ELCANO V HILL 77 SCRA 100 – MAY 26, 1977

FACTS:
Reginal Hill was married and a minor who was then still living in care of his father, Atty. Marvin Hill. Reginald Hill
was prosecuted criminally for killing Agapito Elcano. Reginald was acquitted on the ground that his acts were not
criminal because of “lack of intent to kill, coupled with mistakes. The father of Agapito Elcano then filed a civil
action against Reginald and his father (Marvin Hill) for damages based on Article 2180 of the Civil Code. Hill argued
that the civil action is barred by his son’s acquittal in the criminal case; and that if ever, his civil liability as a parent
has been extinguished by the fact that his son is already an emancipated minor by reason of his marriage.

ISSUE:
Whether or not Atty. Marvin Hill has a vicarious liability being the father of a minor child who committed a tort?

HELD:
The law clearly stated that parental authority is terminated upon emancipation of the child according to Title X of
Family Code; Emancipation and Age of Majority, emancipation takes place by marriage of the minor. However,
such emancipation is not absolute and full. Reginald although married, was living with his father and still
dependent from the latter. ART 2180 applies to Atty. Marvin Hill notwithstanding the emancipation by marriage of
Reginald. Therefore, Article 2180 is applicable to Marvin Hill – the SC however ruled since at the time of the
decision, Reginald is already of age, Marvin’s liability should be subsidiary only – as a matter of equity.

Case Digest: Singson vs BPI G.R. No. L-24837. 29 June 1968.

JULIAN SINGSON and RAMONA DEL CASTILLO vs. BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS
(Pres. Of BPI)G.R. No. L-24837. 29 June 1968.

FACTS:
Appeal by plaintiffs from a decision of the CFI Mla dismissing their complaint against defendants.
On May 8, 1963, the Singsong commenced the present action against the Bank and its president, Freixas, for
damages in consequence of said illegal freezing of plaintiffs' account. After appropriate proceedings, the CFI Mla
rendered judgment dismissing the complaint upon the ground that plaintiffs cannot recover from the defendants
upon the basis of a quasi-delict, because the relation between the parties is contractual in nature.

ISSUES:
WON the existence of a contractual relation between the parties bar recovery of damages.

HELD:
The judgment appealed from is reversed holding defendant BPI to pay to the plaintiffs nominal damages, and
attorney's fees, apart from the costs.The SC have repeatedly held that the existence of a contract between the
parties does not bar the commission of a tort by the one against the order and the consequent recovery of
damages therefore.

In view, of the facts obtaining in the case at bar, and considering, particularly, the circumstance, that the wrong
done to the plaintiff was remedied as soon as the President of the bank realized the mistake they had committed,
the Court finds that an award of nominal damages the amount of which need not be proven in the sum of P1,000,
in addition to attorney's fees in the sum of P500, would suffice to vindicate plaintiff's rights.

[G.R. No. 129029. April 3, 2000]

 RAFAEL REYES TRUCKING CORPORATION, Petitioner, vs. PEOPLE OF THE PHILIPPINES and ROSARIO P. DY (for
herself and on behalf of the minors Maria Luisa, Francis Edward, Francis Mark and Francis Rafael, all surnamed
Dy), Respondents.

FACTS:
The defendant Rafael Reyes Trucking Corporation is a domestic corporation engaged in the business of
transporting beer products for the San Miguel Corporation (SMC for short) from the latters San Fernando,
Pampanga plant to its various sales outlets in Luzon. Among its fleets of vehicles for hire is the white truck trailer
driven by Romeo Dunca y Tumol, a duly licensed driver. Aside from the Corporations memorandum to all its drivers
and helpers to physically inspect their vehicles before each trip, the SMCs Traffic Investigator-Inspector certified
the roadworthiness of this White Truck trailer. In addition to a professional drivers license, it also conducts a rigid
examination of all driver applicants before they are hired.

In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to San
Fernando, Pampanga loaded with 2,000 cases of empty beer "Grande" bottles. Seated at the front right seat
beside him was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At around 4:00 oclock that same
morning while the truck was descending at a slight downgrade along the national road at Tagaran, Cauayan,
Isabela, it approached a damaged portion of the road covering the full width of the trucks right lane going south
and about six meters in length. These made the surface of the road uneven because the potholes were about five
to six inches deep. The left lane parallel to this damaged portion is smooth. As narrated by Ferdinand Domingo,
before approaching the potholes, he and Dunca saw the Nissan with its headlights on coming from the opposite
direction. They used to evade this damaged road by taking the left lance but at that particular moment, because of
the incoming vehicle, they had to run over it. This caused the truck to bounce wildly. Dunca lost control of the
wheels and the truck swerved to the left invading the lane of the Nissan. As a result, Duncas vehicle rammed the
incoming Nissan dragging it to the left shoulder of the road and climbed a ridge above said shoulder where it
finally stopped. The Nissan was severely damaged and its two passengers, namely: Feliciano Balcita and Francisco
Dy, Jr. died instantly from external and internal hemorrhage and multiple fractures.

