, petitioner maintains that the CA erred in holding her liable for the
damages suffered by the respondents.50

The issue to be resolved is whether the petitioner can be held liable for failure to fully disclose
serious side effects to the parents of the child patient who died while undergoing chemotherapy,
despite the absence of finding that petitioner was negligent in administering the said treatment.

The petition is meritorious.

The type of lawsuit which has been called medical malpractice or, more appropriately, medical
negligence, is that type of claim which a victim has available to him or her to redress a wrong
committed by a medical professional which has caused bodily harm. In order to successfully
pursue such a claim, a patient must prove that a health care provider, in most cases a physician,
either failed to do something which a reasonably prudent health care provider would have done,
or that he or she did something that a reasonably prudent provider would not have done; and that
that failure or action caused injury to the patient.51

This Court has recognized that medical negligence cases are best proved by opinions of expert
witnesses belonging in the same general neighborhood and in the same general line of practice
as defendant physician or surgeon. The deference of courts to the expert opinion of qualified
physicians stems from the former’s realization that the latter possess unusual technical skills
which laymen in most instances are incapable of intelligently evaluating, hence the
indispensability of expert testimonies.52

In this case, both the trial and appellate courts concurred in finding that the alleged negligence of
petitioner in the administration of chemotherapy drugs to respondents’ child was not proven
considering that Drs. Vergara and Balmaceda, not being oncologists or cancer specialists, were
not qualified to give expert opinion as to whether petitioner’s lack of skill, knowledge and
professional competence in failing to observe the standard of care in her line of practice was the
proximate cause of the patient’s death. Furthermore, respondents’ case was not at all helped by
the non-production of medical records by the hospital (only the biopsy result and medical bills
were submitted to the court). Nevertheless, the CA found petitioner liable for her failure to inform
the respondents on all possible side effects of chemotherapy before securing their consent to the
said treatment.

The doctrine of informed consent within the context of physician-patient relationships goes far
back into English common law. As early as 1767, doctors were charged with the tort of "battery"
(i.e., an unauthorized physical contact with a patient) if they had not gained the consent of their
patients prior to performing a surgery or procedure. In the United States, the seminal case was
Schoendorff v. Society of New York Hospital53 which involved unwanted treatment performed by
a doctor. Justice Benjamin Cardozo’s oft-quoted opinion upheld the basic right of a patient to
give consent to any medical procedure or treatment: "Every human being of adult years and
sound mind has a right to determine what shall be done with his own body; and a surgeon who
performs an operation without his patient’s consent, commits an assault, for which he is liable in
damages."54 From a purely ethical norm, informed consent evolved into a general principle of law
that a physician has a duty to disclose what a reasonably prudent physician in the medical
community in the exercise of reasonable care would disclose to his patient as to whatever grave
risks of injury might be incurred from a proposed course of treatment, so that a patient,
exercising ordinary care for his own welfare, and faced with a choice of undergoing the proposed
treatment, or alternative treatment, or none at all, may intelligently exercise his judgment by
reasonably balancing the probable risks against the probable benefits.55

Subsequently, in Canterbury v. Spence56 the court observed that the duty to disclose should not
be limited to medical usage as to arrogate the decision on revelation to the physician alone.
Thus, respect for the patient’s right of self-determination on particular therapy demands a
standard set by law for physicians rather than one which physicians may or may not impose
upon themselves.57 The scope of disclosure is premised on the fact that patients ordinarily are
persons unlearned in the medical sciences. Proficiency in diagnosis and therapy is not the full
measure of a physician’s responsibility. It is also his duty to warn of the dangers lurking in the
proposed treatment and to impart information which the patient has every right to expect. Indeed,
the patient’s reliance upon the physician is a trust of the kind which traditionally has exacted
obligations beyond those associated with armslength transactions.58 The physician is not
expected to give the patient a short medical education, the disclosure rule only requires of him a
reasonable explanation, which means generally informing the patient in nontechnical terms as to
what is at stake; the therapy alternatives open to him, the goals expectably to be achieved, and
the risks that may ensue from particular treatment or no treatment.59 As to the issue of
demonstrating what risks are considered material necessitating disclosure, it was held that
experts are unnecessary to a showing of the materiality of a risk to a patient’s decision on
treatment, or to the reasonably, expectable effect of risk disclosure on the decision. Such
unrevealed risk that should have been made known must further materialize, for otherwise the
omission, however unpardonable, is without legal consequence. And, as in malpractice actions
generally, there must be a causal relationship between the physician’s failure to divulge and
damage to the patient.60

Reiterating the foregoing considerations, Cobbs v. Grant61 deemed it as integral part of

physician’s overall obligation to patient, the duty of reasonable disclosure of available choices
with respect to proposed therapy and of dangers inherently and potentially involved in each.
However, the physician is not obliged to discuss relatively minor risks inherent in common
procedures when it is common knowledge that such risks inherent in procedure of very low
incidence. Cited as exceptions to the rule that the patient should not be denied the opportunity to
weigh the risks of surgery or treatment are emergency cases where it is evident he cannot
evaluate data, and where the patient is a child or incompetent.62 The court thus concluded that
the patient’s right of self-decision can only be effectively exercised if the patient possesses
adequate information to enable him in making an intelligent choice. The scope of the physician’s
communications to the patient, then must be measured by the patient’s need, and that need is
whatever information is material to the decision. The test therefore for determining whether a
potential peril must be divulged is its materiality to the patient’s decision.63

Cobbs v. Grant further reiterated the pronouncement in Canterbury v. Spence that for liability of
the physician for failure to inform patient, there must be causal relationship between physician’s
failure to inform and the injury to patient and such connection arises only if it is established that,
had revelation been made, consent to treatment would not have been given.

There are four essential elements a plaintiff must prove in a malpractice action based upon the
doctrine of informed consent: "(1) the physician had a duty to disclose material risks; (2) he failed
to disclose or inadequately disclosed those risks; (3) as a direct and proximate result of the
failure to disclose, the patient consented to treatment she otherwise would not have consented
to; and (4) plaintiff was injured by the proposed treatment." The gravamen in an informed
consent case requires the plaintiff to "point to significant undisclosed information relating to the
treatment which would have altered her decision to undergo it.64

Examining the evidence on record, we hold that there was adequate disclosure of material risks
inherent in the chemotherapy procedure performed with the consent of Angelica’s parents.
Respondents could not have been unaware in the course of initial treatment and amputation of
Angelica’s lower extremity, that her immune system was already weak on account of the
malignant tumor in her knee. When petitioner informed the respondents beforehand of the side
effects of chemotherapy which includes lowered counts of white and red blood cells, decrease in
blood platelets, possible kidney or heart damage and skin darkening, there is reasonable
expectation on the part of the doctor that the respondents understood very well that the severity
of these side effects will not be the same for all patients undergoing the procedure. In other
words, by the nature of the disease itself, each patient’s reaction to the chemical agents even
with pre-treatment laboratory tests cannot be precisely determined by the physician. That death
can possibly result from complications of the treatment or the underlying cancer itself,
immediately or sometime after the administration of chemotherapy drugs, is a risk that cannot be
ruled out, as with most other major medical procedures, but such conclusion can be reasonably
drawn from the general side effects of chemotherapy already disclosed.

As a physician, petitioner can reasonably expect the respondents to have considered the
variables in the recommended treatment for their daughter afflicted with a life-threatening illness.
On the other hand, it is difficult to give credence to respondents’ claim that petitioner told them of
95% chance of recovery for their daughter, as it was unlikely for doctors like petitioner who were
dealing with grave conditions such as cancer to have falsely assured patients of chemotherapy’s
success rate. Besides, informed consent laws in other countries generally require only a
reasonable explanation of potential harms, so specific disclosures such as statistical data, may
not be legally necessary.65

The element of ethical duty to disclose material risks in the proposed medical treatment cannot
thus be reduced to one simplistic formula applicable in all instances. Further, in a medical
malpractice action based on lack of informed consent, "the plaintiff must prove both the duty and
the breach of that duty through expert testimony.66 Such expert testimony must show the
customary standard of care of physicians in the same practice as that of the defendant doctor.67

In this case, the testimony of Dr. Balmaceda who is not an oncologist but a Medical Specialist of
the DOH’s Operational and Management Services charged with receiving complaints against
hospitals, does not qualify as expert testimony to establish the standard of care in obtaining
consent for chemotherapy treatment. In the absence of expert testimony in this regard, the Court
feels hesitant in defining the scope of mandatory disclosure in cases of malpractice based on
lack of informed consent, much less set a standard of disclosure that, even in foreign
jurisdictions, has been noted to be an evolving one.

As society has grappled with the juxtaposition between personal autonomy and the medical
profession's intrinsic impetus to cure, the law defining "adequate" disclosure has undergone a
dynamic evolution. A standard once guided solely by the ruminations of physicians is now
dependent on what a reasonable person in the patient’s position regards as significant. This
change in perspective is especially important as medical breakthroughs move practitioners to the
cutting edge of technology, ever encountering new and heretofore unimagined treatments for
currently incurable diseases or ailments. An adaptable standard is needed to account for this
constant progression. Reasonableness analyses permeate our legal system for the very reason
that they are determined by social norms, expanding and contracting with the ebb and flow of
societal evolution.
As we progress toward the twenty-first century, we now realize that the legal standard of
disclosure is not subject to construction as a categorical imperative. Whatever formulae or
processes we adopt are only useful as a foundational starting point; the particular quality or
quantity of disclosure will remain inextricably bound by the facts of each case. Nevertheless,
juries that ultimately determine whether a physician properly informed a patient are inevitably
guided by what they perceive as the common expectation of the medical consumer—"a
reasonable person in the patient’s position when deciding to accept or reject a recommended
medical procedure."68 (Emphasis supplied.)

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated June 15,
2004 and the Resolution dated September 1, 2004 of the Court of Appeals in CA-G.R. CV No.
58013 are SET ASIDE.

The Decision dated September 5, 1997 of the Regional Trial Court of Legazpi City, Branch 8, in
Civil Case No. 8904 is REINSTATED and UPHELD.

No costs.

SO ORDERED.
G.R. No. 148496 March 19, 2002

VIRGINES CALVO doing business under the name and style TRANSORIENT CONTAINER
TERMINAL SERVICES, INC., petitioner,
vs.
UCPB GENERAL INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co.,
Inc.) respondent.

MENDOZA, J.:

This is a petition for review of the decision,1 dated May 31, 2001, of the Court of Appeals,
affirming the decision2 of the Regional Trial Court, Makati City, Branch 148, which ordered
petitioner to pay respondent, as subrogee, the amount of P93,112.00 with legal interest,
representing the value of damaged cargo handled by petitioner, 25% thereof as attorney's fees,
and the cost of the suit. 1âw phi 1.nêt

The facts are as follows:

Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI),
a sole proprietorship customs broker. At the time material to this case, petitioner entered into a
contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting
paper and 124 reels of kraft liner board from the Port Area in Manila to SMC's warehouse at the
Tabacalera Compound, Romualdez St., Ermita, Manila. The cargo was insured by respondent
UCPB General Insurance Co., Inc.

On July 14, 1990, the shipment in question, contained in 30 metal vans, arrived in Manila on
board "M/V Hayakawa Maru" and, after 24 hours, were unloaded from the vessel to the custody
of the arrastre operator, Manila Port Services, Inc. From July 23 to July 25, 1990, petitioner,
pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it
to SMC's warehouse in Ermita, Manila. On July 25, 1990, the goods were inspected by Marine
Cargo Surveyors, who found that 15 reels of the semi-chemical fluting paper were
"wet/stained/torn" and 3 reels of kraft liner board were likewise torn. The damage was placed
at P93,112.00.

SMC collected payment from respondent UCPB under its insurance contract for the
aforementioned amount. In turn, respondent, as subrogee of SMC, brought suit against petitioner
in the Regional Trial Court, Branch 148, Makati City, which, on December 20, 1995, rendered
judgment finding petitioner liable to respondent for the damage to the shipment.

The trial court held:

It cannot be denied . . . that the subject cargoes sustained damage while in the custody
of defendants. Evidence such as the Warehouse Entry Slip (Exh. "E"); the Damage
Report (Exh. "F") with entries appearing therein, classified as "TED" and "TSN", which
the claims processor, Ms. Agrifina De Luna, claimed to be tearrage at the end and
tearrage at the middle of the subject damaged cargoes respectively, coupled with the
Marine Cargo Survey Report (Exh. "H" - "H-4-A") confirms the fact of the damaged
condition of the subject cargoes. The surveyor[s'] report (Exh. "H-4-A") in particular,
which provides among others that:

" . . . we opine that damages sustained by shipment is attributable to improper

handling in transit presumably whilst in the custody of the broker . . . ."

is a finding which cannot be traversed and overturned.

 The evidence adduced by the defendants is not enough to sustain [her] defense that [she
is] are not liable. Defendant by reason of the nature of [her] business should have
devised ways and means in order to prevent the damage to the cargoes which it is under
obligation to take custody of and to forthwith deliver to the consignee. Defendant did not
present any evidence on what precaution [she] performed to prevent [the] said incident,
hence the presumption is that the moment the defendant accepts the cargo [she] shall
perform such extraordinary diligence because of the nature of the cargo.

....

Generally speaking under Article 1735 of the Civil Code, if the goods are proved to have
been lost, destroyed or deteriorated, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they have observed the
extraordinary diligence required by law. The burden of the plaintiff, therefore, is to prove
merely that the goods he transported have been lost, destroyed or deteriorated.
Thereafter, the burden is shifted to the carrier to prove that he has exercised the
extraordinary diligence required by law. Thus, it has been held that the mere proof of
delivery of goods in good order to a carrier, and of their arrival at the place of destination
in bad order, makes out a prima facie case against the carrier, so that if no explanation is
given as to how the injury occurred, the carrier must be held responsible. It is incumbent
upon the carrier to prove that the loss was due to accident or some other circumstances
inconsistent with its liability." (cited in Commercial Laws of the Philippines by Agbayani,
p. 31, Vol. IV, 1989 Ed.)

Defendant, being a customs brother, warehouseman and at the same time a common
carrier is supposed [to] exercise [the] extraordinary diligence required by law, hence the
extraordinary responsibility lasts from the time the goods are unconditionally placed in
the possession of and received by the carrier for transportation until the same are
delivered actually or constructively by the carrier to the consignee or to the person who
has the right to receive the same.3

Accordingly, the trial court ordered petitioner to pay the following amounts --

1. The sum of P93,112.00 plus interest;

2. 25% thereof as lawyer's fee;

3. Costs of suit.4

The decision was affirmed by the Court of Appeals on appeal. Hence this petition for review
on certiorari.

Petitioner contends that:

I. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR [IN]

DECIDING THE CASE NOT ON THE EVIDENCE PRESENTED BUT ON PURE
SURMISES, SPECULATIONS AND MANIFESTLY MISTAKEN INFERENCE.

II. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN

CLASSIFYING THE PETITIONER AS A COMMON CARRIER AND NOT AS PRIVATE
OR SPECIAL CARRIER WHO DID NOT HOLD ITS SERVICES TO THE PUBLIC.5

It will be convenient to deal with these contentions in the inverse order, for if petitioner is not a
common carrier, although both the trial court and the Court of Appeals held otherwise, then she
is indeed not liable beyond what ordinary diligence in the vigilance over the goods transported by
her, would require.6 Consequently, any damage to the cargo she agrees to transport cannot be
presumed to have been due to her fault or negligence.

Petitioner contends that contrary to the findings of the trial court and the Court of Appeals, she is
not a common carrier but a private carrier because, as a customs broker and warehouseman,
she does not indiscriminately hold her services out to the public but only offers the same to select
parties with whom she may contract in the conduct of her business.

The contention has no merit. In De Guzman v. Court of Appeals,7 the Court dismissed a similar
contention and held the party to be a common carrier, thus -

The Civil Code defines "common carriers" in the following terms:

"Article 1732. Common carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or both, by land, water,
or air for compensation, offering their services to the public."

The above article makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity . . . Article 1732 also carefully avoids making any distinction between
a person or enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public," i.e.,
the general community or population, and one who offers services or solicits business
only from a narrow segment of the general population. We think that Article 1732
deliberately refrained from making such distinctions.

So understood, the concept of "common carrier" under Article 1732 may be seen to
coincide neatly with the notion of "public service," under the Public Service Act
(Commonwealth Act No. 1416, as amended) which at least partially supplements the law
on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the
Public Service Act, "public service" includes:

" x x x every person that now or hereafter may own, operate, manage, or control
in the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway
motor vehicle, either for freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier service of any class,
express service, steamboat, or steamship line, pontines, ferries and water craft,
engaged in the transportation of passengers or freight or both, shipyard, marine
repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation
system, gas, electric light, heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. x x x" 8

There is greater reason for holding petitioner to be a common carrier because the transportation
of goods is an integral part of her business. To uphold petitioner's contention would be to deprive
those with whom she contracts the protection which the law affords them notwithstanding the fact
that the obligation to carry goods for her customers, as already noted, is part and parcel of
petitioner's business.

Now, as to petitioner's liability, Art. 1733 of the Civil Code provides:

Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the
 safety of the passengers transported by them, according to all the circumstances of each
case. . . .

In Compania Maritima v. Court of Appeals,9 the meaning of "extraordinary diligence in the

vigilance over goods" was explained thus:

The extraordinary diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required precaution for avoiding
damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It
requires common carriers to render service with the greatest skill and foresight and "to
use all reasonable means to ascertain the nature and characteristic of goods tendered for
shipment, and to exercise due care in the handling and stowage, including such methods
as their nature requires."

In the case at bar, petitioner denies liability for the damage to the cargo. She claims that the
"spoilage or wettage" took place while the goods were in the custody of either the carrying vessel
"M/V Hayakawa Maru," which transported the cargo to Manila, or the arrastre operator, to whom
the goods were unloaded and who allegedly kept them in open air for nine days from July 14 to
July 23, 1998 notwithstanding the fact that some of the containers were deformed, cracked, or
otherwise damaged, as noted in the Marine Survey Report (Exh. H), to wit:

MAXU-2062880 - rain gutter deformed/cracked

ICSU-363461-3 - left side rubber gasket on door distorted/partly loose

PERU-204209-4 - with pinholes on roof panel right portion

TOLU-213674-3 - wood flooring we[t] and/or with signs of water soaked

MAXU-201406-0 - with dent/crack on roof panel

ICSU-412105-0 - rubber gasket on left side/door panel partly detached loosened.10

In addition, petitioner claims that Marine Cargo Surveyor Ernesto Tolentino testified that he has
no personal knowledge on whether the container vans were first stored in petitioner's warehouse
prior to their delivery to the consignee. She likewise claims that after withdrawing the container
vans from the arrastre operator, her driver, Ricardo Nazarro, immediately delivered the cargo to
SMC's warehouse in Ermita, Manila, which is a mere thirty-minute drive from the Port Area
where the cargo came from. Thus, the damage to the cargo could not have taken place while
these were in her custody.11

Contrary to petitioner's assertion, the Survey Report (Exh. H) of the Marine Cargo Surveyors
indicates that when the shipper transferred the cargo in question to the arrastre operator, these
were covered by clean Equipment Interchange Report (EIR) and, when petitioner's employees
withdrew the cargo from the arrastre operator, they did so without exception or protest either with
regard to the condition of container vans or their contents. The Survey Report pertinently reads --

Details of Discharge:

Shipment, provided with our protective supervision was noted discharged ex vessel to
dock of Pier #13 South Harbor, Manila on 14 July 1990, containerized onto 30' x 20'
secure metal vans, covered by clean EIRs. Except for slight dents and paint scratches on
side and roof panels, these containers were deemed to have [been] received in good
condition.
 ....

Transfer/Delivery:

On July 23, 1990, shipment housed onto 30' x 20' cargo containers was [withdrawn] by
Transorient Container Services, Inc. . . . without exception.

[The cargo] was finally delivered to the consignee's storage warehouse located at
Tabacalera Compound, Romualdez Street, Ermita, Manila from July 23/25, 1990.12

As found by the Court of Appeals:

From the [Survey Report], it [is] clear that the shipment was discharged from the vessel
to the arrastre, Marina Port Services Inc., in good order and condition as evidenced by
clean Equipment Interchange Reports (EIRs). Had there been any damage to the
shipment, there would have been a report to that effect made by the arrastre operator.
The cargoes were withdrawn by the defendant-appellant from the arrastre still in good
order and condition as the same were received by the former without exception, that is,
without any report of damage or loss. Surely, if the container vans were deformed,
cracked, distorted or dented, the defendant-appellant would report it immediately to the
consignee or make an exception on the delivery receipt or note the same in the
Warehouse Entry Slip (WES). None of these took place. To put it simply, the defendant-
appellant received the shipment in good order and condition and delivered the same to
the consignee damaged. We can only conclude that the damages to the cargo occurred
while it was in the possession of the defendant-appellant. Whenever the thing is lost (or
damaged) in the possession of the debtor (or obligor), it shall be presumed that the loss
(or damage) was due to his fault, unless there is proof to the contrary. No proof was
proffered to rebut this legal presumption and the presumption of negligence attached to a
common carrier in case of loss or damage to the goods.13

Anent petitioner's insistence that the cargo could not have been damaged while in her custody as
she immediately delivered the containers to SMC's compound, suffice it to say that to prove the
exercise of extraordinary diligence, petitioner must do more than merely show the possibility that
some other party could be responsible for the damage. It must prove that it used "all reasonable
means to ascertain the nature and characteristic of goods tendered for [transport] and that [it]
exercise[d] due care in the handling [thereof]." Petitioner failed to do this.

Nor is there basis to exempt petitioner from liability under Art. 1734(4), which provides --

Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:

....

(4) The character of the goods or defects in the packing or in the containers.

....

For this provision to apply, the rule is that if the improper packing or, in this case, the defect/s in
the container, is/are known to the carrier or his employees or apparent upon ordinary
observation, but he nevertheless accepts the same without protest or exception notwithstanding
such condition, he is not relieved of liability for damage resulting therefrom.14 In this case,
petitioner accepted the cargo without exception despite the apparent defects in some of the
container vans. Hence, for failure of petitioner to prove that she exercised extraordinary diligence
in the carriage of goods in this case or that she is exempt from liability, the presumption of
negligence as provided under Art. 173515 holds.

WHEREFORE, the decision of the Court of Appeals, dated May 31, 2001, is AFFIRMED. 1âwphi1.nêt

SO ORDERED.
G.R. No. 126074 February 24, 1998

RIDJO TAPE & CHEMICAL CORP. and RIDJO PAPER CORPORATION, petitioners,
vs.
HON. COURT OF APPEALS, MANILA ELECTRIC CO., HON. PRESIDING JUDGE, Branch
104-REGIONAL TRIAL COURT OF QUEZON CITY, respondents.

