[G.R. No. 70890. September 18, 1992.

CRESENCIO LIBI * and AMELIA YAP LIBI, Petitioners, v. HON. INTERMEDIATE

APPELLATE COURT, FELIPE GOTIONG and SHIRLEY GOTIONG, Respondents.

Alex Y. Tan, for Petitioners.

Mario D. Ortiz and Danilo V. Ortiz for Private Respondents.

SYLLABUS

1. CIVIL LAW; QUASI DELICT; LIABILITY OF PARENTS FOR CIVIL LIABILITY ARISING FROM
CRIMINAL OFFENSES COMMITTED BY THEIR MINOR CHILDREN; RULE. — The parents are
and should be held primarily liable for the civil liability arising from criminal offenses
committed by their minor children under their legal authority or control, or who live in their
company, unless it is proven that the former acted with the diligence of a good father of a
family to prevent such damages. That primary liability is premised on the provisions of
Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their
children 9 years of age or under, or over 9 but under 15 years of age who acted without
discernment; and, with regard to their children over 9 but under 15 years of age who acted
with discernment, or 15 years or over but under 21 years of age, such primary liability shall
be imposed pursuant to Article 2180 of the Civil Code. Under said Article 2180, the
enforcement of such liability shall be effected against the father and, in case of his death or
incapacity, the mother. This was amplified by the Child and Youth Welfare Code which
provides that the same shall devolve upon the father and, in case of his death or incapacity,
upon the mother or, in case of her death or incapacity, upon the guardian, but the liability
may also be voluntarily assumed by a relative or family friend of the youthful offender.
However, under the Family Code, this civil liability is now, without such alternative
qualification, the responsibility of the parents and those who exercise parental authority
over the minor offender. For civil liability arising from quasi-delicts committed by minors,
the same rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as
so modified.

DECISION

REGALADO, J.:

One of the ironic verities of life, it has been said, is that sorrow is sometimes a touchstone
of love. A tragic illustration is provided by the instant case, wherein two lovers died while
still in the prime of their years, a bitter episode for those whose lives they have touched.
While we cannot expect to award complete assuagement to their families through seemingly
prosaic legal verbiage, this disposition should at least terminate the acrimony and rancor of
an extended judicial contest resulting from the unfortunate occurrence.

In this final denouement of the judicial recourse the stages whereof were alternately
initiated by the parties, petitioners are now before us seeking the reversal of the judgment
of respondent court promulgated on January 2, 1985 in AC-G.R. CV No. 69060 with the
following decretal portion:jgc:chanrobles.com.ph
"WHEREFORE, the decision of the lower court dismissing plaintiff’s complaint is hereby
reversed; and instead, judgment is hereby rendered sentencing defendants, jointly and
solidarily, to pay to plaintiffs the following amounts:chanrobles.com : virtual law library

1. Moral damages, P30,000.000;

2. Exemplary damages, P10,000.00;

3. Attorney’s fees, P20,000.00, and costs.

However, denial of defendants-appellees’ counterclaims is affirmed." 1

Synthesized from the findings of the lower courts, it appears that respondent spouses are
the legitimate parents of Julie Ann Gotiong who, at the time of the deplorable incident which
took place and from which she died on January 14, 1979, was an 18-year old first year
commerce student of the University of San Carlos, Cebu City; while petitioners are the
parents of Wendell Libi, then a minor between 18 and 19 years of age living with his
aforesaid parents, and who also died in the same event on the same date.

For more than two (2) years before their deaths, Julie Ann Gotiong and Wendell Libi were
sweethearts until December, 1978 when Julie Ann broke up her relationship with Wendell
after she supposedly found him to be sadistic and irresponsible. During the first and second
weeks of January, 1979, Wendell kept pestering Julie Ann with demands for reconciliation
but the latter persisted in her refusal, prompting the former to resort to threats against her.
In order to avoid him, Julie Ann stayed in the house of her best friend, Malou Alfonso, at the
corner of Maria Cristina and Juana Osmeña Streets, Cebu City, from January 7 to 13, 1978.

On January 14, 1979, Julie Ann and Wendell died, each from a single gunshot wound
inflicted with the same firearm, a Smith and Wesson revolver licensed in the name of
petitioner Cresencio Libi, which was recovered from the scene of the crime inside the
residence of private respondents at the corner of General Maxilom and D. Jakosalem streets
of the same city.

Due to the absence of an eyewitness account of the circumstances surrounding the death of
both minors, their parents, who are the contending parties herein, posited their respective
theories drawn from their interpretation of circumstantial evidence, available reports,
documents and evidence of physical facts.

Private respondents, bereaved over the death of their daughter, submitted that Wendell
caused her death by shooting her with the aforesaid firearm and, thereafter, turning the gun
on himself to commit suicide. On the other hand, Petitioners, puzzled and likewise
distressed over the death of their son, rejected the imputation and contended that an
unknown third party, whom Wendell may have displeased or antagonized by reason of his
work as a narcotics informer of the Constabulary Anti-Narcotics Unit (CANU), must have
caused Wendell’s death and then shot Julie Ann to eliminate any witness and thereby avoid
identification.chanrobles.com:cralaw:red

As a result of the tragedy, the parents of Julie Ann filed Civil Case No. R-17774 in the then
Court of First Instance of Cebu against the parents of Wendell to recover damages arising
from the latter’s vicarious liability under Article 2180 of the Civil Code. After trial, the court
below rendered judgment on October 20, 1980 as follows:jgc:chanrobles.com.ph
"WHEREFORE, premises duly considered, judgment is hereby rendered dismissing plaintiffs’
complaint for insufficiency of the evidence. Defendants’ counterclaim is likewise denied for
lack of sufficient merit." 2

On appeal to respondent court, said judgment of the lower court dismissing the complaint of
therein plaintiffs-appellants was set aside and another judgment was rendered against
defendants-appellees who, as petitioners in the present appeal by certiorari, now submit for
resolution the following issues in this case:chanrob1es virtual 1aw library

1. Whether or not respondent court correctly reversed the trial court in accordance with
established decisional laws; and

2. Whether or not Article 2180 of the Civil Code was correctly interpreted by respondent
court to make petitioners liable for vicarious liability. 3

In the proceedings before the trial court, Dr. Jesus P. Cerna, Police Medico-Legal Officer of
Cebu, submitted his findings and opinions on some postulates for determining whether or
not the gunshot wound was inflicted on Wendell Libi by his own suicidal act. However,
undue emphasis was placed by the lower court on the absence of gunpowder or tattooing
around the wound at the point of entry of the bullet. It should be emphasized, however,
that this is not the only circumstance to be taken into account in the determination of
whether it was suicide or not.

It is true that said witness declared that he found no evidence of contact or close-contact of
an explosive discharge in the entrance wound. However, as pointed out by private
respondents, the body of deceased Wendell Libi must have been washed at the funeral
parlor, considering the hasty interment thereof a little after eight (8) hours from the
occurrence wherein he died. Dr. Cerna himself could not categorically state that the body of
Wendell Libi was left untouched at the funeral parlor before he was able to conduct his
autopsy. It will also be noted that Dr. Cerna was negligent in not conducting a paraffin test
on Wendell Libi, hence possible evidence of gunpowder residue on Wendell’s hands was
forever lost when Wendell was hastily buried.cralawnad

More specifically, Dr. Cerna testified that he conducted an autopsy on the body of Wendell
Libi about eight (8) hours after the incident or, to be exact, eight (8) hours and twenty (20)
minutes based on the record of death; that when he arrived at the Cosmopolitan Funeral
Homes, the body of the deceased was already on the autopsy table and in the stage of rigor
mortis; and that said body was not washed, but it was dried. 4 However, on redirect
examination, he admitted that during the 8-hour interval, he never saw the body nor did he
see whether said body was wiped or washed in the area of the wound on the head which he
examined because the deceased was inside the morgue. 5 In fact, on cross-examination, he
had earlier admitted that as far as the entrance of the wound, the trajectory of the bullet
and the exit of the wound are concerned, it is possible that Wendell Libi shot himself. 6

He further testified that the muzzle of the gun was not pressed on the head of the victim
and that he found no burning or singeing of the hair or extensive laceration on the gunshot
wound of entrance which are general characteristics of contact or near-contact fire. On
direct examination, Dr. Cerna nonetheless made these clarification:jgc:chanrobles.com.ph

"Q Is it not a fact that there are certain guns which are so made that there would be no
black residue or tattooing that could result from these guns because they are what we call
clean?
A Yes, sir. I know that there are what we call smokeless powder.

ATTY. ORTIZ:chanrob1es virtual 1aw library

Q Yes. So, in cases, therefore, of guns where the powder is smokeless, those indications
that you said may not rule out the possibility that the gun was closer than 24 inches, is that
correct?

A If the . . . assuming that the gun used was .. the bullet used was a smokeless powder.

Q At any rate, doctor, from . . . disregarding those other matters that you have noticed, the
singeing, etc., from the trajectory, based on the trajectory of the bullet as shown in your
own sketch, is it not a fact that the gun could have been fired by the person himself, the
victim himself, Wendell Libi, because it shows a point of entry a little above the right ear
and point of exit a little above that, to be very fair and on your oath?

A As far as the point of entrance is concerned and as far as the trajectory of the bullet is
concerned and as far as the angle or the manner of fire is concerned, it could have been
fired by the victim." 7

As shown by the evidence, there were only two used bullets 8 found at the scene of the
crime, each of which were the bullets that hit Julie Ann Gotiong and Wendell Libi,
respectively. Also, the sketch prepared by the Medico-Legal Division of the National Bureau
of Investigation, 9 shows that there is only one gunshot wound of entrance located at the
right temple of Wendell Libi. The necropsy report prepared by Dr. Cerna states:chanrob1es
virtual 1aw library

x x x

"Gunshot wound, ENTRANCE, ovaloid, 0.5 x 0.4 cm., with contusion collar widest inferiorly
by 0.2 cm., edges inverted, oriented upward, located at the head, temporal region, right,
2.8 cms. behind and 5.5 cms. above right external auditory meatus, directed slightly
forward, upward and to the left, involving skin and soft tissues, making a punch-in fracture
on the temporal bone, right, penetrating cranial cavity, lacerating extensively along its
course the brain tissues, fracturing parietal bone, left, and finally making an EXIT wound,
irregular, 2.0 x 1.8 cms., edges (e)verted, parietal region, left, 2.0 cms. behind and 12.9
cms. above left external auditory meatus.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

x x x

"Evidence of contact or close-contact fire, such as burning around the gunshot wound of
entrance, gunpowder tatooing (sic), smudging, singeing of hair, extensive laceration or
bursting of the gunshot wound of entrance, or separation of the skin from the underlying
tissue, are absent." 10

On cross-examination, Dr. Cerna demonstrated his theory which was made of record,
thus:jgc:chanrobles.com.ph

"Q Now, will you please use yourself as Wendell Libi, and following the entrance of the
wound, the trajectory of the bullet and the exit of the wound, and measuring yourself 24
inches, will you please indicate to the Honorable Court how would it have been possible for
Wendell Libi to kill himself? Will you please indicate the 24 inches?

WITNESS:chanrob1es virtual 1aw library

A Actually, sir, the 24 inches is approximately one arm’s length.

ATTY. SENINING:chanrob1es virtual 1aw library

I would like to make of record that the witness has demonstrated by extending his right arm
almost straight towards his head." 11

Private respondents assail the fact that the trial court gave credence to the testimonies of
defendants’ witnesses Lydia Ang and James Enrique Tan, the first being a resident of an
apartment across the street from the Gotiongs and the second, a resident of the house
adjacent to the Gotiong residence, who declared having seen a "shadow" of a person at the
gate of the Gotiong house after hearing shots therefrom.

On cross-examination, Lydia Ang testified that the apartment where she was staying faces
the gas station; that it is the second apartment; that from her window she can see directly
the gate of the Gotiongs and, that there is a firewall between her apartment and the gas
station. 12 After seeing a man jump from the gate of the Gotiongs to the rooftop of the
Tans, she called the police station but the telephone lines were busy. Later on, she talked
with James Enrique Tan and told him that she saw a man leap from the gate towards his
rooftop. 13

However, James Enrique Tan testified that he saw a "shadow" on top of the gate of the
Gotiongs, but denied having talked with anyone regarding what he saw. He explained that
he lives in a duplex house with a garden in front of it; that his house is next to Felipe
Gotiong’s house; and he further gave the following answers to these
questions:chanrobles.com : virtual law library

"ATTY. ORTIZ: (TO WITNESS).

Q What is the height of the wall of the Gotiong’s in relation to your house?

WITNESS:chanrob1es virtual 1aw library

A It is about 8 feet.

ATTY. ORTIZ: (TO WITNESS)

Q And where were you looking from?

WITNESS:chanrob1es virtual 1aw library

A From upstairs in my living room.

ATTY. ORTIZ (TO WITNESS)

Q From Your living room window, is that correct?

WITNESS:chanrob1es virtual 1aw library

A Yes, but not very clear because the wall is high." 14

Analyzing the foregoing testimonies, we agree with respondent court that the same do not
inspire credence as to the reliability and accuracy of the witnesses’ observations, since the
visual perceptions of both were obstructed by high walls in their respective houses in
relation to the house of herein private respondents. On the other hand, witness Manolo
Alfonso, testifying on rebuttal, attested without contradiction that he and his sister, Malou
Alfonso, were waiting for Julie Ann Gotiong when they heard her scream; that when Manolo
climbed the fence to see what was going on inside the Gotiong house, he heard the first
shot; and, not more than five (5) seconds later, he heard another shot. Consequently, he
went down from the fence and drove to the police station to report the incident. 15 Manolo’s
direct and candid testimony establishes and explains the fact that it was he whom Lydia Ang
and James Enrique Tan saw as the "shadow" of a man at the gate of the Gotiong house.

We have perforce to reject petitioners’ effete and unsubstantiated pretension that it was
another man who shot Wendell and Julie Ann. It is significant that the Libi family did not
even point to or present any suspect in the crime nor did they file any case against any
alleged "John Doe." Nor can we sustain the trial court’s dubious theory that Wendell Libi did
not die by his own hand because of the overwhelming evidence — testimonial, documentary
and pictorial — the confluence of which point to Wendell as the assailant of Julie Ann, his
motive being revenge for her rejection of his persistent pleas for a
reconciliation.chanrobles.com:cralaw:red

Petitioners’ defense that they had exercised the due diligence of a good father of a family,
hence they should not be civilly liable for the crime committed by their minor son, is not
borne out by the evidence on record either.

Petitioner Amelita Yap Libi, mother of Wendell, testified that her husband, Cresencio Libi,
owns a gun which he kept in a safety deposit box inside a drawer in their bedroom. Each of
these petitioners holds a key to the safety deposit box and Amelita’s key is always in her
bag, all of which facts were known to Wendell. They have never seen their son Wendell
taking or using the gun. She admitted, however, that on that fateful night the gun was no
longer in the safety deposit box. 16 We, accordingly, cannot but entertain serious doubts
that petitioner spouses had really been exercising the diligence of a good father of a family
by safely locking the fatal gun away. Wendell could not have gotten hold thereof unless one
of the keys to the safety deposit box was negligently left lying around or he had free access
to the bag of his mother where the other key was.

The diligence of a good father of a family required by law in a parent and child relationship
consists, to a large extent, of the instruction and supervision of the child. Petitioners were
gravely remiss in their duties as parents in not diligently supervising the activities of their
son, despite his minority and immaturity, so much so that it was only at the time of
Wendell’s death that they allegedly discovered that he was a CANU agent and that
Cresencio’s gun was missing from the safety deposit box. Both parents were sadly wanting
in their duty and responsibility in monitoring and knowing the activities of their children
who, for all they know, may be engaged in dangerous work such as being drug informers,
17 or even drug users. Neither was a plausible explanation given for the photograph of
Wendell, with a handwritten dedication to Julie Ann at the back thereof, 18 holding upright
what clearly appears as a revolver and on how or why he was in possession of that firearm.

In setting aside the judgment of the court a quo and holding petitioners civilly liable, as
explained at the start of this opinion, respondent court waved aside the protestations of
diligence on the part of petitioners and had this to say:jgc:chanrobles.com.ph

". . . It is still the duty of parents to know the activity of their children who may be engaged
in this dangerous activity involving the menace of drugs. Had the defendants-appellees
been diligent in supervising the activities of their son, Wendell, and in keeping said gun
from his reach, they could have prevented Wendell from killing Julie Ann Gotiong.
Therefore, appellants are liable under Article 2180 of the Civil Code which
provides:chanrob1es virtual 1aw library

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

"Having been grossly negligent in preventing Wendell Libi from having access to said gun
which was allegedly kept in a safety deposit box, defendants-appellees are subsidiarily liable
for the natural consequence of the criminal act of said minor who was living in their
company. This vicarious liability of herein defendants-appellees has been reiterated by the
Supreme Court in many cases, prominent of which is the case of Fuellas v. Cadano, et. al.
(L-14409, Oct. 31, 1961, 3 SCRA 361-367), which held that:chanrob1es virtual 1aw library

‘The subsidiary liability of parents for damages caused by their minor children imposed by
Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and
criminal offenses.’

‘The subsidiary liability of parent’s arising from the criminal acts of their minor children who
acted with discernment is determined under the provisions of Article 2180, N.C.C. and under
Article 101 of the Revised Penal Code, because to hold that the former only covers
obligations which arise from quasi-delicts and not obligations which arise from criminal
offenses, would result in the absurdity that while for an act where mere negligence
intervenes the father or mother may stand subsidiarily liable for the damages caused by his
or her son, no liability would attach if the damage is caused with criminal intent.’ (3 SCRA
361-362).

". . . In the instant case, minor son of herein defendants-appellees, Wendell Libi somehow
got hold of the key to the drawer where said gun was kept under lock without defendant-
spouses ever knowing that said gun had been missing from that safety box since 1978 when
Wendell Libi had) a picture taken wherein he proudly displayed said gun and dedicated this
picture to his sweetheart, Julie Ann Gotiong; also since then, Wendell Libi was said to have
kept said gun in his car, in keeping up with his supposed role of a CANU agent . .
." chanrobles lawlibrary : rednad

x x x

"Based on the foregoing discussions of the assigned errors, this Court holds that the lower
court was not correct in dismissing herein plaintiffs-appellants’ complaint because as
preponderantly shown by evidence, defendants-appellees utterly failed to exercise all the
diligence of a good father of the family in preventing their minor son from committing this
crime by means of the gun of defendants-appellees which was freely accessible to Wendell
Libi for they have not regularly checked whether said gun was still under lock, but learned
that it was missing from the safety deposit box only after the crime had been committed."
(Emphases ours.) 19

We agree with the conclusion of respondent court that petitioners should be held liable for
the civil liability based on what appears from all indications was a crime committed by their
minor son. We take this opportunity, however, to digress and discuss its ratiocination
therefor on jurisprudential dicta which we feel require clarification.

In imposing sanctions for the so-called vicarious liability of petitioners, respondent court
cites Fuellas v. Cadano, Et. Al. 20 which supposedly holds that" (t)he subsidiary liability of
parents for damages caused by their minor children imposed by Article 2180 of the New
Civil Code covers obligations arising from both quasi-delicts and criminal offenses," followed
by an extended quotation ostensibly from the same case explaining why under Article 2180
of the Civil Code and Article 101 of the Revised Penal Code parents should assume
subsidiary liability for damages caused by their minor children. The quoted passages are set
out two paragraphs back, with pertinent underscoring for purposes of the discussion
hereunder.chanrobles law library

Now, we do not have any objection to the doctrinal rule holding, the parents liable, but the
categorization of their liability as being subsidiary, and not primary, in nature requires a
hard second look considering previous decisions of this court on the matter which warrant
comparative analyses. Our concern stems from our readings that if the liability of the
parents for crimes or quasi-delicts of their minor children is subsidiary, then the parents can
neither invoke nor be absolved of civil liability on the defense that they acted with the
diligence of a good father of a family to prevent damages. On the other hand, if such
liability imputed to the parents is considered direct and primary, that diligence would
constitute a valid and substantial defense.