For the funeral expenses of Francisco Dy, Jr. her widow spent P651,360.00. At the time of his death he was 45
years old. He was the President and Chairman of the Board of the Dynamic Wood Products and Development
Corporation (DWPC), a wood processing establishment, from which he was receiving an income of P10,000.00 a
month. In the Articles of Incorporation of the DWPC, the spouses Francisco Dy, Jr. and Rosario Perez Dy appear to
be stockholders of 10,000 shares each with par value of P100.00 per share out of its outstanding and subscribed
capital stock of 60,000 shares valued at P6,000,000.00. Under its 1988 Income Tax Returns the DWPC had a taxable
net income of P78,499.30. Francisco Dy, Jr. was a La Salle University graduate in Business Administration, past
president of the Pasay Jaycees, National Treasurer and President of the Philippine Jaycees in 1971 and 1976,
respectively, and World Vice-President of Jaycees International in 1979. He was also the recipient of numerous
awards as a civic leader. His children were all studying in prestigious schools and spent about P180,000.00 for their
education in 1988 alone.

The trial court rendered a joint decision finding the accused Romeo Dunca y de Tumol guilty beyond reasonable
doubt of the crime of Double Homicide through Reckless Imprudence with violation of the Motor Vehicle Law
(Rep. Act No. 4136), and appreciating in his favor the mitigating circumstance of voluntary surrender without any
aggravating circumstance to offset the same, the Court sentences him to suffer two (2) indeterminate penalties of
four months and one day of arresto mayor as minimum to three years, six months and twenty days as maximum;
to indemnify the Heirs of Francisco Dy. Jr. in the amount of P3,000,000.00 as compensatory damages,
P1,000,000.00 as moral damages, and P1,030,000.00 as funeral expenses; Ordering the plaintiff in Civil Case No. Br.
19-424 to pay the defendant therein actual damages in the amount of P84,000.00; and Ordering the dismissal of
the complaint in Civil Case No. Br. 19-424.
Petitioner and the accused filed a notice of appeal from the joint decision.On the other hand, private respondents
moved for amendment of the dispositive portion of the joint decision so as to hold petitioner subsidiarily liable for
the damages awarded to the private respondents in the event of insolvency of the accused.

The trial court rendered a supplemental decision ordering the defendant Reyes Trucking Corporation subsidiarily
liable for all the damages awarded to the heirs of Francisco Dy, Jr., in the event of insolvency of the accused but
deducting therefrom the damages of P84,000.00 awarded to said defendant.

Petitioner filed with the trial court a supplemental notice of appeal from the supplemental decision. During the
pendency of the appeal, the accused jumped bail and fled to a foreign country. The Court of Appeals dismissed the
appeal of the accused in the criminal case and rendered an amended decision affirming that of the trial court.
Petitioner filed a motion for reconsideration of the amended decision. The Court of Appeals denied petitioners
motion for reconsideration for lack of merit. Hence, this petition for review.

ISSUES:
1. May petitioner as owner of the truck involved in the accident be held subsidiarily liable for the damages
awarded to the offended parties in the criminal action against the truck driver despite the filing of a separate civil
action by the offended parties against the employer of the truck driver?
2. May the Court award damages to the offended parties in the criminal case despite the filing of a civil action
against the employer of the truck driver; and in amounts exceeding that alleged in the information for reckless
imprudence resulting in homicide and damage to property?