ROMERO, J.:

Before us is a petition to review the decision1 of the Court of Appeals which reversed that of the
Regional Trial Court of Quezon City, Branch 104 in Civil Case Nos. Q-92-13845 and Q-92-13879
ordering petitioners to pay private respondent Manila Electric Co. (MERALCO) the amount of
P415,317.66 and P89,710.58 plus the costs of suit. This petition involves the two cases filed by
petitioners which were eventually consolidated.

Civil Case No. Q-92-13845:

On November 16, 1990, petitioners applied for and was granted electric service by MERALCO.
Ten months later, however, or on September 4, 1991, petitioners received a letter from
MERALCO demanding payment of P415,317.66, allegedly representing unregistered electric
consumption for the period November 7, 1990, to February 13, 1991. MERALCO justified its
demand on the ground that the unregistered electric consumption was due to the defects of the
electric meter located in the premises of petitioners.

Since petitioners refused to pay the amount, MERALCO notified them that in the event the
overdue account remained unpaid, it would be forced to disconnect their electricity. Alarmed by
this development, petitioners, instead of settling the amount, filed on October 29, 1992 a case
before Branch 98 of the Quezon City RTC for the issuance of a writ of preliminary injunction
and/or temporary restraining order to forestall any planned disconnection by MERALCO.

On November 19, 1992, the trial court granted the player for preliminary injunction.

Civil Case No. 13879:

On July 30, 1992, petitioners received another demand letter from MERALCO, this time requiring
them to pay the amount of P89,710.58 representing the unregistered electric consumption for the
period July 15, 1991 to April 13, 1992, the deficiency again due to the defective meter installed in
petitioners' compound.

MERALCO's demand having remained unheeded, petitioners were advised that their electric
service would be disconnected without further notice. Hence, on November 5, 1992, petitioners
filed a case before Branch 104 of the Quezon City RTC, seeking to enjoin MERALCO from
implementing the suspension of electric

Thereafter, on November 9, 1992, petitioners filed a motion for the consolidation of the two
cases, which was granted, resulting in the joint trial of said before Branch 104 of the Quezon City
RTC.

On November 27, 1992, the trial court issued the corresponding preliminary injunction.

After due trial, the lower court rendered a decision, the dispositive portion of which reads:
 WHEREFORE, judgment is hereby rendered in this case in favor of the plaintiff(s) and
against the defendants:

1. Making the Injunction permanent, enjoining the defendants in both cases, and all their
subordinates, legal representatives, electric meter readers and technicians from
committing acts of dispossession/disruption of electric power on the subject premises
located at the compound of Ridjo Tape and Chemical Corporation and Ridjo Paper
Corporation located at 64 and 68 Judge Juan Luna St., San Francisco del Monte,
Quezon City.

2. Ordering defendants to pay the cost of suit.

Defendants' counterclaim on (the) two cases are (sic) denied for lack of merit.

MERALCO appealed to the Court of Appeals which, on January 22, 1996, reversed the trial
court's finding, to wit:

WHEREFORE, the appealed judgment is REVERSED; and appellees Ridjo Tape and
Chemical Corporation and Ridjo Paper Corporation are hereby ordered to pay subject
differential billings of P415,317.66 and P89,710.58, respectively. Costs against the
appellees.2

Aggrieved, petitioners filed a motion for reconsideration, which was denied by the Court of
Appeals in a resolution dated August 14, 1996.3 Hence, this petition.

From the pleadings filed by the parties, it can be deduced that the only issue to be resolved is
whether petitioners, despite the absence of evidence of tampering, are liable to pay for the
unregistered electrical service.

For a better understanding of the two cases, the terms and conditions of the Service Agreement
regarding payments are reproduced:

PAYMENTS

Bills will be rendered by the Company to the Customer monthly in accordance with the
applicable rate schedule. Said Bills are payable to collectors or at the main or branch
offices of the Company or at its authorized banks within ten (10) days after the regular
reading date of the electric meters. The word "month" as used herein and in the rate
schedule is hereby defined to be the elapsed time between two succeeding meter
readings approximately thirty (30) days apart. In the event of the stoppage or the failure
by any meter to register the full amount of energy consumed, the Customer shall be
billed for such period on an estimated consumption based upon his use of energy in a
similar period of like use. (Emphasis supplied)

In disclaiming any liability, petitioners assert that the phrase "stoppage or failure by any meter to
register the full amount of energy consumed" can only refer to tampering on the part of the
customer and not mechanical failure or defects. 4 MERALCO, on the other hand, argues that to
follow the interpretation advanced by petitioners would constitute an unjust enrichment in favor of its
customers.5

Evidently, the Service Contract between petitioners and MERALCO partakes of the nature of a
contract of adhesion as it was prepared solely by the latter, the only participation of the former
being that they affixed or "adhered" their signature thereto,6 thus, leaving no room for negotiation
and depriving petitioners of the opportunity to bargain on equal footing.7 Nevertheless, these
types of contracts have been declared to be binding as ordinary contracts because the party
adhering thereto is free to reject it in its entirety.8

Being an ordinary contract, therefore, the principle that contracting parties can make stipulations
in their contract provided they are not contrary to law, morals, good customs, public order or
public policy, stands strong and true.9To be sure, contracts are respected as laws between the
contracting parties, and they may establish such stipulations, clauses, terms and conditions as
they may want to include.10 Since both parties offered conflicting interpretations of the stipulation,
however, then judicial determination of the parties' intention is mandated.11 In this regard, it must
be stressed that in construing a written contract, the reason behind and the circumstances
surrounding its execution are of paramount importance to place the interpreter in the situation
occupied by the parties concerned at the time the writing was executed.12

With these pronouncement as parameters, and considering the circumstances of the parties, we
are constrained to uphold MERALCO's interpretation.

At this juncture, we hasten to point out that the production and distribution of electricity is a highly
technical business undertaking,13 and in conducting its operation, it is only logical for public
utilities, such as MERALCO, to employ mechanical devices and equipment for the orderly pursuit
of its business.

It is to be expected that the parties were consciously aware that these devices or equipment are
susceptible to defects and mechanical failure. Hence, we are not prepared to believe that
petitioners were ignorant of the fact that stoppages in electric meters can also result from
inherent defects or flaws and not only from tampering or intentional mishandling.

Clearly, therefore, the rationale of the provision in the Service Agreement was primarily to cover
situations similar to the instant case, for there are instances when electric meters do fail to record
the quantity of the current used for whatever reason.14 It is precisely this kind or predicament that
MERALCO seeks to protect itself from so as to avert business losses or reverses. It must be
borne in mind that construction of the terms of a contract which would amount to impairment or
loss of right is not favored; conservation and presentation, not waiver, abandonment or forfeiture
of a right, is the rule.15 Since MERALCO supplied electricity to petitioners for a fee, no intent to
donate the same can be gleaned from the terms of the Agreement. Hence, the stipulation must
be upheld.

Corollarily, it must be underscored that MERALCO has the imperative duty to make a reasonable
and proper inspection of its apparatus and equipment to ensure that they do not
malfunction,16 and the due diligence to discover and repair defects therein. Failure to perform
such duties constitutes negligence.17

A review of the records, however, discloses that the unpaid charges covered the periods from
November 7, 1990 to February 13, 1991 for Civil Case No. Q-92-13045 and from July 15, 1991
to April 13, 1992 for Civil Case No. 13879, approximately three months and nine months,
respectively. On such basis, we take judicial notice that during those periods, personnel
representing MERALCO inspected and examined the electric meters of petitioners regularly for
the purpose of determining the monthly dues payable. So, why were these defects not detected
and reported on time?

It has been held that notice of a defect need not be direct and express; it is enough that the same
had existed for such a length of time that it is reasonable to presume that it had been
detected, 18 and the presence of a conspicuous defect which has existed for a considerable
length of time will create a presumption of constructive notice thereof.19 Hence, MERALCO's
failure to discover the defect, if any, considering the length of time, amounts to inexcusable
negligence. Furthermore, we need not belabor the point that as a public utility, MERALCO has
the obligation to discharge its functions with utmost care and diligence.
Accordingly, we are left with no recourse but to conclude that this is a case of negligence on the
part of MERALCO for which it must bear the consequences. Its failure to make the necessary
repairs and replacement of the defective electric meter installed within the premises of petitioners
was obviously the proximate cause of the instant dispute between the parties.

Indeed, if an unusual electric consumption was not reflected in the statements of account of
petitioners, MERALCO, considering its technical knowledge and vast experience in providing
electric service, could have easily verified any possible error in the meter reading. In the absence
of such a mistake, the electric meters themselves should be inspected for possible defects or
breakdowns and forthwith repaired and, if necessary, replaced. Furthermore, if MERALCO
discovered that contraptions or illegal devices were installed which would alter the result of the
meter reading, then it should have filed the appropriate criminal complaint against petitioners
under Presidential Decree No. 401.20

The rationale behind this ruling is that public utilities should be put on notice, as a deterrent, that
if they completely disregard their duty of keeping their electric meters in serviceable condition,
they run the risk of forfeiting, by reason of their negligence, amounts originally due from their
customers. Certainly, we cannot sanction a situation wherein the defects in the electric meter are
allowed to continue indefinitely until suddenly the public utilities concerned demand payment for
the unrecorded electricity utilized when, in the first place, they should have remedied the
situation immediately. If we turn a blind eye on MERALCO's omission, it may courage negligence
on the part of public utilities, to the detriment of the consuming public.

In view of the foregoing discussion, the liability of petitioners for consumed unrecorded electricity
must be limited by reason of MERALCO's negligence. Hence, an equitable solution would be for
petitioners to pay only the estimated consumption on a three-month average before the period in
controversy. To hold would unjustly enrich petitioners who would be allowed to utilize additional
electricity, albeit unrecorded, at no extra cost.

To summarize, it is worth emphasizing that it is not our intention to impede or diminish the
business viability of MERALCO, or any public utility company for that matter. On the contrary, we
would like to stress that, being a public utility vested with vital public interest, MERALCO is
impressed with certain obligations towards its customers and any omission on its part to perform
such duties would be prejudicial to its interest. For in the final analysis, the bottom line is that
those who do not exercise such prudence in the discharge of their duties shall be made to bear
the consequences of such oversight.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. CV No.
44010 is hereby MODIFIED. Petitioners are ordered to pay MERALCO the amount P168,342.75,
representing its average electric consumption three months prior to the period in
controversy.21 No costs.

SO ORDERED
G.R. No. 172200 July 6, 2010

THE HEIRS OF REDENTOR COMPLETO and ELPIDIO ABIAD, Petitioners,

vs.
SGT. AMANDO C. ALBAYDA, JR., Respondent.

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision1dated January 2, 2006 and the Resolution2 dated March 30, 2006 of the
Court of Appeals (CA) in CA-G.R. CV No. 68405.

The Facts

The facts of the case are as follows:

Respondent Amando C. Albayda, Jr. (Albayda) is a Master Sergeant of the Philippine Air Force,
527th Base Security Squadron, 520th Airbase, Philippine Air Force, located at Villamor Air Base
(VAB), Pasay City. Petitioner Redentor Completo (Completo), now represented by his heirs, was
the taxi driver of a Toyota Corolla, bearing Plate No. PYD-128, owned and operated by co-
petitioner Elpidio Abiad (Abiad).3 Albayda and Completo figured in an accident along the
intersection of 8th and 11th Streets, VAB. Albayda filed a complaint for damages before the
Regional Trial Court (RTC) of Pasay City. The case was docketed as Civil Case No. 98-1333.4

The amended complaint alleged that, on August 27, 1997, while Albayda was on his way to the
office to report for duty, riding a bicycle along 11th Street, the taxi driven by Completo bumped
and sideswiped him, causing serious physical injuries. Albayda was brought to the Philippine Air
Force General Hospital (PAFGH) inside VAB. However, he was immediately transferred to the
Armed Forces of the Philippines Medical Center (AFPMC) on V. Luna Road, Quezon City,
because there was a fracture in his left knee and there was no orthopedic doctor available at
PAFGH. From August 27, 1997 until February 11, 1998, he was confined therein. He was again
hospitalized at PAFGH from February 23, 1998 until March 22, 1998.5

Conciliation between the parties before the barangay failed. Thus, Albayda filed a complaint for
physical injuries through reckless imprudence against Completo before the Office of the City
Prosecutor of Pasay City. On the other hand, Completo filed a counter-charge of damage to
property through reckless imprudence against Albayda. On January 13, 1998, the Office of the
City Prosecutor issued a resolution,6 recommending the filing of an information for reckless
imprudence resulting in physical injuries against Completo. The counter-charge of damage to
property was recommended dismissed.7

The case was raffled to the Metropolitan Trial Court of Pasay City, Branch 45, where Albayda
manifested his reservation to file a separate civil action for damages against petitioners
Completo and Abiad.8

Albayda alleged that the proximate cause of the incident which necessitated his stay in the
hospital for approximately seven (7) months was the negligence of Completo who, at the time of
the accident, was in the employ of Abiad. The pain he suffered required him to undergo medical
physiotherapy for a number of years to regain normality of his left knee joint, and he claimed that
he incurred actual damages totaling Two Hundred Seventy-Six Thousand Five Hundred Fifty
Pesos (₱276,550.00), inclusive of his anticipated operations.9
He further stated that aggravating the physical sufferings, mental anguish, frights, serious
anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation resulting
from his injuries, his wife abandoned him in May 1998, and left their children in his custody. He
thus demanded the amount of Six Hundred Thousand Pesos (₱600,000.00) as moral damages.
He likewise asked for exemplary damages in the amount of Two Hundred Thousand Pesos
(₱200,000.00) and attorney’s fees of Twenty-Five Thousand Pesos (₱25,000.00), plus One
Thousand Pesos (₱1,000.00) per court appearance.10

In his answer to the amended complaint, Completo alleged that, on August 27, 1997, he was
carefully driving the taxicab along 8th Street, VAB, when suddenly he heard a strange sound
from the rear right side of the taxicab. When he stopped to investigate, he found Albayda lying on
the road and holding his left leg. He immediately rendered assistance and brought Albayda to
PAFGH for emergency treatment.11

Completo also asserted that he was an experienced driver who, in accordance with traffic rules
and regulations and common courtesy to his fellow motorists, had already reduced his speed to
twenty (20) kilometers per hour even before reaching the intersection of 8th and 11th Streets. In
contrast, Albayda rode his bicycle at a very high speed, causing him to suddenly lose control of
the bicycle and hit the rear door on the right side of the taxicab.12

The deep indentation on the rear right door of the taxicab was caused by the impact of Albayda’s
body that hit the taxicab after he had lost control of the bicycle; while the slight indentation on the
right front door of the taxicab was caused by the impact of the bike that hit the taxicab after
Albayda let go of its handles when he had lost control of it.13

Completo maintained that Albayda had no cause of action. The accident and the physical injuries
suffered by Albayda were caused by his own negligence, and his purpose in filing the complaint
was to harass petitioners and unjustly enrich himself at their expense.14

After submission of the parties’ respective pleadings, a pretrial conference was held. On
December 8, 1998, the RTC issued a pretrial order. Thereafter, trial on the merits ensued.15

Albayda presented himself, Michael Navarro (Navarro), Dr. Rito Barrosa, Jr. (Dr. Barrosa), Dr.
Armando Sta. Ana, Jr., Dr. Ranny Santiago, (Dr. Santiago), and Dr. Manuel Fidel Magtira (Dr.
Magtira) as witnesses in open court.16

On direct examination, Navarro testified that, on August 27, 1997, at around 1:45 p.m., he saw a
taxicab, with Plate No. PYD-128, coming from 11th Street, running at an unusual speed. The
normal speed should have been twenty-five (25) kilometers per hour. He was at the corner of 9th
and 8th Streets when the taxicab passed by him. The side of the bicycle was hit by the taxicab at
the intersection of 11th and 8th Streets. He saw Albayda fall to the ground, grimacing in pain.
The taxicab at that moment was about ten (10) meters away from Albayda. On cross-
examination, Navarro reiterated that the taxicab was running quite fast. The bicycle ridden by
Albayda reached the intersection of 8th and 11th Streets before the taxicab hit it.17

Dr. Santiago, the orthopedic surgeon who treated Albayda when the latter was admitted at
AFPMC, testified that the cause of the injury was "hard impact," and recommended an operation
to alleviate the suffering. On cross-examination, he said that there was a separation of the
fragments of the proximal leg, the injured extremity, called levia. They placed the victim on knee
traction or calcaneal traction,18 in order to avoid further swelling. They bore the calcanean bone
with a stainless steel pin so that they could put five percent (5%) of the body weight of the patient
to cool down the leg. He treated Albayda for three (3) months. He recommended surgery, but the
victim had other medical problems, like an increase in sugar level, and they were waiting for the
availability of the implant. The implant was supposed to be placed on the lateral aspect of the
proximal leg or the levia, the part with the separation. It was a long implant with screws.19
Dr. Magtira testified that Albayda was readmitted at AFPMC on January 25, 1999 because of
complaints of pain and limitation of motion on the knee joint. Upon evaluation, the pain was
caused by traumatic arthritis brought about by malunion of the lateral trivial condial. An operation
of the soft tissue release was conducted for him to mobilize his knee joint and attain proper range
of motion. After the operation, Albayda attained functional range of motion, but because of
subsisting pain, they had to do osteoplasty20 of the malunion, which was another operation. On
cross-examination, Dr. Magtira testified that he rendered free medical service at AFPMC.21

Albayda testified that he was thirty-six (36) years old and a soldier of the Armed Forces of the
Philippines. On August 27, 1997, at around 1:40 p.m., he was riding his bike on his way to the
office, located on 916 Street, VAB. He had to stop at the corner of 11th and 8th Streets because
an oncoming taxicab was moving fast. However, the taxicab still bumped the front tire of his bike,
hit his left knee and threw him off until he fell down on the road. The taxicab stopped about ten
meters away, and then moved backwards. Its driver, Completo, just stared at him. When
somebody shouted to bring him to the hospital, two (2) persons, one of whom was Dr. Barrosa,
helped him and carried him into the taxicab driven by Completo, who brought him to PAFGH.22

Upon examination, it was found that Albayda suffered fracture in his left knee and that it required
an operation. No orthopedic doctor was available at PAFGH. Thus, he was transferred that same
afternoon to AFPMC, where he was confined until February 11, 1998.23

At AFPMC, Albayda’s left leg was drilled on and attached to traction. When his leg was drilled, it
was so painful that he had to shout. After his release from the hospital, he continued to suffer
pain in his leg. He underwent reflexology and therapy which offered temporary relief from pain.
But after some time, he had to undergo therapy and reflexology again.24

On January 25, 1999, Albayda was readmitted at AFPMC and operated on. On June 24, 1999,
he was operated on again. Wire and screw were installed so that he could bend his knee.
Nonetheless, he continued to suffer pain. As of the date of his testimony in court, he was
scheduled for another operation in January 2000, when the steel that would be installed in his leg
arrives.25

For his food, Albayda spent Thirty Pesos (₱30.00) each day during his six (6) months of
confinement; for his bed pan, One Thousand Pesos (₱1,000.00); for his twice weekly reflexology,
Three Hundred Pesos (₱300.00) every session since April 1997; for his caretaker, ₱300.00 per
day for six months. He also asked for ₱600,000.00 in moral damages because Completo did not
lend him a helping hand, and he would be suffering deformity for the rest of his life. He
demanded ₱25,000.00 as attorney’s fees and ₱1,000.00 for every court appearance of his
lawyer.26

On cross-examination, Albayda testified that, on the date of the incident, he was the base guard
at VAB, and his duty was from 2 p.m. to 8 p.m. That afternoon, he was not in a hurry to go to his
place of work because it was only about 1:45 p.m., and his place of work was only six (6) meters
away. After the accident, he was brought to PAFGH, and at 3:00 p.m., he was brought to the
AFPMC. When he was discharged from the hospital, he could no longer walk.27

Dr. Barrosa’s testimony during cross-examination emphasized that he was with 2 other persons
when he carried Albayda into the taxicab driven by Completo. He was certain that it was not
Completo who carried the victim into the taxicab. It was only a matter of seconds when he rushed
to the scene of the accident. The taxicab backed up fifteen (15) seconds later. Albayda lay 2
meters away from the corner of 8th and 11th Streets.28

Completo, Abiad, and Benjamin Panican (Panican) testified for the defense.29

Completo alleged that he had been employed as taxi driver of FOJS Transport, owned by Abiad,
since February 1997. On August 27, 1997, he was driving the taxicab, with Plate No. PYD-128,
from 10:00 a.m. At around 1:45 p.m., he was on his way home when a bicycle bumped his
taxicab at the intersection of 8th and 11th Streets, VAB. The bicycle was travelling from south to
north, and he was going east coming from the west. The bicycle was coming from 11th Street,
while he was travelling along 8th Street.30

On cross-examination, Completo testified that when Albayda hit the rear right door of the taxicab,
the latter fell to the ground. When he heard a noise, he immediately alighted from the taxicab. He
denied that he stopped about 10 meters away from the place where Albayda fell. He carried
Albayda and drove him to the hospital.31

Panican testified that he worked as an airconditioner technician in a shop located on 8th Street
corner 11th Street. On the date and time of the incident, he was working in front of the shop near
the roadside. He saw a bicycle bump the rear right side of the taxicab. Then, the driver of the
taxicab alighted, carried Albayda, and brought him to the hospital.32

When questioned by the trial court, Panican testified that the bicycle was running fast and that he
saw it bump the taxicab. The taxicab already passed the intersection of 11th and 8th Streets
when the bicycle arrived.33

Abiad testified that, aside from being a soldier, he was also a franchise holder of taxicabs and
passenger jeepneys. When Completo applied as a driver of the taxicab, Abiad required the
former to show his bio-data, NBI clearance, and driver’s license. Completo never figured in a
vehicular accident since the time he was employed in February 1997. Abiad averred that
Completo was a good driver and a good man. Being the operator of taxicab, Abiad would wake
up early and personally check all the taxicabs.34

On July 31, 2000, the trial court rendered a decision,35 the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff [Albayda] and against the
defendants [Completo and Abiad]. Accordingly, the defendants [Completo and Abiad] are hereby
ordered to pay the plaintiff [Albayda] the following sum:

1. ₱46,000.00 as actual damages;

2. ₱400,000.00 as moral damages; [and]

3. ₱25,000.00 as attorney’s fees.

Costs against the defendants [Completo and Abiad].