We believe that the civil liability of parents for quasi-delicts of their minor children, as
contemplated in Article 2180 of the Civil Code, is primary and not subsidiary. In fact, if we
apply Article 2194 of said code which provides for solidary liability of joint tortfeasors, the
persons responsible for the act or omission, in this case the minor and the father and, in
case of his death of incapacity, the mother, are solidarily liable. Accordingly, such parental
liability is primary and not subsidiary, hence the last paragraph of Article 2180 provides
that" (t)he responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to prevent
damages."cralaw virtua1aw library

We are also persuaded that the liability of the parents for felonies committed by their minor
children is likewise primary, not subsidiary. Article 101 of the Revised Penal Code
provides:jgc:chanrobles.com.ph

"ARTICLE 101. Rules regarding civil liability in certain cases. —

x x x

First. In cases of subdivisions . . . 2, and 3 of Article 12, the civil liability for acts committed
by . . . a person under nine years of age, or by one over nine but under fifteen years of age,
who has acted without discernment, shall devolve upon those having such person under
their legal authority or control, unless it appears that there was no fault or negligence on
their part." (Emphasis supplied.) 21

Accordingly, just like the rule in Article 2180 of the Civil Code, under the foregoing provision
the civil liability of the parents for crimes committed by their minor children is likewise
direct and primary, and also subject to the defense of lack of fault or negligence on their
part, that is, the exercise of the diligence of a good father of a family.
That in both quasi-delicts and crimes the parents primarily respond for such damages is
buttressed by the corresponding provisions in both codes that the minor transgressor shall
be answerable or shall respond with his own property only in the absence or in case of
insolvency of the former. Thus, for civil liability ex quasi delicto of minors, Article 2182 of
the Civil Code states that" (i)f the minor causing damage has no parents or guardian, the
minor . . . shall be answerable with his own property in an action against him where a
guardian ad litem shall be appointed." For civil liability ex delicto of minors, an equivalent
provision is found in the third paragraph of Article 101 of the Revised Penal Code, to
wit:jgc:chanrobles.com.ph

"Should there be no person having such . . . minor under his authority, legal guardianship
or control, or if such person be insolvent, said . . . minor shall respond with (his) own
property, excepting property exempt from execution, in accordance with civil law."cralaw
virtua1aw library

The civil liability of parents for felonies committed by their minor children contemplated in
the aforesaid rule in Article 101 of the Revised Penal Code in relation to Article 2180 of the
Civil Code has, aside from the aforecited case of Fuellas, been the subject of a number of
cases adjudicated by this Court, viz.: Exconde v. Capuno, Et Al., 22 Araneta v. Arreglado,
23 Salen, Et. Al. v. Balce, 24 Paleyan, etc., Et. Al. v. Bangkili, Et Al., 25 and Elcano, et al, v.
Hill, Et. Al. 26 Parenthetically, the aforesaid cases were basically on the issue of the civil
liability of parents for crimes committed by their minor children over 9 but under 15 years
of age, who acted with discernment, and also of minors 15 years of aye or over, since these
situations are not covered by Article 101, Revised Penal Code. In both instances, this Court
held that the issue of parental civil liability should be resolved in accordance with the
provisions of Article 2180 of the Civil Code for the reasons well expressed in Salen and
adopted in the cases hereinbefore enumerated that to hold that the civil liability under
Article 2180 would apply only to quasi-delicts and not to criminal offenses would result in
the absurdity that in an act involving mere negligence the parents would be liable but not
where the damage is caused with criminal intent. In said cases, however, there are
unfortunate variances resulting in a regrettable inconsistency in the Court’s determination of
whether the liability of the parents, in cases involving either crimes or quasi-delicts of their
minor children, is primary or subsidiary.

In Exconde, where the 15-year old minor was convicted of double homicide through reckless
imprudence, in a separate civil action arising from the crime the minor and his father were
held jointly and severally liable for failure of the latter to prove the diligence of a good
father of a family. The same liability in solidum and, therefore, primary liability was imposed
in a separate civil action in Araneta on the parents and their 14-year old son who was found
guilty of frustrated homicide, but on the authority of Article 2194 of the Civil Code providing
for solidary responsibility of two or more persons who are liable for a quasi-delict.

However, in Salen, the father was declared subsidiarily liable for damages arising from the
conviction of his son, who was over 15 but less than 18 years of age, by applying Article
2180 but, this time, disregarding Article 2194 of the Civil Code. In the present case, as
already explained, the petitioners herein were also held liable but supposedly in line with
Fuellas which purportedly declared the parents subsidiarily liable for the civil liability for
serious physical injuries committed by their 13-year old son. On the other hand, in Paleyan,
the mother and her 19-year old son were adjudged solidarily liable for damages arising from
his conviction for homicide by the application of Article 2180 of the Civil Code since this is
likewise not covered by Article 101 of the Revised Penal Code. Finally, in Elcano, although
the son was acquitted in a homicide charge due to "lack of intent, coupled with mistake," it
was ruled that while under Article 2180 of the Civil Code there should be solidary liability for
damages, since the son, "although married, was living with his father and getting
subsistence from him at the time of the occurrence," but "is now of age, as a matter of
equity" the father was only held subsidiarily liable.

It bears stressing, however, that the Revised Penal Code provides for subsidiary liability
only for persons causing damages under the compulsion of irresistible force or under the
impulse of an uncontrollable fear; 27 innkeepers, tavernkeepers and proprietors of
establishments; 28 employers, teachers, persons and corporations engaged in industry; 29
and principals, accomplices and accessories for the unpaid civil liability of their co-accused
in the other classes. 30

Also, coming back to respondent court’s reliance on Fuellas in its decision in the present
case, it is not exactly accurate to say that Fuellas provided for subsidiary liability of the
parents therein. A careful scrutiny shows that what respondent court quoted verbatim in its
decision now on appeal in the present case, and which it attributed to Fuellas, was the
syllabus on the law report of said case which spoke of "subsidiary" liability. However, such
categorization does not specifically appear in the text of the decision in Fuellas. In fact, after
reviewing therein the cases of Exconde, Araneta and Salen and the discussions in said cases
of Article 101 of the Revised Penal Code in relation to Article 2180 of the Civil Code, this
Court concluded its decision in this wise:jgc:chanrobles.com.ph

"Moreover, the case at bar was decided by the Court of Appeals on the basis of evidence
submitted therein by both parties, independent of the criminal case. And responsibility for
fault or negligence under Article 2176 upon which the present action was instituted, is
entirely separate and distinct from the civil liability arising from fault or negligence under
the Penal Code (Art. 2177), and having in mind the reasons behind the law as heretofore
stated, any discussion as to the minor’s criminal responsibility is of no moment."cralaw
virtua1aw library

Under the foregoing considerations, therefore, we hereby rule that the parents are and
should be held primarily liable for the civil liability arising from criminal offenses committed
by their minor children under their legal authority or control, or who live in their company,
unless it is proven that the former acted with the diligence of a good father of a family to
prevent such damages. That primary liability is premised on the provisions of Article 101 of
the Revised Penal Code with respect to damages ex delicto caused by their children 9 years
of age or under, or over 9 but under 15 years of age who acted without discernment; and,
with regard to their children over 9 but under 15 years of age who acted with discernment,
or 15 years or over but under 21 years of age, such primary liability shall be imposed
pursuant to Article 2180 of the Civil Code. 31

Under said Article 2180, the enforcement of such liability shall be effected against the father
and, in case of his death or incapacity, the mother. This was amplified by the Child and
Youth Welfare Code which provides that the same shall devolve upon the father and, in case
of his death or incapacity, upon the mother or, in case of her death or incapacity, upon the
guardian, but the liability may also be voluntarily assumed by a relative or family friend of
the youthful offender. 32 However, under the Family Code, this civil liability is now, without
such alternative qualification, the responsibility of the parents and those who exercise
parental authority over the minor offender. 33 For civil liability arising from quasi-delicts
committed by minors, the same rules shall apply in accordance with Articles 2180 and 2182
of the Civil Code, as so modified.

In the case at bar, whether the death of the hapless Julie Ann Gotiong was caused by a
felony or a quasi-delict committed by Wendell Libi, respondent court did not err in holding
petitioners liable for damages arising therefrom. Subject to the preceding modifications of
the premises relied upon by it therefor and on the bases of the legal imperatives herein
explained, we conjoin in its findings that said petitioners failed to duly exercise the requisite
diligentissimi patris familias to prevent such damages.

ACCORDINGLY, the instant Petition is DENIED and the assailed judgment of respondent
Court of Appeals is hereby AFFIRMED, with costs against petitioners.

SO ORDERED.
G.R. No. L-14409 October 31, 1961

AGAPITO FUELLAS, petitioner,

vs.
ELPIDIO CADANO, ET AL., respondents.

Ambrosio Padilla, Feliciano C. Tumale and Roberto R. Reverente for petitioner.

Valerio V. Rovira for respondents.

PAREDES, J.:

For serious physical injuries sustained by Pepito Cadano, son of plaintiff-appellee Elpidio
Cadano, two separate actions were instituted, Civil Case No. 583, filed on October 1, 1954,
for damages against Agapito Fuellas, father of the minor Rico Fuellas, who caused the
injuries, and Criminal Case No. 1765, against Rico Fuellas, filed on November 11, 1954, for
serious physical injuries. They were tried jointly. On May 18, 1956, a judgment of conviction
in the criminal case was rendered, finding Rico Fuellas guilty of the offense charged. No
pronouncement as to his civil liability was made, the trial judge having ruled that the same
"shall be determined in Civil Case No. 583 of this Court." On May 25, 1956, the same court,
rendered judgment in the civil case making defendant therein, now appellant Agapito
Fuellas, liable under Art. 2180 of the new Civil Code for the following damages: —

For medicine, etc. P1,000.00

For moral damages 6,000.00

As exemplary 2,000.00
damages

As attorney's fees 600.00

Total P9,600.00

with 6% annual interest thereon until paid. The Court of Appeals modified the judgment by
reducing the moral damages to P3,000.00. An appeal was taken to this tribunal solely on
questions of law.

Pepito Cadano and Rico Fuellas, son of defendant-appellant Agapito Fuellas, were both 13
years old, on September 16, 1954. They were classmates at St. Mary's High School,
Dansalan City. In the afternoon of September 16, 1954, while Pepito was studying his
lessons in the classroom, Rico took the pencil of one Ernesto Cabanok and surreptitiously
placed it inside the pocket of Pepito. When Ernesto asked Rico to return the pencil, it was
Pepito who returned the same, an act which angered Rico, who held the neck of Pepito and
pushed him to the floor. Villamira, a teacher, separated Rico and Pepito and told them to go
home. Rico went ahead, with Pepito following. When Pepito had just gone down of the
schoolhouse, he was met by Rico, still in an angry mood. Angelito Aba, a classmate, told the
two to shake hands. Pepito extended his hand to Rico. Instead of accepting the proffer to
shake hands, Rico held Pepito by the neck and with his leg, placed Pepito out of balance and
pushed him to the ground. Pepito fell on his right side with his right arm under his body,
whereupon, Rico rode on his left side. While Rico was in such position, Pepito suddenly cried
out "My arm is broken." Rico then got up and went away. Pepito was helped by others to go
home. That same evening Pepito was brought to the Lanao General Hospital for treatment
(Exh. 4). An X-Ray taken showed that there was a complete fracture of the radius and ulna
of the right forearm which necessitated plaster casting (Exhs. A, B and D). On November
20, 1954, more than a month after Pepito's release from the hospital, the plaster cast was
removed. And up to the last day of hearing of the case, the right forearm of Pepito was seen
to be shorter than the left forearm, still in bandage and could not be fully used.

It is contended that in the decision of the Court of Appeals, the petitioner-appellant was
ordered to pay damages for the deliberate injury caused by his son; that the said court held
the petitioner liable pursuant to par. 2 of Art. 2180 of the Civil Code, in connection with Art.
2176 of the same Code; that according to the last article, the act of the minor must be one
wherein "fault or negligence" is present; and that there being no fault or negligence on the
part of petitioner-appellant's minor son, but deliberate intent, the above mentioned articles
are not applicable, for the existence of deliberate intent in the commission of an act
negatives the presence of fault or negligence in its commission. Appellant, therefore,
submits that the appellate Court erred in holding him liable for damages for the deliberate
criminal act of his minor son.

The above-mentioned provisions of the Civil Code states: —

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. (Article 2176)

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

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

xxx xxx xxx (Article 2180).

In the case of Araneta vs. Arreglado, G.R. No. L-11394, prom. September 9, 1958,
Benjamin Araneta was talking with other students of the Ateneo de Manila, seated atop a
low ruined wall. Dario Arreglado, a former student of the Ateneo, chanced to pass by. The
boys twitted him on his leaving the Ateneo and enrolling in the De la Salle College.
Arreglado, resenting the banter, pulled a Japanese luger pistol (licensed in the name of his
father Juan Arreglado), fired the same at Araneta, hitting him in the lower jaw. Dario was
indicted for frustrated homicide and pleaded guilty. But in view of his youth, he being only
14 years of age, the Court suspended the proceedings (Art. 80 of the Revised Penal Code).
Thereafter, action was instituted by Araneta and his father against Juan Arreglado, his wife
and their son Dario to recover material, moral and exemplary damages. The Court of First
Instance sentenced the Arreglados to pay P3,943.00 as damages and attorney's fees. The
Aranetas appealed in view of the meager amount of indemnity awarded. This tribunal
affirmed the decision but increased the indemnity to P18,000.00. This decision was
predicated upon the fact that Arreglado's father had acted negligently in allowing his son to
have access to the pistol used to injure Benjamin. And this was the logical consequence of
the case, considering the fact that the civil law liability under Article 2180 is not respondeat
superior but the relationship of pater familias which bases the liability of the father
ultimately on his own negligence and not on that of his minor son (Cuison vs. Norton &
Harrison, 55 Phil. 23), and that if an injury is caused by the fault or negligence of his minor
son, the law presumes that there was negligence on the part of his father (Bahia vs.
Litonjua y Leynes, 30 Phil., 625).

In an earlier case (Exconde vs. Capuno, et al., G.R. No. L-10132, prom. June 29, 1957),
holding the defendants jointly and severally liable with his minor son Dante for damages,
arising from the criminal act committed by the latter, this tribunal gave the following
reasons for the rule: —

The civil liability which the law imposes upon the father and, in case of his death or
incapacity, the mother, for any damages that may be caused by the minor children
who live with them, is obvious. This is a necessary consequence of the parental
authority they exercise over them which imposes upon the parents the "duty of
supporting them, keeping them in their company, educating them in proportion to
their means", while on the other hand, gives them the "right to correct and punish
them in moderation" (Arts. 134 and 135, Spanish Civil Code). The only way by which
they can relieve themselves of this liability is if they prove that they exercised all the
diligence of a good father of a family to prevent the damage (Art. 1903, last
paragraph, Spanish Civil Code). This, defendants failed to prove.

And a noted Spanish commentator said: —

Since children and wards do not yet have the capacity to govern themselves, the law
imposes upon the parents and guardians the duty of exercising special vigilance over
the acts of their children and wards in order that damages to third persons due to
the ignorance, lack of foresight or discernment of such children and wards may be
avoided. If the parents and guardians fail to comply with this duty, they should
suffer the consequences of their abandonment or negligence by repairing the
damage caused" (12 Manresa, 649-650). (See also Arts. 311 and 316, Civil Code).

It is further argued that the only way by which a father can be made responsible for the
criminal act of his son committed with deliberate intent and with discernment, is an action
based on the provisions of the Revised Penal Code on subsidiary liability of the parents; that
the minor Fuellas having been convicted of serious physical injuries at the age of 13, the
provisions of par. 3 of Art. 12, Revised Penal Code, could have been applied, but having
acted with discernment, Art. 101 of the same Code can not include him. And as par. 2, of
Art. 101, states that "the exemption from criminal liability established in subdivisions 1, 2,
3, 5 and 6 of Article 12 and in subdivision 4 of Art. 11 of this Code does not include
exemption from civil liability, which shall be enforced subject to the following rules: First, in
cases of subdivisions 1, 2 and 3 of Article 12, the civil liability for acts committed by an
imbecile or insane person and by a person under nine years of age or by one over nine but
under fifteen years of age, who has acted without discernment, shall devolve upon those
having such person under their legal authority or control, unless it appears that there was
no fault or negligence on their part," the appellant concluded that this provision covers only
a situation where a minor under 15 but over 9 years old commits a criminal act "without
discernment."

In the recent case of Salen and Salbanera vs. Jose Balce, G.R. No. L-14414, April 27, 1960;
57 Off. Gaz. No. 37, p. 6603, September 11, 1961, the defendant Balce was the father of a
minor Gumersindo Balce, below 18 years of age who was living with him. Gumersindo was
found guilty of homicide for having killed Carlos Salen, minor son of plaintiffs. The trial court
rendered judgment dismissing the case, stating that the civil liability of the minor son of
defendant arising from his criminal liability must be determined under the provisions of the
Revised Penal Code and not under Art. 2180 of the new Civil Code. In reversing the
decision, this tribunal held: —

It is true that under Art. 101 of the Revised Penal Code, a father is made civilly liable
for the acts committed by his son only if the latter is an imbecile, an insane, under 9
years of age, or over 9 but under 15 years of age, who acts without discernment,
unless it appears that there is no fault or negligence on his part. This is because a
son who commits the act under any of those conditions is by law exempt from
criminal liability (Article 12, subdivisions 1, 2 and 3, Revised Penal Code). The idea is
not to leave the act entirely unpunished but to attach certain civil liability to the
person who has the delinquent minor under his legal authority or control. But a
minor over 15 who acts with discernment is not exempt from criminal liability, for
which reason the Code is silent as to the subsidiary liability of his parents should he
stand convicted. In that case, resort should be had to the general law which is our
Civil Code.

The particular law that governs this case is Article 2180, the pertinent portion of
which provides: "The father and, in case of his death or incapacity, the mother, are
responsible for damages caused by the minor children who live in their company." To
hold that this provision does not apply to the instant case because it only covers
obligations which arise from quasi-delicts and not obligations which arise from
criminal offenses, would result in the absurdity that while for an act where mere
negligence intervenes the father or mother may stand subsidiarily liable for the
damage caused by his or her son, no liability would attach if the damage is caused
with criminal intent. Verily, the void apparently exists in the Revised Penal Code is
subserved by this particular provision of our Civil Code, as may be gleaned from
some recent decisions of this Court which cover equal or identical cases.

Moreover, the case at bar was decided by the Court of Appeals on the basis of the evidence
submitted therein by both parties, independently of the criminal case. And responsibility for
fault or negligence under Article 2176 upon which the action in the present case was
instituted, is entirely separate and distinct from the civil liability arising from fault of
negligence under the Penal Code (Art. 2177), and having in mind the reasons behind the
law as heretofore stated, any discussion as to the minor's criminal responsibility is of no
moment.

IN VIEW HEREOF, the petition is dismissed, the decision appealed from is affirmed, with
costs against the petitioner.

Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Dizon and De Leon, JJ., concur.
Bautista and Barrera, JJ., took no part.
G.R. No. L-14414 April 27, 1960

SEVERINO SALEN and ELENA SALBANERA, plaintiffs-appellants,

vs.
JOSE BALCE, defendant-appellee.

Marciano C. Dating, Jr. for appellants.

Severino Balce for appellee.

BAUTISTA ANGELO, J.:

On February 5, 1957, plaintiffs brought this action against defendant before the Court of
First Instance of Camarines Norte to recover the sum of P2,000.00, with legal interest
thereon from July 18, 1952, plus attorney' fees and other incidental expenses.

Defendant, in his answer, set up the defense that the law upon which plaintiffs predicate
their right to recover does not here apply for the reason that law refers to quasi-delicts and
not to criminal cases.

After trial, the court sustained the theory of defendant and dismissed the complaint with
costs. Hence the present appeal.

Plaintiffs are the legitimate parents of Carlos Salen who died single from wounds caused by
Gumersindo Balce, a legitimate son of defendant. At the time, Gumersindo Balce was also
Single, a minor below 18 years of age, and was living with defendant. As a result of Carlos
Salen's death, Gumersindo Balce accused and convicted of homicide and was sentenced to
imprisonment and to pay the heirs of the deceased an indemnity in the amount of
P2,000.00. Upon petition of plaintiff, the only heirs of the deceased, a writ of execution was
issued for the payment of the indemnity but it was returned unsatisfied because
Gumersindo Balce was insolvent and had no property in his name. Thereupon, plaintiffs
demanded upon defendant, father of Gumersindo, the payment of the indemnity the latter
has failed to pay, but defendant refused, thus causing plaintiffs to institute the present
action.