HELD:
1. Rafael Reyes Trucking Corporation, as employer of the accused who has been adjudged guilty in the criminal
case for reckless imprudence, can not be held subsidiarily liable because of the filing of the separate civil action
based on quasi delict against it. In view of the reservation to file, and the subsequent filing of the civil action for
recovery of civil liability, the same was not instituted with the criminal action. Such separate civil action was for
recovery of damages under Article 2176 of the Civil Code, arising from the same act or omission of the accused. In
negligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability arising from
crime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi delict under Article 2176 of
the Civil Code of the Philippines. Once the choice is made, the injured party can not avail himself of any other
remedy because he may not recover damages twice for the same negligent act or omission of the accused. This is
the rule against double recovery.In other words, "the same act or omission can create two kinds of liability on the
part of the offender, that is, civil liability ex delicto, and civil liability quasi delicto" either of which "may be
enforced against the culprit, subject to the caveat under Article 2177 of the Civil Code that the offended party can
not recover damages under both types of liability." In the instant case, the offended parties elected to file a
separate civil action for damages against petitioner as employer of the accused, based on quasi delict, under
Article 2176 of the Civil Code of the Philippines. Private respondents sued petitioner Rafael Reyes Trucking
Corporation, as the employer of the accused, to be vicariously liable for the fault or negligence of the latter. Under
the law, this vicarious liability of the employer is founded on at least two specific provisions of law.The first is
expressed in Article 2176 in relation to Article 2180 of the Civil Code, which would allow an action predicated
on quasi-delict to be instituted by the injured party against the employer for an act or omission of the employee
and would necessitate only a preponderance of evidence to prevail. Here, the liability of the employer for the
negligent conduct of the subordinate is direct and primary, subject to the defense of due diligence in the selection
and supervision of the employee. The enforcement of the judgment against the employer in an action based on
Article 2176 does not require the employee to be insolvent since the nature of the liability of the employer with
that of the employee, the two being statutorily considered joint tortfeasors, is solidary. The second, predicated on
Article 103 of the Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a felony
committed by his employee in the discharge of his duty. This liability attaches when the employee is convicted of a
crime done in the performance of his work and is found to be insolvent that renders him unable to properly
respond to the civil liability adjudged. Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985
Rules of Criminal Procedure, when private respondents, as complainants in the criminal action, reserved the right
to file the separate civil action, they waived other available civil actions predicated on the same act or omission of
the accused-driver. Such civil action includes the recovery of indemnity under the Revised Penal Code, and
damages under Articles 32, 33, and 34 of the Civil Code of the Philippines arising from the same act or omission of
the accused. The intention of private respondents to proceed primarily and directly against petitioner as employer
of accused truck driver became clearer when they did not ask for the dismissal of the civil action against the latter
based on quasi delict.Consequently, the Court of Appeals and the trial court erred in holding the accused civilly
liable, and petitioner-employer of the accused subsidiarily liable for damages arising from crime (ex delicto) in the
criminal action as the offended parties in fact filed a separate civil action against the employer based on quasi
delict resulting in the waiver of the civil action ex delicto.It might be argued that private respondents as
complainants in the criminal case withdrew the reservation to file a civil action against the driver (accused) and
manifested that they would pursue the civil liability of the driver in the criminal action. However, the withdrawal is
ineffective to reverse the effect of the reservation earlier made because private respondents did not withdraw the
civil action against petitioner based on quasi delict. In such a case, the provision of Rule 111, Section 1, paragraph 3
of the 1985 Rules on Criminal Procedure is clear that the reservation to file or the filing of a separate civil action
results in a waiver of other available civil actions arising from the same act or omission of the accused. Rule 111,
Section 1, paragraph 2 enumerated what are the civil actions deemed waived upon such reservation or filing, and
one of which is the civil indemnity under the Revised Penal Code. Rule 111, Section 1, paragraph 3 of the 1985
Rules on Criminal Procedure specifically provides: "A waiver of any of the civil actions extinguishes the others. The
institution of, or the reservation of the right to file, any of said civil actions separately waives the others."The
rationale behind this rule is the avoidance of multiple suits between the same litigants arising out of the same act
or omission of the offender. The restrictive phraseology of the section under consideration is meant to cover all
kinds of civil actions, regardless of their source in law, provided that the action has for its basis the same act or
omission of the offender. However, petitioner as defendant in the separate civil action for damages filed against it,
based on quasi delict, may be held liable thereon. Thus, the trial court grievously erred in dismissing plaintiffs civil
complaint. And the Court of Appeals erred in affirming the trial courts decision. Unfortunately private respondents
did not appeal from such dismissal and could not be granted affirmative relief.The Court, however, in exceptional
cases has relaxed the rules "in order to promote their objectives and assist the parties in obtaining just, speedy,
and inexpensive determination of every action or proceeding" or exempted "a particular case from the operation
of the rules." Invoking this principle, we rule that the trial court erred in awarding civil damages in the criminal
case and in dismissing the civil action. Apparently satisfied with such award, private respondent did not appeal
from the dismissal of the civil case. However, petitioner did appeal. Hence, this case should be remanded to the
trial court so that it may render decision in the civil case awarding damages as may be warranted by the evidence.

2. The award of damages in the criminal case was improper because the civil action for the recovery of civil liability
was waived in the criminal action by the filing of a separate civil action against the employer. As enunciated
in Ramos vs. Gonong, "civil indemnity is not part of the penalty for the crime committed." The only issue brought
before the trial court in the criminal action is whether accused Romeo Dunca y de Tumol is guilty of reckless
imprudence resulting in homicide and damage to property. The action for recovery of civil liability is not included
therein, but is covered by the separate civil action filed against the petitioner as employer of the accused truck-
driver. In this case, accused-driver jumped bail pending his appeal from his conviction. Thus, the judgment
convicting the accused became final and executory, but only insofar as the penalty in the criminal action is
concerned. The damages awarded in the criminal action was invalid because of its effective waiver. The
pronouncement was void because the action for recovery of the civil liability arising from the crime has been
waived in said criminal action. With respect to the issue that the award of damages in the criminal action exceeded
the amount of damages alleged in the amended information, the issue is de minimis. At any rate, the trial court
erred in awarding damages in the criminal case because by virtue of the reservation of the right to bring a separate
civil action or the filing thereof, "there would be no possibility that the employer would be held liable because in
such a case there would be no pronouncement as to the civil liability of the accused. As a final note, the Court
reiterate that "the policy against double recovery requires that only one action be maintained for the same act or
omission whether the action is brought against the employee or against his employer. The injured party must
choose which of the available causes of action for damages he will bring.
CRIMPRO Section 3, Rule 111 (As per syllabus)
Title MANLICLIC VS CALAUNAN GR No. 150157
Date: January 25, 2007
Ponente: CHICO-NAZARIO, J.
MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS MODESTO CALAUNAN
LINES, INC. (PRBLI)
Nature of the case: Petition for review assailing the decision of the Court of Appeals dated 28 September 2001 in
CA-G.R. CV No. 55909 which affirmed in toto the decision of the Regional Trial Court (RTC) of Dagupan City,
Branch 42, in Civil Case No. D-10086, finding petitioners Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc.
(PRBLI) solidarily liable to pay damages and attorney’s fees to respondent Modesto Calaunan.
FACTS
Philippine Rabbit Bus No. 353 with plate number CVD-478, owned by petitioner PRBLI and driven by petitioner
Mauricio Manliclic collided with the owner-type jeep with plate number PER-290, owned by respondent Modesto
Calaunan and driven by Marcelo Mendoza. The accident happened at around 6:00 to 7:00 o’clock in the morning of
12 July 1988 at approximately Kilometer 40 of the North Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan.
The front right side of the Philippine Rabbit Bus hit the rear left side of the jeep causing the latter to move to the
shoulder on the right and then fall on a ditch with water resulting to further extensive damage. The bus veered to
the left and stopped 7 to 8 meters from point of collision.
Respondent suffered minor injuries while his driver was unhurt. He was first brought for treatment to the Manila
Central University Hospital in Kalookan City by Oscar Buan, the conductor of the Philippine Rabbit Bus, and was
later transferred to the Veterans Memorial Medical Center.
A criminal case was filed before the RTC of Malolos, Bulacan, charging petitioner Manliclic with Reckless
Imprudence Resulting in Damage to Property with Physical Injuries. Subsequently on 2 December 1991,
respondent filed a complaint for damages against petitioners Manliclic and PRBLI before the RTC of Dagupan City.
The criminal case was tried ahead of the civil case. When the civil case was heard counsel for respondent prayed
that the transcripts of stenographic notes (TSNs) of the testimonies in the criminal case be received in evidence in
the civil case in as much as these witnesses are not available to testify in the civil case.