SO ORDERED.36

Completo and Abiad filed an appeal. The CA affirmed the trial court with modification in a
Decision37 dated January 2, 2006, viz.:

WHEREFORE, premises considered, the appeal is DENIED for lack of merit. The assailed
Decision dated 31 July 2000 rendered by the Regional Trial Court of Pasay City, Branch 117, in
Civil Case No. 98-1333 is hereby AFFIRMED with the following MODIFICATIONS:

1. the award of Php 46,000.00 as actual damages is DELETED;

2. temperate damages in the amount of Php 40,000.00 is awarded in favor of appellee;

3. moral damages in favor of appellee is REDUCED to Php 200,000.00;

 4. appellants Redentor Completo and Elpidio Abiad are solidarily liable to pay appellee
Amando C. Albayda, Jr. said temperate and moral damages, as well as the attorney’s
fees in the amount of Php 25,000.00 awarded by the trial court;

5. the temperate and moral damages shall earn legal interest at 6% per annum computed
from the date of promulgation of Our Decision;

6. upon finality of Our Decision, said moral and temperate damages shall earn legal
interest at the rate of 12% per annum, in lieu of 6% per annum, until full payment. Costs
against appellants.

SO ORDERED.38

Hence, this petition.

The Issues

Petitioners presented the following issues for resolution: (1) whether the CA erred in finding that
Completo was the one who caused the collision;

(2) whether Abiad failed to prove that he observed the diligence of a good father of the family;
and (3) whether the award of moral and temperate damages and attorney’s fees to Albayda had
no basis.39

The Ruling of the Court

The petition is bereft of merit.

I. On Negligence

The issues raised by petitioners essentially delve into factual matters which were already passed
upon by the RTC and the CA. Conclusions and findings of fact of the trial court are entitled to
great weight on appeal and should not be disturbed unless for strong and cogent reasons,
because the trial court is in a better position to examine real evidence, as well as to observe the
demeanor of the witnesses while testifying in the case. The fact that the CA adopted the findings
of fact of the trial court makes the same binding upon this Court. Well-settled is the rule that the
Supreme Court is not a trier of facts.40 To be sure, findings of fact of lower courts are deemed
conclusive and binding upon the Supreme Court, save only for clear and exceptional
reasons,41 none of which is present in the case at bar.

The instant case involved a collision between a taxicab and a bicycle which resulted in serious
physical injuries to the bicycle rider, Albayda. It is a rule in negligence suits that the plaintiff has
the burden of proving by a preponderance of evidence the motorist’s breach in his duty of care
owed to the plaintiff, that the motorist was negligent in failing to exercise the diligence required to
avoid injury to the plaintiff, and that such negligence was the proximate cause of the injury
suffered.42

Article 2176 of the Civil Code provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no preexisting contractual relation between the parties, is called a quasi-
delict. In this regard, the question of the motorist's negligence is a question of fact.

It was proven by a preponderance of evidence that Completo failed to exercise reasonable

diligence in driving the taxicab because he was over-speeding at the time he hit the bicycle
ridden by Albayda. Such negligence was the sole and proximate cause of the serious physical
injuries sustained by Albayda. Completo did not slow down even when he approached the
intersection of 8th and 11th Streets of VAB. It was also proven that Albayda had the right of way,
considering that he reached the intersection ahead of Completo.

The bicycle occupies a legal position that is at least equal to that of other vehicles lawfully on the
highway, and it is fortified by the fact that usually more will be required of a motorist than a
bicyclist in discharging his duty of care to the other because of the physical advantages the
automobile has over the bicycle.43

At the slow speed of ten miles per hour, a bicyclist travels almost fifteen feet per second, while a
car traveling at only twenty-five miles per hour covers almost thirty-seven feet per second, and
split-second action may be insufficient to avoid an accident. It is obvious that a motor vehicle
poses a greater danger of harm to a bicyclist than vice versa. Accordingly, while the duty of using
reasonable care falls alike on a motorist and a bicyclist, due to the inherent differences in the two
vehicles, more care is required from the motorist to fully discharge the duty than from the
bicyclist.44 Simply stated, the physical advantages that the motor vehicle has over the bicycle
make it more dangerous to the bicyclist than vice versa.45

Under Article 2180 of the Civil Code, the obligation imposed by Article 2176 is demandable not
only for one’s own acts or omissions, but also for those persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees, but the employers’
responsibility shall cease upon proof that they observed all the diligence of a good father of the
family in the selection and supervision of their employees.

When an injury is caused by the negligence of an employee, a legal presumption instantly arises
that the employer was negligent. This presumption may be rebutted only by a clear showing on
the part of the employer that he exercised the diligence of a good father of a family in the
selection and supervision of his employee. If the employer successfully overcomes the legal
presumption of negligence, he is relieved of liability. In other words, the burden of proof is on the
employer.46

The trial court’s finding that Completo failed to exercise reasonable care to avoid collision with
Albayda at the intersection of 11th and 8th Streets of VAB gives rise to liability on the part of
Completo, as driver, and his employer Abiad. The responsibility of two or more persons who are
liable for quasi-delict is solidary.47 The civil liability of the employer for the negligent acts of his
employee is also primary and direct, owing to his own negligence in selecting and supervising his
employee.48 The civil liability of the employer attaches even if the employer is not inside the
vehicle at the time of the collision.49

In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience, and service records. On the other hand, with respect to the
supervision of employees, employers should formulate standard operating procedures, monitor
their implementation, and impose disciplinary measures for breaches thereof. To establish these
factors in a trial involving the issue of vicarious liability, employers must submit concrete proof,
including documentary evidence.50

Abiad testified that before he hired Completo, he required the latter to show his bio-data, NBI
clearance, and driver’s license. Abiad likewise stressed that Completo was never involved in a
vehicular accident prior to the instant case, and that, as operator of the taxicab, he would wake
up early to personally check the condition of the vehicle before it is used.

The protestation of Abiad to escape liability is short of the diligence required under the law.
Abiad’s evidence consisted entirely of testimonial evidence, and the unsubstantiated and self-
serving testimony of Abiad was insufficient to overcome the legal presumption that he was
negligent in the selection and supervision of his driver.
 II. On Damages

The CA rightfully deleted the award of actual damages by the RTC because Albayda failed to
present documentary evidence to establish with certainty the amount that he incurred during his
hospitalization and treatment for the injuries he suffered. In the absence of stipulation, actual
damages are awarded only for such pecuniary loss suffered that was duly proved.51

While the amount of actual damages was not duly established with certainty, the Court
recognizes the fact that, indeed, Albayda incurred a considerable amount for the necessary and
reasonable medical expenses, loss of salary and wages, loss of capacity to earn increased
wages, cost of occupational therapy, and harm from conditions caused by prolonged
immobilization. Temperate damages, more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with certainty.52 Temperate damages
must be reasonable under the circumstances.53 Thus, the Court finds the award of One Hundred
Thousand Pesos (₱100,000.00) as temperate damages reasonable under the circumstances.

Doubtless, Albayda suffered immeasurable pain because of the incident caused by petitioners’
negligence. The CA explained:

The court vicariously feels the pain the plaintiff [Albayda] suffered a number of times. After he
was bumped by defendants’ cab, he cried in pain. When the doctors bore holes into his left knee,
he cried in pain. When he was tractioned, when he was subjected to an operation after operation
he suffered pain. When he took the witness stand to testify, he walked with crutches, his left knee
in bandage, stiff and unfuctional. Pain was written [on] his face. He does deserve moral
damages.54

Moral damages are awarded in quasi-delicts causing physical injuries. The permanent deformity
and the scar left by the wounds suffered by Albayba will forever be a reminder of the pain and
suffering that he had endured and continues to endure because of petitioners’ negligence. Thus,
the award of moral damages in the amount of Five Hundred Thousand Pesos (₱500,000.00) is
proper.

Finally, an interest rate of six percent (6%) per annum is due on the amount of ₱100,000.00, as
temperate damages, and ₱500,000.00, as moral damages, which we have awarded. The 6% per
annum interest rate on the temperate and moral damages shall commence to run from the date
of the promulgation of this Decision. Upon finality of the Decision, an interest rate of twelve
percent (12%) per annum shall be imposed on the amount of the temperate and moral damages
until full payment thereof.55

The award of attorney’s fees is hereby deleted for failure to prove that petitioners acted in bad
faith in refusing to satisfy respondent’s just and valid claim.

WHEREFORE, in view of the foregoing, the Decision dated January 2, 2006 and the Resolution
dated March 30, 2006 of the Court of Appeals in CA-G.R. CV No. 68405 are hereby AFFIRMED
with MODIFICATION, viz.:

(1) The estate of the late Redentor Completo and Elpidio Abiad are solidarily liable to pay
One Hundred Thousand Pesos (₱100,000.00), as temperate damages, and Five
Hundred Thousand Pesos (₱500,000.00), as moral damages;

(2) The temperate and moral damages hereby awarded shall earn legal interest at the
rate of six percent (6%) per annum from the date of the promulgation of this Decision.
Upon finality of this Decision, an interest rate of twelve percent (12%) per annum shall be
imposed on the amount of the temperate and moral damages until full payment thereof.
Costs against petitioners.

SO ORDERED.
G.R. No. L-3422 June 13, 1952

HIDALGO ENTERPRISES, INC., petitioner,

vs.
GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT OF APPEALS, respondents.

Quisumbing, Sycip, Quisumbing and Salazar for petitioner.

Antonio M. Moncado for respondents.

BENGZON, J.:

This is an appeal by certiorari, from a decision of the Court of Appeals requiring Hidalgo
Enterprises, Inc. to pay Guillermo Balandan and his wife, damages in the sum of P2,000 for the
death of their son Mario.

It appears that the petitioner Hidalgo Enterprises, Inc. "was the owner of an ice-plant factory in
the City of San Pablo, Laguna, in whose premises were installed two tanks full of water, nine feet
deep, for cooling purposes of its engine. While the factory compound was surrounded with fence,
the tanks themselves were not provided with any kind of fence or top covers. The edges of the
tanks were barely a foot high from the surface of the ground. Through the wide gate entrance,
which is continually open, motor vehicles hauling ice and persons buying said commodity
passed, and any one could easily enter the said factory, as he pleased. There was no guard
assigned on the gate. At about noon of April 16, 1948, plaintiff's son, Mario Balandan, a boy
barely 8 years old, while playing with and in company of other boys of his age entered the factory
premises through the gate, to take a bath in one of said tanks; and while thus bathing, Mario
sank to the bottom of the tank, only to be fished out later, already a cadaver, having been died of
"asphyxia secondary to drowning."

The Court of Appeals, and the Court of First Instance of Laguna, took the view that the petitioner
maintained an attractive nuisance (the tanks), and neglected to adopt the necessary precautions
to avoid accidents to persons entering its premises. It applied the doctrine of attractive nuisance,
of American origin, recognized in this Jurisdiction in Taylor vs. Manila Electric 16 Phil., 8.

The doctrine may be stated, in short, as follows: One who maintains on his premises dangerous
instrumentalities or appliances of a character likely to attract children in play, and who fails to
exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a
child of tender years who is injured thereby, even if the child is technically a trespasser in the
premises. (See 65 C.J.S., p. 455.)

The principle reason for the doctrine is that the condition or appliance in question although its
danger is apparent to those of age, is so enticing or alluring to children of tender years as to
induce them to approach, get on or use it, and this attractiveness is an implied invitation to such
children (65 C.J.S., p. 458).

Now, is a swimming pool or water tank an instrumentality or appliance likely to attract the little
children in play? In other words is the body of water an attractive nuisance?

The great majority of American decisions say no.

The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as
well as natural, in the absence of some unusual condition or artificial feature other than
the mere water and its location.

There are numerous cases in which the attractive nuisance doctrine has not been held
not to be applicable to ponds or reservoirs, pools of water, streams, canals, dams,
 ditches, culverts, drains, cesspools or sewer pools, . . . (65 C.J.S., p. 476 et seg. citing
decisions of California, Georgia, Idaho, Illinois, Kansas, Iowa, Louisiana, Miss., Missouri,
Montana, Oklahoma, Pennsylvania, Tennessee, Texas, Nebraska, Wisconsin.)

In fairness to the Court of Appeals it should be stated that the above volume of Corpus Juris
Secundum was published in 1950, whereas its decision was promulgated on September 30,
1949.

The reason why a swimming pool or pond or reservoir of water is not considered an attractive
nuisance was lucidly explained by the Indiana Appellate Court as follows:

Nature has created streams, lakes and pools which attract children. Lurking in their
waters is always the danger of drowning. Against this danger children are early instructed
so that they are sufficiently presumed to know the danger; and if the owner of private
property creates an artificial pool on his own property, merely duplicating the work of
nature without adding any new danger, . . . (he) is not liable because of having created
an "attractive nuisance." Anderson vs. Reith-Riley Const. Co., N. E., 2nd, 184, 185; 112
Ind. App., 170.

Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the
petitioner had taken reasonable precautions becomes immaterial. And the other issue submitted
by petitioner — that the parents of the boy were guilty of contributory negligence precluding
recovery, because they left for Manila on that unlucky day leaving their son under the care of no
responsible individual — needs no further discussion.

The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved from liability. No
costs.

Feria, Padilla, Tuason, Montemayor, and Bautista Angelo, JJ., concur.

G.R. No. 7763 December 2, 1957

HONORIA DELGADO VDA. DE GREGORIO, ET AL., plaintiffs-appellants,

vs.
GO CHONG BING, defendant-appellee.

Pedro P. Suarez and Sabina Agcaoili Suarez for appellants.

Castillo, Cervantes, Occena, Lozano, Montana, Cunanan and Sison for appellee.

LABRADOR, J.:

Appeal from a judgment of the Court of First Instance of Davao absolving defendant from liability
for the accidental death of Quirico Gregorio. It came to this Court as the amount demanded in the
complaint is more than P50,000.

On or before June 2, 1952, defendant was the owner of a truck. He had a driver and a cargador
or driver's helper by the name of Francisco Romera. In the afternoon of June 2, 1952, defendant
ordered Romera to drive his truck, with instructions to follow another track driven by his driver
and help the latter in crossing Sumlog river which was then flooded, should it be unable to cross
the river because of the flood. Romera at that time was not a licensed driver. He only had a
student's permit, issued to him on March 31, 1952 (Exhibit "1"). The truck started from the town
of Lupon at about 5:30 o'clock in the afternoon, driven by Romera. Some persons boarded the
truck and among them was one policeman by the name of Venancio Orfanel. While the truck was
on the way, it made a stop and then Orfanel took the wheel from Romera, while the latter stayed
on the driver's left, reclined on a spare tire inside of the truck. As to the circumstances under
which Orfanel was able to take hold of and drive the truck, there is some dispute and this matter
will be taken up later in the decision.

While the truck was being driven by Orfanel, with another truck ahead of it driven by defendant's
driver it so happened that they came to a truck that was trying to park on the left side of the road.
Romera suggested to Orfanel that he shift to low gear and Orfanel did so. But as they
approached the parking truck, and in order to avoid colliding with it, Orfanel swerved the truck
towards the right. It so happened that at that time two pedestrians were on the right side of the
road, As the truck had swerved to the right and was proceeding to hit the said pedestrians,
Romera told Orfanel to apply the brake, but Orfanel instead of doing so put his foot on the
gasoline and the truck did not stop but went on and hit and run over one of the pedestrians, by
the name of Quirico Gregorio. The plaintiffs appellants' in this action are Gregorio's widow and
his children and of the accident, Orfanel was prosecuted for homicide with reckless imprudence.
He pleaded guilty to the charge and was sentenced accordingly.

As hinted above, an important issue in the case has relation to the circumstances under which
Orfanel was able to take hold of the wheel and drive the truck. To sustain the theory that
defendant's cargador Francisco Romera was negligent, plaintiffs introduced one Javier A. Dayo
as a witness. According to this witness the truck was speeding at the rate of 20 miles an hour.
According to him also, while the truck was about pass by the house of one Lucio, running at a
speed per hour, he heard Romera shouting "hand brake! hand brake!"; that both Orfanel and
Romera tried to turn the driver's wheel to the left and direct the truck towards also the left to
avoid the collision. According to his witness also, Romera gave the wheel to Orfanel voluntarily
upon the request of the latter.

Plaintiffs also sought to prove that Romera gave the truck voluntarily to the policeman by
presenting the affidavit of Romera made on June 3, 1952 (Exhibit "1"). This affidavit, however, is
inadmissible as evidence against the defendant because it is hearsay with respect, to him. It may
not be considered as part of the res gestae either, because the affidavit was taken one day after
the incident.
lawphi1.net

Against the above evidence, the defendant testified that he gave positive instructions to Romera
not to allow anybody to drive the truck, and Romera himself testified that he had warned Orfanel
that his master prohibited him from allowing anybody to drive the truck, but that as Orfanel was a
uniformed policeman and insisted that he drive the truck, and that as he believed that the
policeman knew how to drive, he let him drive the truck.

We are of the belief that defendant's claim that Romera gave the wheel to the policeman for fear
of, or out of respect for, the latter, has been proved by a preponderance of the evidence. The
testimony of witness Dayo is not corroborated by any other testimony. As he testified that he was
two meters behind Romera, he could not have noticed with exactness the circumstances under
which the policeman was able to get hold of the wheel and drive the truck and his testimony in
that respect cannot be believed. We are, therefore, forced to the conclusion that the
defendant's cargador, or Francisco Romera gave the wheel to Orfanel out of respect for the
latter, who was a uniformed policeman and because he believed that the latter had both the
ability and the authority to drive the truck, especially as he himself had only a student's permit
and not a driver's license.

The court a quo dismissed the action on the ground that as the death or accident was caused by
an act or omission of a person who is not in any way related to the defendant, and as such act or
omission was punishable by law, and as a matter of fact he had already been punished therefor,
no civil liability should be imposed upon the defendant. Against this decision the plaintiffs have
appealed to this Court, contending that when defendant permitted his cargador, who was not
provided with a driver's license, to drive the truck, he thereby violated the provisions of the
Revised Motor Vehicle Law (section 28., Act No. 3992), and that this constitutes negligence per
se. (People vs. Santos, et al., CA-G.R. No. 1088-1089R.) But admitting for the sake of argument
that the defendant had so violated the law, or may be deemed negligent in entrusting the truck to
one who is not provided with a driver's license, it is clear that he may not be declared liable for
the accident because his negligence was not the direct and proximate cause thereof. The leading
case in this jurisdiction on negligence is that of Taylor vs. Manila Electric Railroad and Light
Company, 16 Phil. 8. Negligence as a source of obligation both under the civil law and in
American cases was carefully considered and it was held:

We agree with counsel for appellant that under the Civil Code, as under the generally
accepted doctrine in the United States, the plaintiff in an action such as that under
consideration, in order to establish his right to a recovery, must establish by competent
evidence:

(1) Damages to the plaintiff.

(2) Negligence by act or omission of which defendant personally, or some person for
whose acts it must respond, was guilty.

(3) The connection of cause and effect between the negligence and the damage. (Taylor
vs. Manila Electric Railroad and Light Co., supra. p.15)

In accordance with the decision of the Supreme Court of Spain, in order that a person may be
held guilty for damage through negligence, it is necessary that there be an act or omission on the
part of the person who is to be charged with the liability and that damage is produced by the said
act or omission.

In accordance with the fundamental principle of proof, that the burden thereof is upon the
plaintiff, it is apparent that it is the duty of him who shall claim damages to establish their
existence. The decisions of April 9, 1896, and March 18, July 6, and September 27,
 1898, have especially supported the principle, the first setting forth in detail the
necessary points of the proof, which are two: An Act or omission on the part of the
person who is to be charged with the liability, and the production of the damage by said
act or omission.

This includes, by inference, the establishment of a relation of cause or effect between the
act or the omission and the damage; the latter must be the direct result of one of the first
two. As the decision of March 22, 1881, said, it is necessary that the damages result
immediately and directly from an act performed culpably and wrongfully; 'necessarily
presupposing, a legal ground for imputability. (Taylor vs. Manila Electric Railroad and
Light Co., supra, p. 28.).

It is evident that the proximate, immediate and direct cause of the death of the plaintiffs' intestate
was the negligence of Orfanel, a uniformed policeman, who took the wheel of the truck from
defendant's cargador, in spite of the protest of the latter. The reason for absolving the defendant
therefor is not because the one responsible for the accident had already received indemnification
for the accident, but because there is no direct and proximate causal connection between the
negligence or violation of the law by the defendant to the death of the plaintiff's intestate.

For the foregoing considerations, the judgment appealed from is hereby affirmed, without costs.
G.R. No. L-10126 October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA,
OSCAR and ALFREDO BATACLAN, represented by their Natural guardian, SALUD
VILLANUEVA VDA. DE BATACLAN, plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.

Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.

Fortunato Jose for defendant and appellant.

MONTEMAYOR, J.:

Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated
by its owner defendant Mariano Medina under a certificate of public convenience, left the town of
Amadeo, Cavite, on its way to Pasay City, driven by its regular chauffeur, Conrado Saylon. There
were about eighteen passengers, including the driver and conductor. Among the passengers
were Juan Bataclan, seated beside and to the right of the driver, Felipe Lara, sated to the right of
Bataclan, another passenger apparently from the Visayan Islands whom the witnesses just called
Visaya, apparently not knowing his name, seated in the left side of the driver, and a woman
named Natalia Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that
same morning, while the bus was running within the jurisdiction of Imus, Cavite, one of the front
tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the right side of the
road and turned turtle. Some of the passengers managed to leave the bus the best way they
could, others had to be helped or pulled out, while the three passengers seated beside the driver,
named Bataclan, Lara and the Visayan and the woman behind them named Natalia Villanueva,
could not get out of the overturned bus. Some of the passengers, after they had clambered up to
the road, heard groans and moans from inside the bus, particularly, shouts for help from
Bataclan and Lara, who said they could not get out of the bus. There is nothing in the evidence to
show whether or not the passengers already free from the wreck, including the driver and the
conductor, made any attempt to pull out or extricate and rescue the four passengers trapped
inside the vehicle, but calls or shouts for help were made to the houses in the neighborhood.
After half an hour, came about ten men, one of them carrying a lighted torch made of bamboo
with a wick on one end, evidently fueled with petroleum. These men presumably approach the
overturned bus, and almost immediately, a fierce fire started, burning and all but consuming the
bus, including the four passengers trapped inside it. It would appear that as the bus overturned,
gasoline began to leak and escape from the gasoline tank on the side of the chassis, spreading
over and permeating the body of the bus and the ground under and around it, and that the lighted
torch brought by one of the men who answered the call for help set it on fire.

That same day, the charred bodies of the four deemed passengers inside the bus were removed
and duly identified that of Juan Bataclan. By reason of his death, his widow, Salud Villanueva, in
her name and in behalf of her five minor children, brought the present suit to recover from
Mariano Medina compensatory, moral, and exemplary damages and attorney's fees in the total
amount of P87,150. After trial, the Court of First Instance of Cavite awarded P1,000 to the
plaintiffs plus P600 as attorney's fee, plus P100, the value of the merchandise being carried by
Bataclan to Pasay City for sale and which was lost in the fire. The plaintiffs and the defendants
appealed the decision to the Court of Appeals, but the latter endorsed the appeal to us because
of the value involved in the claim in the complaint.