The question for determination is whether appellee can be held subsidiary liable to pay the
indemnity of P2,000.00 which his son was sentenced to pay in the criminal case filed
against him.

In holding that the civil liability of the son of appellee arises from his criminal liability and,
therefore, the subsidiary liability of appellee must be determined under the provisions of the
Revised Penal Code, and not under Article 2180 of the new Civil Code which only applies to
obligations which arise from quasi-delicts, the trial court made the following observation:

The law provides that a person criminally liable for a felony is also civilly liable (Art.
100 of the Revised Penal Code). But there is no law which holds the father either
primarily or subsidiarily liable for the civiliability inccured by the son who is a minor
of 8 years. Under Art. 101 of the Penal Code, the father is civilly liable for the acts
committed by his son if the latter is an imbecile, or insane, or under 9 years of age
or over 9 but under 15, who has acted without discernment. Under Art. 102, only in
keepers and tavern-keepers are held subsidiarily liable and under Art. 103 of the
same Penal Code, the subsidiary liability established in Art. 102 shall apply only to
 "employers, teachers, persons and corporations engaged in any kind of industry for
felonies committed by their servants, pupils, workmen, apprentices or employees in
the discharge of their duties." By the principle of exclusio unus exclusio ulterius, the
defendant in this case cannot be held subsidiary liable for the civil liability of
Gumersindo Balce who has been convicted of homicide for the killing of the plaintiff's
son Carlos Salen.

Art. 2180 of the Civil Code, relied by the plaintiff's, is not applicable to the case at
bar. It applies to obligations which arise from quasi-delicts and not obligations which
arise from criminal offenses. Civil liability arising from criminal negligence or offenses
is governed by the provisions of the Penal Code and civil liability arising from civil
negligence is governed by the provision of the Civil Code. The obligation imposed by
Art. 2176 of the New Civil Code expressly refers to obligations which arise from
quasi-delicts. And obligations arising from quasi-delict (Commissioner's note). And
according to Art. 2177, the 'responsibility for fault of negligence under Art. 2176 is
entirely separate and distinct from the civil liabilty arising from negligence under the
Penal Code. . . .

While we agree with the theory that, as a rule, the civil liability arising from a crime shall be
governed by the provisions of the Revised Penal Code, we disagree with the contention that
the subsidiary liability of persons for acts of those who are under their custody should
likewise be governed by the same Code even in the absence of any provision governing the
case, for that would leave the transgression of certain right without any punishment or
sanction in the law. Such would be the case if we would uphold the theory of appellee as
sustained by the trial court.

It is true that under Article 101 of the Revised Penal Code, a father is made civilly liable for
the acts committed by his son only if the latter is an imbecile, an insane, under 9 years of
age, over 9 but under 15 years of age, who act without discernment, unless it appears that
there is no fault or negligence on his part. This is because a son who commits the act under
any of those conditions is by law exempt from criminal liability (Article 12, subdivisions 1, 2
and 3, Revised Penal Code). The idea is not to leave the act entirely unpunished but to
attach certain civil liability to the person who has the deliquent minor under his legal
authority or control. But a minor over 15 who acts with discernment is not exempt from
criminal liability, for which reason the Code is silent as to the subsidiary liability of his
parents should he stand convicted. In that case, resort should be had to the general law
which is our Civil Code.

The particular law that governs this case is Article 2180, the pertinent portion of which
provides: "The father and, in case of his death or incapacity, the mother, are responsible for
damages caused by the minor children who lived in their company." To hold that this
provision does not apply to the instant case because it only covers obligations which arise
from quasi-delicts and not obligations which arise from criminal offenses, would result in the
absurdity that while for an act where mere negligence intervenes the father or mother may
stand subsidiarily liable for the damage caused by his or her son, no liability would attach if
the damage is caused with criminal intent. Verily, the void that apparently exists in the
Revised Penal Code is subserved by this particular provision of our Civil Code, as may be
gleaned from some recent decisions of this Court which cover equal or identical cases.

A case in point is Exconde vs. Capuno, 101 Phil., 843, the facts of which are as follows:
 Dante Capuno, a minor of 15 years of age, lives in the company of his father, Delfin
Capuno. He is a student of the Balintawak Elementary School in the City of San Pablo
and a member of the Boy Scout Organization of his school. On Marcy 31, 1949, on
the occasion of a certain parade in honor of Dr. Jose Rizal in the City of San Pablo,
Dante Capuno was one of those instructed by the City School Supervisor to join the
parade. From the school, Dante Capuno, together with other students, boarded a
jeep. When the jeep started to run, Dante Capuno took hold of the wheel and drove
it while the driver sat on his left side. They have not gone far when the jeep turned
turtle and two of its passengers, Amando Ticson and Isidro Caperina died as a
consequence. The corresponding criminal action for double homicide through
reckless imprudence was instituted against Dante Capuno. During the trial, Sabina
Exconde, as mother of the deceased Isidro Caperina, reserved her right to bring a
separate civil action for damages against the accused. Dante Capuno was found
guilty of the criminal offense charged against him. In line with said reservation of
Sabina Exconde, the corresponding civil action for damages was filed against Delfin
Capuno, Dante Capuno and others.

In holding Delfin Capuno jointly and severally liable with his minor son Dante Capuno arising
from the criminal act committed by the latter, this Court made the following ruling:

The civil liability which the law imposes upon the father and, in case of his death or
incapacity, the mother, for any damages that may be caused by the minor children
who live with them, is obvious. This is a necessary consequence of the parental
authority they exercise over them which imposes upon the parents the "duty of
supporting them, keeping them in their company, educating them in proportion to
their means", while, on the other hand, gives them the "right to correct and punish
them in moderation" (Arts. 134 and 135, Spanish Civil Code). The only way by which
they can relieved themselves of this liability is if they prove that they exercised all
the diligence of a good father of a family to prevent the damage (Art. 1903, last
paragraph, Spanish Civil Code.) This defendants failed to prove.

Another case in point is Araneta vs. Arreglado 104 Phil., 524; 55 Off. Gaz. [9] 1961. The
facts of this case are as follows:

On March 7, 1951, while plaintiff Benjamin Araneta was talking with the other
students of the Ateneo de Manila while seated atop a low ruined wall bordering the
Ateneo grounds along Dakota Street, in the City of Manila, Dario Arreglado, a former
student of the Ateneo, chanced to pass by. Those on the wall called Dario and
conversed with him, and in the course of their talk, twitted him on his leaving the
Ateneo and enrolling in the De La Salle College. Apparently, Arreglado resented the
banter and suddenly pulling from his pocket a Japanese Luger pistol (licensed in the
name of his father Juan Arreglado), fired the same at Araneta, hitting him in the
lower jaw, causing him to drop backward, bleeding profusely. Helped by his friends,
the injured lad was taken first to the school infirmary and later to the Singian
Hospital, where he lay hovering between life and death for three days. The vigor of
youth came to his rescue; he rallied and after sometime finally recovered, the
gunshot would left him with a degenerative injury to the jawbone (mandible) and a
scar in the lower portion of the face, where the bullet had plowed through. The
behavior of Benjamin was likewise affected, he becoming inhibited and morose after
leaving the hospital.
Dario Arreglado was indicted for frustrated homicide and pleaded guilty, but in view of his
youth, he being only 14 years of age, the court suspended the proceedings as prescribed by
Article 80 of the Revised Penal Code. Thereafter, an action was instituted by Araneta and his
father against Juan Arreglado, his wife, and their son Dario, to recover material, moral and
exemplary damages. The court of first instance, after trial, sentenced the Arreglados to pay
P3,943.00 as damages and attorney's fees. From this decision, the Araneta appealed in view
of the meager amount of indemnity awarded. This Court affirmed the decision but increased
the indemnity to P18,000.00. This is a typical case of parental subsidiary liability arising
from the criminal act of a minor son.

Wherefore, the decision appealed from is reversed. Judgement is hereby rendered ordering
appellee to pay appellants the sum of P2,000.00, with legal interest thereon from the filing
of the complaint, and the costs.
G.R. No. L-24101 September 30, 1970

MARIA TERESA Y. CUADRA, minor represented by her father ULISES P. CUADRA, ET

AL., plaintiffs-appellees,
vs.
ALFONSO MONFORT, defendant-appellant.

Rodolfo J. Herman for plaintiffs-appellees.

Luis G. Torres and Abraham E. Tionko for defendant-appellant.

MAKALINTAL, J.:

This is an action for damages based on quasi-delict, decided by the Court of First Instance
of Negros Occidental favorably to the plaintiffs and appealed by the defendant to the Court
of Appeals, which certified the same to us since the facts are not in issue.

Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade Six at
the Mabini Elementary School in Bacolod City. On July 9, 1962 their teacher assigned them,
together with three other classmates, to weed the grass in the school premises. While thus
engaged Maria Teresa Monfort found a plastic headband, an ornamental object commonly
worn by young girls over their hair. Jokingly she said aloud that she had found an
earthworm and, evidently to frighten the Cuadra girl, tossed the object at her. At that
precise moment the latter turned around to face her friend, and the object hit her right eye.
Smarting from the pain, she rubbed the injured part and treated it with some powder. The
next day, July 10, the eye became swollen and it was then that the girl related the incident
to her parents, who thereupon took her to a doctor for treatment. She underwent surgical
operation twice, first on July 20 and again on August 4, 1962, and stayed in the hospital for
a total of twenty-three days, for all of which the parents spent the sum of P1,703.75.
Despite the medical efforts, however, Maria Teresa Cuadra completely lost the sight of her
right eye.

In the civil suit subsequently instituted by the parents in behalf of their minor daughter
against Alfonso Monfort, Maria Teresa Monfort's father, the defendant was ordered to pay
P1,703.00 as actual damages; P20,000.00 as moral damages; and P2,000.00 as attorney's
fees, plus the costs of the suit.

The legal issue posed in this appeal is the liability of a parent for an act of his minor child
which causes damage to another under the specific facts related above and the applicable
provisions of the Civil Code, particularly Articles 2176 and 2180 thereof, which read:

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 provisions of this Chapter.

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

xxx xxx xxx

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

The underlying basis of the liability imposed by Article 2176 is the fault or negligence
accompanying the act or the omission, there being no willfulness or intent to cause damage
thereby. When the act or omission is that of one person for whom another is responsible,
the latter then becomes himself liable under Article 2180, in the different cases enumerated
therein, such as that of the father or the mother under the circumstances above quoted.
The basis of this vicarious, although primary, liability is, as in Article 2176, fault or
negligence, which is presumed from that which accompanied the causative act or omission.
The presumption is merely prima facie and may therefore be rebutted. This is the clear and
logical inference that may be drawn from the last paragraph of Article 2180, which states
"that the responsibility treated of in this Article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to prevent
damage."

Since the fact thus required to be proven is a matter of defense, the burden of proof
necessarily rests on the defendant. But what is the exact degree of diligence contemplated,
and how does a parent prove it in connection with a particular act or omission of a minor
child, especially when it takes place in his absence or outside his immediate company?
Obviously there can be no meticulously calibrated measure applicable; and when the law
simply refers to "all the diligence of a good father of the family to prevent damage," it
implies a consideration of the attendant circumstances in every individual case, to
determine whether or not by the exercise of such diligence the damage could have been
prevented.

In the present case there is nothing from which it may be inferred that the defendant could
have prevented the damage by the observance of due care, or that he was in any way
remiss in the exercise of his parental authority in failing to foresee such damage, or the act
which caused it. On the contrary, his child was at school, where it was his duty to send her
and where she was, as he had the right to expect her to be, under the care and supervision
of the teacher. And as far as the act which caused the injury was concerned, it was an
innocent prank not unusual among children at play and which no parent, however careful,
would have any special reason to anticipate much less guard against. Nor did it reveal any
mischievous propensity, or indeed any trait in the child's character which would reflect
unfavorably on her upbringing and for which the blame could be attributed to her parents.

The victim, no doubt, deserves no little commiseration and sympathy for the tragedy that
befell her. But if the defendant is at all obligated to compensate her suffering, the obligation
has no legal sanction enforceable in court, but only the moral compulsion of good
conscience.

The decision appealed from is reversed, and the complaint is dismissed, without
pronouncement as to costs.
Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ.,
concur.

Concepcion, C.J., is on leave.

Fernando, J., took no part.

G.R. No. 85044 June 3, 1992

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,

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

FELICIANO, J.:

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

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

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

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

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

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

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

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

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

Dismissal of appeal; purely on technical grounds is frowned upon where the

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

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

Whoever by act or omission causes damage to another, there being fault or

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

Upon the other hand, the law imposes civil liability upon the father and, in case of his death
or incapacity, the mother, for any damages that may be caused by a minor child who lives
with them. Article 2180 of the Civil Code reads:
 The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.

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

xxx xxx xxx

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

This principle of parental liability is a species of what is frequently designated as vicarious

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

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

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

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

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

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

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

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

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

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

xxx xxx xxx

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

xxx xxx xxx

(Emphasis supplied)

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

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

Article 58 Torts — Parents and guardians are responsible for the damage
caused by the child under their parental authority in accordance with the civil
Code. (Emphasis supplied)
Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite
that the child, doer of the tortious act, shall have beer in the actual custody of the parents
sought to be held liable for the ensuing damage:

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

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

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

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

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

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents,

were indispensable parties to the suit for damages brought by petitioners, and that the
dismissal by the trial court of petitioners' complaint, the indispensable parties being already
before the court, constituted grave abuse of discretion amounting to lack or excess of
jurisdiction.

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

SO ORDERED.
 ST. JOSEPHS COLLEGE, SR. JOSEPHINI G.R. No. 182353
AMBATALI, SFIC, and ROSALINDA TABUGO,
Petitioners, Present:

CARPIO, J.,
Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
JAYSON MIRANDA, represented by his
father, RODOLFO S. MIRANDA, Promulgated:
Respondent.
June 29, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This petition for review on certiorari seeks to set aside the Decision[1] of the Court of Appeals
(CA) in CA-G.R. CV No. 68367, which affirmed in toto the decision[2] 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
Colleges [SJCs] 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 [Jaysons]
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 [Jaysons] eye and
the different parts of the bodies of some of his group mates. As a result thereof,
[Jaysons] 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, [Jaysons] wound had not completely healed and still
had to undergo another surgery.

Upon learning of the incident and because of the need for finances, [Jaysons]
mother, who was working abroad, had to rush back home for which she
spent P36,070.00 for her fares and had to forego her salary from November
23, 1994 to December 26, 1994, in the amount of at least P40,000.00.

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 attorneys 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 [Jaysons] eyes.

Jayson was rushed by the school employees to the school clinic and thereafter
transferred to St. Lukes 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 [Jaysons] discharge, Rodolfo S.
Miranda, [Jaysons] father, requested SJC to advance the amount of P26,176.35
representing [Jaysons] 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 [Jaysons] failure to comply with the written procedure
for the experiment and his teachers 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, Jaysons father, on Jaysons 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 P77,338.25 as actual

damages; However, [Jayson] is ordered to reimburse [petitioner]
St. Joseph College the amount of P26,176.36 representing the
advances given to pay [Jaysons] initial hospital expenses or in
the alternative to deduct said amount of P26,176.36 from
the P77,338.25 actual damages herein awarded by way of legal
compensation;

2. To pay [Jayson] the sum of P50,000.00 as mitigated

moral damages;

3. To pay [Jayson] the sum of P30,000.00 as reasonable

attorneys 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]

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 JAYSONS 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. MARYS COLLEGE V. WILLIAM CARPITANOS, x x x
JAYSONS 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 ATTORNEYS 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 courts 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 Jaysons 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. Marys Academy v. Carpitanos[9] which absolved
St. Marys Academy from liability for the untimely death of its student during a school
sanctioned activity, declaring that the negligence of petitioner St. Marys 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 latters 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 Jaysons 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
ones 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 classfifty (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. Marys preclude their liability in this case.

Unfortunately for petitioners, St. Marys 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 minors parents primarily. The negligence of petitioner St.
Marys Academy was only a remote cause of the accident. Between the remote
cause and the injury, there intervened the negligence of the minors 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. Marys, for petitioner [St. Marys 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 [Jaysons] 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 attorneys 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.
AQUINAS SCHOOL, G.R. No. 184202
Petitioner,
Present:
CARPIO, J., Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
SPS. JOSE INTON and MA. VICTORIA
S. INTON, on their behalf and on
behalf of their minor child, JOSE LUIS
S. INTON, and SR. MARGARITA Promulgated:
YAMYAMIN, OP,
Respondents. January 26, 2011
x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case is about the private schools liability for the outside catechists act of shoving
a student and kicking him on the legs when he disobeyed her instruction to remain in his seat
and not move around the classroom.

The Facts and the Case

In 1998 respondent Jose Luis Inton (Jose Luis) was a grade three student at Aquinas
School (Aquinas). Respondent Sister Margarita Yamyamin (Yamyamin), a religion teacher
who began teaching at that school only in June of that year, taught Jose Luis grade three
religion class.

On July 14, 1998, while Yamyamin was writing on the blackboard, Jose Luis left his
assigned seat and went over to a classmate to play a joke of surprising him. Yamyamin
noticed this and sent Jose Luis back to his seat. After a while, Jose Luis got up again and went
over to the same classmate. This time, unable to tolerate the childs behavior, Yamyamin
approached Jose Luis and kicked him on the legs several times. She also pulled and shoved
his head on the classmates seat. Finally, she told the child to stay where he was on that spot
of the room and finish copying the notes on the blackboard while seated on the floor.

As a result of the incident, respondents Jose and Victoria Inton (the Intons) filed an
action for damages on behalf of their son Jose Luis against Yamyamin and Aquinas before the
Regional Trial Court (RTC) of Pasig City in Civil Case 67427. The Intons also filed a criminal
action against Yamyamin for violation of Republic Act 7610 to which she pleaded guilty and
was sentenced accordingly.

With regard to the action for damages, the Intons sought to recover actual, moral, and
exemplary damages, as well as attorneys fees, for the hurt that Jose Luis and his mother
Victoria suffered.The RTC dismissed Victorias personal claims but ruled in Jose Luis favor,
holding Yamyamin liable to him for moral damages of P25,000.00, exemplary damages
of P25,000.00, and attorneys fees of P10,000.00 plus the costs of suit.[1]

Not satisfied, the Intons elevated the case to the Court of Appeals (CA).[2] They asked
the CA to increase the award of damages and hold Aquinas solidarily liable with
Yamyamin. Finding that an employer-employee relation existed between Aquinas and
Yamyamin, the CA found them solidarily liable to Jose Luis. The CA, however, declined to
increase the award of damages.[3] Jose Luis moved for partial reconsideration but this was
denied. Aquinas, for its part, appealed directly to this Court from the CA decision through a
petition for review on certiorari.

The Issue Presented

The sole issue presented in this case is whether or not the CA was correct in holding
Aquinas solidarily liable with Yamyamin for the damages awarded to Jose Luis.

The Courts Ruling

The CA found Aquinas liable to Jose Luis based on Article 2180 of the Civil Code upon
the CAs belief that the school was Yamyamins employer. Aquinas contests this.

The Court has consistently applied the four-fold test to determine the existence of an
employer-employee relationship: the employer (a) selects and engages the employee; (b)
pays his wages; (c) has power to dismiss him; and (d) has control over his work. Of these,
the most crucial is the element of control. Control refers to the right of the employer, whether
actually exercised or reserved, to control the work of the employee as well as the means and
methods by which he accomplishes the same.[4]
 In this case, the school directress testified that Aquinas had an agreement with a
congregation of sisters under which, in order to fulfill its ministry, the congregation would
send religion teachers to Aquinas to provide catechesis to its students. Aquinas insists that it
was not the school but Yamyamins religious congregation that chose her for the task of
catechizing the schools grade three students, much like the way bishops designate the
catechists who would teach religion in public schools. Under the circumstances, it was quite
evident that Aquinas did not have control over Yamyamins teaching methods. The Intons had
not refuted the school directress testimony in this regard. Consequently, it was error for the
CA to hold Aquinas solidarily liable with Yamyamin.