On 22 July 1996, the trial court rendered its decision in favor of respondent Calaunan and against petitioners
Manliclic and PRBLI. The trial court ordered the herein petitioners to pay the respondents jointly and solidarily the
amount of P40,838.00 as actual damages for the towing as well as the repair and the materials used for the repair
of the jeep in question; P100,000.00 as moral damages and anotherP100,000.00 as exemplary damages and
P15,000.00 as attorney’s fees, including appearance fees of the lawyer. In addition, the petitioners are also to pay
costs. Petitioners appealed the decision via Notice of Appeal to the Court of Appeals.
In a decision dated 28 September 2001, the Court of Appeals, finding no reversible error in the decision of the trial
court, affirmed it in all respects. On the other hand, petitioner Manliclic was acquitted by the Court of Appeals of
the charge of Reckless Imprudence Resulting in Damage to Property with Physical Injuries.
From the complaint, it can be gathered that the civil case for damages was one arising from, or based on, quasi-
delict. Petitioner Manliclic was sued for his negligence or reckless imprudence in causing the collision, while
petitioner PRBLI was sued for its failure to exercise the diligence of a good father in the selection and supervision
of its employees, particularly petitioner Manliclic. Petitioner Manliclic was acquitted not on reasonable doubt, but
on the ground that he is not the author of the act complained of.
ISSUE/S
Can Manliclic still be held liable for the collision and be found negligent notwithstanding the declaration of the
Court of Appeals that there was an absence of negligence on his part?
RATIO: Yes.
Section 2(b) of Rule 111 of the Rules of Criminal Procedure reads:
(b) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a
declaration in a final judgment that the fact from which the civil might arise did not exist.
In spite of said ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted section applies
only to a civil action arising from crime or ex delicto and not to a civil action arising from quasi-delict or culpa
aquiliana. The extinction of civil liability referred to in Par. (e) of Section 3, Rule 111 [now Section 2 (b) of Rule
111], refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability
for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in
the criminal case that the criminal act charged has not happened or has not been committed by the accused.

A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code with a substantivity all its own,
and individuality that is entirely apart and independent from a delict or crime – a distinction exists between the
civil liability arising from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability arising from a crime under the Penal Code, or create an
action for quasi-delicts or culpa extra-contractual under the Civil Code. It is now settled that acquittal of the
accused, even if based on a finding that he is not guilty, does not carry with it the extinction of the civil liability
based on quasi delict.

In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil liability arising from the
crime may be proved by preponderance of evidence only. However, if an accused is acquitted on the basis that he
was not the author of the act or omission complained of (or that there is declaration in a final judgment that the
fact from which the civil might arise did not exist), said acquittal closes the door to civil liability based on the crime
or ex delicto. In this second instance, there being no crime or delict to speak of, civil liability based thereon or ex
delicto is not possible. In this case, a civil action, if any, may be instituted on grounds other than the delict
complained of.
As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be extinguished by an acquittal,
whether it be on ground of reasonable doubt or that accused was not the author of the act or omission
complained of (or that there is declaration in a final judgment that the fact from which the civil liability might arise
did not exist). The responsibility arising from fault or negligence in a quasi-delict is entirely separate and distinct
from the civil liability arising from negligence under the Penal Code. An acquittal or conviction in the criminal case
is entirely irrelevant in the civil case based on quasi-delict or culpa aquiliana.
RULING