Our new Civil Code amply provides for the responsibility of common carrier to its passengers and
their goods. For purposes of reference, we are reproducing the pertinent codal provisions:

ART. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and
 for the safety of the passengers transported by them, according to all the circumstances
of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in
articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the
safety of the passengers is further set forth in articles 1755 and 1756.

ART. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with
a due regard for all the circumstances.

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755

ART. 1759. Common carriers are liable for the death of or injuries to passengers through
the negligence or willful acts of the former's employees, although such employees may
have acted beyond the scope of their authority or in violation of the order of the common
carriers.

This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.

ART. 1763. A common carrier responsible for injuries suffered by a passenger on

account of the willful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.

We agree with the trial court that the case involves a breach of contract of transportation for hire,
the Medina Transportation having undertaken to carry Bataclan safely to his destination, Pasay
City. We also agree with the trial court that there was negligence on the part of the defendant,
through his agent, the driver Saylon. There is evidence to show that at the time of the blow out,
the bus was speeding, as testified to by one of the passengers, and as shown by the fact that
according to the testimony of the witnesses, including that of the defense, from the point where
one of the front tires burst up to the canal where the bus overturned after zig-zaging, there was a
distance of about 150 meters. The chauffeur, after the blow-out, must have applied the brakes in
order to stop the bus, but because of the velocity at which the bus must have been running, its
momentum carried it over a distance of 150 meters before it fell into the canal and turned turtle.

There is no question that under the circumstances, the defendant carrier is liable. The only
question is to what degree. The trial court was of the opinion that the proximate cause of the
death of Bataclan was not the overturning of the bus, but rather, the fire that burned the bus,
including himself and his co-passengers who were unable to leave it; that at the time the fire
started, Bataclan, though he must have suffered physical injuries, perhaps serious, was still alive,
and so damages were awarded, not for his death, but for the physical injuries suffered by him.
We disagree. A satisfactory definition of proximate cause is found in Volume 38, pages 695-696
of American jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:

. . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have
occurred.' And more comprehensively, 'the proximate legal cause is that acting first and
producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal
connection with its immediate predecessor, the final event in the chain immediately
effecting the injury as a natural and probable result of the cause which first acted, under
such circumstances that the person responsible for the first event should, as an ordinary
 prudent and intelligent person, have reasonable ground to expect at the moment of his
act or default that an injury to some person might probably result therefrom.

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely
causing him physical injuries, if through some event, unexpected and extraordinary, the
overturned bus is set on fire, say, by lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one might still contend that the proximate
cause of his death was the fire and not the overturning of the vehicle. But in the present case
under the circumstances obtaining in the same, we do not hesitate to hold that the proximate
cause was the overturning of the bus, this for the reason that when the vehicle turned not only on
its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or
unexpected; that the coming of the men with a lighted torch was in response to the call for help,
made not only by the passengers, but most probably, by the driver and the conductor
themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to carry
a light with them, and coming as they did from a rural area where lanterns and flashlights were
not available; and what was more natural than that said rescuers should innocently approach the
vehicle to extend the aid and effect the rescue requested from them. In other words, the coming
of the men with a torch was to be expected and was a natural sequence of the overturning of the
bus, the trapping of some of its passengers and the call for outside help. What is more, the
burning of the bus can also in part be attributed to the negligence of the carrier, through is driver
and its conductor. According to the witness, the driver and the conductor were on the road
walking back and forth. They, or at least, the driver should and must have known that in the
position in which the overturned bus was, gasoline could and must have leaked from the gasoline
tank and soaked the area in and around the bus, this aside from the fact that gasoline when
spilled, specially over a large area, can be smelt and directed even from a distance, and yet
neither the driver nor the conductor would appear to have cautioned or taken steps to warn the
rescuers not to bring the lighted torch too near the bus. Said negligence on the part of the agents
of the carrier come under the codal provisions above-reproduced, particularly, Articles 1733,
1759 and 1763.

As regard the damages to which plaintiffs are entitled, considering the earning capacity of the
deceased, as well as the other elements entering into a damage award, we are satisfied that the
amount of SIX THOUSAND (P6,000) PESOS would constitute satisfactory compensation, this to
include compensatory, moral, and other damages. We also believe that plaintiffs are entitled to
attorney's fees, and assessing the legal services rendered by plaintiffs' attorneys not only in the
trial court, but also in the course of the appeal, and not losing sight of the able briefs prepared by
them, the attorney's fees may well be fixed at EIGHT HUNDRED (P800) PESOS for the loss of
merchandise carried by the deceased in the bus, is adequate and will not be disturbed.

There is one phase of this case which disturbs if it does not shock us. According to the evidence,
one of the passengers who, because of the injuries suffered by her, was hospitalized, and while
in the hospital, she was visited by the defendant Mariano Medina, and in the course of his visit,
she overheard him speaking to one of his bus inspectors, telling said inspector to have the tires
of the bus changed immediately because they were already old, and that as a matter of fact, he
had been telling the driver to change the said tires, but that the driver did not follow his
instructions. If this be true, it goes to prove that the driver had not been diligent and had not
taken the necessary precautions to insure the safety of his passengers. Had he changed the
tires, specially those in front, with new ones, as he had been instructed to do, probably, despite
his speeding, as we have already stated, the blow out would not have occurred. All in all, there is
reason to believe that the driver operated and drove his vehicle negligently, resulting in the death
of four of his passengers, physical injuries to others, and the complete loss and destruction of
their goods, and yet the criminal case against him, on motion of the fiscal and with his consent,
was provisionally dismissed, because according to the fiscal, the witnesses on whose testimony
he was banking to support the complaint, either failed or appear or were reluctant to testify. But
the record of the case before us shows the several witnesses, passengers, in that bus, willingly
and unhesitatingly testified in court to the effect of the said driver was negligent. In the public
interest the prosecution of said erring driver should be pursued, this, not only as a matter of
justice, but for the promotion of the safety of passengers on public utility buses. Let a copy of this
decision be furnished the Department of Justice and the Provincial Fiscal of Cavite.

In view of the foregoing, with the modification that the damages awarded by the trial court are
increased from ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and
from SIX HUNDRED PESOS TO EIGHT HUNDRED (P800) PESOS, for the death of Bataclan
and for the attorney's fees, respectively, the decision appealed is from hereby affirmed, with
costs.
G.R. No. 92087 May 8, 1992

SOFIA FERNANDO, in her behalf and as the legal guardian of her minor children, namely:
ALBERTO & ROBERTO, all surnamed FERNANDO, ANITA GARCIA, NICOLAS LIAGOSO,
ROSALIA BERTULANO, in her behalf and as the legal guardian of her minor children,
namely: EDUARDO, ROLANDO, DANIEL, AND JOCELYN, all surnamed BERTULANO,
PRIMITIVA FAJARDO in her behalf and as legal guardian of her minor children, namely:
GILBERT, GLEN, JOCELYN AND JOSELITO, all surnamed FAJARDO, and EMETERIA
LIAGOSO, in her behalf and as guardian ad litem, of her minor grandchildren, namely:
NOEL, WILLIAM, GENEVIEVE and GERRY, all surnamed LIAGOSO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS AND CITY OF DAVAO, respondents.

MEDIALDEA, J.:

This is a petition for review on certiorari praying that the amended decision of the Court of
Appeals dated January 11, 1990 in CA-G.R. No. C.V. 04846, entitled "Sofia Fernando, etc., et al.
v. The City of Davao," be reversed and that its original decision dated January 31, 1986 be
reinstated subject to the modification sought by the petitioners in their motion for partial
reconsideration dated March 6, 1986.

The antecedent facts are briefly narrated by the trial court, as follows:

From the evidence presented we see the following facts: On November 7, 1975,
Bibiano Morta, market master of the Agdao Public Market filed a requisition
request with the Chief of Property of the City Treasurer's Office for the re-
emptying of the septic tank in Agdao. An invitation to bid was issued to Aurelio
Bertulano, Lito Catarsa, Feliciano Bascon, Federico Bolo and Antonio Suñer, Jr.
Bascon won the bid. On November 26, 1975 Bascon was notified and he signed
the purchase order. However, before such date, specifically on November 22,
1975, bidder Bertulano with four other companions namely Joselito Garcia,
William Liagoso, Alberto Fernando and Jose Fajardo, Jr. were found dead inside
the septic tank. The bodies were removed by a fireman. One body, that of
Joselito Garcia, was taken out by his uncle, Danilo Garcia and taken to the
Regional Hospital but he expired there. The City Engineer's office investigated
the case and learned that the five victims entered the septic tank without
clearance from it nor with the knowledge and consent of the market master. In
fact, the septic tank was found to be almost empty and the victims were
presumed to be the ones who did the re-emptying. Dr. Juan Abear of the City
Health Office autopsied the bodies and in his reports, put the cause of death of all
five victims as "asphyxia" caused by the diminution of oxygen supply in the body
working below normal conditions. The lungs of the five victims burst, swelled in
hemmorrhagic areas and this was due to their intake of toxic gas, which, in this
case, was sulfide gas produced from the waste matter inside the septic tank. (p.
177, Records)

On August 28, 1984, the trial court rendered a decision, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, this case is hereby DISMISSED without

pronouncement as to costs.

SO ORDERED. (Records, p. 181)

From the said decision, the petitioners appealed to the then Intermediate Appellate Court (now
Court of Appeals). On January 3, 1986, the appellate court issued a decision, the dispositive
portion of which reads:

WHEREFORE, in view of the facts fully established and in the liberal

interpretation of what the Constitution and the law intended to protect the plight of
the poor and the needy, the ignorant and the
indigent –– more entitled to social justice for having, in the unforgettable words of
Magsaysay, "less in life," We hereby reverse and set aside the appealed
judgment and render another one:

1. Ordering the defendant to pay to the plaintiffs Dionisio Fernando, Sofia

Fernando and her minor children the following sums of money:

a) Compensatory damages for his death P30,000.00

b) Moral damages P20,000.00

2. Ordering the defendant to pay to the plaintiffs David Garcia and Anita Garcia
the following sums of money:

a) Compensatory damages for his death P30,000.00

b) Moral damages P20,000.00

3. Ordering the defendant to pay to the plaintiff Rosalia Bertulano (sic) and her
minor children the following sums of money

a) Compensatory damages for his death P30,000.00

b) Moral damages P20,000.00

4. Ordering the defendant to pay to the plaintiff Primitiva Fajardo and her minor
children the following sums of money:

a) Compensatory damages for his death P30,000.00

b) Moral damages P20,000.00

5. Ordering the defendant to pay to the plaintiffs Norma Liagoso, Nicolas Liagoso
and Emeteria Liagoso and her minor grandchildren the following sums of money:

a) Compensatory damages for his death P30,000.00

b) Moral damages P20,000.00

The death compensation is fixed at P30,000.00 in accordance with the rulings of

the Supreme Court starting with People vs. De la Fuente, Nos. L-63251-52,
December 29, 1983, 126 SCRA 518 reiterated in the recent case of People
vs. Nepomuceno, No. L-41412, May 27, 1985. Attorney's fees in the amount of
P10,000.00 for the handling of the case for the 5 victims is also awarded.

No pronouncement as to costs.
 SO ORDERED. (Rollo, pp. 33-34)

Both parties filed their separate motions for reconsideration. On January 11, 1990, the Court of
Appeals rendered an Amended Decision, the dispositive portion of which reads:

WHEREFORE, finding merit in the motion for reconsideration of the defendant-

appellee Davao City, the same is hereby GRANTED. The decision of this Court
dated January 31, 1986 is reversed and set aside and another one is hereby
rendered dismissing the case. No pronouncement as to costs.

SO ORDERED. (Rollo, p. 25)

Hence, this petition raising the following issues for resolution:

1. Is the respondent Davao City guilty of negligence in the case at bar?

2. If so, is such negligence the immediate and proximate cause of deaths of the
victims hereof? (p. 72, Rollo)

Negligence has been defined as the failure to observe for the protection of the interests of
another person that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury (Corliss v. Manila Railroad Company, L-
21291, March 28, 1969, 27 SCRA 674, 680). Under the law, a person who by his omission
causes damage to another, there being negligence, is obliged to pay for the damage done
(Article 2176, New Civil Code). As to what would constitute a negligent act in a given situation,
the case of Picart v. Smith (37 Phil. 809, 813) provides Us the answer, to wit:

The test by which to determine the existence of negligence in a particular case

may be stated as follows: Did the defendant in doing the alleged negligent act
use that reasonable care and caution which an ordinarily prudent person would
have used in the same situation? If not, then he is guilty of negligence. The law
here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet pater familias of the Roman law. The existence of
negligence in a given case is not determined by reference to the personal
judgment of the actor in the situation before him. The law considers what would
be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of human experience
and in view of the facts involved in the particular case. Abstract speculation
cannot here be of much value but this much can be profitably said: Reasonable
men govern their conduct by the circumstances which are before them or known
to them. They are not, and are not supposed to be, omniscient of the future.
Hence they can be expected to take care only when there is something before
them to suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued? If so, it
was the duty of the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by the ignoring of the suggestion
born of this provision, is always necessary before negligence can be held to exist.
Stated in these terms, the proper criterion for determining the existence of
negligence in a given case is this: Conduct is said to be negligent when a prudent
man in the position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable warrant his foregoing the conduct or guarding
against its consequences. (emphasis supplied)
To be entitled to damages for an injury resulting from the negligence of another, a claimant must
establish the relation between the omission and the damage. He must prove under Article 2179
of the New Civil Code that the defendant's negligence was the immediate and proximate cause
of his injury. Proximate cause has been defined as that cause, which, in natural and continuous
sequence unbroken by any efficient intervening cause, produces the injury, and without which
the result would not have occurred (Vda. de Bataclan, et al. v. Medina, 102 Phil. 181, 186). Proof
of such relation of cause and effect is not an arduous one if the claimant did not in any way
contribute to the negligence of the defendant. However, where the resulting injury was the
product of the negligence of both parties, there exists a difficulty to discern which acts shall be
considered the proximate cause of the accident. In Taylor v.Manila Electric Railroad and Light
Co. (16 Phil. 8, 29-30), this Court set a guideline for a judicious assessment of the situation:

Difficulty seems to be apprehended in deciding which acts of the injured party

shall be considered immediate causes of the accident. The test is
simple. Distinction must be made between the accident and the injury, between
the event itself, without which there could have been no accident, and those acts
of the victim not entering into it, independent of it, but contributing to his own
proper hurt. For instance, the cause of the accident under review was the
displacement of the crosspiece or the failure to replace it. This produced the
event giving occasion for damages — that is, the sinking of the track and the
sliding of the iron rails. To this event, the act of the plaintiff in walking by the side
of the car did not contribute, although it was an element of the damage which
came to himself. Had the crosspiece been out of place wholly or partly through
his act or omission of duty, that would have been one of the determining causes
of the event or accident, for which he would have been responsible. Where he
contributes to the principal occurrence, as one of its determining factors, he can
not recover. Where, in conjunction with the occurrence, he contributes only to his
own injury, he may recover the amount that the defendant responsible for the
event should pay for such injury, less a sum deemed a suitable equivalent for his
own imprudence. (emphasis Ours)

Applying all these established doctrines in the case at bar and after a careful scrutiny of the
records, We find no compelling reason to grant the petition. We affirm.

Petitioners fault the city government of Davao for failing to clean a septic tank for the period of 19
years resulting in an accumulation of hydrogen sulfide gas which killed the laborers. They
contend that such failure was compounded by the fact that there was no warning sign of the
existing danger and no efforts exerted by the public respondent to neutralize or render harmless
the effects of the toxic gas. They submit that the public respondent's gross negligence was the
proximate cause of the fatal incident.

We do not subscribe to this view. While it may be true that the public respondent has been
remiss in its duty to re-empty the septic tank annually, such negligence was not a continuing one.
Upon learning from the report of the market master about the need to clean the septic tank of the
public toilet in Agdao Public Market, the public respondent immediately responded by issuing
invitations to bid for such service. Thereafter, it awarded the bid to the lowest bidder, Mr.
Feliciano Bascon (TSN, May 24, 1983, pp. 22-25). The public respondent, therefore, lost no time
in taking up remedial measures to meet the situation. It is likewise an undisputed fact that despite
the public respondent's failure to re-empty the septic tank since 1956, people in the market have
been using the public toilet for their personal necessities but have remained unscathed. The
testimonies of Messrs. Danilo Garcia and David Secoja (plaintiffs'-petitioners' witnesses) on this
point are relevant, to wit:

Atty. Mojica, counsel for defendant Davao City:

xxx xxx xxx

The place where you live is right along the Agdao creek, is that
correct?

DANILO GARCIA:

A Yes, sir.

Q And to be able to go to the market place, where you claim you

have a stall,, you have to pass on the septic tank?

A Yes, sir.

Q Day in and day out, you pass on top of the septic tank?

A Yes, sir.

Q Is it not a fact that everybody living along the creek passes on

top of this septic tank as they go out from the place and return to
their place of residence, is that correct?

And this septic tank, rather the whole of the septic tank, is
covered by lead . . .?

A Yes, sir. there is cover.

Q And there were three (3) of these lead covering the septic tank?

A Yes, sir.

Q And this has always been closed?

A Yes, sir. (TSN, November 26, 1979, pp. 21-23, emphasis

supplied)

ATTY. JOVER, counsel for the plaintiffs:

Q You said you are residing at Davao City, is it not?

DAVID SEJOYA:

A Yes, sir.

Q How long have you been a resident of Agdao?

A Since 1953.

Q Where specifically in Agdao are you residing?

A At the Public Market.

Q Which part of the Agdao Public Market is your house located?

A Inside the market in front of the fish section.

 Q Do you know where the Agdao septic tank is located?

A Yes, sir.

Q How far is that septic tank located from your house?

A Around thirty (30) meters.

Q Have you ever had a chance to use that septic tank (public
toilet)?

A Yes, sir.

Q How many times, if you could remember?

A Many times, maybe more than 1,000 times.

Q Prior to November 22, 1975, have you ever used that septic
tank (public toilet)?

A Yes, sir.

Q How many times have you gone to that septic tank (public
toilet) prior to that date, November 22, 1975?

A Almost 1,000 times. (TSN, February 9, 1983, pp. 1-2)

The absence of any accident was due to the public respondent's compliance with the
sanitary and plumbing specifications in constructing the toilet and the septic tank (TSN,
November 4, 1983, p. 51). Hence, the toxic gas from the waste matter could not have
leaked out because the septic tank was air-tight (TSN, ibid, p. 49). The only indication
that the septic tank in the case at bar was full and needed emptying was when water
came out from it (TSN, September 13, 1983, p. 41). Yet, even when the septic tank was
full, there was no report of any casualty of gas poisoning despite the presence of people
living near it or passing on top of it or using the public toilet for their personal necessities.

Petitioners made a lot of fuss over the lack of any ventilation pipe in the toilet to emphasize the
negligence of the city government and presented witnesses to attest on this lack. However, this
strategy backfired on their faces. Their witnesses were not expert witnesses. On the other hand,
Engineer Demetrio Alindada of the city government testified and demonstrated by drawings how
the safety requirements like emission of gases in the construction of both toilet and septic tank
have been complied with. He stated that the ventilation pipe need not be constructed outside the
building as it could also be embodied in the hollow blocks as is usually done in residential
buildings (TSN, November 4, 1983, pp. 50-51). The petitioners submitted no competent evidence
to corroborate their oral testimonies or rebut the testimony given by Engr. Alindada.

We also do not agree with the petitioner's submission that warning signs of noxious gas should
have been put up in the toilet in addition to the signs of "MEN" and "WOMEN" already in place in
that area. Toilets and septic tanks are not nuisances per se as defined in Article 694 of the New
Civil Code which would necessitate warning signs for the protection of the public. While the
construction of these public facilities demands utmost compliance with safety and sanitary
requirements, the putting up of warning signs is not one of those requirements. The testimony of
Engr. Alindada on this matter is elucidative:

ATTY. ALBAY:
Q Mr. Witness, you mentioned the several aspects of the approval
of the building permit which include the plans of an architect,
senitary engineer and electrical plans. All of these still pass your
approval as building official, is that correct?

DEMETRIO ALINDADA:

A Yes.

Q So there is the sanitary plan submitted to and will not be

approved by you unless the same is in conformance with the
provisions of the building code or sanitary requirements?

A Yes, for private building constructions.

Q How about public buildings?

A For public buildings, they are exempted for payment of building

permits but still they have to have a building permit.

Q But just the same, including the sanitary plans, it require your
approval?

A Yes, it requires also.

Q Therefore, under the National Building Code, you are

empowered not to approve sanitary plans if they are not in
conformity with the sanitary requirements?

A Yes.

Q Now, in private or public buildings, do you see any warning

signs in the vicinity of septic tanks?

A There is no warning sign.

Q In residential buildings do you see any warning sign?

A There is none.

ATTY. AMPIG:

We submit that the matter is irrelevant and immaterial, Your

Honor.

ATTY. ALBAY:

But that is in consonance with their cross-examination, your

Honor.

COURT:

Anyway it is already answered.

 ATTY. ALBAY:

Q These warning signs, are these required under the preparation

of the plans?

A It is not required.

Q I will just reiterate, Mr. Witness. In residences, for example like

the residence of Atty. Ampig or the residence of the honorable
Judge, would you say that the same principle of the septic tank,
from the water closet to the vault, is being followed?

A Yes.

ATTY. ALBAY:

That will be all, Your Honor. (TSN, December 6, 1983, pp. 62-63)

In view of this factual milieu, it would appear that an accident such as toxic gas leakage from the
septic tank is unlikely to happen unless one removes its covers. The accident in the case at bar
occurred because the victims on their own and without authority from the public respondent
opened the septic tank. Considering the nature of the task of emptying a septic tank especially
one which has not been cleaned for years, an ordinarily prudent person should undoubtedly be
aware of the attendant risks. The victims are no exception; more so with Mr. Bertulano, an old
hand in this kind of service, who is presumed to know the hazards of the job. His failure,
therefore, and that of his men to take precautionary measures for their safety was the proximate
cause of the accident. In Culion Ice, Fish and Elect. Co., v. Phil. Motors Corporation (55 Phil.
129, 133), We held that when a person holds himself out as being competent to do things
requiring professional skill, he will be held liable for negligence if he fails to exhibit the care and
skill of one ordinarily skilled in the particular work which he attempts to do (emphasis Ours). The
fatal accident in this case would not have happened but for the victims' negligence. Thus, the
appellate court was correct to observe that:

. . . Could the victims have died if they did not open the septic tank which they
were not in the first place authorized to open? Who between the passive object
(septic tank) and the active subject (the victims herein) who, having no authority
therefore, arrogated unto themselves, the task of opening the septic tank which
caused their own deaths should be responsible for such deaths. How could the
septic tank which has been in existence since the 1950's be the proximate cause
of an accident that occurred only on November 22, 1975? The stubborn fact
remains that since 1956 up to occurrence of the accident in 1975 no injury nor
death was caused by the septic tank. The only reasonable conclusion that could
be drawn from the above is that the victims' death was caused by their own
negligence in opening the septic tank. . . . (Rollo, p. 23)

Petitioners further contend that the failure of the market master to supervise the area where the
septic tank is located is a reflection of the negligence of the public respondent.