Of course, Aquinas still had the responsibility of taking steps to ensure that only
qualified outside catechists are allowed to teach its young students. In this regard, it cannot
be said that Aquinas took no steps to avoid the occurrence of improper conduct towards the
students by their religion teacher.

First, Yamyamins transcript of records, certificates, and diplomas showed that she was
qualified to teach religion.

Second, there is no question that Aquinas ascertained that Yamyamin came from a
legitimate religious congregation of sisters and that, given her Christian training, the school
had reason to assume that she would behave properly towards the students.

Third, the school gave Yamyamin a copy of the schools Administrative Faculty Staff
Manual that set the standards for handling students. It also required her to attend a teaching
orientation before she was allowed to teach beginning that June of 1998.[5]

Fourth, the school pre-approved the content of the course she was to teach [6] to ensure
that she was really catechizing the students.
And fifth, the school had a program for subjecting Yamyamin to classroom
evaluation.[7] Unfortunately, since she was new and it was just the start of the school year,
Aquinas did not have sufficient opportunity to observe her methods. At any rate, it acted
promptly to relieve her of her assignment as soon as the school learned of the incident. [8] It
cannot be said that Aquinas was guilty of outright neglect.

Regarding the Intons plea for an award of greater amounts of damages, the Court
finds no justification for this since they did not appeal from the decision of the CA. The Intons
prayed for the increase only in their comment to the petition. They thus cannot obtain from
this Court any affirmative relief other than those that the CA already granted them in its
decision.[9]

WHEREFORE, the Court GRANTS the petition, SETS ASIDE the decision of the Court
of Appeals in CA-G.R. CV 88106 dated August 4, 2008, and HOLDS petitioner Aquinas School
not liable in damages to respondent Jose Luis Inton.

SO ORDERED.
G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA

PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA
A. AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A.
AMADORA and MARIA TISCALINA A. AMADORA, petitioners
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR
LLUCH SERGIO P. DLMASO JR., CELESTINO DICON, ANIANO ABELLANA, PABLITO
DAFFON thru his parents and natural guardians, MR. and MRS. NICANOR GUMBAN,
and ROLANDO VALENCIA, thru his guardian, A. FRANCISCO ALONSO, respondents.

Jose S. Amadora & Associates for petitioners.

Padilla Law Office for respondents.

CRUZ, J.:

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement
exercises where he would ascend the stage and in the presence of his relatives and friends
receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it
turned out, though, fate would intervene and deny him that awaited experience. On April
13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-
Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his
expectations and his life as well. The victim was only seventeen years old. 1

Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein
petitioners, as the victim's parents, filed a civil action for damages under Article 2180 of the
Civil Code against the Colegio de San Jose-Recoletos, its rector the high school principal, the
dean of boys, and the physics teacher, together with Daffon and two other students,
through their respective parents. The complaint against the students was later dropped.
After trial, the Court of First Instance of Cebu held the remaining defendants liable to the
plaintiffs in the sum of P294,984.00, representing death compensation, loss of earning
capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and
attorney's fees .3 On appeal to the respondent court, however, the decision was reversed
and all the defendants were completely absolved . 4

In its decision, which is now the subject of this petition for certiorari under Rule 45 of the
Rules of Court, the respondent court found that Article 2180 was not applicable as the
Colegio de San Jose-Recoletos was not a school of arts and trades but an academic
institution of learning. It also held that the students were not in the custody of the school at
the time of the incident as the semester had already ended, that there was no clear
identification of the fatal gun and that in any event the defendant, had exercised the
necessary diligence in preventing the injury. 5

The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on
April 13, 1972, and while in its auditorium was shot to death by Pablito Daffon, a classmate.
On the implications and consequences of these facts, the parties sharply disagree.
The petitioners contend that their son was in the school to show his physics experiment as a
prerequisite to his graduation; hence, he was then under the custody of the private
respondents. The private respondents submit that Alfredo Amadora had gone to the school
only for the purpose of submitting his physics report and that he was no longer in their
custody because the semester had already ended.

There is also the question of the identity of the gun used which the petitioners consider
important because of an earlier incident which they claim underscores the negligence of the
school and at least one of the private respondents. It is not denied by the respondents that
on April 7, 1972, Sergio Damaso, Jr., the dean of boys, confiscated from Jose Gumban an
unlicensed pistol but later returned it to him without making a report to the principal or
taking any further action .6 As Gumban was one of the companions of Daffon when the
latter fired the gun that killed Alfredo, the petitioners contend that this was the same pistol
that had been confiscated from Gumban and that their son would not have been killed if it
had not been returned by Damaso. The respondents say, however, that there is no proof
that the gun was the same firearm that killed Alfredo.

Resolution of all these disagreements will depend on the interpretation of Article 2180
which, as it happens, is invoked by both parties in support of their conflicting positions. The
pertinent part of this article reads as follows:

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.

Three cases have so far been decided by the Court in connection with the above-quoted
provision, to wit: Exconde v. Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v.
Brillantes. 9 These will be briefly reviewed in this opinion for a better resolution of the case
at bar.

In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a
Boy Scout, attended a Rizal Day parade on instructions of the city school supervisor. After
the parade, the boy boarded a jeep, took over its wheel and drove it so recklessly that it
turned turtle, resulting in the death of two of its passengers. Dante was found guilty of
double homicide with reckless imprudence. In the separate civil action flied against them,
his father was held solidarily liable with him in damages under Article 1903 (now Article
2180) of the Civil Code for the tort committed by the 15-year old boy.

This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated
the school in an obiter dictum (as it was not a party to the case) on the ground that it was
riot a school of arts and trades. Justice J.B.L. Reyes, with whom Justices Sabino Padilla and
Alex Reyes concurred, dissented, arguing that it was the school authorities who should be
held liable Liability under this rule, he said, was imposed on (1) teachers in general; and (2)
heads of schools of arts and trades in particular. The modifying clause "of establishments of
arts and trades" should apply only to "heads" and not "teachers."

Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a
classmate with a razor blade during recess time at the Lourdes Catholic School in Quezon
City, and the parents of the victim sued the culprits parents for damages. Through Justice
Labrador, the Court declared in another obiter (as the school itself had also not been sued
that the school was not liable because it was not an establishment of arts and trades.
Moreover, the custody requirement had not been proved as this "contemplates a situation
where the student lives and boards with the teacher, such that the control, direction and
influences on the pupil supersede those of the parents." Justice J.B.L. Reyes did not take
part but the other members of the court concurred in this decision promulgated on May 30,
1960.

In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a
classmate with fist blows in the laboratory of the Manila Technical Institute. Although the
wrongdoer — who was already of age — was not boarding in the school, the head thereof
and the teacher in charge were held solidarily liable with him. The Court declared through
Justice Teehankee:

The phrase used in the cited article — "so long as (the students) remain in
their custody" — means the protective and supervisory custody that the
school and its heads and teachers exercise over the pupils and students for as
long as they are at attendance in the school, including recess time. There is
nothing in the law that requires that for such liability to attach, the pupil or
student who commits the tortious act must live and board in the school, as
erroneously held by the lower court, and the dicta in Mercado (as well as in
Exconde) on which it relied, must now be deemed to have been set aside by
the present decision.

This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who
stressed, in answer to the dissenting opinion, that even students already of age were
covered by the provision since they were equally in the custody of the school and subject to
its discipline. Dissenting with three others,11 Justice Makalintal was for retaining the custody
interpretation in Mercado and submitted that the rule should apply only to torts committed
by students not yet of age as the school would be acting only in loco parentis.

In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde
Case but added that "since the school involved at bar is a non-academic school, the
question as to the applicability of the cited codal provision to academic institutions will have
to await another case wherein it may properly be raised."

This is the case.

Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly
impleaded and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not
a school of arts and trades but an academic institution of learning. The parties herein have
also directly raised the question of whether or not Article 2180 covers even establishments
which are technically not schools of arts and trades, and, if so, when the offending student
is supposed to be "in its custody."

After an exhaustive examination of the problem, the Court has come to the conclusion that
the provision in question should apply to all schools, academic as well as non-academic.
Where the school is academic rather than technical or vocational in nature, responsibility for
the tort committed by the student will attach to the teacher in charge of such student,
following the first part of the provision. This is the general rule. In the case of
establishments of arts and trades, it is the head thereof, and only he, who shall be held
liable as an exception to the general rule. In other words, teachers in general shall be liable
for the acts of their students except where the school is technical in nature, in which case it
is the head thereof who shall be answerable. Following the canon of reddendo singula
singulis"teachers" should apply to the words "pupils and students" and "heads of
establishments of arts and trades" to the word "apprentices."

The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in
Exconde where he said in part:

I can see no sound reason for limiting Art. 1903 of the Old Civil Code to
teachers of arts and trades and not to academic ones. What substantial
difference is there between them insofar as concerns the proper supervision
and vice over their pupils? It cannot be seriously contended that an academic
teacher is exempt from the duty of watching that his pupils do not commit a
tort to the detriment of third Persons, so long as they are in a position to
exercise authority and Supervision over the pupil. In my opinion, in the
phrase "teachers or heads of establishments of arts and trades" used in Art.
1903 of the old Civil Code, the words "arts and trades" does not qualify
"teachers" but only "heads of establishments." The phrase is only an updated
version of the equivalent terms "preceptores y artesanos" used in the Italian
and French Civil Codes.

If, as conceded by all commentators, the basis of the presumption of

negligence of Art. 1903 in some culpa in vigilando that the parents, teachers,
etc. are supposed to have incurred in the exercise of their authority, it would
seem clear that where the parent places the child under the effective
authority of the teacher, the latter, and not the parent, should be the one
answerable for the torts committed while under his custody, for the very
reason/that the parent is not supposed to interfere with the discipline of the
school nor with the authority and supervision of the teacher while the child is
under instruction. And if there is no authority, there can be no responsibility.

There is really no substantial distinction between the academic and the non-academic
schools insofar as torts committed by their students are concerned. The same vigilance is
expected from the teacher over the students under his control and supervision, whatever
the nature of the school where he is teaching. The suggestion in the Exconde and Mercado
Cases is that the provision would make the teacher or even the head of the school of arts
and trades liable for an injury caused by any student in its custody but if that same tort
were committed in an academic school, no liability would attach to the teacher or the school
head. All other circumstances being the same, the teacher or the head of the academic
school would be absolved whereas the teacher and the head of the non-academic school
would be held liable, and simply because the latter is a school of arts and trades.

The Court cannot see why different degrees of vigilance should be exercised by the school
authorities on the basis only of the nature of their respective schools. There does not seem
to be any plausible reason for relaxing that vigilance simply because the school is academic
in nature and for increasing such vigilance where the school is non-academic. Notably, the
injury subject of liability is caused by the student and not by the school itself nor is it a
result of the operations of the school or its equipment. The injury contemplated may be
caused by any student regardless of the school where he is registered. The teacher certainly
should not be able to excuse himself by simply showing that he is teaching in an academic
school where, on the other hand, the head would be held liable if the school were non-
academic.
These questions, though, may be asked: If the teacher of the academic school is to be held
answerable for the torts committed by his students, why is it the head of the school only
who is held liable where the injury is caused in a school of arts and trades? And in the case
of the academic or non- technical school, why not apply the rule also to the head thereof
instead of imposing the liability only on the teacher?

The reason for the disparity can be traced to the fact that historically the head of the school
of arts and trades exercised a closer tutelage over his pupils than the head of the academic
school. The old schools of arts and trades were engaged in the training of
artisans apprenticed to their master who personally and directly instructed them on the
technique and secrets of their craft. The head of the school of arts and trades was such a
master and so was personally involved in the task of teaching his students, who usually
even boarded with him and so came under his constant control, supervision and influence.
By contrast, the head of the academic school was not as involved with his students and
exercised only administrative duties over the teachers who were the persons directly dealing
with the students. The head of the academic school had then (as now) only a vicarious
relationship with the students. Consequently, while he could not be directly faulted for the
acts of the students, the head of the school of arts and trades, because of his closer ties
with them, could be so blamed.

It is conceded that the distinction no longer obtains at present in view of the expansion of
the schools of arts and trades, the consequent increase in their enrollment, and the
corresponding diminution of the direct and personal contract of their heads with the
students. Article 2180, however, remains unchanged. In its present state, the provision
must be interpreted by the Court according to its clear and original mandate until the
legislature, taking into account the charges in the situation subject to be regulated, sees fit
to enact the necessary amendment.

The other matter to be resolved is the duration of the responsibility of the teacher or the
head of the school of arts and trades over the students. Is such responsibility co-extensive
with the period when the student is actually undergoing studies during the school term, as
contended by the respondents and impliedly admitted by the petitioners themselves?

From a reading of the provision under examination, it is clear that while the custody
requirement, to repeat Palisoc v. Brillantes, does not mean that the student must be
boarding with the school authorities, it does signify that the student should be within the
control and under the influence of the school authorities at the time of the occurrence of the
injury. This does not necessarily mean that such, custody be co-terminous with the
semester, beginning with the start of classes and ending upon the close thereof, and
excluding the time before or after such period, such as the period of registration, and in the
case of graduating students, the period before the commencement exercises. In the view of
the Court, the student is in the custody of the school authorities as long as he is under the
control and influence of the school and within its premises, whether the semester has not
yet begun or has already ended.

It is too tenuous to argue that the student comes under the discipline of the school only
upon the start of classes notwithstanding that before that day he has already registered and
thus placed himself under its rules. Neither should such discipline be deemed ended upon
the last day of classes notwithstanding that there may still be certain requisites to be
satisfied for completion of the course, such as submission of reports, term papers,
clearances and the like. During such periods, the student is still subject to the disciplinary
authority of the school and cannot consider himself released altogether from observance of
its rules.

As long as it can be shown that the student is in the school premises in pursuance of a
legitimate student objective, in the exercise of a legitimate student right, and even in the
enjoyment of a legitimate student right, and even in the enjoyment of a legitimate student
privilege, the responsibility of the school authorities over the student continues. Indeed,
even if the student should be doing nothing more than relaxing in the campus in the
company of his classmates and friends and enjoying the ambience and atmosphere of the
school, he is still within the custody and subject to the discipline of the school authorities
under the provisions of Article 2180.

During all these occasions, it is obviously the teacher-in-charge who must answer for his
students' torts, in practically the same way that the parents are responsible for the child
when he is in their custody. The teacher-in-charge is the one designated by the dean,
principal, or other administrative superior to exercise supervision over the pupils in the
specific classes or sections to which they are assigned. It is not necessary that at the time
of the injury, the teacher be physically present and in a position to prevent it. Custody does
not connote immediate and actual physical control but refers more to the influence exerted
on the child and the discipline instilled in him as a result of such influence. Thus, for the
injuries caused by the student, the teacher and not the parent shag be held responsible if
the tort was committed within the premises of the school at any time when its authority
could be validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall
directly on the teacher or the head of the school of arts and trades and not on the school
itself. If at all, the school, whatever its nature, may be held to answer for the acts of its
teachers or even of the head thereof under the general principle of respondeat superior, but
then it may exculpate itself from liability by proof that it had exercised the diligence of
a bonus paterfamilias.

Such defense is, of course, also available to the teacher or the head of the school of arts
and trades directly held to answer for the tort committed by the student. As long as the
defendant can show that he had taken the necessary precautions to prevent the injury
complained of, he can exonerate himself from the liability imposed by Article 2180, which
also states that:

The responsibility treated of in this article shall cease when the Persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damages.

In this connection, it should be observed that the teacher will be held liable not only when
he is acting in loco parentis for the law does not require that the offending student be of
minority age. Unlike the parent, who wig be liable only if his child is still a minor, the
teacher is held answerable by the law for the act of the student under him regardless of the
student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of the
technical school although the wrongdoer was already of age. In this sense, Article 2180
treats the parent more favorably than the teacher.

The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his
dissenting opinion in Palisoc that the school may be unduly exposed to liability under this
article in view of the increasing activism among the students that is likely to cause violence
and resulting injuries in the school premises. That is a valid fear, to be sure. Nevertheless, it
should be repeated that, under the present ruling, it is not the school that will be held
directly liable. Moreover, the defense of due diligence is available to it in case it is sought to
be held answerable as principal for the acts or omission of its head or the teacher in its
employ.

The school can show that it exercised proper measures in selecting the head or its teachers
and the appropriate supervision over them in the custody and instruction of the pupils
pursuant to its rules and regulations for the maintenance of discipline among them. In
almost all cases now, in fact, these measures are effected through the assistance of an
adequate security force to help the teacher physically enforce those rules upon the
students. Ms should bolster the claim of the school that it has taken adequate steps to
prevent any injury that may be committed by its students.

A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to
hold him directly answerable for the damage caused by his students as long as they are in
the school premises and presumably under his influence. In this respect, the Court is
disposed not to expect from the teacher the same measure of responsibility imposed on the
parent for their influence over the child is not equal in degree. Obviously, the parent can
expect more obedience from the child because the latter's dependence on him is greater
than on the teacher. It need not be stressed that such dependence includes the child's
support and sustenance whereas submission to the teacher's influence, besides being
coterminous with the period of custody is usually enforced only because of the students'
desire to pass the course. The parent can instill more las discipline on the child than the
teacher and so should be held to a greater accountability than the teacher for the tort
committed by the child.

And if it is also considered that under the article in question, the teacher or the head of the
school of arts and trades is responsible for the damage caused by the student or apprentice
even if he is already of age — and therefore less tractable than the minor — then there
should all the more be justification to require from the school authorities less accountability
as long as they can prove reasonable diligence in preventing the injury. After all, if the
parent himself is no longer liable for the student's acts because he has reached majority age
and so is no longer under the former's control, there is then all the more reason for leniency
in assessing the teacher's responsibility for the acts of the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities
of Colegio de San Jose-Recoletos notwithstanding that the fourth year classes had formally
ended. It was immaterial if he was in the school auditorium to finish his physics experiment
or merely to submit his physics report for what is important is that he was there for a
legitimate purpose. As previously observed, even the mere savoring of the company of his
friends in the premises of the school is a legitimate purpose that would have also brought
him in the custody of the school authorities.

2. The rector, the high school principal and the dean of boys cannot be held liable because
none of them was the teacher-in-charge as previously defined. Each of them was exercising
only a general authority over the student body and not the direct control and influence
exerted by the teacher placed in charge of particular classes or sections and thus
immediately involved in its discipline. The evidence of the parties does not disclose who the
teacher-in-charge of the offending student was. The mere fact that Alfredo Amadora had
gone to school that day in connection with his physics report did not necessarily make the
physics teacher, respondent Celestino Dicon, the teacher-in-charge of Alfredo's killer.

3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon
was negligent in enforcing discipline upon Daffon or that he had waived observance of the
rules and regulations of the school or condoned their non-observance. His absence when the
tragedy happened cannot be considered against him because he was not supposed or
required to report to school on that day. And while it is true that the offending student was
still in the custody of the teacher-in-charge even if the latter was physically absent when
the tort was committed, it has not been established that it was caused by his laxness in
enforcing discipline upon the student. On the contrary, the private respondents have proved
that they had exercised due diligence, through the enforcement of the school regulations, in
maintaining that discipline.

4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held
liable especially in view of the unrefuted evidence that he had earlier confiscated an
unlicensed gun from one of the students and returned the same later to him without taking
disciplinary action or reporting the matter to higher authorities. While this was clearly
negligence on his part, for which he deserves sanctions from the school, it does not
necessarily link him to the shooting of Amador as it has not been shown that he confiscated
and returned pistol was the gun that killed the petitioners' son.

5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly
liable under the article because only the teacher or the head of the school of arts and trades
is made responsible for the damage caused by the student or apprentice. Neither can it be
held to answer for the tort committed by any of the other private respondents for none of
them has been found to have been charged with the custody of the offending student or has
been remiss in the discharge of his duties in connection with such custody.

In sum, the Court finds under the facts as disclosed by the record and in the light of the
principles herein announced that none of the respondents is liable for the injury inflicted by
Pablito Damon on Alfredo Amadora that resulted in the latter's death at the auditorium of
the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with the
petitioners over the loss of their son under the tragic circumstances here related, we
nevertheless are unable to extend them the material relief they seek, as a balm to their
grief, under the law they have invoked.

WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so

ordered.

Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Griño-Aquino, JJ.,
concur.

Fernan, Padilla and Teehankee, C.J., JJ, took no part.

G.R. No. 82465 February 25, 1991

ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND

ROSARIO LACANDULA, BENJAMIN ILUMIN, TIRSO DE CHAVEZ, LUISITO VINAS,
CONNIE ARQUIO AND PATRIA CADIZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and DR. ROMULO
CASTILLO and LILIA CADIZ, respondents.

Jose C. Flores, Jr. for petitioners.

Jovito E. Talabong for private respondents.

PARAS, J.:

This is a petition for review of the decision * of the Court of Appeals, the dispositive portion
of which reads:

WHEREFORE, the decision under appeal is hereby affirmed, with the following
modifications: (1) Exemplary damages in the amount of P20,000.00 are hereby
awarded to plaintiffs, in addition to the actual damages of P30,000.00, moral
damages of P20,000.00 and attorney's fees in the amount of P15,000.00 awarded to
plaintiffs in the decision under appeal; (2) St. Francis High School, represented by
the Spouses Fernando Nantes and Rosario Lacandula, and Benjamin Illumin, are
hereby held jointly and severally liable with defendants Connie Arquio, Tirso de
Chaves, Luisito Vinas and Patria Cadis for the payment to plaintiffs of the
abovementioned actual damages, moral damages, exemplary damages and
attorney's fees, and for costs; and (3) Defendants Yoly Jaro and Nida Aragones are
hereby absolved from liability, and the case against them, together with their
respective counterclaims, is hereby ordered dismissed.

SO ORDERED. (p. 60, Rollo)

The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the
St. Francis High School, wanted to join a school picnic undertaken by Class I-B and Class I-
C at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. Romulo
Castillo and Lilia Cadiz Castillo, because of short notice, did not allow their son to join but
merely allowed him to bring food to the teachers for the picnic, with the directive that he
should go back home after doing so. However, because of persuasion of the teachers,
Ferdinand went on with them to the beach.

During the picnic and while the students, including Ferdinand, were in the water, one of the
female teachers was apparently drowning. Some of the students, including Ferdinand, came
to her rescue, but in the process, it was Ferdinand himself who drowned. His body was
recovered but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna
in Sariaya, Quezon and later to the Mt. Cannel General Hospital where he was pronounced
dead on arrival.
Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the
Regional Trial Court, Branch LVIII of Lucena City, against the St. Francis High School,
represented by the spouses Fernando Nantes and Rosario Lacandula, Benjamin Illumin (its
principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio, Nida Aragones,
Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the
death of their 13-year old son, Ferdinand Castillo. Contending that the death of their son
was due to the failure of the petitioners to exercise the proper diligence of a good father of
the family in preventing their son's drowning, respondents prayed of actual, moral and
exemplary damages, attorney's fees and expenses for litigation.

The trial court found in favor of the respondents and against petitioners-teachers Arquio, de
Chaves, Vinas, Aragones, Jaro and Cadiz, ordering all of them jointly and severally to pay
respondents the sum of P30,000.00 as actual damages, P20,000.00 as moral damages,
P15,000.00 as attorney's fees, and to pay the costs. The court a quo reasoned:

Taking into consideration the evidence presented, this Court believes that the
defendant teachers namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro,
Nida Aragones and Patria Cadiz had failed to exercise the diligence required of them
by law under the circumstances to guard against the harm they had foreseen. (pp.
2930, Rollo)

xxx xxx xxx

While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the
picnic site, the drowning incident had already occurred, such fact does not and
cannot excuse them from their liability. In fact, it could be said that by coming late,
they were remiss in their duty to safeguard the students. (p. 30, Rollo)

The students, young as they were then (12 to 13 years old), were easily attracted to
the sea without aforethought of the dangers it offers. Yet, the precautions and
reminders allegedly performed by the defendants-teachers definitely fell short of the
standard required by law under the circumstances. While the defendants-teachers
admitted that some parts of the sea where the picnic was held are deep, the
supposed lifeguards of the children did not even actually go to the water to test the
depth of the particular area where the children would swim. And indeed the fears of
the plaintiffs that the picnic area was dangerous was confirmed by the fact that three
persons during the picnic got drowned at the same time. Had the defendant teachers
made an actual and physical observation of the water before they allowed the
students to swim, they could have found out that the area where the children were
swimming was indeed dangerous. And not only that, the male teachers who
according to the female teachers were there to supervise the children to ensure their
safety were not even at the area where the children were swimming. They were
somewhere and as testified to by plaintiffs' witness they were having a drinking
spree. (pp. 55-56, Rollo)

On the other hand, the trial court dismissed the case against the St. Francis High School,
Benjamin Illumin and Aurora Cadorna. Said the court a quo:

As shown and adverted to above, this Court cannot find sufficient evidence showing
that the picnic was a school sanctioned one. Similarly no evidence has been shown to
hold defendants Benjamin Illumin and Aurora Cadorna responsible for the death of
Ferdinand Castillo together with the other defendant teachers. It has been
 sufficiently shown that Benjamin Illumin had himself not consented to the picnic and
in fact he did not join it. On the other hand, defendant Aurora Cadorna had then her
own class to supervise and in fact she was not amongst those allegedly invited by
defendant Connie Arquio to supervise class I-C to which Ferdinand Castillo belongs.
(p. 30, Rollo)

Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses

assigned the following errors committed by the trial court:

1. The lower court erred in not declaring the defendant St. Francis High School and
its administrator/principal Benjamin Illumin as equally liable not only for its approved
co-curricular activities but also for those which they unreasonably failed to exercise
control and supervision like the holding of picnic in the dangerous water of Talaan
Beach, Sariaya, Quezon.

2. The lower court erred in not declaring the St. Francis High School and principal
Benjamin Illumin as jointly and solidarily liable with their co-defendants-teachers
Rosario Lacandula, et als., for the tragic death of Ferdinand Castillo in a picnic at
Talaan Beach, Sariaya, Quezon, last March 20, 1982.

3. The lower court erred in not declaring higher amount for actual and moral
damages for the untimely and tragic death of Ferdinand Castillo in favor of plaintiffs-
appellants against all the defendants. (pp. 56-57, Rollo)

The Court of Appeals ruled:

We find plaintiffs-appellants' submission well-taken.

Even were We to find that the picnic in question was not a school-sponsored activity,
nonetheless it cannot be gainsaid that the same was held under the supervision of
the teachers employed by the said school, particularly the teacher in charge of Class
I-C to whom the victim belonged, and those whom she invited to help her in
supervising the class during the picnic. Considering that the court a quo found
negligence on the part of the six defendants-teachers who, as such, were charged
with the supervision of the children during the picnic, the St. Francis High School and
the school principal, Benjamin Illumin, are liable under Article 2176 taken together
with the 1st, 4th and 5th paragraphs of Article 2180 of the Civil Code. They cannot
escape liability on the mere excuse that the picnic was not an "extra-curricular
activity of the St. Francis High School." We find from the evidence that, as claimed
by plaintiffs-appellants, the school principal had knowledge of the picnic even from
its planning stage and had even been invited to attend the affair; and yet he did not
express any prohibition against undertaking the picnic, nor did he prescribe any
precautionary measures to be adopted during the picnic. At the least, We must find
that the school and the responsible school officials, particularly the principal,
Benjamin Illumin, had acquiesced to the holding of the picnic.

Under Article 2180, supra, the defendant school and defendant school principal must
be found jointly and severally liable with the defendants-teachers for the damages
incurred by the plaintiffs as a result of the death of their son. It is the rule that in
cases where the above-cited provisions find application, the negligence of the
employees in causing the injury or damage gives rise to a presumption of negligence
on the part of the owner and/or manager of the establishment (in the present case,
 St. Francis High School and its principal); and while this presumption is not
conclusive, it may be overthrown only by clear and convincing proof that the owner
and/or manager exercised the care and diligence of a good father of a family in the
selection and/or supervision of the employee or employees causing the injury or
damage (in this case, the defendants-teachers). The record does not disclose such
evidence as would serve to overcome the aforesaid presumption and absolve the St.
Francis High School and its principal from liability under the above-cited provisions.

As to the third assigned error interposed by plaintiffs-appellants, while We cannot

but commiserate with the plaintiffs for the tragedy that befell them in the untimely
death of their son Ferdinand Castillo and understand their suffering as parents,
especially the victim's mother who, according to appellants, suffered a nervous
breakdown as a result of the tragedy, We find that the amounts fixed by the court a
quo as actual damages and moral damages (P30,000.00 and P20,000.00,
respectively) are reasonable and are those which are sustained by the evidence and
the law.

However, We believe that exemplary or corrective damages in the amount of

P20,000.00 may and should be, as it is hereby, imposed in the present case by way
of example of correction for the public good, pursuant to Article 2229 of the Civil
Code. (pp. 57-59, Rollo)

On the other hand, petitioners-teachers assigned the following errors committed by the trial
court:

1. ". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida
Aragones, Yoly Jaro and Patria Cadiz guilty of negligence and jointly and severally
liable for damages such finding not being supported by facts and evidence.

2. ". . . in dismissing the counterclaim interposed by the defendants. (p. 59, Rollo)

On this score, respondent Court ruled:

The main thrust of defendants-appellants appeal is that plaintiffs, the parents of the
victim Ferdinand Castillo, were not able to prove by their evidence that they did not
give their son consent to join the picnic in question. However, We agree with the trial
court in its finding that whether or not the victim's parents had given such
permission to their son was immaterial to the determination of the existence of
liability on the part of the defendants for the damage incurred by the plaintiffs-
appellants as a result of the death of their son. What is material to such a
determination is whether or not there was negligence on the part of defendants vis-
a-visthe supervision of the victim's group during the picnic; and, as correctly found
by the trial court, an affirmative reply to this question has been satisfactorily
established by the evidence, as already pointed out.

However, We sustain defendants-appellants insofar as two of the defendants-

teachers, Yoly Jaro and Nida Aragones, are concerned. As to them, the trial court
found:

While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived
at the picnic site, the drowning incident had already occurred, such fact does
 not and cannot excuse them from their liability. In fact, it could be said that
by coming late, they were remiss in their duty to safeguard the students.

The evidence shows that these two defendants had satisfactorily explained why they
were late in going to the picnic site, namely, that they had to attend to the entrance
examination being conducted by the school which is part of their duty as teachers
thereof. Since they were not at the picnic site during the occurrence in question, it
cannot be said that they had any participation in the negligence attributable to the
other defendants-teachers who failed to exercise diligence in the supervision of the
children during the picnic and which failure resulted in the drowning of plaintiffs' son.
Thus, We may not attribute any act or omission to the two teachers, Yoly Jaro and
Nida Aragones, as to make them liable for the injury caused to the plaintiffs because
of the death of their son resulting from his drowning at the picnic. Accordingly, they
must be absolved from any liability.

As to the second assigned error raised by defendants-appellants, We agree with the

court a quo that the counterclaim must be dismissed for lack of merit. (pp. 59-
60, Rollo)

Hence, this petition.

The issues presented by petitioners are:

A) Whether or not there was negligence attributable to the defendants which will
warrant the award of damages to the plaintiffs;

B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is
applicable to the case at bar;

C) Whether or not the award of exemplary and moral damages is proper under the
circumstances surrounding the case at bar. (pp. 81-82, Rollo)

In the resolution of January 16, 1989, We gave due course to the petition and required the
parties to submit their respective memoranda.

The petition is impressed with merit.

If at all petitioners are liable for negligence, this is because of their own negligence or the
negligence of people under them. In the instant case however, as will be shown hereunder,
petitioners are neither guilty of their own negligence or guilty of the negligence of those
under them.

Hence, it cannot be said that they are guilty at all of any negligence. Consequently they
cannot be held liable for damages of any kind.

At the outset, it should be noted that respondent spouses, parents of the victim
Ferdinand, allowed their son to join the excursion.

Testimony of Dr. Castillo on cross exam. by Atty. Flores

 Q Now, when your son asked you for money to buy food, did you not ask him
where he will bring this?

A I asked him where he was going, he answered, I am going to the picnic,

and when I asked him where, he did not answer, sir.

Q And after giving the money, you did not tell him anything more?

A No more, sir.

Q And after that you just learned that your son join the picnic?

A Yes, sir.

Q And you came to know of it after the news that your son was drowned in
the picnic came to you, is that correct?

A Yes, sir.

Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20,
1982, you did not know that your son join the picnic?

A No, sir, I did not know.

Q Did you not look for your son during that time?

A I am too busy with my profession, that is why I was not able, sir.

Q You did not ask your wife?

A I did not, sir.

Q And neither did your wife tell you that your son join the picnic?

A Later on after 12:00, sir.

Q And during that time you were too busy that you did not inquire whether
your son have joined that picnic?

A Yes, sir.

(TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo)

The fact that he gave money to his son to buy food for the picnic even without knowing
where it will be held, is a sign of consent for his son to join the same. Furthermore.

Testimony of Dr. Lazaro on cross examination:

Q How did you conduct this mental and physical examination?

 A I have interviewed several persons and the patient herself She even felt
guilty about the death of her son because she cooked adobo for him so he
could join the excursion where her son died of drowning.

Q Why were you able to say she was feeling guilty because she was the one
who personally cooked the adobo for her son?

A It was during the interview that I had gathered it from the patient herself.
She was very sorry had she not allowed her son to join the excursion her son
would have not drowned. I don't know if she actually permitted her son
although she said she cooked adobo so he could join. (Emphasis Supplied)
(TSN, p. 19, hearing of April 30, 1984, Dr. Lazaro — witness).

Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code
in rendering petitioner school liable for the death of respondent's son.

Article 2180, par. 4 states that:

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

xxx xxx xxx

Employers shall be liable for 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.

Under this paragraph, it is clear that before an employer may be held liable for the
negligence of his employee, the act or omission which caused damage or prejudice must
have occurred while an employee was in the performance of his assigned tasks.

In the case at bar, the teachers/petitioners were not in the actual performance of their
assigned tasks. The incident happened not within the school premises, not on a school day
and most importantly while the teachers and students were holding a purely private affair, a
picnic. It is clear from the beginning that the incident happened while some members of the
I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no
permit from the school head or its principal, Benjamin Illumin because this picnic is not a
school sanctioned activity neither is it considered as an extra-curricular activity.

As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of
the planning of the picnic by the students and their teachers does not in any way or in any
manner show acquiescence or consent to the holding of the same. The application therefore
of Article 2180 has no basis in law and neither is it supported by any jurisprudence. If we
were to affirm the findings of respondent Court on this score, employers wig forever be
exposed to the risk and danger of being hailed to Court to answer for the misdeeds or
omissions of the employees even if such act or omission he committed while they are not in
the performance of their duties.

Finally, no negligence could be attributable to the petitioners-teachers to warrant the award

of damages to the respondents-spouses.
Petitioners Connie Arquio the class adviser of I-C, the section where Ferdinand belonged,
did her best and exercised diligence of a good father of a family to prevent any untoward
incident or damages to all the students who joined the picnic.

In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E.
instructors and scout masters who have knowledge in First Aid application and swimming.
Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants
(petitioners herein) had life savers especially brought by the defendants in case of
emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did
all what is humanly possible to save the child.

Testimony of Luisito Vinas on cross examination,

Q And when you saw the boy, Ferdinand Castillo, you approached the boy and
claim also having applied first aid on him?

A Yes, sir.

Q And while you were applying the so called first aid, the children were
covering you up or were surrounding you?

A Yes, sir.

Q You were rattled at that time, is it not?

A No, sir.

Q You mean you were in calm and peaceful condition?

A Yes, sir.

Q Despite the fact that the boy was no longer responding to your application
of first aid?

A Yes, sir.

Q You have never been disturbed, "nababahala" in the process of your

application of the first aid on the body of Ferdinand Castillo?

A No, sir, because we were attending to the application of first aid that we
were doing, sir.

Q After you have applied back to back pressure and which you claimed the
boy did not respond, were you not disturb anyway?

A I was disturbed during that time, sir.

Q For how many minutes have you applied the back to back pressure?

A From 9 to 11 times, sir.

 Q You mean 9 to 11 times of having applied the pressure of your body on the
body of Ferdinand Castillo?

A Yes, sir.

Q Will you please describe how you applied a single act of back to back
pressure?

A This has been done by placing the boy lay first downwards, then the face
was a little bit facing right and doing it by massaging the back of the child,
sir." (TSN, pp. 32-35, hearing of July 30, 1984)

Testimony of Tirso de Chavez on direct examination

ATTY. FLORES:

Q Who actually applied the first aid or artificial respiration to the child?

A Myself, sir.

Q How did you apply the first aid to the guy?

A The first step that I took, with the help of Mr. Luisito Vinas, was I applied
back to back pressure and took notice of the condition of the child. We placed
the feet in a higher position, that of the head of the child, sir.

Q After you have placed the boy in that particular position, where the feet
were on a higher level than that of the head, what did you do next?

A The first thing that we did, particularly myself, was that after putting the
child in that position, I applied the back to back pressure and started to
massage from the waistline up, but I noticed that the boy was not
responding, sir.

Q For how long did you apply this back to back pressure on the boy?

A About 10 seconds, sir.

Q What about Mr. Vinas?

A Almost the same a little longer, for 15 seconds, sir.

Q After you noticed that the boy was not responding, what did you do?

A When we noticed that the boy was not responding, we changed the position
of the boy by placing the child facing upwards laying on the sand then we
applied the mouth to mouth resuscitation, sir. (pp. 92-93, Rollo)
With these facts in mind, no moral nor exemplary damages may be awarded in favor of
respondents-spouses. The case at bar does not fall under any of the grounds to grant moral
damages.

Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury. Though incapable of pecuniary computation, moral damages may
be recovered if they are the proximate result of the defendant's wrongful act or
omission.

Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or
negligence, hence, no moral damages can be assessed against them.

While it is true that respondents-spouses did give their consent to their son to join the
picnic, this does not mean that the petitioners were already relieved of their duty to observe
the required diligence of a good father of a family in ensuring the safety of the children. But
in the case at bar, petitioners were able to prove that they had exercised the required
diligence. Hence, the claim for moral or exemplary damages becomes baseless.

PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding
petitioners herein guilty of negligence and liable for the death of Ferdinand Castillo and
awarding the respondents damages, is hereby SET ASIDE insofar as the petitioners herein
are concerned, but the portion of the said decision dismissing their counterclaim, there
being no merit, is hereby AFFIRMED.

SO ORDERED.

Sarmiento and Regalado, JJ., concur.

The Lawphil Project - Arellano Law Foundation

Separate Opinions

PADILLA, J., dissenting:

I regret that I can not concur with the majority. I believe that the reversal of respondent
appellate court's decision gives rise to a situation which was neither contemplated nor
intended by the applicable laws. I refer more particularly to the fact that the ponencia has
left private respondents-spouses with no one to hold liable for the untimely demise of their
son. On the other hand, they have, to my mind, been wronged. and they should at least be
recompensed for their sufferings. For this and other reasons stated hereunder. I dissent.

The issues, as adopted by the ponencia from the record, are as follows:

A) Whether or not there was negligence attributable to the defendants which will
warrant the award of damages to the plaintiffs;
 B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is
applicable to the case at bar;

C) Whether or not the award of exemplary and moral damages is proper under the
circumstances surrounding the case at bar.1

In my opinion, the record clearly shows negligence on the part of the petitioners-teachers,
with the exception of Aragones and Jaro. As to these two, respondent court absolved them
from liability for their having satisfactorily demonstrated lack of participation in the
negligence of their colleagues. I am in agreement with said conclusion. But I also agree with
the respondent court in its finding that Tirso de Chavez, Luisito Viñas, Connie Arguio and
Patria Cadiz failed to exercise DILIGENT SUPERVISION over the children during the ill-fated
excursion.