WHEREFORE, premises considered, the instant petition for review is DENIED. The decision of the Court of Appeals
in CA-G.R. CV No. 55909 is AFFIRMED with the MODIFICATION that (1) the award of moral damages shall be
reduced to P50,000.00; and (2) the award of exemplary damages shall be lowered to P50,000.00. Costs against
petitioners.
)

LIBI VS. IAC

FACTS:
Julie Ann Gotiong and Wendell Libi were a sweetheart until the former broke up with the latter after she found out
the Wendell was irresponsible and sadistic. Wendell wanted reconciliation but was not granted by Julie so it
prompted him to resort to threats. One day, there were found dead from a single gunshot wound each coming
from the same gun. The parents of Julie herein private respondents filed a civil case against the parents of
Wendell to recover damages. Trial court dismissed the complaint for insufficiency of evidence but was set aside by
CA.

ISSUE:
WON the parents should be held liable for such damages.
HELD:
The subsidiary liability of parents for damages caused by their minor children imposed under Art 2180 of the Civil
Code and Art. 101 of Revised Penal Code covered obligations arising from both quasi-delicts and criminal offenses.
The court held that the civil liability of the parents for quasi-delict of their minor children is primary and not
subsidiary and that responsibility shall cease when the persons can prove that they observe all the diligence of a
good father of a family to prevent damage. However, Wendell’s mother testified that her husband owns a gun
which he kept in a safety deposit box inside a drawer in their bedroom. Each of the spouses had their own key.
She likewise admitted that during the incident, the gun was no longer in the safety deposit box. Wendell could not
have gotten hold of the gun unless the key was left negligently lying around and that he has free access of the
mother’s bag where the key was kept. The spouses failed to observe and exercise the required diligence of a good
father to prevent such damage.

[G.R. No. 135644. September 17, 2001]

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. SPOUSES GONZALO and MATILDE LABUNG-DEANG,
respondents.

The petitioner in the case is the Government Service Insurance System (hereafter, GSIS). Having lost the case in the
trial court and the Court of Appeals, it now comes to this Court for redress.

At the onset, we state that the issue is not suability or whether GSIS may be sued despite the doctrine of state
immunity from suit, but liability, whether or not GSIS may be liable to pay damages to respondent spouses given
the applicable law and the circumstances of the case.

The Case

The case is a petition for review on certiorari of the decision of the Court of Appeals affirming the decision of the
Regional Trial Court, Angeles City ordering GSIS to pay respondents Gonzalo (now deceased) and Matilde Labung-
Deang (hereafter, spouses Deang) temperate damages, attorneys fees, legal interests and costs of suit for the loss
of their title to real property mortgaged to the GSIS.

The Facts

Sometime in December 1969, the spouses Deang obtained a housing loan from the GSIS in the amount of eight
thousand five hundred pesos (P8,500.00). Under the agreement, the loan was to mature on December 23, 1979.
The loan was secured by a real estate mortgage constituted over the spouses property covered by Transfer
Certificate of Title No. 14926-R issued by the Register of Deeds of Pampanga. As required by the mortgage deed,
the spouses Daeng deposited the owners duplicate copy of the title with the GSIS.

On January 19, 1979, eleven (11) months before the maturity of the loan, the spouses Deang settled their debt
with the GSIS and requested for the release of the owners duplicate copy of the title since they intended to
secure a loan from a private lender and use the land covered by it as collateral security for the loan of fifty
thousand pesos (P50,000.00) which they applied for with one Milagros Runes. They would use the proceeds of the
loan applied for the renovation of the spouses residential house and for business.

However, personnel of the GSIS were not able to release the owners duplicate of the title as it could not be found
despite diligent search.[12] As stated earlier, the spouses as mortgagors deposited the owners duplicate copy of
the title with the GSIS located at its office in San Fernando, Pampanga.

Satisfied that the owners duplicate copy of the title was really lost, in 1979, GSIS commenced the reconstitution
proceedings with the Court of First Instance of Pampanga for the issuance of a new owners copy of the same.
On June 22, 1979, GSIS issued a certificate of release of mortgage.

On June 26, 1979, after the completion of judicial proceedings, GSIS finally secured and released the reconstituted
copy of the owners duplicate of Transfer Certificate of Title No. 14926-R to the spouses Deang.

On July 6, 1979, the spouses Deang filed with the Court of First Instance, Angeles City a complaint against GSIS
for damages, claiming that as result of the delay in releasing the duplicate copy of the owners title, they were
unable to secure a loan from Milagros Runes, the proceeds of which could have been used in defraying the
estimated cost of the renovation of their residential house and which could have been invested in some profitable
business undertaking.

In its defense, GSIS explained that the owners duplicate copy of the title was released within a reasonable time
since it had to conduct standard pre-audit and post-audit procedures to verify if the spouses Deangs account had
been fully settled.