We do not think so. The market master knew that work on the septic tank was still forthcoming. It
must be remembered that the bidding had just been conducted. Although the winning bidder was
already known, the award to him was still to be made by the Committee on Awards. Upon the
other hand, the accident which befell the victims who are not in any way connected with the
winning bidder happened before the award could be given. Considering that the case was yet no
award to commence work on the septic tank, the duty of the market master or his security guards
to supervise the work could not have started (TSN, September 13, 1983, p. 40). Also, the victims
could not have been seen working in the area because the septic tank was hidden by a garbage
storage which is more or less ten (10) meters away from the comfort room itself (TSN, ibid, pp.
38-39). The surreptitious way in which the victims did their job without clearance from the market
master or any of the security guards goes against their good faith. Even their relatives or family
members did not know of their plan to clean the septic tank.

Finally, petitioners' insistence on the applicability of Article 24 of the New Civil Code cannot be
sustained. Said law states:

Art. 24. In all contractual, property or other relations, when one of the parties is at
a disadvantage on account of his moral dependence, ignorance, indigence,
mental weakness, tender age or other handicap, the courts must be vigilant for
his protection.

We approve of the appellate court's ruling that "(w)hile one of the victims was invited to
bid for said project, he did not win the bid, therefore, there is a total absence of
contractual relations between the victims and the City Government of Davao City that
could give rise to any contractual obligation, much less, any liability on the part of Davao
City." (Rollo, p. 24) The accident was indeed tragic and We empathize with the
petitioners. However, the herein circumstances lead Us to no other conclusion than that
the proximate and immediate cause of the death of the victims was due to their own
negligence. Consequently, the petitioners cannot demand damages from the public
respondent.

ACCORDINGLY, the amended decision of the Court of Appeals dated January 11, 1990 is
AFFIRMED. No costs.

SO ORDERED
G.R. No. 72964 January 7, 1988

FILOMENO URBANO, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT AND PEOPLE OF THE
PHILIPPINES, respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of the then Intermediate Appellate Court which affirmed the decision of the then Circuit Criminal
Court of Dagupan City finding petitioner Filomeno Urban guilty beyond reasonable doubt of the crime of homicide.

The records disclose the following facts of the case.

At about 8:00 o'clock in the morning of October 23, 1980, petitioner Filomeno Urbano went to his
ricefield at Barangay Anonang, San Fabian, Pangasinan located at about 100 meters from the
tobacco seedbed of Marcelo Javier. He found the place where he stored his palay flooded with
water coming from the irrigation canal nearby which had overflowed. Urbano went to the elevated
portion of the canal to see what happened and there he saw Marcelo Javier and Emilio Erfe
cutting grass. He asked them who was responsible for the opening of the irrigation canal and
Javier admitted that he was the one. Urbano then got angry and demanded that Javier pay for
his soaked palay. A quarrel between them ensued. Urbano unsheathed his bolo (about 2 feet
long, including the handle, by 2 inches wide) and hacked Javier hitting him on the right palm of
his hand, which was used in parrying the bolo hack. Javier who was then unarmed ran away
from Urbano but was overtaken by Urbano who hacked him again hitting Javier on the left leg
with the back portion of said bolo, causing a swelling on said leg. When Urbano tried to hack and
inflict further injury, his daughter embraced and prevented him from hacking Javier.

Immediately thereafter, Antonio Erfe, Emilio Erfe, and Felipe Erfe brought Javier to his house
about 50 meters away from where the incident happened. Emilio then went to the house of
Barangay Captain Menardo Soliven but not finding him there, Emilio looked for barrio councilman
Felipe Solis instead. Upon the advice of Solis, the Erfes together with Javier went to the police
station of San Fabian to report the incident. As suggested by Corporal Torio, Javier was brought
to a physician. The group went to Dr. Guillermo Padilla, rural health physician of San Fabian,
who did not attend to Javier but instead suggested that they go to Dr. Mario Meneses because
Padilla had no available medicine.

After Javier was treated by Dr. Meneses, he and his companions returned to Dr. Guillermo
Padilla who conducted a medico-legal examination. Dr. Padilla issued a medico-legal certificate
(Exhibit "C" dated September 28, 1981) which reads:

TO WHOM IT MAY CONCERN:

This is to certify that I have examined the wound of Marcelo Javier, 20 years of
age, married, residing at Barangay Anonang, San Fabian, Pangasinan on
October 23, 1980 and found the following:
 1 -Incised wound 2 inches in length at the upper portion of the lesser palmar
prominence, right.

As to my observation the incapacitation is from (7-9) days period. This wound

was presented to me only for medico-legal examination, as it was already treated
by the other doctor. (p. 88, Original Records)

Upon the intercession of Councilman Solis, Urbano and Javier agreed to settle their differences.
Urbano promised to pay P700.00 for the medical expenses of Javier. Hence, on October 27,
1980, the two accompanied by Solis appeared before the San Fabian Police to formalize their
amicable settlement. Patrolman Torio recorded the event in the police blotter (Exhibit A), to wit:

xxx xxx xxx

Entry Nr 599/27 Oct '80/103OH/ Re entry Nr 592 on page 257 both parties
appeared before this Station accompanied by brgy. councilman Felipe Solis and
settled their case amicably, for they are neighbors and close relatives to each
other. Marcelo Javier accepted and granted forgiveness to Filomeno Urbano who
shoulder (sic) all the expenses in his medical treatment, and promising to him
and to this Office that this will never be repeated anymore and not to harbour any
grudge against each other. (p. 87, Original Records.)

Urbano advanced P400.00 to Javier at the police station. On November 3, 1980, the additional
P300.00 was given to Javier at Urbano's house in the presence of barangay captain Soliven.

At about 1:30 a.m. on November 14, 1980, Javier was rushed to the Nazareth General Hospital
in a very serious condition. When admitted to the hospital, Javier had lockjaw and was having
convulsions. Dr. Edmundo Exconde who personally attended to Javier found that the latter's
serious condition was caused by tetanus toxin. He noticed the presence of a healing wound in
Javier's palm which could have been infected by tetanus.

On November 15, 1980 at exactly 4:18 p.m., Javier died in the hospital. The medical findings of
Dr. Exconde are as follows:

Date Diagnosis

11-14-80 ADMITTED due to trismus

adm. at DX TETANUS

1:30 AM Still having frequent muscle spasm. With diffi-

#35, 421 culty opening his mouth. Restless at times. Febrile

11-15-80 Referred. Novaldin 1 amp. inj. IM. Sudden cessa-

tion of respiration and HR after

muscular spasm.

02 inhalation administered. Ambo

bag resuscita-

tion and cardiac massage done

but to no avail.
 Pronounced dead by Dra.
Cabugao at 4:18 P.M.

PMC done and cadaver brought

home by rela-

tives. (p. 100, Original Records)

In an information dated April 10, 1981, Filomeno Urbano was charged with the crime of homicide
before the then Circuit Criminal Court of Dagupan City, Third Judicial District.

Upon arraignment, Urbano pleaded "not guilty." After trial, the trial court found Urbano guilty as
charged. He was sentenced to suffer an indeterminate prison term of from TWELVE (12) YEARS
of prision mayor, as minimum to SEVENTEEN (17) years, FOUR (4) MONTHS and ONE (1)
DAY of reclusion temporal, as maximum, together with the accessories of the law, to indemnify
the heirs of the victim, Marcelo Javier, in the amount of P12,000.00 without subsidiary
imprisonment in case of insolvency, and to pay the costs. He was ordered confined at the New
Bilibid Prison, in Muntinlupa, Rizal upon finality of the decision, in view of the nature of his
penalty.

The then Intermediate Appellate Court affirmed the conviction of Urbano on appeal but raised the
award of indemnity to the heirs of the deceased to P30,000.00 with costs against the appellant.

The appellant filed a motion for reconsideration and/or new trial. The motion for new trial was
based on an affidavit of Barangay Captain Menardo Soliven (Annex "A") which states:

That in 1980, I was the barrio captain of Barrio Anonang, San Fabian,
Pangasinan, and up to the present having been re-elected to such position in the
last barangay elections on May 17, 1982;

That sometime in the first week of November, 1980, there was a typhoon that
swept Pangasinan and other places of Central Luzon including San Fabian, a
town of said province;

That during the typhoon, the sluice or control gates of the Bued irrigation dam
which irrigates the ricefields of San Fabian were closed and/or controlled so
much so that water and its flow to the canals and ditches were regulated and
reduced;

That due to the locking of the sluice or control gates of the dam leading to the
canals and ditches which will bring water to the ricefields, the water in said canals
and ditches became shallow which was suitable for catching mudfishes;

That after the storm, I conducted a personal survey in the area affected, with my
secretary Perfecto Jaravata;

That on November 5, 1980, while I was conducting survey, I saw the late Marcelo
Javier catching fish in the shallow irrigation canals with some companions;

That few days there after,or on November l5, l980, I came to know that said
Marcelo Javier died of tetanus. (p. 33, Rollo)

The motion was denied. Hence, this petition.

In a resolution dated July 16, 1986, we gave due course to the petition.
The case involves the application of Article 4 of the Revised Penal Code which provides that
"Criminal liability shall be incurred: (1) By any person committing a felony (delito) although the
wrongful act done be different from that which he intended ..." Pursuant to this provision "an
accused is criminally responsible for acts committed by him in violation of law and for all the
natural and logical consequences resulting therefrom." (People v. Cardenas, 56 SCRA 631).

The record is clear that Marcelo Javier was hacked by the petitioner who used a bolo as a result
of which Javier suffered a 2-inch incised wound on his right palm; that on November 14, 1981
which was the 22nd day after the incident, Javier was rushed to the hospital in a very serious
condition and that on the following day, November 15, 1981, he died from tetanus.

Under these circumstances, the lower courts ruled that Javier's death was the natural and logical
consequence of Urbano's unlawful act. Hence, he was declared responsible for Javier's death.
Thus, the appellate court said:

The claim of appellant that there was an efficient cause which supervened from
the time the deceased was wounded to the time of his death, which covers a
period of 23 days does not deserve serious consideration. True, that the
deceased did not die right away from his wound, but the cause of his death was
due to said wound which was inflicted by the appellant. Said wound which was in
the process of healing got infected with tetanus which ultimately caused his
death.

Dr. Edmundo Exconde of the Nazareth General Hospital testified that the victim
suffered lockjaw because of the infection of the wound with tetanus. And there is
no other way by which he could be infected with tetanus except through the
wound in his palm (tsn., p. 78, Oct. 5, 1981). Consequently, the proximate cause
of the victim's death was the wound which got infected with tetanus. And the
settled rule in this jurisdiction is that an accused is liable for all the consequences
of his unlawful act. (Article 4, par. 1, R.P.C. People v. Red, CA 43 O.G. 5072;
People v. Cornel 78 Phil. 418).

Appellant's allegation that the proximate cause of the victim's death was due to
his own negligence in going back to work without his wound being properly
healed, and lately, that he went to catch fish in dirty irrigation canals in the first
week of November, 1980, is an afterthought, and a desperate attempt by
appellant to wiggle out of the predicament he found himself in. If the wound had
not yet healed, it is impossible to conceive that the deceased would be reckless
enough to work with a disabled hand. (pp. 20-21, Rollo)

The petitioner reiterates his position that the proximate cause of the death of Marcelo Javier was
due to his own negligence, that Dr. Mario Meneses found no tetanus in the injury, and that Javier
got infected with tetanus when after two weeks he returned to his farm and tended his tobacco
plants with his bare hands exposing the wound to harmful elements like tetanus germs.

The evidence on record does not clearly show that the wound inflicted by Urbano was infected
with tetanus at the time of the infliction of the wound. The evidence merely confirms that the
wound, which was already healing at the time Javier suffered the symptoms of the fatal ailment,
somehow got infected with tetanus However, as to when the wound was infected is not clear
from the record.

In Vda. de Bataclan, et al. v. Medina (102 Phil. 1181), we adopted the following definition of
proximate cause:

xxx xxx xxx

 ... A satisfactory definition of proximate cause is found in Volume 38, pages 695-
696 of American Jurisprudence, cited by plaintiffs-appellants in their brief. It is as
follows:

... "that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result
would not have occurred."And more comprehensively, "the proximate legal cause
is that acting first and producing the injury, either immediately or by setting other
events in motion, all constituting a natural and continuous chain of events, each
having a close causal connection with its immediate predecessor, the final event
in the chain immediately effecting the injury as a natural and probable result of
the cause which first acted, under such circumstances that the person
responsible for the first event should, as an ordinarily prudent and intelligent
person, have reasonable ground to expect at the moment of his act or default that
an injury to some person might probably result therefrom." (at pp. 185-186)

The issue, therefore, hinges on whether or not there was an efficient intervening cause from the
time Javier was wounded until his death which would exculpate Urbano from any liability for
Javier's death.

We look into the nature of tetanus-

The incubation period of tetanus, i.e., the time between injury and the
appearance of unmistakable symptoms, ranges from 2 to 56 days. However, over
80 percent of patients become symptomatic within 14 days. A short incubation
period indicates severe disease, and when symptoms occur within 2 or 3 days of
injury the mortality rate approaches 100 percent.

Non-specific premonitory symptoms such as restlessness, irritability, and

headache are encountered occasionally, but the commonest presenting
complaints are pain and stiffness in the jaw, abdomen, or back and difficulty
swallowing. As the progresses, stiffness gives way to rigidity, and patients often
complain of difficulty opening their mouths. In fact, trismus in the commonest
manifestation of tetanus and is responsible for the familiar descriptive name of
lockjaw. As more muscles are involved, rigidity becomes generalized, and
sustained contractions called risus sardonicus. The intensity and sequence of
muscle involvement is quite variable. In a small proportion of patients, only local
signs and symptoms develop in the region of the injury. In the vast majority,
however, most muscles are involved to some degree, and the signs and
symptoms encountered depend upon the major muscle groups affected.

Reflex spasm usually occur within 24 to 72 hours of the first symptom, an interval
referred to as the onset time. As in the case of the incubation period, a short
onset time is associated with a poor prognosis. Spasms are caused by sudden
intensification of afferent stimuli arising in the periphery, which increases rigidity
and causes simultaneous and excessive contraction of muscles and their
antagonists. Spasms may be both painful and dangerous. As the disease
progresses, minimal or inapparent stimuli produce more intense and longer
lasting spasms with increasing frequency. Respiration may be impaired by
laryngospasm or tonic contraction of respiratory muscles which prevent adequate
ventilation. Hypoxia may then lead to irreversible central nervous system damage
and death.

Mild tetanus is characterized by an incubation period of at least 14 days and an

onset time of more than 6 days. Trismus is usually present, but dysphagia is
absent and generalized spasms are brief and mild. Moderately severe tetanus
 has a somewhat shorter incubation period and onset time; trismus is marked,
dysphagia and generalized rigidity are present, but ventilation remains adequate
even during spasms. The criteria for severe tetanus include a short incubation
time, and an onset time of 72 hrs., or less, severe trismus, dysphagia and rigidity
and frequent prolonged, generalized convulsive spasms. (Harrison's Principle of
Internal Medicine, 1983 Edition, pp. 1004-1005; Emphasis supplied)

Therefore, medically speaking, the reaction to tetanus found inside a man's body depends on the
incubation period of the disease.

In the case at bar, Javier suffered a 2-inch incised wound on his right palm when he parried the
bolo which Urbano used in hacking him. This incident took place on October 23, 1980. After 22
days, or on November 14, 1980, he suffered the symptoms of tetanus, like lockjaw and muscle
spasms. The following day, November 15, 1980, he died.

If, therefore, the wound of Javier inflicted by the appellant was already infected by tetanus germs
at the time, it is more medically probable that Javier should have been infected with only a mild
cause of tetanus because the symptoms of tetanus appeared on the 22nd day after the hacking
incident or more than 14 days after the infliction of the wound. Therefore, the onset time should
have been more than six days. Javier, however, died on the second day from the onset time. The
more credible conclusion is that at the time Javier's wound was inflicted by the appellant, the
severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could
have been infected with tetanus after the hacking incident. Considering the circumstance
surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but
not 20 to 22 days before he died.

The rule is that the death of the victim must be the direct, natural, and logical consequence of the
wounds inflicted upon him by the accused. (People v. Cardenas, supra) And since we are
dealing with a criminal conviction, the proof that the accused caused the victim's death must
convince a rational mind beyond reasonable doubt. The medical findings, however, lead us to a
distinct possibility that the infection of the wound by tetanus was an efficient intervening cause
later or between the time Javier was wounded to the time of his death. The infection was,
therefore, distinct and foreign to the crime. (People v. Rellin, 77 Phil. 1038).

Doubts are present. There is a likelihood that the wound was but the remote cause and its
subsequent infection, for failure to take necessary precautions, with tetanus may have been
the proximate cause of Javier's death with which the petitioner had nothing to do. As we ruled
in Manila Electric Co. v. Remoquillo, et al. (99 Phil. 118).

"A prior and remote cause cannot be made the be of an action if such remote
cause did nothing more than furnish the condition or give rise to the occasion by
which the injury was made possible, if there intervened between such prior or
remote cause and the injury a distinct, successive, unrelated, and efficient cause
of the injury, even though such injury would not have happened but for such
condition or occasion. If no danger existed in the condition except because of the
independent cause, such condition was not the proximate cause. And if an
independent negligent act or defective condition sets into operation the instances
which result in injury because of the prior defective condition, such subsequent
act or condition is the proximate cause." (45 C.J. pp. 931-932). (at p. 125)

It strains the judicial mind to allow a clear aggressor to go scot free of criminal liability. At the very
least, the records show he is guilty of inflicting slight physical injuries. However, the petitioner's
criminal liability in this respect was wiped out by the victim's own act. After the hacking incident,
Urbano and Javier used the facilities of barangay mediators to effect a compromise agreement
where Javier forgave Urbano while Urbano defrayed the medical expenses of Javier. This
settlement of minor offenses is allowed under the express provisions of Presidential Decree G.R.
No. 1508, Section 2(3). (See also People v. Caruncho, 127 SCRA 16).

We must stress, however, that our discussion of proximate cause and remote cause is limited to
the criminal aspects of this rather unusual case. It does not necessarily follow that the petitioner
is also free of civil liability. The well-settled doctrine is that a person, while not criminally liable,
may still be civilly liable. Thus, in the recent case of People v. Rogelio Ligon y Tria, et al. (G.R.
No. 74041, July 29, 1987), we said:

xxx xxx xxx

... While the guilt of the accused in a criminal prosecution must be established
beyond reasonable doubt, only a preponderance of evidence is required in a civil
action for damages. (Article 29, Civil Code). The judgment of acquittal
extinguishes the civil liability of the accused only when it includes a declaration
that the facts from which the civil liability might arise did not exist. (Padilla v.
Court of Appeals, 129 SCRA 559).

The reason for the provisions of article 29 of the Civil Code, which provides that
the acquittal of the accused on the ground that his guilt has not been proved
beyond reasonable doubt does not necessarily exempt him from civil liability for
the same act or omission, has been explained by the Code Commission as
follows:

The old rule that the acquittal of the accused in a criminal case
also releases him from civil liability is one of the most serious
flaws in the Philippine legal system. It has given use to
numberless instances of miscarriage of justice, where the
acquittal was due to a reasonable doubt in the mind of the court
as to the guilt of the accused. The reasoning followed is that
inasmuch as the civil responsibility is derived from the criminal
offense, when the latter is not proved, civil liability cannot be
demanded.

This is one of those causes where confused thinking leads to

unfortunate and deplorable consequences. Such reasoning fails
to draw a clear line of demarcation between criminal liability and
civil responsibility, and to determine the logical result of the
distinction. The two liabilities are separate and distinct from each
other. One affects the social order and the other, private rights.
One is for the punishment or correction of the offender while the
other is for reparation of damages suffered by the aggrieved
party. The two responsibilities are so different from each other
that article 1813 of the present (Spanish) Civil Code reads thus:
"There may be a compromise upon the civil action arising from a
crime; but the public action for the imposition of the legal penalty
shall not thereby be extinguished." It is just and proper that, for
the purposes of the imprisonment of or fine upon the accused, the
offense should be proved beyond reasonable doubt. But for the
purpose of indemnity the complaining party, why should the
offense also be proved beyond reasonable doubt? Is not the
invasion or violation of every private right to be proved only by a
preponderance of evidence? Is the right of the aggrieved person
any less private because the wrongful act is also punishable by
the criminal law?
 "For these reasons, the Commission recommends the adoption of
the reform under discussion. It will correct a serious defect in our
law. It will close up an inexhaustible source of injustice-a cause
for disillusionment on the part of the innumerable persons injured
or wronged."

The respondent court increased the P12,000.00 indemnification imposed by the trial court to
P30,000.00. However, since the indemnification was based solely on the finding of guilt beyond
reasonable doubt in the homicide case, the civil liability of the petitioner was not thoroughly
examined. This aspect of the case calls for fuller development if the heirs of the victim are so
minded.

WHEREFORE, the instant petition is hereby GRANTED. The questioned decision of the then
Intermediate Appellate Court, now Court of Appeals, is REVERSED and SET ASIDE. The
petitioner is ACQUITTED of the crime of homicide. Costs de oficio.

SO ORDERED.
G.R. No. 156037 May 28, 2007

MERCURY DRUG CORPORATION, Petitioner,

vs.
SEBASTIAN M. BAKING, Respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari1 assailing the Decision2 dated
May 30, 2002 and Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV
No. 57435, entitled "Sebastian M. Baking, plaintiff-appellee, versus Mercury Drug Co. Inc.,
defendant-appellant."

The facts are:

On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for
a medical check-up. On the following day, after undergoing an ECG, blood, and hematology
examinations and urinalysis, Dr. Sy found that respondent’s blood sugar and triglyceride were
above normal levels. Dr. Sy then gave respondent two medical prescriptions – Diamicron for his
blood sugar and Benalize tablets for his triglyceride.

Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the
prescribed medicines. However, the saleslady misread the prescription for Diamicron as a
prescription for Dormicum. Thus, what was sold to respondent was Dormicum, a potent sleeping
tablet.

Unaware that what was given to him was the wrong medicine, respondent took one pill of
Dormicum on three consecutive days –November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m.,
and November 8 at 7:30 a.m.

On November 8 or on the third day he took the medicine, respondent figured in a vehicular
accident. The car he was driving collided with the car of one Josie Peralta. Respondent fell
asleep while driving. He could not remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have a bearing on his physical and mental state at the
time of the collision, respondent returned to Dr. Sy’s clinic. Upon being shown the medicine, Dr.
Sy was shocked to find that what was sold to respondent was Dormicum, instead of the
prescribed Diamicron.