I may concede, albeit with reservation, that the afore-mentioned petitioners may not have
been negligent in finding ways and means to revive the young Castillo AFTER the drowning
incident. Their application of first-aid measures may have failed to revive him but the
petitioners had fully exhausted their efforts to save the deceased. This concession, however,
is given with hesitation, for there is indication in the record that petitioner petitioners may
have tarried too long in securing immediate medical attention for the deceased. I refer to
the trial court's finding that "it still took the jeep which brought Ferdinand Castillo to the
poblacion six (6) minutes before it finally moved to await the other teachers."2

All this aside, I am really disturbed about, and would like to emphasize the demonstrated
lack of diligence on the part of the petitioners-teachers BEFORE the unfortunate incident
took place. Despite awareness that the waters in the area were deep, petitioners- teachers
did not take concrete steps to make sure their wards did not stray too far and too deeply.
Even if they were not actually informed of the possible dangers which the area posed,
petitioners-teachers should have first "tested the waters", so to speak, to ensure which
parts thereof were safe for swimming purposes. However, this was not the case for as
testified to by petitioner de Chavez, "they admitted that they did not even go to the water
to check its depth although they were aware that some parts of it were deep." 3

At best, it appears that only oral safety instructions were imparted to the young
excursionists.

But, what I find most disturbing is the fact that at the time the trouble arose, Viñas and de
Chavez, the male teachers who were supposed to ensure the children's safety, being
physical education instructors, were nowhere within the immediate vicinity but were, in fact,
as admitted by the latter, "at his house getting some foods (sic) and thinks." The Court a
quo even went as far as to say that "they were somewhere and as testified to by plaintiffs'
witness they were having a drinking spree!"4

It thus appears that the petitioners-teachers failed to exercise the proper diligence or what I
may refer to as DILIGENCE BEFORE THE FACT. As earlier mentioned, the steps taken to
revive the deceased may be considered adequate, despite my reservations, but the over-all
lack of diligence on the part of petitioners-teachers suffices to put them within the
standards set by this Court in determining the existence of negligence. As held in Hedy Gan
y Yu vs. Court of Appeals, et al., the test in determining whether or not a person is
negligent in doing an act whereby injury or damage results to the person or property of
another is this: Would 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 the duty on the doer TO TAKE PRECAUTION
against its mischievous results and the failure to do so constitutes negligence. 5

The next issue to be addressed pertains to the liability of the petitioner St. Francis High
School as represented by petitioners-spouses Fernando Nantes and Rosario Lacandula. The
majority would like to emphasize the fact that the unfortunate incident having occurred
during a purely private affair, the teachers involved therein were not in the actual
performance of their assigned tasks. Consequently, any act or omission caused by them
cannot bind their employer, petitioner St. Francis High School.

I take exception to this proposition. Although the excursion may not have been attended by
the appropriate school authorities, the presence or stamp of authority of the school
nevertheless pervaded by reason of the participation not of one but of several teachers, the
petitioners. As found by the court a quo, the excursion was an activity "organized by the
teachers themselves, for the students and to which the student, NATURALLY, acceded." 6

Moreover, the record indicates that petitioner Benjamin Illumin, school principal, knew of
the excursion and had, in fact, been invited to attend. As the majority see it, such
knowledge does not in any manner show acquiescence or consent to the holding of the
excursion, a view which I do not accept. It seems to me that having known of the
forthcoming activity, petitioner Illumin, as school principal, should have taken appropriate
measures to ensure the safety of his students. Having preferred to remain silent, and even
indifferent, he now seeks excuse from such omission by invoking his alleged lack of consent
to the excursion. But it is precisely his silence and negligence in performing his role as
principal head of the school that must be construed as an implied consent to such activity.

As administrative head (principal) of St. Francis High School, petitioner Illumin acted as the
agent of his principal (the school) or its representatives, the petitioners-spouses Nantes and
Lacandula. Consequently, and as found by the respondent court.1âwphi1 Article 2176 in
conjunction with Article 2180, paragraphs (1) and (5) are applicable to the situation. In the
application of these provisions, the negligence of the employee in causing injury or damage
gives rise to a presumption of negligence on the part of the owner and/or manager of the
establishment. While this presumption is not conclusive, it may be overcome only by clear
and convincing evidence that the owner and/or manager exercised the care and diligence of
a good father of a family in the selection and/or supervision of the employees causing the
injury or damage. I agree with the respondent court that no proof was presented to absolve
the owner and/or manager, herein petitioners-spouses Nantes and Lacandula, and Illumin.
Thus, as correctly held by the respondent court, they too must be accountable for the death
of Ferdinand Castillo.

The majority view appears to be apprehensive that employers will be continuously held
accountable for misdeeds of their employees committed even when the same are done not
in the actual exercise of their duties. I fail to appreciate such apprehensions, which need not
arise on the part of employers, so long as the latter have no knowledge of, or give consent
to, such act or omission on the part of their employee.

Educational institutions have responsibilities which cannot be equated with those of the
ordinary employer or business establishment. Such institutions, particularly the primary and
secondary schools, hold the tremendous responsibility of exercising supervision over young
children. Too often, such schools avoid liabilities, as in the instant cage, by invoking the
absence of approval on their part for activities that may be held outside school premises or
held on a day not a school day. It is about time that such schools realize that theirs is not a
mere moneymaking entity or one impersonally established for the sole task of teaching the
rudimentary skills of "reading, writing and 'rithmetic." They must consider that their
students are children of tender years who are in need of adequate care, continuing attention
and guidance.

Anent the issue of damages, from the foregoing discussion the award thereof is clearly
proper. I only wish to point out the basis for moral damages which is found in Article 2219
of the Civil Code, to wit:

Moral damages may be recovered in the following and analogous cases:

1. . . . .

2. Quasi-delicts causing physical injuries;

xxx xxx xxx

It should be noted that the term "physical injuries" must not be construed in its penal sense
alone but rather in its generic sense, in the spirit of this Court's rulings in Carandang vs.
Santiago (51 O.G. 2878) and Madeja vs. Caro, et al., (G.R. No. 51183, 21 December 1983,
126 SCRA 293). Thus, the death of private respondents' son as a result of petitioners'
negligence gives rise to an action for quasi-delict which, as provided, entitles the claimant
to an award of moral damages.

In the light of the foregoing, I vote to AFFIRM the decision of the respondent court and thus
hold the petitioners jointly and severally liable for the death of Ferdinand Castillo.

Melencio-Herrera, J., concur.

ST. MARYS ACADEMY, petitioner, vs. WILLIAM CARPITANOS and LUCIA S.
CARPITANOS, GUADA DANIEL, JAMES DANIEL II, JAMES DANIEL,
SR., and VIVENCIO VILLANUEVA, respondents.

DECISION
PARDO, J.:

The Case

The case is an appeal via certiorari from the decision[1] of the Court of Appeals as well as
the resolution denying reconsideration, holding petitioner liable for damages arising from an
accident that resulted in the death of a student who had joined a campaign to visit the public
schools in Dipolog City to solicit enrollment.

The Facts

The facts, as found by the Court of Appeals, are as follows:

Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William
Carpitanos and Lucia Carpitanos filed on June 9, 1995 a case against James Daniel II and
his parents, James Daniel Sr. and Guada Daniel, the vehicle owner, Vivencio Villanueva and
St. Marys Academy before the Regional Trial Court of Dipolog City.

On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its
decision the dispositive portion of which reads as follows:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following

manner:

1. Defendant St. Marys Academy of Dipolog City, is hereby ordered to pay plaintiffs William
Carpitanos and Luisa Carpitanos, the following sums of money:

a. FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of

Sherwin S. Carpitanos;
b. FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by
plaintiffs for burial and related expenses;
c. TEN THOUSAND PESOS (P10,000.00) for attorneys fees;
d. FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages;
and to pay costs.

2. Their liability being only subsidiary, defendants James Daniel, Sr. and Guada Daniel are
hereby ordered to pay herein plaintiffs the amount of damages above-stated in the event of
insolvency of principal obligor St. Marys Academy of Dipolog City;
3. Defendant James Daniel II, being a minor at the time of the commission of the tort and
who was under special parental authority of defendant St. Marys Academy, is ABSOLVED
from paying the above-stated damages, same being adjudged against defendants St. Marys
Academy, and subsidiarily, against his parents;

4. Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim not
being in order as earlier discussed in this decision, is hereby DISMISSED.

IT IS SO ORDERED. (Decision, pp. 32-33; Records, pp. 205-206).

From the records it appears that from 13 to 20 February 1995, defendant-appellant St.
Marys Academy of Dipolog City conducted an enrollment drive for the school year 1995-
1996. A facet of the enrollment campaign was the visitation of schools from where
prospective enrollees were studying. As a student of St. Marys Academy, Sherwin
Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin,
along with other high school students were riding in a Mitsubishi jeep owned by defendant
Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The
jeep was driven by James Daniel II then 15 years old and a student of the same
school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep
turned turtle.

Sherwin Carpitanos died as a result of the injuries he sustained from the accident. [2]

In due time, petitioner St. Marys academy appealed the decision to the Court of
Appeals.[3]
On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual
damages to P25,000.00 but otherwise affirming the decision a quo, in toto.[4]
On February 29, 2000, petitioner St. Marys Academy filed a motion for reconsideration
of the decision. However, on May 22, 2000, the Court of Appeals denied the motion.[5]
Hence, this appeal.[6]

The Issues

1) Whether the Court of Appeals erred in holding the petitioner liable for damages
for the death of Sherwin Carpitanos.
2) Whether the Court of Appeals erred in affirming the award of moral damages
against the petitioner.

The Courts Ruling

We reverse the decision of the Court of Appeals.

The Court of Appeals held petitioner St. Marys Academy liable for the death of Sherwin
Carpitanos under Articles 218[7] and 219[8] of the Family Code, pointing out that petitioner
was negligent in allowing a minor to drive and in not having a teacher accompany the minor
students in the jeep.
 Under Article 218 of the Family Code, the following shall have special parental authority
over a minor child while under their supervision, instruction or custody: (1) the school, its
administrators and teachers; or (2) the individual, entity or institution engaged in child
care. This special parental authority and responsibility applies to all authorized activities,
whether inside or outside the premises of the school, entity or institution. Thus, such authority
and responsibility applies to field trips, excursions and other affairs of the pupils and students
outside the school premises whenever authorized by the school or its teachers.[9]
Under Article 219 of the Family Code, if the person under custody is a minor, those
exercising special parental authority are principally and solidarily liable for damages caused
by the acts or omissions of the unemancipated minor while under their supervision,
instruction, or custody.[10]
However, for petitioner 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.[11]

In order that there may be a recovery for an injury, however, it must be shown that the
injury for which recovery is sought must be the legitimate consequence of the wrong done;
the connection between the negligence and the injury must be a direct and natural
sequence of events, unbroken by intervening efficient causes. In other words, the
negligence must be the proximate cause of the injury. For, negligence, no matter in what it
consists, cannot create a right of action unless it is the proximate cause of the injury
complained of. And the proximate cause of an injury is 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.[12]

In this case, the respondents failed to show that the negligence of petitioner was the
proximate cause of the death of the victim.
Respondents Daniel spouses and Villanueva admitted that the immediate cause of the
accident was not the negligence of petitioner or the reckless driving of James Daniel II, but
the detachment of the steering wheel guide of the jeep.
In their comment to the petition, respondents Daniel spouses and Villanueva admitted
the documentary exhibits establishing that the cause of the accident was the detachment of
the steering wheel guide of the jeep. Hence, the cause of the accident was not the
recklessness of James Daniel II but the mechanical defect in the jeep of Vivencio
Villanueva. Respondents, including the spouses Carpitanos, parents of the deceased Sherwin
Carpitanos, did not dispute the report and testimony of the traffic investigator who stated
that the cause of the accident was the detachment of the steering wheel guide that caused
the jeep to turn turtle.
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. Hence, the respondents reliance on Article 219 of the Family Code that those given
the authority and responsibility under the preceding Article shall be principally and solidarily
liable for damages caused by acts or omissions of the unemancipated minor was unfounded.
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 minors
parents primarily. The negligence of petitioner St. Marys Academy was only a remote cause
of the accident. Between the remote cause and the injury, there intervened the negligence of
the minors parents or the detachment of the steering wheel guide of the jeep.

The proximate cause of an injury is 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.[13]

Considering that the negligence of the minor driver or the detachment of the steering
wheel guide of the jeep owned by respondent Villanueva was an event over which petitioner
St. Marys Academy had no control, and which was the proximate cause of the accident,
petitioner may not be held liable for the death resulting from such accident.
Consequently, we find that petitioner likewise cannot be held liable for moral damages in
the amount of P500,000.00 awarded by the trial court and affirmed by the Court of Appeals.
Though incapable of pecuniary computation, moral damages may be recovered if they
are the proximate result of the defendants wrongful act or omission. [14] In this case, the
proximate cause of the accident was not attributable to petitioner.
For the reason that petitioner was not directly liable for the accident, the decision of the
Court of Appeals ordering petitioner to pay death indemnity to respondent Carpitanos must
be deleted. Moreover, the grant of attorneys fees as part of damages is the exception rather
than the rule.[15] The power of the court to award attorneys fees under Article 2208 of the
Civil Code demands factual, legal and equitable justification.[16] Thus, the grant of attorneys
fees against the petitioner is likewise deleted.
Incidentally, there was no question that the registered owner of the vehicle was
respondent Villanueva. He never denied and in fact admitted this fact. We have held that the
registered owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to third persons for injuries caused the latter while the vehicle
was being driven on the highways or streets.[17] Hence, with the overwhelming evidence
presented by petitioner and the respondent Daniel spouses that the accident occurred because
of the detachment of the steering wheel guide of the jeep, it is not the school, but the
registered owner of the vehicle who shall be held responsible for damages for the death of
Sherwin Carpitanos.

The Fallo

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of
Appeals[18] and that of the trial court.[19] The Court remands the case to the trial court for
determination of the liability of defendants, excluding petitioner St. Marys
Academy, Dipolog City.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, and Ynares-Santiago, JJ., concur.
Puno, J., in the result.
G.R. No. L-29025 October 4, 1971

Spouses MOISES P. PALISOC and BRIGIDA P. PALISOC, plaintiffs-appellants,

vs.
ANTONIO C. BRILLANTES and TEODOSIO V. VALENTON, owner and President,
respectively, of a school of arts and trades, known under the name and style of
"Manila Technical Institute" (M.I.T.), VIRGILIO L. DAFFON and SANTIAGO M.
QUIBULUE, defendants-appellees.

Leovillo C. Agustin for plaintiffs-appellants. .

Honorato S. Reyes for appellee Brillantes, et al. .

Villareal, Almacen Navarra & Amores for appellee Daffon. .

TEEHANKEE, J.:

An appeal in forma pauperis on pure questions of law from a decision of the Court of First
Instance of Manila. .

Plaintiffs-appellants as parents of their sixteen-year old son, Dominador Palisoc, and a

student in automotive mechanics at the Manila Technical Institute, Quezon Boulevard,
Manila, had filed on May 19, 1966, the action below for damages arising from the death on
March 10, 1966 of their son at the hands of a fellow student, defendant Virgilio L. Daffon, at
the laboratory room of the said Institute. .

Defendants, per the trial court's decision, are: "(T)he defendant Antonio C. Brillantes, at the
time when the incident which gave rise to his action occurred was a member of the Board of
Directors of the institute;1 the defendant Teodosio Valenton, the president thereof; the
defendant Santiago M. Quibulue, instructor of the class to which the deceased belonged;
and the defendant Virgilio L. Daffon, a fellow student of the deceased. At the beginning the
Manila Technical Institute was a single proprietorship, but lately on August 2, 1962, it was
duly incorporated."

The facts that led to the tragic death of plaintiffs' son were thus narrated by the trial court:
"(T)he deceased Dominador Palisoc and the defendant Virgilio L. Daffon were classmates,
and on the afternoon of March 10, 1966, between two and three o'clock, they, together with
another classmate Desiderio Cruz were in the laboratory room located on the ground floor.
At that time the classes were in recess. Desiderio Cruz and Virgilio L. Daffon were working
on a machine while Dominador Palisoc was merely looking on at them. Daffon made a
remark to the effect that Palisoc was acting like a foreman. Because of this remark Palisoc
slapped slightly Daffon on the face. Daffon, in retaliation, gave Palisoc a strong flat blow on
the face, which was followed by other fist blows on the stomach. Palisoc retreated
apparently to avoid the fist blows, but Daffon followed him and both exchanged blows until
Palisoc stumbled on an engine block which caused him to fall face downward. Palisoc
became pale and fainted. First aid was administered to him but he was not revived, so he
was immediately taken to a hospital. He never regained consciousness; finally he died. The
foregoing is the substance of the testimony of Desiderio Cruz, the lone witness to the
incident."
The trial court expressly gave credence to this version of the incident, as testified to by the
lone eyewitness, Desiderio Cruz, a classmate of the protagonists, as that of a disinterested
witness who "has no motive or reason to testify one way or another in favor of any party"
and rejected the self-exculpatory version of defendant Daffon denying that he had inflicted
any fist blows on the deceased. .

With the postmortem findings of Dr. Angelo Singian of the Manila Police Department who
performed the autopsy re "Cause of death: shock due to traumatic fracture of theribs (6th
and 7th, left, contusion of the pancreas and stomach with intra-gastric hemorrhage and
slight subarachnoid hemorrhage on the brain," and his testimony that these internal injuries
of the deceased were caused "probably by strong fist blows," the trial court found defendant
Daffon liable for the quasi delict under Article 2176 of the Civil Code.3 It held that "(T)he
act, therefore, of the accused Daffon in giving the deceased strong fistblows in the stomach
which ruptured his internal organs and caused his death falls within the purview of this
article of the Code."4

The trial court, however, absolved from liability the three other defendants-officials of the
Manila Technical Institute, in this wise:

... Their liabilities are based on the provisions of Article 2180 of the New Civil
Code which reads:

Art. 2180. ... .

Lastly, teachers or heads of establishments of arts and trades

shall be liable for damages caused by their pupils and students
and apprentices, so long as they remain in their custody.

In the opinion of the Court, this article of the Code is not applicable to the
case at bar, since this contemplates the situation where the control or
influence of the teachers and heads of school establishments over the conduct
and actions by the pupil supersedes those of the parents.

CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE

CONSTRUED: — The clause "so long as they remain in their
custody" contained in Article 2180 of the new civil code
contemplated a situation where the pupil lives and boards with
the teacher, such that the control or influence on the pupil
supersedes those of the parents. In those circumstances the
control or influence over the conduct and actions of the pupil as
well as the responsibilities for their sort would pass from the
father and mother to the teachers. (Ciriaco L. Mercado,
Petitioner vs. the Court of Appeals, Manuel Quisumbing, Jr., et
al., respondents, G.R. No. L-14862, May 30, 1960).5

There is no evidence that the accused Daffon lived and boarded with his
teacher or the other defendant officials of the school. These defendants
cannot therefore be made responsible for the tort of the defendant Daffon.

Judgment was therefore rendered by the trial court as follows:

 1. Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs as heirs of
the deceased Dominador Palisoc (a) P6,000.00 for the death of Dominador
Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00
for moral damages; (d) P10,000.00 for loss of earning power, considering
that the deceased was only between sixteen and seventeen years, and in
good health when he died, and (e) P2,000.00 for attorney's fee, plus the
costs of this action. .

2. Absolving the other defendants. .

3. Dismissing the defendants' counterclaim for lack of merit.

Plaintiffs' appeal raises the principal legal question that under the factual findings of the trial
court, which are now beyond review, the trial court erred in absolving the defendants-school
officials instead of holding them jointly and severally liable as tortfeasors, with defendant
Daffon, for the damages awarded them as a result of their son's death. The Court finds the
appeal, in the main, to be meritorious. .

1. The lower court absolved defendants-school officials on the ground that the provisions of
Article 2180, Civil Code, which expressly hold "teachers or heads of establishments of arts
and trades ... liable for damages caused by their pupils and students and apprentices, so
long as they remain in their custody," are not applicable to to the case at bar, since "there
is no evidence that the accused Daffon [who inflicted the fatal fistblows]6 lived and boarded
with his teacher or the other defendants-officials of the school. These defendants cannot
therefore be made responsible for the tort of the defendant Daffon."