On July 31, 1995, the trial court rendered a decision ruling for the spouses Deang. The trial court reasoned that the
loss of the owners duplicate copy of the title in the possession of GSIS as security for the mortgage... without
justifiable cause constitutes negligence on the part of the employee of GSIS who lost it, making GSIS liable for
damages. We quote the dispositive portion of the decision:

IN VIEW OF THE FOREGOING, the Court renders judgment ordering the GSIS:
a) To pay the plaintiffs-spouses the amount of P20,000.00 as temperate damages;
b) To pay plaintiffs-spouses the amount of P15,000.00 as attorneys fees;
c) To pay legal interest on the award in paragraphs a) and b) from the filing of the complaint; and,
d) To pay cost of the suit.
SO ORDERED.

On August 30, 1995, GSIS appealed the decision to the Court of Appeals.

On September 21, 1998, the Court of Appeals promulgated a decision affirming the appealed judgment, ruling:
First, since government owned and controlled corporations (hereafter, GOCCs) whose charters provide that they
can sue and be sued have a legal personality separate and distinct from the government, GSIS is not covered by
Article 2180 of the Civil Code, and it is liable for damages caused by their employees acting within the scope of
their assigned tasks. Second, the GSIS is liable to pay a reasonable amount of damages and attorneys fees, which
the appellate court will not disturb. We quote the dispositive portion:

WHEREFORE, finding no reversible error in the appealed judgment, the same is hereby AFFIRMED.
SO ORDERED.

Hence, this appeal.

The Issue:
Whether the GSIS, as a GOCC primarily performing governmental functions, is liable for a negligent act of its
employee acting within the scope of his assigned tasks.

HELD:
We rule that the GSIS is liable for damages. We deny the petition for lack of merit.

GSIS, citing the sixth paragraph of Article 2180 of the Civil Code argues that as a GOCC, it falls within the term State
and cannot be held vicariously liable for negligence committed by its employee acting within his functions.
Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but
also for those of persons for whom one is responsible.

xxx

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

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

xxx (underscoring ours)

The argument is untenable. The cited provision of the Civil Code is not applicable to the case at bar. However, the
trial court and the Court of Appeals erred in citing it as the applicable law. Nonetheless, the conclusion is the same.
As heretofore stated, we find that GSIS is liable for damages.

The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-delict. We do
not agree. Article 2176 of the Civil Code defines quasi-delict as follows:

Whoever by act or omission causes damages 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 (underscoring ours).

Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had a loan
agreement secured by a real estate mortgage. The duty to return the owners duplicate copy of title arose as soon
as the mortgage was released. GSIS insists that it was under no obligation to return the owners duplicate copy of
the title immediately. This insistence is not warranted. Negligence is obvious as the owners duplicate copy could
not be returned to the owners. Thus, the more applicable provisions of the Civil Code are:

Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those
who in any manner contravene the tenor thereof are liable for damages.

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the obligation was constituted xxx.

Since good faith is presumed and bad faith is a matter of fact which should be proved, we shall treat GSIS as a
party who defaulted in its obligation to return the owners duplicate copy of the title. As an obligor in good faith,
GSIS is liable for all the natural and probable consequences of the breach of the obligation. The inability of the
spouses Deang to secure another loan and the damages they suffered thereby has its roots in the failure of the
GSIS to return the owners duplicate copy of the title.

We come now to the amount of damages. In a breach of contract, moral damages are not awarded if the
defendant is not shown to have acted fraudulently or with malice or bad faith. The fact that the complainant
suffered economic hardship or worries and mental anxiety is not enough.

There is likewise no factual basis for an award of actual damages. Actual damages to be compensable must be
proven by clear evidence. A court can not rely on speculation, conjecture or guess work as to the fact and amount
of damages, but must depend on actual proof.
However, it is also apparent that the spouses Deang suffered financial damage because of the loss of the owners
duplicate copy of the title. Temperate damages may be granted.

Article 2224. Temperate or moderate damages, which are 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.

GSIS submits that there must be proof of pecuniary loss. This is untenable. The rationale behind temperate
damages is precisely that from the nature of the case, definite proof of pecuniary loss cannot be offered. When
the court is convinced that there has been such loss, the judge is empowered to calculate moderate damages,
rather than let the complainant suffer without redress from the defendants wrongful act.

The award of twenty thousand pesos (P20,000.00) in temperate damages is reasonable considering that GSIS spent
for the reconstitution of the owners duplicate copy of the title.

Next, the attorneys fees. Attorneys fees which are granted as an item of damages are generally not recoverable.
The award of attorneys fees is the exception rather than the rule and counsels fees are not to be awarded every
time a party wins a suit. The award of attorneys fees demands factual, legal and equitable justification; its basis
cannot be left to speculation or conjecture.

We find no circumstance to justify the award of attorneys fees. We delete the same.

VILLANUEVA VS. DOMINGO, 438 SCRA 485 (2004)

FACTS:

Priscilla Domingo is the registered owner of a silver Mitsubishi Lancer Car model 1980 with Plate No. NDW 781
with co-respondent Leandro Luis Domingo as authorized driver. Petitioner Nostradamus Villanueva was then the
registered “owner” of a green Mitsubishi Lancer bearing Plate No. PHK 201.