Thus, on April 14, 1994, respondent filed with the Regional Trial Court (RTC), Branch 80 of
Quezon City a complaint for damages against petitioner, docketed as Civil Case No. Q-94-
20193.

After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent,
thus:
WHEREFORE, premises considered, by preponderance of evidence, the Court hereby renders
judgment in favor of the plaintiff and against the defendant ordering the latter to pay mitigated
damages as follows:

1. ₱250,000.00 as moral damages;

2. ₱20,000.00 as attorney’s fees and litigation expenses;

3. plus ½% of the cost of the suit.

SO ORDERED.

On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment. Petitioner
filed a motion for reconsideration but it was denied in a Resolution dated November 5, 2002.

Hence, this petition.

Petitioner contends that the Decision of the Court of Appeals is not in accord with law or
prevailing jurisprudence.

Respondent, on the other hand, maintains that the petition lacks merit and, therefore, should be
denied.

The issues for our resolution are:

1. Whether petitioner was negligent, and if so, whether such negligence was the
proximate cause of respondent’s accident; and

2. Whether the award of moral damages, attorney’s fees, litigation expenses, and cost of
the suit is justified.

Article 2176 of the New Civil Code provides:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

To sustain a claim based on the above provision, the following requisites must concur: (a)
damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of
cause and effect between the fault or negligence of the defendant and the damage incurred by
the plaintiff.3

There is no dispute that respondent suffered damages.

It is generally recognized that the drugstore business is imbued with public interest. The health
and safety of the people will be put into jeopardy if drugstore employees will not exercise the
highest degree of care and diligence in selling medicines. Inasmuch as the matter of negligence
is a question of fact, we defer to the findings of the trial court affirmed by the Court of Appeals.

Obviously, petitioner’s employee was grossly negligent in selling to respondent Dormicum,

instead of the prescribed Diamicron. Considering that a fatal mistake could be a matter of life and
death for a buying patient, the said employee should have been very cautious in dispensing
medicines. She should have verified whether the medicine she gave respondent was indeed the
one prescribed by his physician. The care required must be commensurate with the danger
involved, and the skill employed must correspond with the superior knowledge of the business
which the law demands.4 1awphi 1.nét

Petitioner contends that the proximate cause of the accident was respondent’s negligence in
driving his car.

We disagree.

Proximate cause is defined as any cause that produces injury in a natural and continuous
sequence, unbroken by any efficient intervening cause, such that the result would not have
occurred otherwise. Proximate cause is determined from the facts of each case, upon a
combined consideration of logic, common sense, policy, and precedent.5

Here, the vehicular accident could not have occurred had petitioner’s employee been careful in
reading Dr. Sy’s prescription. Without the potent effects of Dormicum, a sleeping tablet, it was
unlikely that respondent would fall asleep while driving his car, resulting in a collision.

Complementing Article 2176 is Article 2180 of the same Code which states:

ART. 2180. 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

The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.

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

xxx

The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observed the diligence of a good father of a family to prevent damage.

It is thus clear that the employer of a negligent employee is liable for the damages caused by the
latter. When an injury is caused by the negligence of an employee, there instantly arises a
presumption of the law that there has been negligence on the part of the employer, either in the
selection of his employee or in the supervision over him, after such selection. The presumption,
however, may be rebutted by a clear showing on the part of the employer that he has exercised
the care and diligence of a good father of a family in the selection and supervision of his
employee.6 Here, petitioner's failure to prove that it exercised the due diligence of a good father
of a family in the selection and supervision of its employee will make it solidarily liable for
damages caused by the latter.

As regards the award of moral damages, we hold the same to be in order. Moral damages may
be awarded whenever the defendant’s wrongful act or omission is the proximate cause of the
plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury in the cases specified or
analogous to those provided in Article 2219 of the Civil Code.7
Respondent has adequately established the factual basis for the award of moral damages when
he testified that he suffered mental anguish and anxiety as a result of the accident caused by the
negligence of petitioner’s employee.

There is no hard-and-fast rule in determining what would be a fair and reasonable amount of
moral damages, since each case must be governed by its own peculiar facts. However, it must
be commensurate to the loss or injury suffered.8 Taking into consideration the attending
circumstances here, we are convinced that the amount awarded by the trial court is exorbitant.
Thus, we reduce the amount of moral damages from ₱250,000.00 to ₱50,000.00 only.

In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the
grant of exemplary damages by way of example or correction for the public good. As mentioned
earlier, the drugstore business is affected with public interest. Petitioner should have exerted
utmost diligence in the selection and supervision of its employees. On the part of the employee
concerned, she should have been extremely cautious in dispensing pharmaceutical products.
Due to the sensitive nature of its business, petitioner must at all times maintain a high level of
meticulousness. Therefore, an award of exemplary damages in the amount of ₱25,000.00 is in
order.1aw phi 1.nét

On the matter of attorney’s fees and expenses of litigation, it is settled that the reasons or
grounds for the award thereof must be set forth in the decision of the court.9 Since the trial court’s
decision did not give the basis of the award, the same must be deleted. In Vibram Manufacturing
Corporation v. Manila Electric Company,10 we held:

Likewise, the award for attorney’s fees and litigation expenses should be deleted. Well-enshrined
is that "an award for attorney’s fees must be stated in the text of the court’s decision and not in
the dispositive portion only" (Consolidated Bank and Trust Corporation (Solidbank) v. Court of
Appeals, 246 SCRA 193 [1995] and Keng Hua Paper Products, Inc. v. Court of Appeals, 286
SCRA 257 [1998]). This is also true with the litigation expenses where the body of the decision
discussed nothing for its basis.

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a) the
award of moral damages to respondent is reduced from ₱250,000.00 to ₱50,000.00; (b)
petitioner is likewise ordered to pay said respondent exemplary damages in the amount of
₱25,000.00; and (c) the award of attorney’s fees and litigation expenses is deleted.

Costs against petitioner.

SO ORDERED.
G.R. No. L-40570 January 30, 1976

TEODORO C. UMALI, petitioner,

vs.
HON. ANGEL BACANI, in his capacity as Presiding Judge of Branch IX of the Court of
First Instance of Pangasinan and FIDEL H. SAYNES, respondents.

Julia M. Armas for petitioner.

Antonio de los Reyes for private respondent.

ESGUERRA, J.:

Petition for certiorari to review the decision of the Court of First Instance of Pangasinan Branch
IX, in Civil Case No. U2412, entitled, "Fidel H. Saynes, plaintiff-appellee versus Teodoro C.
Umali, defendant-appellant", which found the death by electrocution of Manuel Saynes, a boy of
3 years and 8 months, as "due to the fault or negligence of the defendant (Umali) as owner and
manager of the Alcala Electric Plant", although the liability of defendant is mitigated by the
contributory negligence of the parents of the boy "in not providing for the proper and delegate
supervision and control over their son The dispositive part of the decision reads as follows:

Wherefore, the Court hereby renders judgment in favor of the plaintiff by ordering
the defendant to pay to the plaintiff the sum of Five Thousand Pesos (P5,000.00)
for the death of his son, Manuel Saynes; the sum of One Thousand Two Hundred
Pesos (P1,200.00) for actual expenses for and in connection with the burial of
said deceased child, and the further sum of Three Thousand Pesos (P3,000.00)
for moral damages and Five Hundred (P500.00) Pesos as reasonable attorney's
fee, or a total of Nine Thousand Seven Hundred (P9,700.00) Pesos, and to pay
the costs of this suit. It Is So Ordered.

Undisputed facts appearing of record are:

On May 14, 1972, a storm with strong rain hit the Municipality of Alcala
Pangasinan, which started from 2:00 o'clock in the afternoon and lasted up to
about midnight of the same day. During the storm, the banana plants standing on
an elevated ground along the barrio road in San Pedro Ili of said municipality and
near the transmission line of the Alcala Electric Plant were blown down and fell
on the electric wire. As a result, the live electric wire was cut, one end of which
was left hanging on the electric post and the other fell to the ground under the
fallen banana plants.

On the following morning, at about 9:00 o'clock barrio captain Luciano Bueno of
San Pedro Iii who was passing by saw the broken electric wire and so he warned
 the people in the place not to go near the wire for they might get hurt. He also
saw Cipriano Baldomero, a laborer of the Alcala Electric Plant near the place and
notified him right then and there of the broken line and asked him to fix it, but the
latter told the barrio captain that he could not do it but that he was going to look
for the lineman to fix it.

Sometime after the barrio captain and Cipriano Baldomero had left the place, a
small boy of 3 years and 8 months old by the name of Manuel P. Saynes, whose
house is just on the opposite side of the road, went to the place where the broken
line wire was and got in contact with it. The boy was electrocuted and he
subsequently died. It was only after the electrocution of Manuel Saynes that the
broken wire was fixed at about 10:00 o'clock on the same morning by the lineman
of the electric plant.

Petitioner claims that he could not be liable under the concept of quasi-delict or tort as owner and
manager of the Alcala Electric Plant because the proximate cause of the boy's death
electrocution could not be due to any negligence on his part, but rather to a fortuitous event-the
storm that caused the banana plants to fall and cut the electric line-pointing out the absence of
negligence on the part of his employee Cipriano Baldomero who tried to have the line repaired
and the presence of negligence of the parents of the child in allowing him to leave his house
during that time.

A careful examination of the record convinces Us that a series of negligence on the part of
defendants' employees in the Alcala Electric Plant resulted in the death of the victim by
electrocution. First, by the very evidence of the defendant, there were big and tall banana plants
at the place of the incident standing on an elevated ground which were about 30 feet high and
which were higher than the electric post supporting the electric line, and yet the employees of the
defendant who, with ordinary foresight, could have easily seen that even in case of moderate
winds the electric line would be endangered by banana plants being blown down, did not even
take the necessary precaution to eliminate that source of danger to the electric line. Second,
even after the employees of the Alcala Electric Plant were already aware of the possible damage
the storm of May 14, 1972, could have caused their electric lines, thus becoming a possible
threat to life and property, they did not cut off from the plant the flow of electricity along the lines,
an act they could have easily done pending inspection of the wires to see if they had been cut.
Third, employee Cipriano Baldomero was negligent on the morning of the incident because even
if he was already made aware of the live cut wire, he did not have the foresight to realize that the
same posed a danger to life and property, and that he should have taken the necessary
precaution to prevent anybody from approaching the live wire; instead Baldomero left the
premises because what was foremost in his mind was the repair of the line, obviously forgetting
that if left unattended to it could endanger life and property.

On defendants' argument that the proximate cause of the victim's death could be attributed to the
parents' negligence in allowing a child of tender age to go out of the house alone, We could
readily see that because of the aforementioned series of negligence on the part of defendants'
employees resulting in a live wire lying on the premises without any visible warning of its lethal
character, anybody, even a responsible grown up or not necessarily an innocent child, could
have met the same fate that befell the victim. It may be true, as the lower Court found out, that
the contributory negligence of the victim's parents in not properly taking care of the child, which
enabled him to leave the house alone on the morning of the incident and go to a nearby place cut
wire was very near the house (where victim was living) where the fatal fallen wire electrocuted
him, might mitigate respondent's liability, but we cannot agree with petitioner's theory that the
parents' negligence constituted the proximate cause of the victim's death because the real
proximate cause was the fallen live wire which posed a threat to life and property on that morning
due to the series of negligence adverted to above committed by defendants' employees and
which could have killed any other person who might by accident get into contact with it. Stated
otherwise, even if the child was allowed to leave the house unattended due to the parents'
negligence, he would not have died that morning where it not for the cut live wire he accidentally
touched.

Art. 2179 of the Civil Code provides that if the negligence of the plaintiff (parents of the victim in
this case) was only contributory, the immediate and proximate cause of the injury being the
defendants' lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded. This law may be availed of by the petitioner but does not exempt him
from liability. Petitioner's liability for injury caused by his employees negligence is well defined in
par. 4, of Article 2180 of the Civil Code, which states:

The owner and manager of an establishment or enterprise are likewise

responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on tile occasion of their functions.

The negligence of the employee is presumed to be the negligence of the employer because the
employer is supposed to exercise supervision over the work of the employees. This liability of the
employer is primary and direct (Standard Vacuum Oil Co. vs. Tan and Court of Appeals, 107
Phil. 109). In fact the proper defense for the employer to raise so that he may escape liability is to
prove that he exercised, the diligence of the good father of the family to prevent damage not only
in the selection of his employees but also in adequately supervising them over their work. This
defense was not adequately proven as found by the trial Court, and We do not find any sufficient
reason to deviate from its finding.

Notwithstanding diligent efforts, we fail to fired any reversible error committed by the trial Court in
this case, either in its appreciation of the evidence on questions of facts or on the interpretation
and application of laws government quasi-delicts and liabilities emanating therefrom. The
inevitable conclusion is that no error amounting to grave abuse of discretion was committed and
the decision must be left untouched.

WHEREFORE, the decision of respondent Court dated June 27, 1974 is affirmed.

Costs against petitioner.

SO ORDERED.
G.R. No. L-5691 December 27, 1910

S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-appellees,

vs.
WILLIAM VAN BUSKIRK, defendant-appellant.

Lionel D. Hargis for appellant.

Sanz and Oppisso for appellee.

MORELAND, J.:

The facts found by the trial court are undisputed by either party in this case. They are —

That on the 11th day of September, 1908, the plaintiff, Carmen Ong de Martinez, was
riding in a carromata on Calle Real, district of Ermita, city of Manila, P.I., along the left-
hand side of the street as she was going, when a delivery wagon belonging to the
defendant used for the purpose of transportation of fodder by the defendant, and to which
was attached a pair of horses, came along the street in the opposite direction to that the
in which said plaintiff was proceeding, and that thereupon the driver of the said plaintiff's
carromata, observing that the delivery wagon of the defendant was coming at great
speed, crowded close to the sidewalk on the left-hand side of the street and stopped, in
order to give defendant's delivery wagon an opportunity to pass by, but that instead of
passing by the defendant's wagon and horses ran into the carromata occupied by said
plaintiff with her child and overturned it, severely wounding said plaintiff by making a
serious cut upon her head, and also injuring the carromata itself and the harness upon
the horse which was drawing it.

xxx xxx xxx

These facts are not dispute, but the defendant presented evidence to the effect that the
cochero, who was driving his delivery wagon at the time the accident occurred, was a
good servant and was considered a safe and reliable cochero; that the delivery wagon
had sent to deliver some forage at Paco Livery Stable on Calle Herran, and that for the
purpose of delivery thereof the cochero driving the team as defendant's employee tied
the driving lines of the horses to the front end of the delivery wagon and then went back
inside of the wagon for the purpose of unloading the forage to be delivered; that while
unloading the forage and in the act of carrying some of it out, another vehicle drove by,
the driver of which cracked a whip and made some other noises, which frightened the
horses attached to the delivery wagon and they ran away, and the driver was thrown
from the inside of the wagon out through the rear upon the ground and was unable to
stop the horses; that the horses then ran up and on which street they came into collision
with the carromata in which the plaintiff, Carmen Ong de Martinez, was riding.
The defendant himself was not with the vehicle on the day in question.

Upon these facts the court below found the defendant guilty of negligence and gave judgment
against him for P442.50, with interest thereon at the rate of 6 per cent per annum from the 17th
day of October, 1908, and for the costs of the action. The case is before us on an appeal from
that judgment.

There is no general law of negligence in the Philippine Islands except that embodied in the Civil
Code. The provisions of that code pertinent to this case are —

Art. 1902. A person who by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done.

Art. 1903. The obligation imposed by preceding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.

The father, and on his death or incapacity the mother, is liable for the damages caused
by the minors who live with them.

Guardians are liable for the damages caused by minors or incapacitated persons who
are under their authority and live with them.

Owners of directors of an establishment or enterprise are equally liable for the damages
caused by the employees in the service of the branches in which the latter may be
employed or on account of their duties.

The State is liable in this sense when it acts through a special agent, but not when the
damages should have been caused by the official to whom properly it pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.

Finally, masters or directors of arts and trades are liable for the damages caused by their
pupils or apprentices while they are under their custody.

The liability referred to in this article shall cease when the persons mentioned therein
prove that they employed all the diligence of a good father of a family to avoid the
damage.

Passing the question whether or not an employer who has furnished a gentle and tractable team
and a trusty and capable driver is, under the last paragraph of the above provisions, liable for the
negligence of such driver in handling the team, we are of the opinion that the judgment must be
reversed upon the ground that the evidence does not disclose that the cochero was negligent.

While the law relating to negligence in this jurisdiction may possibly be some what different from
that in Anglo-Saxon countries, a question we do not now discuss, the rules under which the fact
of negligence is determined are, nevertheless, generally the same. That is to say, while the law
designating the person responsible for a negligent act may not be the same here as in many
jurisdictions, the law determining what is a negligent act is the same here, generally speaking, as
elsewhere. (Supreme court of Spain, 4 December, 1903; 16 May, 1893; 27 June, 1894; 9 April,
1896; 14 March, 1901; 2 March, 1904; 7 February, 1905; 16 June, 1905; 23 June, 1905; 13 April,
1903; 7 March, 1902; 12 June, 1900; 2 March, 1907; 18 March, 1898; 3 June, 1901.)

It appears from the undisputed evidence that the horses which caused the damage were gentle
and tractable; that the cochero was experienced and capable; that he had driven one of the
horses several years and the other five or six months; that he had been in the habit, during all
that time, of leaving them in the condition in which they were left on the day of the accident; that
they had never run away up to that time and there had been, therefore, no accident due to such
practice; that to leave the horses and assist in unloading the merchandise in the manner
described on the day of the accident was the custom of all cochero who delivered merchandise
of the character of that which was being delivered by the cochero of the defendant on the day in
question, which custom was sanctioned by their employers.

In our judgment, the cochero of the defendant was not negligent in leaving the horses in the
manner described by the evidence in this case, either under Spanish or American jurisprudence.
(Lynch vs. Nurdin, 1 Q. B., 422; Rumsey vs. Nelson, 58 Vt., 590; Drake vs. Mount, 33 N. J. L.,
442; Hoboken Land and Improvement Co. vs. Lally, 48 N. J. L., 604; Wasmer vs. D. L. & W. R.
R. Co., 80 N. Y., 212.) l awphi1.net

In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord Kenyon said:

He was performing his duty while removing the goods into the house, and, if every
person who suffered a cart to remain in the street while he took goods out of it was
obliged to employ another to look after the horses, it would be impossible for the
business of the metropolis to go on.

In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:

The degree of care required of the plaintiff, or those in charged of his horse, at the time of
the injury, is that which would be exercised by a person of ordinary care and prudence
under like circumstances. It can not be said that the fact of leaving the horse unhitched is
in itself negligence. Whether it is negligence to leave a horse unhitched must be depend
upon the disposition of the horse; whether he was under the observation and control of
some person all the time, and many other circumstances; and is a question to be
determined by the jury from the facts of each case.

In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was error on the part of the
trial court to refuse to charge that "it is not negligence for the driver of a quite, gentle horse to
leave him unhitched and otherwise unattended on the side of a public highways while the driver
is upon the sidewalk loading goods on the wagon." The said court closed its opinion with these
words:

There was evidence which could have fully justified the jury in finding that the horse was
quite and gentle, and that the driver was upon the sidewalk loading goods on the wagon,
at time of the alleged injury, and that the horse had been used for years in that way
without accident. The refusal of the trial court to charge as requested left the jury free to
find was verdict against the defendant, although the jury was convinced that these facts
were proven. lawphil.net

In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:

That evidence that a servant, whom traders employed to deliver goods, upon stopping
with his horse and wagon to deliver a parcel at a house from fifty to a hundred rods from
a railroad crossing, left the horse unfastened for four or five minutes while he was in the
house, knowing that it was not afraid of cars, and having used it for three or four months
without ever hitching it or knowing it to start, is not conclusive, as a matter of law, of a
want of due care on his part.

The duty, a violation of which is claimed to be negligence in the respect in question, is to

exercise reasonable care and prudence. Where reasonable care is employed in doing an act not
itself illegal or inherently likely to produce damage to others, there will be no liability, although
damage in fact ensues. (Milwaukee Ry. Co. vs. Arms, 91 U. S., 489; Parrott vs. Wells, 15 Wall.,
524; Brown vs. Kendall, 6 Cushing, 292; Jackson Architectural Iron Works vs. Hurlbut, 158 N. Y.,
34 Westerfield vs. Levis, 43 La. An., 63; Niosi vs. Empire Steam Laundry, 117 Cal., 257.)

The act of defendant's driver in leaving the horses in the manner proved was not unreasonable
or imprudent. Acts the performance of which has not proved destructive or injurious and which
have, therefore, been acquiesced in by society for so long a time that they have ripened into
custom, can not be held to be themselves unreasonable or imprudent. Indeed the very reason
why they have been permitted by society is that they beneficial rather than prejudicial. Accidents
itc-alf

sometimes happen and injuries result from the most ordinary acts of life. But such are not their
natural or customary results. To hold that, because such an act once resulted in accident or
injury, the actor is necessarily negligent, is to go far. The fact that the doctrine of res ipsa
loquitur is sometimes successfully invoked in such a case, does not in any sense militate against
the reasoning presented. That maxim at most only creates aprima facie case, and that only in the
absence of proof of the circumstances under which the act complained of was performed. It is
something invoked in favor of the plaintiff before defendant's case showing the conditions and
circumstances under which the injury occurred, the creative reason for the doctrine of res ipsa
loquitur disappears. This is demonstrated by the case of Inland and Seaboard Costing Co. vs.
Tolson (139 U.S., 551), where the court said (p. 554):

. . . The whole effect of the instruction in question, as applied to the case before the jury,
was that if the steamboat, on a calm day and in smooth water, was thrown with such
force against a wharf properly built, as to tear up some of the planks of the flooring, this
would be prima facie evidence of negligence on the part of the defendant's agent in
making the landing, unless upon the whole evidence in the case this prima
facie evidence was rebutted. As such damage to a wharf is not ordinarily done by a
steamboat under control of her officers and carefully managed by them, evidence that
such damage was done in this case was prima facie, and, if unexplained, sufficient
evidence of negligence on their part, and the jury might properly be so instructed.

There was presented in this case, and by the plaintiffs themselves, not only the fact of the
runway and the accident resulting therefrom, but also the conditions under which the runaway
occurred. Those conditions showing of themselves that the defendant's cochero was not
negligent in the management of the horse, the prima facie case in plaintiffs' favor, if any, was
destroyed as soon as made.