The lower court based its legal conclusion expressly on the Court's dictum in Mercado vs.
Court of Appeals,7 that "(I)t would seem that the clause "so long as they remain in their
custody," contemplates a situation where the pupil lives and boards with the teacher, such
that the control, direction and influence on the pupil supersedes those of the parents. In
these circumstances the control or influence over the conduct and actions of the pupil would
pass from the father and mother to the teacher; and so would the responsibility for the torts
of the pupil. Such a situation does not appear in the case at bar; the pupils appear to go to
school during school hours and go back to their homes with their parents after school is
over." This dictum had been made in rejecting therein petitioner father's contention that his
minor son's school, Lourdes Catholic School at Kanlaon, Quezon City [which was not a party
to the case] should be held responsible, rather than him as father, for the moral damages of
P2,000.00 adjudged against him for the physical injury inflicted by his son on a classmate.
[A cut on the right cheek with a piece of razor which costs only P50.00 by way of medical
expenses to treat and cure, since the wound left no scar.] The moral damages award was
after all set aside by the Court on the ground that none of the specific cases provided in
Article 2219, Civil Code, for awarding moral damages had been established, petitioner's son
being only nine years old and not having been shown to have "acted with discernment" in
inflicting the injuries on his classmate. .

The dictum in Mercado was based in turn on another dictum in the earlier case of Exconde
vs. Capuno,8 where the only issue involved as expressly stated in the decision, was whether
the therein defendant-father could be civilly liable for damages resulting from a death
caused in a motor vehicle accident driven unauthorizedly and negligently by his minor son,
(which issue was resolved adversely against the father). Nevertheless, the dictum in such
earlier case that "It is true that under the law abovequoted, teachers or directors of arts and
trades are liable for any damage caused by their pupils or apprentices while they are under
their custody, but this provision only applies to an institution of arts and trades and not to
any academic educational institution" was expressly cited and quoted in Mercado. .

2. The case at bar was instituted directly against the school officials and squarely raises the
issue of liability of teachers and heads of schools under Article 2180, Civil Code, for
damages caused by their pupils and students against fellow students on the school
premises. Here, the parents of the student at fault, defendant Daffon, are not involved,
since Daffon was already of age at the time of the tragic incident. There is no question,
either, that the school involved is a non-academic school,9 the Manila Technical Institute
being admittedly a technical vocational and industrial school. .

The Court holds that under the cited codal article, defendants head and teacher of the
Manila Technical Institute (defendants Valenton and Quibulue, respectively) are liable jointly
and severally for damages to plaintiffs-appellants for the death of the latter's minor son at
the hands of defendant Daffon at the school's laboratory room. No liability attaches to
defendant Brillantes as a mere member of the school's board of directors. The school itself
cannot be held similarly liable, since it has not been properly impleaded as party defendant.
While plaintiffs sought to so implead it, by impleading improperly defendant Brillantes, its
former single proprietor, the lower court found that it had been incorporated since August 2,
1962, and therefore the school itself, as thus incorporated, should have been brought in as
party defendant. Plaintiffs failed to do so, notwithstanding that Brillantes and his co-
defendants in their reply to plaintiffs' request for admission had expressly manifested and
made of record that "defendant Antonio C. Brillantes is not the registered owner/head of the
"Manila Technical Institute" which is now a corporation and is not owned by any individual
person."10

3. The rationale of such liability of school heads and teachers for the tortious acts of their
pupils and students, so long as they remain in their custody, is that they stand, to a certain
extent, as to their pupils and students, in loco parentis and are called upon to "exercise
reasonable supervision over the conduct of the child."11 This is expressly provided for in
Articles 349, 350 and 352 of the Civil Code.12 In the law of torts, the governing principle is
that the protective custody of the school heads and teachers is mandatorily substituted for
that of the parents, and hence, it becomes their obligation as well as that of the school itself
to provide proper supervision of the students' activities during the whole time that they are
at attendance in the school, including recess time, as well as to take the necessary
precautions to protect the students in their custody from dangers and hazards that would
reasonably be anticipated, including injuries that some student themselves may inflict
willfully or through negligence on their fellow students. .

4. As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde,
"the basis of the presumption of negligence of Art. 1903 [now 2180] is some culpa in
vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of
their authority" 13 and "where the parent places the child under the effective authority of the
teacher, the latter, and not the parent, should be the one answerable for the torts
committed while under his custody, for the very reason that the parent is not supposed to
interfere with the discipline of the school nor with the authority and supervision of the
teacher while the child is under instruction." The school itself, likewise, has to respond for
the fault or negligence of its school head and teachers under the same cited article. 14

5. The lower court therefore erred in law in absolving defendants-school officials on the
ground that they could be held liable under Article 2180, Civil Code, only if the student who
inflicted the fatal fistblows on his classmate and victim "lived and boarded with his teacher
or the other defendants officials of the school." As stated above, the phrase used in the
cited article — "so long as (the students) remain in their custody" means the protective and
supervisory custody that the school and its heads and teachers exercise over the pupils and
students for as long as they are at attendance in the school, including recess time. There is
nothing in the law that requires that for such liability to attach the pupil or student who
commits the tortious act must live and board in the school, as erroneously held by the lower
court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be
deemed to have been set aside by the present decision. .

6. Defendants Valenton and Quibulue as president and teacher-in-charge of the school must
therefore be held jointly and severally liable for the quasi-delict of their co-defendant Daffon
in the latter's having caused the death of his classmate, the deceased Dominador Palisoc.
The unfortunate death resulting from the fight between the protagonists-students could
have been avoided, had said defendants but complied with their duty of providing adequate
supervision over the activities of the students in the school premises to protect their
students from harm, whether at the hands of fellow students or other parties. At any rate,
the law holds them liable unless they relieve themselves of such liability, in compliance with
the last paragraph of Article 2180, Civil Code, by "(proving) that they observed all the
diligence of a good father of a family to prevent damage." In the light of the factual findings
of the lower court's decision, said defendants failed to prove such exemption from liability. .

7. Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of
their son should be increased to P12,000.00 as set by the Court in People vs. Pantoja,15 and
observed in all death indemnity cases thereafter is well taken. The Court, in Pantoja, after
noting the decline in the purchasing power of the Philippine peso, had expressed its
"considered opinion that the amount of award of compensatory damages for death caused
by a crime or quasi-delict should now be P12,000.00." The Court thereby adjusted the
minimum amount of "compensatory damages for death caused by a crime or quasi-delict"
as per Article 2206, Civil Code, from the old stated minimum of P3,000.00 to P12,000.00,
which amount is to be awarded "even though there may have been mitigating
circumstances" pursuant to the express provisions of said codal article. .

8. Plaintiffs-appellees' other claims on appeal that the lower court should have awarded
exemplary damages and imposed legal interest on the total damages awarded, besides
increasing the award of attorney's fees all concern matters that are left by law to the
discretion of the trial court and the Court has not been shown any error or abuse in the
exercise of such discretion on the part of the trial court.16 Decisive here is the touchstone
provision of Article 2231, Civil Code, that "In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence." No gross negligence on the part of
defendants was found by the trial court to warrant the imposition of exemplary damages, as
well as of interest and increased attorney's fees, and the Court has not been shown in this
appeal any compelling reason to disturb such finding. .

ACCORDINGLY, the judgment appealed from is modified so as to provide as follows: .

1. Sentencing the defendants Virgilio L. Daffon, TeodosioV. Valenton and Santiago M.

Quibulue jointly and severallyto pay plaintiffs as heirs of the deceased Dominador Palisoc
(a) P12,000.00 for the death of Dominador Palisoc; (b) P3,375.00 for actual and
compensatory expenses; (c) P5,000.00 for moral, damages; (d) P10,000.00 for loss of
earning power and (e) P2,000.00 for attorney's fee, plus the costs of this action in both
instances; 2. absolving defendant Antonio C. Brillantes from the complaint; and 3.
dismissing defendants' counterclaims. .
Concepcion, C.J., Villamor and Makasiar, JJ., concur. .

Dizon, J., took no part. .

REYES, J.B.L., J., concurring: .

I concur with the opinion of Mr. Justice Teehankee but would like to clarify that the
argument of the dissenting opinion of the effect that the responsibility of teachers and
school officers under Articles 2180 should be limited to pupils who are minors (below the
age of majority) is not in accord with the plain text of the law. Article 2180 of the Civil Code
of the Philippines is to the following effect: .

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

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

Guardians are liable for damages caused by the minors or incapacitated

persons who are under their authority and live in their company. .

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. .

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

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.

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observe all the diligence of a good father of
a family to prevent damages.

Examination of the article shows that where the responsibility prescribed therein is limited
to illegal acts during minority, the article expressly so provides, as in the case of the parents
and of the guardians. It is natural to expect that if the law had intended to similarly restrict
the civil responsibility of the other categories of persons enumerated in the article, it would
have expressly so stated. The fact that it has not done so indicates an intent that the
liability be not restricted to the case of persons under age. Further, it is not without
significance that the teachers and heads of scholarly establishments are not grouped with
parents and guardians but ranged with owners and managers of enterprises, employers and
the state, as to whom no reason is discernible to imply that they should answer only for
minors. .

Giorgi, in his well-known "Teoria de las Obligaciones en el Derecho Moderno", Volume 5,

page 404, No. 272 (Sp. Ed.), after noting the split among commentators on the point it
issue, observes with considerable cogency that —

272. Ante esta variedad de opiniones, ninguna de las cuales se funds en

argumentos merecedores de seria ponderacion, no es facil tomar un partido.
Esto no obstante, debiendo manisfestar nuestra opinion, nos acercamos a la
de los que no estiman necesaria la menor edad del discipulo o del aprendiz;
porque si el aforismo ubi voluit dixit, ubi noluit tacuit, no es siempre
argumento seguro para interpreter la ley, es infalible cuanto se refiere a una
misma disposicion relative a varios casos. Y tal es el art. 1.153. Lo que haya
establecido important poco si, elevandones a los principios de razon, puede
dudarse de la oportunidad de semajante diferencia; porque la voluntad cierta
del legislador prevalece in iure condito a cualquier otra consideracion. Por otra
parte, si bien se considera, no puede parecer extrano o absurdo el suponer
que un discipulo y un aprendiz, aunque mayores de edad, acepten
voluntariamente la entera vigilancia de su preceptor mientras dura la
educacion. Ni parece dudoso desde el momento que los artesanos y los
preceptores deben, al par de los padres, responder civilmente de los daños
comitidos por sus discipulos, aun cuando estos esten faltos de discernimiento.

Similarly, Planiol-Ripert, in their "Droit Civil Pratique," Volume VI, No. 635 (Spanish
version), say that —

635. Personas de quien responde. — Si bien la responsibilidad del maestro es

originalmente una estension de la de los padres (1), el art. 1384 no especifica
que los alumnos y aprendices han de ser menores de edad, por lo que la
presuncion de culpa funcionara aun cuando sean mayores (2); pero, la
vigilancia no tendra que ser ejercida en iguales terminos. Aun respecto a los
menores variara segun la edad, extremo que tendra que ternese en ceunta a
los fines de apreciar si el maestro ha podido impedir el acto nocivo o no. .

I submit, finally, that while in the case of parents and guardians, their authority and
supervision over the children and wards end by law upon the latter reaching majority age,
the authority and custodial supervision over pupils exist regardless of the age of the latter.
A student over twenty-one, by enrolling and attending a school, places himself under the
custodial supervision and disciplinary authority of the school authorities, which is the basis
of the latter's correlative responsibility for his torts, committed while under such authority.
Of course, the teachers' control is not as plenary as when the student is a minor; but that
circumstance can only affect the decree of the responsibility but cannot negate the
existence thereof. It is only a factor to be appreciated in determining whether or not the
defendant has exercised due diligence in endeavoring to prevent the injury, as prescribed in
the last paragraph of Article 2180. .

Barredo, J., concurs.

Separate Opinions

MAKALINTAL, J., dissenting:

I vote to affirm the decision appealed from. I see no reason to depart from the doctrine laid
down by this Court in Mercado v. Court of Appeals, 108 Phil. 414, where the clause "so long
as they remain in their custody" used in Article 2180 of the Civil Code was construed as
referring to a "situation where the pupil lives and boards with the teacher, such that the
(latter's) control, direction and influence on the pupil supersedes those of the parents." I
think it is highly unrealistic and conducive to unjust results, considering the size of the
enrollment in many of our educational institutions, academic and non-academic, as well as
the temper, attitudes and often destructive activism of the students, to hold their teachers
and/or the administrative heads of the schools directly liable for torts committed by them.
When even the school authorities find themselves besieged, beleaguered and attacked, and
unable to impose the traditional disciplinary measures formerly recognized as available to
them, such as suspension or outright expulsion of the offending students, it flies in the face
of logic and reality to consider such students, merely from the fact of enrollment and class
attendance, as "in the custody" of the teachers or school heads within the meaning of the
statute, and to hold the latter liable unless they can prove that they have exercised "all the
diligence of a good father of the family to prevent damage." Article 2180, if applied as
appellants construe it, would be bad law. It would demand responsibility without
commensurate authority, rendering teachers and school heads open to damage suits for
causes beyond their power to control. Present conditions being what they are, I believe the
restrictive interpretation of the aforesaid provision enunciated in Mercado should be
maintained. .

With particular reference to the case at bar, one other factor constrains me to dissent. The
opinion of the majority states: "Here, the parents of the student at fault, defendant Daffon,
are not involved, since Daffon was already of age at the time of the tragic incident." This
statement is of course in accordance with Article 2180, which says that "the father and, in
case of his death or incapacity, the mother, are responsible for the damages caused by the
minor children who live in their company." Note that for parental responsibility to arise the
children must be minors who live in their company. If, as stated also in the opinion of the
majority, "the rationale of (the) liability of school heads and teachers for the tortious acts of
their pupils and students, so long as they remain in their custody, is that they stand, to a
certain extent, as to their pupils and students, in loco parentis and are called upon to
exercise reasonable supervision over the conduct of the child," then it stands to reason that
(1) the clause "so long as they remain in their custody" as used in reference to teachers and
school heads should be equated with the phrase "who live in their company" as used in
reference to parents; and (2) that just as parents are not responsible for damages caused
by their children who are no longer minors, so should teachers and school heads be exempt
from liability for the tortious acts of their students in the same age category. I find no
justification, either in the law itself or in justice and equity, to make a substitute parent
liable where the real parent would be free from liability. .

Zaldivar, Castro and Fernando, JJ., concur.

 [G.R. No. 116617. November 16, 1998]

METRO MANILA TRANSIT CORPORATION (MMTC), PEDRO A. MUSA, CONRADO

TOLENTINO, FELICIANA CELEBRADO and THE GOVERNMENT SERVICE
INSURANCE SYSTEM, petitioners, vs. COURT OF APPEALS, SPS. RODOLFO V.
ROSALES and LILY ROSALES, respondents.

[G.R. No. 126395. November 16, 1998]

RODOLFO V. ROSALES and LILY R. ROSALES, petitioners, vs. THE COURT OF

APPEALS, METRO MANILA TRANSIT CORPORATION (MMTC), PEDRO A. MUSA,
CONRADO TOLENTINO, FELICIANA CELEBRADO and THE GOVERNMENT
SERVICE INSURANCE SYSTEM, respondents.

DECISION
MENDOZA, J.:

These are appeals brought, on the one hand, by the Metro Manila Transit Corporation
(MMTC) and Pedro Musa and, on the other, by the spouses Rodolfo V. Rosales and Lily R.
Rosales from the decision,[1] dated August 5, 1994, of the Court of Appeals, which affirmed
with modification the judgment of the Regional Trial Court of Quezon City holding MMTC and
Musa liable to the spouses Rosales for actual, moral, and exemplary damages, attorneys fees,
and the costs of suit for the death of the latters daughter. MMTC and Musa in G.R. No. 116617
appeal insofar as they are held liable for damages, while the spouses Rosales in G.R. No.
126395 appeal insofar as the amounts awarded are concerned.
The facts are as follows:
MMTC is the operator of a fleet of passenger buses within the Metro Manila area. Musa
was its driver assigned to MMTC Bus No. 27. The spouses Rosales were parents of Liza Rosalie,
a third-year high school student at the University of the Philippines Integrated School.
At around a quarter past one in the afternoon of August 9, 1986, MMTC Bus No. 27, which
was driven by Musa, hit Liza Rosalie who was then crossing Katipunan Avenue in Quezon
City. An eye witness said the girl was already near the center of the street when the bus, then
bound for the south, hit her.[2] She fell to the ground upon impact, rolled between the two
front wheels of the bus, and was run over by the left rear tires thereof.[3] Her body was
dragged several meters away from the point of impact. Liza Rosalie was taken to the
Philippine Heart Center,[4] but efforts to revive her proved futile.
Pedro Musa was found guilty of reckless imprudence resulting in homicide and sentenced
to imprisonment for a term of 2 years and 4 months, as minimum, to 6 years, as maximum,
by the Regional Trial Court of Quezon City.[5] The trial court found:

All told, this Court, therefore, holds that the accused, who was then the driver of MMTC Bus
No. 027, is criminally responsible for the death of the girl victim in violation of Article 365(2)
of the Revised Penal Code. For, in the light of the evidence that the girl victim was already
at the center of the Katipunan Road when she was bumped, and, therefore, already past the
right lane when the MMTC Bus No. 027 was supposed to have passed; and, since the said
bus was then running at a speed of about 25 kilometers per hour which is inappropriate
since Katipunan road is a busy street, there is, consequently, sufficient proof to show that
the accused was careless, reckless and imprudent in the operation of his MMTC Bus No.
027, which is made more evident by the circumstance that the accused did not blow his
horn at the time of the accident, and he did not even know that he had bumped the girl
victim and had ran over her, demonstrating thereby that he did not exercise diligence and
take the necessary precaution to avoid injury to persons in the operation of his vehicle, as,
in fact, he ran over the girl victim who died as a result thereof.[6]

The spouses Rosales filed an independent civil action for damages against MMTC, Musa,
MMTC Acting General Manager Conrado Tolentino, and the Government Service Insurance
System (GSIS). They subsequently amended their complaint to include Feliciana Celebrado,
a dispatcher of the MMTC, as a defendant therein. The counsel of MMTC and Musa attempted
to introduce testimony that Musa was not negligent in driving Bus No. 27 but was told by the
trial judge:

COURT:

That is it. You can now limit your question to the other defendant here but to re-try again
the actual facts of the accident, this Court would not be in the position. It would be
improper for this Court to make any findings with respect to the negligence of herein
driver. You ask questions only regarding the civil aspect as to the other defendant but not
as to the accused.[7]

The counsel submitted to the ruling of the court.[8]

In a decision rendered on March 6, 1990, the Regional Trial Court of Quezon City found
MMTC and Musa guilty of negligence and ordered them to pay damages and attorneys fees,
as follows:

WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering

defendant Metro Manila Transit Corporation primarily and defendant Pedro Musa subsidiarily
liable to plaintiffs-spouses Rodolfo V. Rosales and Lily R. Rosales as follows:

1. Actual damages in the amount of P150,000.00;

2. Moral damages in the amount of P500,000.00;
3. Exemplary damages in the amount of P100,000.00;
4. Attorneys fees in the amount of P50,000.00; and
5. Costs of suit.[9]
Both parties appealed to the Court of Appeals. On August 5, 1994, the Court of Appeals
affirmed the decision of the trial court with the following modification:

WHEREFORE, except for the modification deleting the award of P150,000.00 as actual
damages and awarding in lieu thereof the amount of P30,000.00 as death indemnity, the
decision appealed from is, in all other aspects, hereby AFFIRMED.[10]
 The spouses Rosales filed a motion for reconsideration, which the appellate court, in a
resolution, dated September 12, 1996, partly granted by increasing the indemnity for the
death of Liza Rosalie from P30,000.00 to P50,000.00. Hence, these appeals.
In G.R. No. 116617, MMTC and Musa assail the decision of the Court of Appeals on the
following grounds:
PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE COURT A
QUOS DECISION PARTICULARLY IN NOT HOLDING THAT PETITIONER-
APPELLANT MMTC EXERCISED THE DILIGENCE OF A GOOD FATHER OF A
FAMILY IN THE SELECTION AND SUPERVISION OF ITS DRIVERS. THIS BEING
THE CASE, APPELLANT MMTC IS ENTITLED TO BE ABSOLVED FROM ANY
LIABILITY OR AT LEAST TO A REDUCTION OF THE RECOVERABLE DAMAGES.
THE PUBLIC RESPONDENT COURT OF APPEALS, JUST LIKE THE COURT A QUO,
OVERLOOKED THE FACT THAT PETITIONER MMTC, A GOVERNMENT-OWNED
CORPORATION, COMMITTED NO FRAUD, MALICE, BAD FAITH, NOR WANTON,
FRAUDULENT, OPPRESSIVE AND MALEVOLENT ACTUATIONS AGAINST HEREIN
RESPONDENTS-APPELLEES.
THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE
COURT A QUOS DECISION TO HOLD PETITIONER-APPELLANT MMTC PRIMARILY
LIABLE TO PRIVATE RESPONDENTS-APPELLEES IN THE AMOUNT OF P500,000
AS MORAL DAMAGES, P100,000 AS EXEMPLARY DAMAGES AND P30,000 BY
WAY OF DEATH INDEMNITY.
THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE
COURT A QUOS DECISION IN RENDERING JUDGMENT FOR ATTORNEYS FEES
IN THE AMOUNT OF P50,000.00 IN FAVOR OF PRIVATE RESPONDENTS-
APPELLEES.
On the other hand, in G.R. No. 126395, the spouses Rosales contend:

The Court of Appeals erred in:

First, considering that death indemnity which this Honorable Court set at P50,000.00 is akin
to actual damages;

Second, not increasing the amount of damages awarded;

Third, refusing to hold all the defendants, now private respondents, solidarily liable.