On Oct. 22, 1991, 9:45 PM, following a green traffic light, Priscilla Domingo silver Lancer then driven by Leandro
Domingo was cruising the middle lane of South Superhighway at moderate speed when suddenly, a green
Mitsubishi Lancer with Plate No. PHK 201 driven by Renato Dela Cruz Ocfemia darted from Vito Cruz St. towards
the South Superhighway directly into the path of Domingo’s car thereby hitting and bumping its left front portion.
As a result of the impact, NDW 781 hit two parked vehicles at the roadside, the second hitting another car parked
in front of it.

Traffic accident report found Ocfemia driving with expired license and positive for alcoholic breath. Manila Asst.
Prosecutor Pascua recommended filing of information for reckless imprudence resulting to damage to property
and physical injuries. The original complaint was amended twice: first impleading Auto Palace Car Exchange as
commercial agent and/or buyer-seller and second, impleading Albert Jaucian as principal defendant doing business
under the name and style of Auto Palace Car Exchange. Except Ocfemia, all defendants filed separate answers to
the complaint.

Petitioner Nostradamus Villanueva claimed that he was no longer the owner of the car at the time of the mishap
because it was swapped with a Pajero owned by Albert Jaucian/Auto Palace Car Exchange. Linda Gonzales declared
that her presence at the scene of the accident was upon the request of the actual owner of the Mitsubishi Lancer
PHK 201, Albert Jaucian for whom she had been working as agent/seller. Auto Palace Car Exchange represented by
Albert Jaucian claimed that he was not the registered owner of the car. Moreover, it could not be held subsidiarily
liable as employer of Ocfemia because the latter was off-duty as utility employee at the time of the incident.
Neither was Ocfemia performing a duty related to his employment.
RTC found petitioner Villanueva liable and ordered him to pay respondent actual, moral and exemplary damages
plus appearance and attorney’s fees. In conformity with equity and the ruling in First Malayan Lending and Finance
Corp. vs CA, Albert Jaucian is hereby ordered to indemnify Villanueva for whatever amount the latter is hereby
ordered to pay under the judgment.

CA upheld trial court’s decision but deleted the award for appearance and attorney’s fees as the same was not
justified in the body of the decision.

ISSUE:
May the registered owner of a motor vehicle be held liable for damages arising from a vehicular accident involving
his motor vehicle while being operated by the employee of its buyer without the latter’s consent and knowledge?

RULING:

YES, the registered owner of any vehicle is directly and primarily responsible for the public and third persons while
it is being operated. The rationale behind such doctrine was explained way back in 1957 in Erezo vs. Jepte.

The principle upon which this doctrine is based is that in dealing with vehicles registered under the Public Service
Law, the public has the right to assume or presume that the registered owner is the actual owner thereof, for it
would be difficult for the public to enforce the actions that they may have for injuries caused to them by the
vehicles being negligently operated if the public should be required to prove who the actual owner is. How would
the public or third persons know against whom to enforce their rights in case of subsequent transfers of the
vehicles? We do not imply by his doctrine, however, that the registered owner may not recover whatever amount
he had paid by virtue of his liability to third persons from the person to whom he had actually sold, assigned or
conveyed the vehicle.
Under the same principle the registered owner of any vehicle, even if not used for a public service, should
primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle is being
driven on the highways or streets. The members of the Court are in agreement that the defendant-appellant
should be held liable to plaintiff-appellee for the injuries occasioned to the latter because of the negligence of the
driver, even if the defendant-appellant was no longer the owner of the vehicle at the time of the damage because
he had previously sold it to another.
A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in
the same action brought against him to recover for the damage or injury done, against the vendee or transferee of
the vehicle. The inconvenience of the suit is no justification for relieving him of liability; said inconvenience is the
price he pays for failure to comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible for the
damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be indemnified
by the real or actual owner of the amount that he may be required to pay as damage for the injury caused to the
plaintiff-appellant.
PETITION DENIED.

ARANETA V. DE JOYA

G.R. NO. L-25172, 24 MAY 1974

FACTS:

Sometime in November 1952 the respondent, then general manager of the Ace Advertising, proposed to
the board of directors that an employee, Ricardo Taylor, be sent to the United States to take up special
studies in television but the board failed to act on the proposal. Still, respondent sent Taylor abroad, on
September 1953, and assured J. Antonio Araneta, company director, that the trip will be funded by
other parties, as respondent later confirmed in a memorandum. From September 1, 1953 to March 15,
1954, Taylor continued receiving his salaries while abroad. His salaries was ordered and approved by the
respondent and were included in the semi-monthly payroll checks of the corporation employees. Three
of the checks were signed by the company treasurer, who also put up part of the bill connected with
Taylor’s trip and handed him letters for delivery in the US. A total of P5,043.20 was disbursed by Ace
Advertising for Taylor’s travel and studies. The company filed a complaint for recovery of sum, with the
court of first instance in Manila, alleging they had no knowledge of the engagement neither they
authorized nor ratified it. The respondent denied all charges, also alleging that it was for the company’s
benefit. A 3rd-party complaint was filed against Vicente Araneta, company treasurer, for signing the
checks, and Ricardo Taylor. Vicente Araneta and respondent claimed they signed the documents in good
faith.