It is a matter of common knowledge as well as proof that it is the universal practice of merchants
to deliver merchandise of the kind of that being delivered at the time of the injury, in the manner
in which that was then being delivered; and that it is the universal practice to leave the horses in
the manner in which they were left at the time of the accident. This is the custom in all cities. It
has not been productive of accidents or injuries. The public, finding itself unprejudiced by such
practice, has acquiesced for years without objection. Ought the public now, through the courts,
without prior objection or notice, to be permitted to reverse the practice of decades and thereby
make culpable and guilty one who had every reason and assurance to believe that he was acting
under the sanction of the strongest of all civil forces, the custom of a people? We think not.

The judgement is reversed, without special finding as to costs. So ordered.

G.R. No. 167750 March 15, 2010

BANK OF THE PHILIPPINE ISLANDS, Petitioner,

vs.
REYNALD R. SUAREZ, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the Decision dated 30 November 20042 and Resolution dated 11
April 2005 of the Court of Appeals in CA-G.R. CV No. 76988, affirming the trial court's decision of
18 October 2002 and denying reconsideration.

The Facts

Respondent Reynald R. Suarez (Suarez) is a lawyer who used to maintain both savings and
current accounts with petitioner Bank of the Philippine Islands’ (BPI) Ermita Branch from 1988 to
1997.

Sometime in 1997, Suarez had a client who planned to purchase several parcels of land in
Tagaytay City, but preferred not to deal directly with the land owners. In accordance with his
client’s instruction, Suarez transacted with the owners of the Tagaytay properties, making it
appear that he was the buyer of the lots. As regards the payment of the purchase money, Suarez
and his client made an arrangement such that Suarez’s client would deposit the money in
Suarez’s BPI account and then, Suarez would issue checks to the sellers. Hence, on 16 June
1997, Suarez’s client deposited a Rizal Commercial Banking Corporation (RCBC) check with a
face value of ₱19,129,100, representing the total consideration of the sales, in BPI Pasong Tamo
Branch to be credited to Suarez’s current account in BPI Ermita Branch.

Aware of the banking system’s 3-day check clearing policy,3 Suarez instructed his secretary,
Petronila Garaygay (Garaygay), to confirm from BPI whether the face value of the RCBC check
was already credited to his account that same day of 16 June 1997. According to Garaygay, BPI
allegedly confirmed the same-day crediting of the RCBC check. Relying on this confirmation,
Suarez issued on the same day five checks of different amounts totaling ₱19,129,100 for the
purchase of the Tagaytay properties.4

The next day, Suarez left for the United States (U.S.) for a vacation. While Suarez was in the
U.S., Garaygay informed him that the five checks he issued were all dishonored by BPI due to
insufficiency of funds and that his current account had been debited a total of ₱57,200 as penalty
for the dishonor. Suarez’s secretary further told him that the checks were dishonored despite an
assurance from RCBC, the drawee bank for the sum of ₱19,129,100, that this amount had
already been debited from the account of the drawer on 16 June 1997 and the RCBC check was
fully funded.
On 19 June 1997, the payees of the five BPI checks that Suarez issued on 16 June 1997
presented the checks again. Since the RCBC check (which Suarez’s client issued) had already
been cleared by that time, rendering Suarez’s available funds sufficient, the checks were
honored by BPI.

Subsequently, Suarez sent a letter to BPI demanding an apology and the reversal of the charges
debited from his account. Suarez received a call from Fe Gregorius, then manager of the BPI
Ermita Branch, who requested a meeting with him to explain BPI’s side. However, the meeting
did not transpire.

Suarez sent another letter to BPI addressed to its president, Xavier Loinaz. Consequently, BPI
representatives asked another meeting with Suarez. During the meeting, the BPI officers handed
Suarez a letter, the relevant text of which reads:

Dear Atty. Suarez:

Your letter to our President, Xavier P. Loinaz dated 02 July 1997 was referred to
us for investigation and reply.

Our investigation discloses that when the checks you issued against your
account were received for clearing, the checks you deposited were not yet
cleared. Hence, the dishonor of the your checks.

We do not see much in your allegation that you have suffered damages just
because the reason for the return was "DAIF" and not "DAUD". In both instances,
there is a dishonor nonetheless.5

Upon Suarez’s request, BPI delivered to him the five checks which he issued on 16 June 1997.
Suarez claimed that the checks were tampered with, specifically the reason for the dishonor,
prompting him to send another letter informing BPI of its act of falsification by making it appear
that it marked the checks with "drawn against uncollected deposit (DAUD) and not "drawn
against insufficient fund" (DAIF). In reply, BPI offered to reverse the penalty charges which were
debited from his account, but denied Suarez’s claim for damages. Suarez rejected BPI’s offer.

Claiming that BPI mishandled his account through negligence, Suarez filed with the Regional
Trial Court a complaint for damages, docketed as Civil Case No. 98-574.

The Regional Trial Court, Makati City, Branch 136 rendered judgment in favor of Suarez, thus:

WHEREFORE, judgment is hereby rendered ordering defendant bank to pay the following
amounts:

1. The amount of ₱57,200.00, with interest from date of first demand until full payment as
actual damages;

2. The sum of ₱3,000,000.00 by way of moral damages;

3. The amount of ₱1,000,000.00 as and for exemplary damages;

4. The sum of ₱1.00 as attorney’s fees, and

The costs of litigation.

SO ORDERED.6
BPI appealed to the Court of Appeals, which affirmed the trial court’s decision. The dispositive
portion of the 30 November 2004 Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the instant appeal is DISMISSED. The decision dated 18
October 2002 of the Regional Trial Court, Branch 136, of Makati is AFFIRMED in toto.

SO ORDERED.7

The Court of Appeals denied BPI’s motion for reconsideration in its 11 April 2005 Resolution.

Hence, this petition.

The Court of Appeals’ Ruling

In affirming the trial court’s decision, the Court of Appeals ruled as follows:

Contrary to its contention, plaintiff-appellee’s evidence convincingly established the latter’s

entitlement to damages, which was the direct result of defendant-appellant’s negligence in
handling his account. It was duly proven that after his client deposited a check in the amount of
₱19,129,100.00 on 16 June 1997, it was confirmed through plaintiff-appellee’s secretary by an
employee of defendant-appellant bank that the aforesaid amount was, on the same day, already
credited to his account. It was on the basis of this confirmation which made plaintiff-appellee
issue five (5) checks in the amount of ₱19,129,100.00 to different payees. And despite RCBC’s
assurance that the aforementioned amount had already been debited from the account of the
drawer bank, defendant-appellant bank still dishonored the five (5) checks for DAIF as reason
when the various payees presented them for payment on 17 June 1997.

It was also proven that defendant-appellant bank through its employee inadvertently marked the
dorsal sides of the checks as DAIF instead of DAUD. A closer look at the checks would indicate
that intercalations were made marking the acronym DAIF thereon to appear as DAUD. Although
the intercalation was obvious in the ₱12 million check, still the fact that there was intercalation
made in the said check cannot be denied. It bears to stress that there lies a big difference
between a check dishonored for reasons of DAUD and a check dishonored for DAIF. A check
dishonored for reasons of DAIF would unduly expose herein plaintiff-appellee to criminal
prosecution for violation of B.P. 22 while a check dishonored for reasons of DAUD would not.
Thus, it was erroneous on the part of defendant-appellant bank to surmise that plaintiff-appellee
would not suffer damages anyway for the dishonored checks for reasons of DAUD or DAIF
because there was dishonor nonetheless.

While plaintiff-appellee had been spared from any criminal prosecution, his reputation, however,
was sullied on account of the dishonored checks by reason of DAIF. His transaction with the
would be sellers of the property in Tagaytay was aborted because the latter doubted his capacity
to fulfill his obligation as buyer of their [properties.] As the agent of the true buyers, he had a lot
of explaining to do with his client. In short, he suffered humiliation.

Defendant-appellant bank also contends that plaintiff-appellee is liable to pay the charges
mandated by the Philippine Clearing House Rules and Regulations (PCHRR).

If truly these charges were mandated by the PCHRR, defendant-appellant bank should not have
attempted to renege on its act of debiting the charges to plaintiff-appellee’s account. In its letter
dated 28 July 1997 addressed to plaintiff-appellee, the former has offered to reverse these
charges in order to mitigate the effects of the returned checks on the latter. This, to the mind of
the court, is tantamount to an admission on their (defendant-appellant bank’s employees) part
that they have committed a blunder in handling plaintiff-appellee’s account. Perforce, defendant-
appellant bank should return the amount of the service charges debited to plaintiff-appellee. It is
basic in the law governing human relations that "no one shall be unjustly enriched at the expense
of others."8

The Issues

In its Memorandum, BPI raised the following issues:

A. WHETHER [BPI] WAS NEGLIGENT IN HANDLING THE ACCOUNT OF [SUAREZ];

B. WHETHER [SUAREZ] IS LIABLE TO PAY THE SERVICE CHARGES IMPOSED BY

THE PHILIPPINE CLEARING HOUSE CORPORATION; and

C. WHETHER [BPI] IS LIABLE TO PAY [SUAREZ] MORAL AND EXEMPLARY

DAMAGES, ATTORNEY’S FEES AND COSTS OF LITIGATION.9

The Court’s Ruling

The petition is partly meritorious.

As a rule, this Court is not a trier of facts. However, there are well- recognized exceptions to this
rule, one of which is when certain relevant facts were overlooked by the lower court, which facts,
if properly appreciated, would justify a different conclusion from the one reached in the assailed
decision.10 Reviewing the records, we find that the lower courts misappreciated the evidence in
this case.

Suarez insists that BPI was negligent in handling his account when BPI dishonored the checks
he issued to various payees on 16 June 1997, despite the RCBC check deposit made to his
account on the same day to cover the total amount of the BPI checks.

Negligence is defined as "the omission to do something which a reasonable man, guided upon
those considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent man and reasonable man could not do."11 The question
concerning BPI's negligence, however, depends on whether BPI indeed confirmed the same-day
crediting of the RCBC check’s face value to Suarez’s BPI account.

In essence, Suarez impresses upon this Court that BPI is estopped12 from dishonoring his
checks since BPI confirmed the same-day crediting of the RCBC check deposit and assured the
adequacy of funds in his account. Suarez points out that he relied on this confirmation for the
issuance of his checks to the owners of the Tagaytay properties. In other words, Suarez claims
that BPI made a representation that he had sufficient available funds to cover the total value of
his checks.

Suarez is mistaken.

Based on the records, there is no sufficient evidence to show that BPI conclusively confirmed the
same-day crediting of the RCBC check which Suarez’s client deposited late on 16 June
1997.13 Suarez’s secretary, Garaygay, testified that she was able to talk to a BPI male employee
about the same-day crediting of the RCBC check.14However, Garaygay failed to (1) identify and
name the alleged BPI employee, and (2) establish that this particular male employee was
authorized by BPI either to disclose any information regarding a depositor’s bank account to a
person other than the depositor over the telephone, or to assure Garaygay that Suarez could
issue checks totaling the face value of the RCBC check. Moreover, a same-day clearing of a
₱19,129,100 check requires approval of designated bank official or officials, and not any bank
official can grant such approval. Clearly, Suarez failed to prove that BPI confirmed the same-day
crediting of the RCBC check, or that BPI assured Suarez that he had sufficient available funds in
his account. Accordingly, BPI was not estopped from dishonoring the checks for inadequacy of
available funds in Suarez’s account since the RCBC check remained uncleared at that time.

While BPI had the discretion to undertake the same-day crediting of the RCBC check,15 and
disregard the banking industry’s 3-day check clearing policy, Suarez failed to convincingly show
his entitlement to such privilege. As BPI pointed out, Suarez had no credit or bill purchase line
with BPI which would qualify him to the exceptions to the 3-day check clearing policy.16 1aw ph!1

Considering that there was no binding representation on BPI’s part as regards the same-day
crediting of the RCBC check, no negligence can be ascribed to BPI’s dishonor of the checks
precisely because BPI was justified in dishonoring the checks for lack of available funds in
Suarez’s account.17

However, BPI mistakenly marked the dishonored checks with "drawn against insufficient funds
(DAIF), " instead of "drawn against uncollected deposit (DAUD)." DAUD means that the account
has, on its face, sufficient funds but not yet available to the drawer because the deposit, usually a
check, had not yet been cleared.18 DAIF, on the other hand, is a condition in which a depositor’s
balance is inadequate for the bank to pay a check.19 In other words, in the case of DAUD, the
depositor has, on its face, sufficient funds in his account, although it is not available yet at the
time the check was drawn, whereas in DAIF, the depositor lacks sufficient funds in his account to
pay the check. Moreover, DAUD does not expose the drawer to possible prosecution
for estafa and violation of BP 22, while DAIF subjects the depositor to liability for such
offenses.20 It is clear therefore that, contrary to BPI’s contention, DAIF differs from DAUD. Now,
does the erroneous marking of DAIF, instead of DAUD, give rise to BPI’s liability for damages?

The following are the conditions for the award of moral damages: (1) there is an injury — whether
physical, mental or psychological — clearly sustained by the claimant; (2) the culpable act or
omission is factually established; (3) the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and (4) the award of damages is
predicated on any of the cases stated in Article 221921 of the Civil Code.22

In the present case, Suarez failed to establish that his claimed injury was proximately caused by
the erroneous marking of DAIF on the checks. Proximate cause has been defined as "any cause
which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the result complained of and without which would not have occurred."23 There is
nothing in Suarez’s testimony which convincingly shows that the erroneous marking of DAIF on
the checks proximately caused his alleged psychological or social injuries. Suarez merely
testified that he suffered humiliation and that the prospective consolidation of the titles to the
Tagaytay properties did not materialize due to the dishonor of his checks,24 not due to the
erroneous marking of DAIF on his checks. Hence, Suarez had only himself to blame for his hurt
feelings and the unsuccessful transaction with his client as these were directly caused by the
justified dishonor of the checks. In short, Suarez cannot recover compensatory damages for his
own negligence.25

While the erroneous marking of DAIF, which BPI belatedly rectified, was not the proximate cause
of Suarez’s claimed injury, the Court reminds BPI that its business is affected with public interest.
It must at all times maintain a high level of meticulousness and should guard against injury
attributable to negligence or bad faith on its part.26 Suarez had a right to expect such high level of
care and diligence from BPI. Since BPI failed to exercise such diligence, Suarez is entitled to
nominal damages27 to vindicate Suarez’s right to such high degree of care and diligence. Thus,
we award Suarez ₱75,000.00 nominal damages.

On the award of actual damages, we find the same without any basis. Considering that BPI
legally dishonored the checks for being drawn against uncollected deposit, BPI was justified in
debiting the penalty charges against Suarez’s account, pursuant to the Rules of the Philippine
Clearing House Corporation,28 to wit:
Sec. 27. PENALTY CHARGES ON RETURNED ITEMS

27.1 A service charge of ₱600.00 for each check shall be levied against the DRAWER of any
check or checks returned for any reason, except for the following:

a) Account Closed

b) No Account

c) Under Garnishment

d) Spurious Check

e) Documentary Stamps Missing (for foreign checks/drafts only)

f) Post-Dated/Stale-Dated

g) Validity Restricted

h) Miscleared Items

I) Deceased Depositor

j) Violation of Clearing Rules and/or Procedures

k) Lost by Presenting Bank while in transit to clearing

as well as other exceptions which may be defined/circulated by PCHC from time to time.29

In view of the foregoing, the Court deems it unnecessary to resolve the other issues raised in this
case.

WHEREFORE, the Court GRANTS the petition in part. The Court SETS ASIDE the 30 November
2004 Decision and 11 April 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 76988,
and deletes the award of all damages and fees. The Court awards to respondent Reynald R.
Suarez nominal damages in the sum of ₱75,000.00.

SO ORDERED.
G.R. No. 182353 June 29, 2010

ST. JOSEPH'S COLLEGE, SR. JOSEPHINI AMBATALI, SFIC, and ROSALINDA

TABUGO, Petitioners,
vs.
JAYSON MIRANDA, represented by his father, RODOLFO S. MIRANDA, Respondent.

DECISION

NACHURA, J.:

This petition for review on certiorari seeks to set aside the Decision1 of the Court of Appeals (CA)
in CA-G.R. CV No. 68367, which affirmed in toto the decision2 of the Regional Trial Court (RTC),
Branch 221, Quezon City, in Civil Case No. Q-95-22889.

The facts, as found by the CA, follow:

On November 17, 1994, at around 1:30 in the afternoon inside St. Joseph College’s [SJC’s]
premises, the class to which [respondent Jayson Val Miranda] belonged was conducting a
science experiment about fusion of sulphur powder and iron fillings under the tutelage of
[petitioner] Rosalinda Tabugo, she being the subject teacher and employee of [petitioner] SJC.
The adviser of [Jayson’s] class is x x x Estefania Abdan.

Tabugo left her class while it was doing the experiment without having adequately secured it
from any untoward incident or occurrence. In the middle of the experiment, [Jayson], who was
the assistant leader of one of the class groups, checked the result of the experiment by looking
into the test tube with magnifying glass. The test tube was being held by one of his group mates
who moved it close and towards the eye of [Jayson]. At that instance, the compound in the test
tube spurted out and several particles of which hit [Jayson’s] eye and the different parts of the
bodies of some of his group mates. As a result thereof, [Jayson’s] eyes were chemically burned,
particularly his left eye, for which he had to undergo surgery and had to spend for his medication.
Upon filing of this case [in] the lower court, [Jayson’s] wound had not completely healed and still
had to undergo another surgery.

Upon learning of the incident and because of the need for finances, [Jayson’s] mother, who was
working abroad, had to rush back home for which she spent ₱36,070.00 for her fares and had to
forego her salary from November 23, 1994 to December 26, 1994, in the amount of at least
₱40,000.00.

Then, too, [Jayson] and his parents suffered sleepless nights, mental anguish and wounded
feelings as a result of his injury due to [petitioners’] fault and failure to exercise the degree of
care and diligence incumbent upon each one of them. Thus, they should be held liable for moral
damages. Also, [Jayson] sent a demand letter to [petitioners] for the payment of his medical
expenses as well as other expenses incidental thereto, which the latter failed to heed. Hence,
[Jayson] was constrained to file the complaint for damages. [Petitioners], therefore, should
likewise compensate [Jayson] for litigation expenses, including attorney’s fees.
On the other hand, [petitioners SJC, Sr. Josephini Ambatali, SFIC, and Tabugo] alleged that
[Jayson] was a grade six pupil of SJC in the school year 1994-1995. On November 17, 1994, at
about 1:30 in the afternoon, the class to which [Jayson] belong[s] was conducting a science
experiment under the guidance and supervision of Tabugo, the class science teacher, about
fusion of sulphur powder and iron fillings by combining these elements in a test tube and heating
the same. Before the science experiment was conducted, [Jayson] and his classmates were
given strict instructions to follow the written procedure for the experiment and not to look into the
test tube until the heated compound had cooled off. [Jayson], however, a person of sufficient age
and discretion and completely capable of understanding the English language and the
instructions of his teacher, without waiting for the heated compound to cool off, as required in the
written procedure for the experiment and as repeatedly explained by the teacher, violated such
instructions and took a magnifying glass and looked at the compound, which at that moment
spurted out of the test tube, a small particle hitting one of [Jayson’s] eyes.

Jayson was rushed by the school employees to the school clinic and thereafter transferred to St.
Luke’s Medical Center for treatment. At the hospital, when Tabago visited [Jayson], the latter
cried and apologized to his teacher for violating her instructions not to look into the test tube until
the compound had cooled off.

After the treatment, [Jayson] was pronounced ready for discharge and an eye test showed that
his vision had not been impaired or affected. In order to avoid additional hospital charges due to
the delay in [Jayson’s] discharge, Rodolfo S. Miranda, [Jayson’s] father, requested SJC to
advance the amount of ₱26,176.35 representing [Jayson’s] hospital bill until his wife could arrive
from abroad and pay back the money. SJC acceded to the request.

On December 6, 1994, however, the parents of [Jayson], through counsel, wrote SJC a letter
demanding that it should shoulder all the medical expenses of [Jayson] that had been incurred
and will be incurred further arising from the accident caused by the science experiment. In a
letter dated December 14, 1994, the counsel for SJC, represented by Sr. Josephini Ambatali,
SFIC, explained that the school cannot accede to the demand because "the accident occurred by
reason of [Jayson’s] failure to comply with the written procedure for the experiment and his
teacher’s repeated warnings and instruction that no student must face, much less look into, the
opening of the test tube until the heated compound has cooled.3

Since SJC did not accede to the demand, Rodolfo, Jayson’s father, on Jayson’s behalf, sued
petitioners for damages.

After trial, the RTC rendered judgment, to wit:

WHEREFORE, premises considered, judgment is hereby rendered in favor of [Jayson] and

against [petitioners]. This Court orders and holds the [petitioners] joint[ly] and solidarily liable to
pay [Jayson] the following amount:

1. To pay [Jayson] the amount of ₱77,338.25 as actual damages; However, [Jayson] is

ordered to reimburse [petitioner] St. Joseph College the amount of ₱26,176.36
representing the advances given to pay [Jayson’s] initial hospital expenses or in the
alternative to deduct said amount of ₱26,176.36 from the ₱77,338.25 actual damages
herein awarded by way of legal compensation;

2. To pay [Jayson] the sum of ₱50,000.00 as mitigated moral damages;

3. To pay [Jayson] the sum of ₱30,000.00 as reasonable attorney’s fees;

4. To pay the costs of suit.

SO ORDERED.4
Aggrieved, petitioners appealed to the CA. However, as previously adverted to, the CA affirmed
in toto the ruling of the RTC, thus:

WHEREFORE, in view of the foregoing, the assailed decision of the RTC of Quezon City, Branch
221 dated September 6, 2000 is hereby AFFIRMED IN TOTO. Costs against [petitioners].5 1avvphi 1

Undaunted, petitioners appealed` by certiorari to this Court, adamant that the CA grievously
erred, thus:

I. THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT FINDING THAT

THE PROXIMATE CAUSE OF JAYSON’S INJURY WAS HIS OWN ACT OF
LOOKING AT THE HEATED TEST TUBE BEFORE THE COMPOUND HAD
COOLED IN COMPLETE DISREGARD OF INSTRUCTIONS GIVEN PRIOR TO
THE EXPERIMENT.

II. THE COURT OF APPEALS FAILED TO APPRECIATE THAT, IN LIGHT OF

THE RULING IN THE CASE OF ST. MARY’S COLLEGE V. WILLIAM
CARPITANOS, x x x JAYSON’S CONTRIBUTORY NEGLIGENCE OF PEEKING
INTO THE TEST TUBE WAS IN FACT THE PROXIMATE CAUSE OF HIS
INJURY FOR WHICH THE PETITIONERS SHOULD NOT BE HELD LIABLE.

III. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE

AWARD OF ACTUAL DAMAGES DESPITE THE ABSENCE OF PROOF TO
SUPPORT THE SAME.

IV. THE LOWER COURT GRIEVOUSLY ERRED IN AWARDING MORAL

DAMAGES TO [JAYSON].

V. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE

AWARD OF ATTORNEY’S FEES TO [JAYSON].