The trial court ordered the respondent to pay the sum disbursed by Ace Advertising, P5,043.20, and
dismissed the third-party complaint. The respondent appealed and the CA affirmed the trial court’s
decision but reversed the judgment on the 3rd-party case stating that Vicente Araneta and Taylor were
complicit in the unauthorized disbursement of corporate moneys jointly with the appellant.

ISSUE:

Whether or not respondent is guilty of a quasi-delict.

RULING:

Yes. The Court upheld the decision of the CA. The Court agrees that the respondent neglected to
perform his duties properly, to the damage of the firm of which he was an officer and affirmed that the
acts of the respondent, Vicente Araneta, and Ricardo Taylor affirm their guilt of unauthorized
disbursement of corporate moneys, without evidence to prove otherwise. And as it was an unauthorized
act of expenditure of corporate funds, and it was these three without whose acts the same could not
have happened, the juridical situation was a simple quasi-delict by them committed upon the
corporation, for which solidary liability should have been imposed upon all in the first place, Art. 2194,
New Civil Code; and only De Joya having been sued and made liable by the corporation, it was the right
of the latter to ask that his two joint tortfeasors be made to shoulder their proportional responsibility.

PICART VS. SMITH, JR.

G.R. No. L-12219

March 15, 1918

FACTS: On the Carlatan Bridge in La Union. Picart was riding on his pony over said bridge. Before he had gotten half
way across, Smith approached from the opposite direction in an automobile. As the defendant neared the bridge
he saw a horseman on it and blew his horn to give warning of his approach. He continued his course and after he
had taken the bridge he gave two more successive blasts, as it appeared to him that the man on horseback before
him was not observing the rule of the road.
Picart saw the automobile coming and heard the warning signals. However, being perturbed by the novelty of the
apparition or the rapidity of the approach, he pulled the pony closely up against the railing on the right side of the
bridge instead of going to the left. He says that the reason he did this was that he thought he did not have
sufficient time to get over to the other side. As the automobile approached, Smith guided it toward his left, that
being the proper side of the road for the machine. In so doing the defendant assumed that the horseman would
move to the other side. Seeing that the pony was apparently quiet, the defendant, instead of veering to the right
while yet some distance away or slowing down, continued to approach directly toward the horse without
diminution of speed. When he had gotten quite near, there being then no possibility of the horse getting across to
the other side, the defendant quickly turned his car sufficiently to the right to escape hitting the horse; but in so
doing the automobile passed in such close proximity to the animal that it became frightened and turned its body
across the bridge, got hit by the car and the limb was broken. The horse fell and its rider was thrown off with some
violenceAs a result of its injuries the horse died. The plaintiff received contusions which caused temporary
unconsciousness and required medical attention for several days.

From a judgment of the CFI of La Union absolving Smith from liability Picart has appealed.

ISSUE: WON Smith was guilty of negligence such as gives rise to a civil obligation to repair the damage done

HELD: the judgment of the lower court must be reversed, and judgment is here rendered that the Picart recover of
Smith damages

YES

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 person would have used in the same situation? If not, then
he is guilty of negligence. 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.

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 ignoring of the suggestion born of this prevision, 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 to warrant his foregoing conduct or guarding against its
consequences.

Applying this test to the conduct of the defendant in the present case we think that negligence is clearly
established. A prudent man, placed in the position of the defendant, would in our opinion, have recognized that
the course which he was pursuing was fraught with risk, and would therefore have foreseen harm to the horse and
the rider as reasonable consequence of that course. Under these circumstances the law imposed on the Smith the
duty to guard against the threatened harm.

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence
in planting himself on the wrong side of the road. But as we have already stated, Smith 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 the
person who has the last fair 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.

AFRICA VS. CALTEX, 16 SCRA 448

Facts: In the afternoon of March 18, 1948, a fire broke out at the Caltex service station at the corner of Antipolo St.
and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the underground
storage, right at the opening of the receiving tank where the nozzle of the hose was inserted. The fire spread to
and burned several houses. The owners, among them petitioner spouses Africa and heirs of Ong, sued respondents
Caltex Phil., Inc., the alleged owner of the station, and Mateo Boquiren, the agent in charge of its operation, for
damages. The CFI and CA found that the petitioners failed to prove negligence of the respondents, and that there
was due care in the premises and with respect to the supervision of their employees.

Issue: Whether or not, without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should
apply so as to presume negligence on the part of the respondents.

Held: Yes. Res ipsa loquitur literally means “the thing or transaction speaks for itself.” For the doctrine of res ipsa
loquitur to apply, the following requisites should be present: (a) the accident is of a kind which ordinarily does not
occur in the absence of someone’s negligence; (b) it is caused by an instrumentality within the exclusive control of
the defendant or defendants; and (c) the possibility of contributing conduct which would make the plaintiff
responsible is eliminated. In the case at bar, the gasoline station, with all its appliances, equipment and employees,
was under the control of respondents. A fire occurred therein and spread to and burned the neighboring houses.
The persons who knew or could have known how the fire started were respondents and their employees, but they
gave no explanation thereof whatsoever. It is a fair and reasonable inference that the incident happened because
of want of care. The negligence of the employees was the proximate cause of the fire, which in the ordinary course
of things does not happen. Therefore, the petitioners are entitled to the award for damages.