VI. THE LOWER COURT GRIEVOUSLY ERRED IN DENYING THE

PETITIONERS’ COUNTERCLAIM.6

We find no reason to depart from the uniform rulings of the lower courts that petitioners were
"negligent since they all failed to exercise the required reasonable care, prudence, caution and
foresight to prevent or avoid injuries to the students."

Jurisprudence dictates that factual findings of the trial court, especially when affirmed by the
appellate court, are accorded the highest degree of respect and are considered conclusive
between the parties.7 A review of such findings by this Court is not warranted except for highly
meritorious circumstances when: (1) the findings of a trial court are grounded entirely on
speculation, surmises or conjectures; (2) a lower court’s inference from its factual findings is
manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion in the
appreciation of facts; (4) the findings of the appellate court go beyond the issues of the case, or
fail to notice certain relevant facts which, if properly considered, will justify a different conclusion;
(5) there is a misappreciation of facts; (6) the findings of fact are conclusions without mention of
the specific evidence on which they are based, are premised on the absence of evidence, or are
contradicted by evidence on record.8 None of the foregoing exceptions which would warrant a
reversal of the assailed decision obtains in this instance.

Yet, petitioners maintain that the proximate cause of Jayson’s injury was his own negligence in
disregarding the instructions given by Tabugo prior to the experiment and peeking into the test
tube. Petitioners invoke our ruling in St. Mary’s Academy v. Carpitanos9 which absolved St.
Mary’s Academy from liability for the untimely death of its student during a school sanctioned
activity, declaring that "the negligence of petitioner St. Mary’s Academy was only a remote cause
of the accident."

We are not convinced.

Contrary to petitioners’ assertions, the lower courts’ conclusions are borne out by the records of
this case. Both courts correctly concluded that the immediate and proximate cause of the
accident which caused injury to Jayson was the sudden and unexpected explosion of the
chemicals, independent of any intervening cause. The assailed Decision of the CA quotes with
favor the RTC decision, thus:

In this case, [petitioners] failed to show that the negligence of [Jayson] was the proximate cause
of the latter’s injury. We find that the immediate cause of the accident was not the negligence of
[Jayson] when he curiously looked into the test tube when the chemicals suddenly exploded
which caused his injury, but the sudden and unexpected explosion of the chemicals independent
of any intervening cause. [Petitioners] could have prevented the mishap if they exercised a
higher degree of care, caution and foresight. The court a quo correctly ruled that:

"All of the [petitioners] are equally at fault and are liable for negligence because all of them are
responsible for exercising the required reasonable care, prudence, caution and foresight to
prevent or avoid injuries to the students. The individual [petitioners] are persons charged with the
teaching and vigilance over their students as well as the supervision and ensuring of their well-
being. Based on the facts presented before this Court, these [petitioners] were remiss in their
responsibilities and lacking in the degree of vigilance expected of them. [Petitioner] subject
teacher Rosalinda Tabugo was inside the classroom when the class undertook the science
experiment although [Jayson] insisted that said [petitioner] left the classroom. No evidence,
however, was presented to establish that [petitioner] Tabugo was inside the classroom for the
whole duration of the experiment. It was unnatural in the ordinary course of events that [Jayson]
was brought to the school clinic for immediate treatment not by [petitioner] subject teacher
Rosalinda Tabugo but by somebody else. The Court is inclined to believe that [petitioner] subject
teacher Tabugo was not inside the classroom at the time the accident happened. The Court is
also perplexed why none of the other students (who were eyewitnesses to the incident) testified
in Court to corroborate the story of the [petitioners]. The Court, however, understands that these
other students cannot testify for [Jayson] because [Jayson] is no longer enrolled in said school
and testifying for [Jayson] would incur the ire of school authorities. Estefania Abdan is equally at
fault as the subject adviser or teacher in charge because she exercised control and supervision
over [petitioner] Tabugo and the students themselves. It was her obligation to insure that nothing
would go wrong and that the science experiment would be conducted safely and without any
harm or injury to the students. [Petitioner] Sr. Josephini Ambatali is likewise culpable under the
doctrine of command responsibility because the other individual [petitioners] were under her
direct control and supervision. The negligent acts of the other individual [petitioners] were done
within the scope of their assigned tasks.

xxxx

"The defense of due diligence of a good father of a family raised by [petitioner] St. Joseph
College will not exculpate it from liability because it has been shown that it was guilty of
inexcusable laxity in the supervision of its teachers (despite an apparent rigid screening process
for hiring) and in the maintenance of what should have been a safe and secured environment for
conducting dangerous experiments. [Petitioner] school is still liable for the wrongful acts of the
teachers and employees because it had full information on the nature of dangerous science
experiments but did not take affirmative steps to avert damage and injury to students. The fact
that there has never been any accident in the past during the conduct of science experiments is
not a justification to be complacent in just preserving the status quo and do away with creative
foresight to install safety measures to protect the students. Schools should not simply install
safety reminders and distribute safety instructional manuals. More importantly, schools should
provide protective gears and devices to shield students from expected risks and anticipated
dangers.

"Ordinarily, the liability of teachers does not extend to the school or university itself, although an
educational institution may be held liable under the principle of RESPONDENT SUPERIOR. It
has also been held that the liability of the employer for the [tortuous] acts or negligence of its
employees is primary and solidary, direct and immediate and not conditioned upon the
insolvency of or prior recourse against the negligent employee."10

Under the foregoing circumstances, we are hard pressed to disturb the findings of the RTC,
which the CA affirmed.

Nonetheless, petitioners make much of the fact that Tabugo specifically instructed her students,
including Jayson, at the start of the experiment, not to look into the heated test tube before the
compound had cooled off. Petitioners would allocate all liability and place all blame for the
accident on a twelve (12)-year-old student, herein respondent Jayson.

We disagree.

As found by both lower courts, the proximate cause of Jayson’s injury was the concurrent failure
of petitioners to prevent the foreseeable mishap that occurred during the conduct of the science
experiment. Petitioners were negligent by failing to exercise the higher degree of care, caution
and foresight incumbent upon the school, its administrators and teachers.

Article 218 of the Family Code, in relation to Article 2180 of the Civil Code, bestows special
parental authority on the following persons with the corresponding obligation, thus:

Art. 218. The school, its administrators and teachers, or the individual, entity or institution
engaged in child care shall have special parental authority and responsibility over the minor child
while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or outside the
premises of the school, entity or institution.

Art. 2180. 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.

xxxx

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

Petitioners’ negligence and failure to exercise the requisite degree of care and caution is
demonstrated by the following:

1. Petitioner school did not take affirmative steps to avert damage and injury to its
students although it had full information on the nature of dangerous science experiments
conducted by the students during class;

2. Petitioner school did not install safety measures to protect the students who conduct
experiments in class;

3. Petitioner school did not provide protective gears and devices, specifically goggles, to
shield students from expected risks and dangers; and
 4. Petitioner Tabugo was not inside the classroom the whole time her class conducted
the experiment, specifically, when the accident involving Jayson occurred. In any event,
the size of the class—fifty (50) students— conducting the experiment is difficult to
monitor.

Moreover, petitioners cannot simply deflect their negligence and liability by insisting that
petitioner Tabugo gave specific instructions to her science class not to look directly into the
heated compound. Neither does our ruling in St. Mary’s preclude their liability in this case.

Unfortunately for petitioners, St. Mary’s is not in point. In that case, respondents thereat admitted
the documentary exhibits establishing that the cause of the accident was a mechanical defect
and not the recklessness of the minor, James Daniel II, in driving the jeep. We held, thus:

Significantly, respondents did not present any evidence to show that the proximate cause of the
accident was the negligence of the school authorities, or the reckless driving of James Daniel II.
x x x.

Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive
the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent
Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and
he allowed James Daniel II, a minor, to drive the jeep at the time of the accident.

Hence, liability for the accident, whether caused by the negligence of the minor driver or
mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor’s
parents primarily. The negligence of petitioner St. Mary’s Academy was only a remote cause of
the accident. Between the remote cause and the injury, there intervened the negligence of the
minor’s parents or the detachment of the steering wheel guide of the jeep.11

In marked contrast, both the lower courts similarly concluded that the mishap which happened
during the science experiment was foreseeable by the school, its officials and teachers. This
neglect in preventing a foreseeable injury and damage equates to neglect in exercising the
utmost degree of diligence required of schools, its administrators and teachers, and, ultimately,
was the proximate cause of the damage and injury to Jayson. As we have held in St. Mary’s, "for
petitioner [St. Mary’s Academy] to be liable, there must be a finding that the act or omission
considered as negligent was the proximate cause of the injury caused because the negligence
must have a causal connection to the accident."12

As regards the contributory negligence of Jayson, we see no need to disturb the lower courts’
identical rulings thereon:

As earlier discussed, the proximate cause of [Jayson’s] injury was the explosion of the heated
compound independent of any efficient intervening cause. The negligence on the part of
[petitioner] Tabugo in not making sure that the science experiment was correctly conducted was
the proximate cause or reason why the heated compound exploded and injured not only [Jayson]
but his classmates as well. However, [Jayson] is partly responsible for his own injury, hence, he
should not be entitled to recover damages in full but must likewise bear the consequences of his
own negligence. [Petitioners], therefore, should be held liable only for the damages actually
caused by their negligence.13

Lastly, given our foregoing ruling, we likewise affirm the lower courts’ award of actual and moral
damages, and grant of attorney’s fees. The denial of petitioners’ counterclaim is also in order.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No.
68367 is AFFIRMED. Costs against petitioners.

SO ORDERED.
G.R. No. L-7664 August 29, 1958

MR. AND MRS. AMADOR C. ONG, plaintiffs-appellants,

vs.
METROPOLITAN WATER DISTRICT, defendant-appellee.

Tomas Tria Tirona for appellants.

Government Corporate Counsel Ambrosio Padilla and Juan C. Jimenez for appellee.

BAUTISTA ANGELO, J.:

Plaintiffs spouses seek to recover from defendant, a government-owned corporation, the sum of
P50,000 as damages, P5,000 as funeral expenses, and P11,000 as attorneys' fees, for the death
of their son Dominador Ong in one of the swimming pools operated by defendant.

Defendant admits the fact that plaintiffs' son was drowned in one of its swimming pools but avers
that his death was caused by his own negligence or by unavoidable accident. Defendant also
avers that it had exercised due diligence in the selection of, and supervision over, its employees
and that it had observed the diligence required by law under the circumstances.

After trial, the lower court found that the action of plaintiffs is untenable and dismissed the
complaint without pronouncement as to costs. Plaintiffs took the case on appeal directly to this
Court because the amount involved exceeds the sum of P50,000.

Defendant owns and operates three recreational swimming pools at its Balara filters, Diliman,
Quezon City, to which people are invited and for which a nominal fee of P0.50 for adults and
P0.20 for children is charged. The main pool it between two small pools of oval shape known as
the "Wading pool" and the "Beginners Pool." There are diving boards in the big pools and the
depths of the water at different parts are indicated by appropriate marks on the wall. The care
and supervision of the pools and the users thereof is entrusted to a recreational section
composed of Simeon Chongco as chief, Armando Rule, a male nurse, and six lifeguards who
had taken the life-saving course given by the Philippine Red Cross at the YMCA in Manila. For
the safety of its patrons, defendant has provided the pools with a ring buoy, toy roof, towing line,
saving kit and a resuscitator. There is also a sanitary inspector who is in charge of a clinic
established for the benefit of the patrons. Defendant has also on display in a conspicuous place
certain rules and regulations governing the use of the pools, one of which prohibits the swimming
in the pool alone or without any attendant. Although defendant does not maintain a full-time
physician in the swimming pool compound, it has however a nurse and a sanitary inspector
ready to administer injections or operate the oxygen resuscitator if the need should arise.

In the afternoon of July 5, 1952, at about 1:00 o'clock, Dominador Ong, a 14-year old high school
student and boy scout, and his brothers Ruben and Eusebio, went to defendant's swimming
pools. This was not the first time that the three brothers had gone to said natatorium for they had
already been there four or five times before. They arrived at the natatorium at about 1:45 p.m.
After paying the requisite admission fee, they immediately went to one of the small pools where
the water was shallow. At about 4:35 p.m., Dominador Ong told his brothers that he was going to
the locker room in an adjoining building to drink a bottle of coke. Upon hearing this, Ruben and
Eusebio went to the bigger pool leaving Dominador in the small pool and so they did not see the
latter when he left the pool to get a bottle of coke. In that afternoon, there were two lifeguards on
duty in the pool compound, namely, Manuel Abaño and Mario Villanueva. The tour of duty of
Abaño was from 8:00 to 12:00 in the morning and from 2:00 to 6:00 in the afternoon, and of
Villanueva from 7:30 to 11:30 a.m. and from 12:30 to 4:30 p.m. Between 4:00 to 5:00 that
afternoon, there were about twenty bathers inside the pool area and Manuel Abaño was going
around the pools to observe the bathers in compliance with the instructions of his chief.

Between 4:40 to 4:45 p.m., some boys who were in the pool area informed a bather by the name
of Andres Hagad, Jr., that somebody was swimming under water for quite a long time. Another
boy informed lifeguard Manuel Abaño of the same happening and Abaño immediately jumped
into the big swimming pool and retrieved the apparently lifeless body of Dominador Ong from the
bottom. The body was placed at the edge of the pool and Abaño immediately applied manual
artificial respiration. Soon after, male nurse Armando Rule came to render assistance, followed
by sanitary inspector Iluminado Vicente who, after being called by phone from the clinic by one of
the security guards, boarded a jeep carrying with him the resuscitator and a medicine kit, and
upon arriving he injected the boy with camphorated oil. After the injection, Vicente left on a jeep
in order to fetch Dr. Ayuyao from the University of the Philippines. Meanwhile, Abaño continued
the artificial manual respiration, and when this failed to revive him, they applied the resuscitator
until the two oxygen tanks were exhausted. Not long thereafter, Dr. Ayuyao arrived with another
resuscitator, but the same became of no use because he found the boy already dead. The doctor
ordered that the body be taken to the clinic.

In the evening of the same day, July 5, 1952, the incident was investigated by the Police
Department of Quezon City and in the investigation boys Ruben Ong and Andres Hagad, Jr.
gave written statements. On the following day, July 6, 1952, an autopsy was performed by Dr.
Enrique V. de los Santos, Chief, Medico Legal Division, National Bureau of Investigation, who
found in the body of the deceased the following: an abrasion on the right elbow lateral aspect;
contusion on the right forehead; hematoma on the scalp, frontal region, right side; a congestion
in the brain with petechial subcortical hemorrhage, frontal lobe; cyanosis on the face and on the
nails; the lung was soggy with fine froth in the bronchioles; dark fluid blood in the heart;
congestion in the visceral organs, and brownish fluid in the stomach. The death was due to
asphyxia by submersion in water.

The issue posed in this appeal is whether the death of minor Dominador Ong can be attributed to
the negligence of defendant and/or its employees so as to entitle plaintiffs to recover damages.

The present action is governed by Article 2176 in relation to Article 2080 of the new Civil Code.
The first article provides that "whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damages done." Such fault or negligence is
called quasi-delict. Under the second article, this obligation is demandable not only for one's own
acts or omissions but also for those of persons for whom one is responsible. In addition, we may
quote the following authorities cited in the decision of the trial court:

"The rule is well settled that the owners of resorts to which people generally are
expressly or by implication invited are legally bound to exercise ordinary care and
prudence in the management and maintenance of such resorts, to the end of making
them reasonably safe for visitors" (Larkin vs. Saltair Beach Co., 30 Utah 86, 83 Pac.
686).

"Although the proprietor of a natatorium is liable for injuries to a patron, resulting from
lack of ordinary care in providing for his safety, without the fault of the patron, he is not,
however, in any sense deemed to be the insurer of the safety of patrons. And the death
of a patron within his premises does not cast upon him the burden of excusing himself
from any presumption of negligence" (Bertalot vs. Kinnare. 72 Ill. App. 52, 22 A. L. R.
635; Flora vs. Bimini Water Co., 161 Cal. 495, 119 Pac. 661). Thus in Bertalot vs.
 Kinnare, supra, it was held that there could be no recovery for the death by drowning of a
fifteen-year boy in defendant's natatorium, where it appeared merely that he was lastly
seen alive in water at the shallow end of the pool, and some ten or fifteen minutes later
was discovered unconscious, and perhaps lifeless, at the bottom of the pool, all efforts to
resuscitate him being without avail.

Since the present action is one for damages founded on culpable negligence, the principle to be
observed is that the person claiming damages has the burden of proving that the damage is
caused by the fault or negligence of the person from whom the damage is claimed, or of one of
his employees (Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517). The
question then that arises is: Have appellants established by sufficient evidence the existence of
fault or negligence on the part of appellee so as to render it liable for damages for the death of
Dominador Ong?

There is no question that appellants had striven to prove that appellee failed to take the
necessary precaution to protect the lives of its patrons by not placing at the swimming pools
efficient and competent employees who may render help at a moment's notice, and they
ascribed such negligence to appellee because the lifeguard it had on the occasion minor Ong
was drowning was not available or was attending to something else with the result that his help
came late. Thus, appellants tried to prove through the testimony of Andres Hagad, Jr. and Ruben
Ong that when Eusebio Ong and Hagad, Jr. detected that there was a drowning person in the
bottom of the big swimming pool and shouted to the lifeguard for help, lifeguard Manuel Abaño
did not immediately respond to the alarm and it was only upon the third call that he threw away
the magazine he was reading and allowed three or four minutes to elapse before retrieving the
body from the water. This negligence of Abaño, they contend, is attributable to appellee.

But the claim of these two witnesses not only was vehemently denied by lifeguard Abaño, but is
belied by the written statements given by them in the investigation conducted by the Police
Department of Quezon City approximately three hours after the happening of the accident. Thus,
these two boys admitted in the investigation that they narrated in their statements everything they
knew of the accident, but, as found by the trial, nowhere in said statements do they state that the
lifeguard was chatting with the security guard at the gate of the swimming pool or was reading a
comic magazine when the alarm was given for which reason he failed to immediately respond to
the alarm. On the contrary, what Ruben Ong particularly emphasized therein was that after the
lifeguard heard the shouts for help, the latter immediately dived into the pool to retrieve the
person under water who turned out to be his brother. For this reason, the trial court made this
conclusion: "The testimony of Ruben Ong and Andres Hagad, Jr. as to the alleged failure of the
lifeguard Abaño to immediately respond to their call may therefore be disregarded because they
are belied by their written statements. (Emphasis supplied.)

On the other hand, there is sufficient evidence to show that appellee has taken all necessary
precautions to avoid danger to the lives of its patrons or prevent accident which may cause their
death. Thus, it has been shown that the swimming pools of appellee are provided with a ring
buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The bottom of the
pools is painted with black colors so as to insure clear visibility. There is on display in a
conspicuous place within the area certain rules and regulations governing the use of the pools.
Appellee employs six lifeguards who are all trained as they had taken a course for that purpose
and were issued certificates of proficiency. These lifeguards work on schedule prepared by their
chief and arranged in such a way as to have two guards at a time on duty to look after the safety
of the bathers. There is a male nurse and a sanitary inspector with a clinic provided with oxygen
resuscitator. And there are security guards who are available always in case of emergency.

The record also shows that when the body of minor Ong was retrieved from the bottom of the
pool, the employees of appellee did everything possible to bring him back to life. Thus, after he
was placed at the edge of the pool, lifeguard Abaño immediately gave him manual artificial
respiration. Soon thereafter, nurse Armando Rule arrived, followed by sanitary inspector
Iluminado Vicente who brought with him an oxygen resuscitator. When they found that the pulse
of the boy was abnormal, the inspector immediately injected him with camphorated oil. When the
manual artificial respiration proved ineffective they applied the oxygen resuscitator until its
contents were exhausted. And while all these efforts were being made, they sent for Dr. Ayuyao
from the University of the Philippines who however came late because upon examining the body
he found him to be already dead. All of the foregoing shows that appellee has done what is
humanly possible under the circumstances to restore life to minor Ong and for that reason it is
unfair to hold it liable for his death.

Sensing that their former theory as regards the liability of appellee may not be of much help,
appellants now switch to the theory that even if it be assumed that the deceased is partly to be
blamed for the unfortunate incident, still appellee may be held liable under the doctrine of "last
clear chance" for the reason that, having the last opportunity to save the victim, it failed to do so.

We do not see how this doctrine may apply considering that the record does not show how minor
Ong came into the big swimming pool. The only thing the record discloses is that minor Ong
informed his elder brothers that he was going to the locker room to drink a bottle of coke but that
from that time on nobody knew what happened to him until his lifeless body was retrieved. The
doctrine of last clear chance simply means that the negligence of a claimant does not preclude a
recovery for the negligence of defendant where it appears that the latter, by exercising
reasonable care and prudence, might have avoided injurious consequences to claimant
notwithstanding his negligence. Or, "As the doctrine usually is stated, a person who has the last
clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his
opponent or the negligence of a third person which is imputed to his opponent, is considered in
law solely responsible for the consequences of the accident." (38 Am. Jur. pp. 900-902)

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself in the wrong side of the road. But as we have
already stated, the defendant was also negligent; and in such case the problem always is
to discover which agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under
these circumstances, the law is that a person who has the last clear chance to avoid the
impending harm and fails to do so is chargeable with the consequences, without
reference to the prior negligence of the other party. (Picart vs. Smith, 37 Phil., 809)

Since it is not known how minor Ong came into the big swimming pool and it being apparent that
he went there without any companion in violation of one of the regulations of appellee as regards
the use of the pools, and it appearing that lifeguard Aba_¤_o responded to the call for help as
soon as his attention was called to it and immediately after retrieving the body all efforts at the
disposal of appellee had been put into play in order to bring him back to life, it is clear that there
is no room for the application of the doctrine now invoked by appellants to impute liability to
appellee..

The last clear chance doctrine can never apply where the party charged is required to act
instantaneously, and if the injury cannot be avoided by the application of all means at
hand after the peril is or should have been discovered; at least in cases in which any
previous negligence of the party charged cannot be said to have contributed to the
injury. O'Mally vs. Eagan, 77 ALR 582, 43 Wyo. 233, 350, 2, P2d 1063. (A.L.R. Digest,
Vol. 8, pp. 955-956)

Before closing, we wish to quote the following observation of the trial court, which we find
supported by the evidence: "There is (also) a strong suggestion coming from the expert evidence
presented by both parties that Dominador Ong might have dived where the water was only 5.5
feet deep, and in so doing he might have hit or bumped his forehead against the bottom of the
pool, as a consequence of which he was stunned, and which to his drowning. As a boy scout he
must have received instructions in swimming. He knew, or have known that it was dangerous for
him to dive in that part of the pool."

Wherefore, the decision appealed from being in accordance with law and the evidence, we
hereby affirm the same, without pronouncement as to costs.