MMTC and Musa do not specifically question the findings of the Court of Appeals and the
Regional Trial Court of Quezon City that Liza Rosalie was hit by MMTC Bus No.
27. Nonetheless, their petition contains discussions which cast doubts on this point. [11] Not
only can they not do this as the rule is that an appellant may not be heard on a question not
specifically assigned as error, but the rule giving great weight, and even finality, to the factual
conclusions of the Court of Appeals which affirm those of the trial court bars a reversal of the
finding of liability against petitioners MMTC and Musa. Only where it is shown that such
findings are whimsical, capricious, and arbitrary can they be overturned. To the contrary, the
findings of both the Court of Appeals and the Regional Trial Court are solidly anchored on the
evidence submitted by the parties. We, therefore, regard them as conclusive in resolving the
petitions at bar.[12] Indeed, as already stated, petitioners counsel submitted to the ruling of
the court that the finding of the trial court in the criminal case was conclusive on them with
regard to the questions of whether Liza Rosalie was hit by MMTC Bus No. 27 and whether its
driver was negligent. Rather, the issue in this case turns on Art. 2180 of the Civil Code, which
provides that employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former
are not engaged in any business or industry. The responsibility of employers for the
negligence of their employees in the performance of their duties is primary, that is, the injured
party may recover from the employers directly, regardless of the solvency of their
employees.[13] The rationale for the rule on vicarious liability has been adumbrated thus:

What has emerged as the modern justification for vicarious liability is a rule of policy, a
deliberate allocation of a risk. The losses caused by the torts of employees, which as a
practical matter are sure to occur in the conduct of the employers enterprise, are placed
upon that enterprise itself, as a required cost of doing business. They are placed upon the
employer because, having engaged in an enterprise, which will on the basis of all past
experience involve harm to others through the tort of employees, and sought to profit by it,
it is just that he, rather than the innocent injured plaintiff, should bear them; and because
he is better able to absorb them, and to distribute them, through prices, rates or liability
insurance, to the public, and so to shift them to society, to the community at large. Added
to this is the makeweight argument that an employer who is held strictly liable is under the
greatest incentive to be careful in the selection, instruction and supervision of his servants,
and to take every precaution to see that the enterprise is conducted safely. [14]

In Campo v. Camarote,[15] we explained the basis of the presumption of negligence in

this wise:

The reason for the law is obvious. It is indeed difficult for any person injured by the
carelessness of a driver to prove the negligence or lack of due diligence of the owner of the
vehicle in the choice of the driver. Were we to require the injured party to prove the owners
lack of diligence, the right will in many cases prove illusory, as seldom does a person in the
community, especially in the cities, have the opportunity to observe the conduct of all
possible car owners therein. So the law imposes the burden of proof of innocence on the
vehicle owner. If the driver is negligent and causes damage, the law presumes that the
owner was negligent and imposes upon him the burden of proving the contrary.

Employers may be relieved of responsibility for the negligent acts of their employees
within the scope of their assigned tasks only if they can show that they observed all the
diligence of a good father of a family to prevent damage. [16] For this purpose, they have the
burden of proving that they have indeed exercised such diligence, both in the selection of the
employee who committed the quasi-delict and in the supervision of the performance of his
duties.
In the selection of prospective employees, employers are required to examine them as
to their qualifications, experience, and service records.[17] 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. [18] To
establish these factors in a trial involving the issue of vicarious liability, employers must
submit concrete proof, including documentary evidence.[19]
In this case, MMTC sought to prove that it exercised the diligence of a good father of a
family with respect to the selection of employees by presenting mainly testimonial evidence
on its hiring procedure. According to MMTC, applicants are required to submit professional
driving licenses, certifications of work experience, and clearances from the National Bureau
of Investigation; to undergo tests of their driving skills, concentration, reflexes, and vision;
and, to complete training programs on traffic rules, vehicle maintenance, and standard
operating procedures during emergency cases.[20]
MMTCs evidence consists entirely of testimonial evidence (1) that transport supervisors
are assigned to oversee field operations in designated areas; (2) that the maintenance
department daily inspects the engines of the vehicles; and, (3) that for infractions of company
rules there are corresponding penalties.[21] Although testimonies were offered that in the case
of Pedro Musa all these precautions were followed, [22] the records of his interview, of the
results of his examinations, and of his service were not presented.
MMTC submitted brochures and programs of seminars for prospective employees on
vehicle maintenance, traffic regulations, and driving skills and claimed that applicants are
given tests to determine driving skills, concentration, reflexes, and vision,[23] but there is no
record that Musa attended such training programs and passed the said examinations before
he was employed. No proof was presented that Musa did not have any record of traffic
violations. Nor were records of daily inspections, allegedly conducted by supervisors, ever
presented.
Normally, employers keep files concerning the qualifications, work experience, training,
evaluation, and discipline of their employees. The failure of MMTC to present such
documentary proof puts in doubt the credibility of its witnesses. What was said in Central
Taxicab Corporation v. Ex-Meralco Employees Transportation Corporation [24] applies to this
case:

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

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

....

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

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

It is noteworthy that, in another case involving MMTC, testimonial evidence of identical

content, which MMTC presented to show that it exercised the diligence of a good father of a
family in the selection and supervision of employees and thus avoid vicarious liability for the
negligent acts of its employees, was held to be insufficient to overcome the presumption of
negligence against it. In Metro Manila Transit Corp. v. Court of Appeals, [25] this Court said:

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

Having found both MMTC and its driver Pedro Musa liable for negligence for the death of
Liza Rosalie on August 9, 1986, we now consider the question of damages which her parents,
the spouses Rosales, are entitled to recover, which is the subject of the appeal in G.R. No.
126395.
Indemnity for Death. Art. 2206 provides for the payment of indemnity for death caused
by a crime or quasi-delict. Initially fixed in said article of the Civil Code at P3,000.00, the
amount of the indemnity has through the years been gradually increased based on the value
of the peso. At present, it is fixed at P50,000.00.[26] To conform to this new ruling, the Court
of Appeals correctly increased the indemnity it had originally ordered the spouses Rosales to
be paid from P30,000.00 to P50,000.00 in its resolution, dated September 12, 1996.
Actual Damages. Art. 2199 provides that except as provided by law or by stipulation, one
is entitled to an adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. The spouses Rosales are claiming actual damages in the amount
of P239,245.40. However, during the trial, they submitted receipts showing that expenses for
the funeral, wake, and interment of Liza Rosalie amounted only to P60,226.65 itemized as
follows: [27]

Medical Attendance P 739.65

Funeral Services 5,100.00

Wreaths 2,500.00

Embalment 1,000.00

Obituaries 7,125.00

Interment fees 2,350.00

Expenses during wake 14,935.00

Mourning clothes 5,000.00

Photography 3,500.00

Video Coverage 10,000.00

Printing of invitation cards 7,977.00

TOTAL 60,226.65

Hence, apart from the indemnity for death, the spouses Rosales are entitled to recover
the above amount as actual damages.
Moral Damages. Under Art. 2206, the spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages for mental anguish by reason
of the death of the deceased. The reason for the grant of moral damages has been explained
thus:

. . . the award of moral damages is aimed at a restoration, within the limits of the possible,
of the spiritual status quo ante; and therefore, it must be proportionate to the suffering
inflicted. The intensity of the pain experienced by the relatives of the victim is proportionate
to the intensity of affection for him and bears no relation whatsoever with the wealth or
means of the offender.[28]

In the instant case, the spouses Rosales presented evidence of the intense moral suffering
they had gone through as a result of the loss of Liza Rosalie who was their youngest
child. Rodolfo Rosales recounted the place of Liza Rosalie in the family and their relationship
with her in the following words:
Q: Mr. Rosales, how was Liza to you as a daughter?
A: Well, Liza as a daughter was the greatest joy of the family; she was our pride, and
everybody loved her - all her brothers and sisters - because she was sweet and
unspoiled. . . . She was soft-spoken to all of us; and she still slept with us at night
although she had her own room. Sometimes in the middle of the night she would open
our door and ask if she could sleep with us. So we let her sleep with us, as she was
the youngest.[29]
The death of Liza Rosalie left a void in their lives. Rodolfo Rosales testified on the
devastating effect of the death of Liza Rosalie:
Q: And after she died, what changes, if any, did you feel in your family?
A: Well, there is something hollow in our family, something is missing. She used to greet
me when I came home and smell if I was drunk and would tell me to dress up and
take a shower before her mommy could see me. She would call me up at the office
and say: Daddy, come home, please help me with my homework. Now, all these
things, I am missing, you know. . . . I do not feel like going home early. Sometimes
my wife would complain and ask: Where did you go? But I cannot explain to her how
I feel.[30]
Lily Rosales described life without Liza Rosalie thus:
Q: Now, your life without Liza, how would you describe it, Dr. Rosales?
A: You know it is very hard to describe. The family was broken apart. We could not go
together because we remember Liza. Every time we go to the cemetery we try as
much as possible not to go together. So, we go to the cemetery one at a time,
sometimes, my husband and I, or my son and another one, but we never go together
because we remember Liza. But before her death we would always be together, the
whole family on weekends and on our days off. My husband works very hard, I also
work very hard and my children go to school. They study very hard. Now we cannot
go together on outings because of the absence of Liza.[31]
The spouses Rosales claim moral damages in the amount of P5,000,000.00. In People v.
Teehankee, Jr.,[32] this Court awarded P1 million as moral damages to the heirs of a
seventeen-year-old girl who was murdered. This amount seems reasonable to us as moral
damages for the loss of a minor child, whether he or she was a victim of a crime or a quasi-
delict. Hence, we hold that the MMTC and Musa are solidarily liable to the spouses Rosales in
the amount of P1,000,000.00 as moral damages for the death of Liza Rosalie.
 Exemplary Damages. Art. 2231 provides that exemplary damages may be recovered in
cases involving quasi-delicts if the defendant acted with gross negligence. This circumstance
obtains in the instant case. The records indicate that at the time of the mishap, there was a
pending criminal case against Musa for reckless imprudence resulting in slight physical injuries
with another branch of the Regional Trial Court, Quezon City.[33] The evidence also shows that
he failed to stop his vehicle at once even after eye witnesses shouted at him. The spouses
Rosales claim exemplary damages in the amount of P5,000,000.00. Under the circumstances,
we deem it reasonable to award the spouses Rosales exemplary damages in the amount of
five hundred thousand pesos (P500,000.00).
Attorneys Fees. Pursuant to Art. 2208, attorneys fees may be recovered when, as in the
instant case, exemplary damages are awarded. In the recent case of Sulpicio Lines, Inc. v.
Court of Appeals,[34] which involved the death of a minor child in the sinking of a vessel, we
held an award of P50,000.00 as attorneys fees to be reasonable. Hence, we affirm the award
of attorneys fees made by the Court of Appeals to the spouses Rosales in that amount.
Compensation for Loss of Earning Capacity. Art. 2206 of the Civil Code provides that in
addition to the indemnity for death caused by a crime or quasi delict, the defendant shall be
liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter; . . . . Compensation of this nature is awarded not for loss of earnings
but for loss of capacity to earn money.[35] Evidence must be presented that the victim, if not
yet employed at the time of death, was reasonably certain to complete training for a specific
profession.[36] In People v. Teehankee,[37] no award of compensation for loss of earning
capacity was granted to the heirs of a college freshman because there was no sufficient
evidence on record to show that the victim would eventually become a professional
pilot.[38] But compensation should be allowed for loss of earning capacity resulting from the
death of a minor who has not yet commenced employment or training for a specific profession
if sufficient evidence is presented to establish the amount thereof. In the United States it has
been observed:

This raises the broader question of the proper measure of damages in death cases involving
children, housewives, the old, and others who do not have market income so that there is
no pecuniary loss to survivors or to the estate of the decedent. The traditional approach was
to award no or merely nominal damages in such cases. . . . Increasingly, however, courts
allow expert testimony to be used to project those lost earnings.[39]

Thus, in Haumersen v. Ford Motor Co.,[40] the court allowed the heirs of a seven-year-old
boy who was killed in a car accident to recover compensation for loss of earning capacity:

Considerable evidence was presented by plaintiffs in an effort to give the jury a foundation
on which to make an award. Briefly stated, this evidence showed Charles Haumersen was a
seven-year-old of above average characteristics. He was described as very intelligent and
all-American. He received high marks in school. He was active in church affairs and
participated in recreational and athletic events, often with children older than himself. In
addition, he had an unusual talent for creating numerous cartoons and other drawings,
some of which plaintiffs introduced at trial.

The record does not disclose passion and prejudice. The key question is whether the verdict
of $100,000 has support in the evidence.

Upon analysis of the record, we conclude that we should not disturb the award.
 The argument for allowing compensation for loss of earning capacity of a minor is even
stronger if he or she was a student, whether already training for a specific profession or still
engaged in general studies. In Krohmer v. Dahl,[41] the court, in affirming the award by the
jury of $85,000.00 to the heirs of an eighteen-year-old college freshman who died of carbon
monoxide poisoning, stated as follows:

There are numerous cases that have held admissible evidence of prospective earnings of a
student or trainee. . . . The appellants contend that such evidence is not admissible unless
the course under study relates to a given occupation or profession and it is shown that the
student is reasonably certain to follow that occupation or profession. It is true that the
majority of these decisions deal with students who are studying for a specific occupation or
profession. However, not one of these cases indicate that evidence of ones education as a
guide to future earnings is not admissible where the student is engaged in general studies
or whose education does not relate to a specific occupation.

In sharp contrast with the situation obtaining in People v. Teehankee, where the
prosecution merely presented evidence to show the fact of the victims graduation from high
school and the fact of his enrollment in a flying school, the spouses Rosales did not content
themselves with simply establishing Liza Rosalies enrollment at UP Integrated School. They
presented evidence to show that Liza Rosalie was a good student, promising artist, and
obedient child. She consistently performed well in her studies since grade school.[42] A survey
taken in 1984 when Liza Rosalie was twelve years old showed that she had good study habits
and attitudes.[43] Cleofe Chi, guidance counselor of the University of the Philippines Integrated
School, described Liza Rosalie as personable, well-liked, and with a balanced
personality.[44] Professor Alfredo Rebillon, a faculty member of the University of the
Philippines College of Fine Arts, who organized workshops which Liza Rosalie attended in 1982
and 1983, testified that Liza Rosalie had the potential of eventually becoming an
artist.[45] Professor Rebillons testimony is more than sufficiently established by the 51 samples
of Liza Rosalies watercolor, charcoal, and pencil drawings submitted as exhibits by the
spouses Rosales.[46] Neither MMTC nor Pedro Musa controverted this evidence.
Considering her good academic record, extra-curricular activities, and varied interests, it
is reasonable to assume that Liza Rosalie would have enjoyed a successful professional career
had it not been for her untimely death.Hence, it is proper that compensation for loss of earning
capacity should be awarded to her heirs in accordance with the formula established in decided
cases[47] for computing net earning capacity, to wit:
Gross Necessary
Net Earning Life x Annual - Living
Capacity =
Expectancy Income Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80)
and the age of the deceased.[48] Since Liza Rosalie was 16 at the time of her death, her life
expectancy was 44 more years.[49] Her projected gross annual income, computed based on
the minimum wage for workers in the non-agricultural sector in effect at the time of her
death,[50] then fixed at P37.00,[51] is P14,630.46.[52] Allowing for necessary living expenses of
fifty percent (50%) of her projected gross annual income,[53] her total net earning capacity
amounts to P321,870.12.[54]
Finally, the spouses Rosales argue that the Court of Appeals erred in absolving Conrado
Tolentino, Feliciana Celebrado, and the GSIS of liability. The spouses Rosales alleged that
Tolentino, as Acting General Manager of the MMTC, and Celebrado, as a dispatcher thereof,
were charged with the supervision of Musa and should, therefore, be held vicariously liable
under Art. 2180 of the Civil Code. With respect to the GSIS, they contend that it was the
insurer in a contract for third party liability it had with the MMTC.
Although the fourth paragraph of Art. 2180 mentions managers among those made
responsible for the negligent acts of others, it is settled that this term is used in the said
provision in the sense of employers.[55] Thus, Tolentino and Celebrado cannot be held liable
for the tort of Pedro Musa.
In Vda. de Maglana v. Consolacion,[56] it was ruled that an insurer in an indemnity
contract for third party liability is directly liable to the injured party up to the extent specified
in the agreement, but it cannot be held solidarily liable beyond that amount. The GSIS
admitted in its answer that it was the insurer of the MMTC for third party liability with respect
to MMTC Bus No. 27 to the extent of P50,000.00.[57] Hence, the spouses Rosales have the
option either to claim the said amount from the GSIS and the balance of the award from
MMTC and Musa or to enforce the entire judgment against the latter, subject to
reimbursement from the former to the extent of the insurance coverage. [58]
One last word. The Regional Trial Court of Quezon City erred in holding MMTC primarily
and Musa secondarily liable for damages arising from the death of Liza Rosalie. It was error
for the appellate court to affirm this aspect of the trial courts decision.
As already stated, MMTC is primarily liable for damages for the negligence of its employee
in view of Art. 2180. Pursuant to Art. 2181, it can recover from its employee what it may
pay. This does not make the employees liability subsidiary. It only means that if the judgment
for damages is satisfied by the common carrier, the latter has a right to recover what it has
paid from its employee who committed the fault or negligence which gave rise to the action
based on quasi-delict.[59] Hence, the spouses Rosales have the option of enforcing the
judgment against either MMTC or Musa.
From another point of view, Art. 2194 provides that the responsibility of two or more
persons who are liable for a quasi-delict is solidary. We ruled in Gelisan v. Alday[60] that the
registered owner/operator of a public service vehicle is jointly and severally liable with the
driver for damages incurred by passengers or third persons as a consequence of injuries
sustained in the operation of said vehicle. In Baliwag Transit, Inc. v. Court of Appeals[61]it was
held that to escape solidary liability for a quasi-delict committed by an employee, the
employer must adduce sufficient proof that it exercised such degree of care. Finally, we held
in the recent case of Philtranco Service Enterprises, Inc. v. Court of Appeals [62] that the
liability of the registered owner of a public service vehicle . . . for damages arising from the
tortious acts of the driver is primary, direct, and joint and several or solidary with the driver.
WHEREFORE, the decision of the Court of Appeals is SET ASIDE and another one is
RENDERED holding the Metro Manila Transit Corporation and Pedro Musa jointly and severally
liable for the death of Liza Rosalie R. Rosales and ORDERING them as such to pay to the
spouses Rodolfo V. Rosales and Lily R. Rosales the following amounts:
1) death indemnity in the amount of fifty thousand pesos (P50,000.00);
2) actual damages in the amount of sixty thousand two hundred twenty six pesos
and sixty five centavos (P60,226.65);
3) moral damages in the amount of one million pesos (P1,000,000.00);
4) exemplary damages in the amount of five hundred thousand pesos
(P500,000.00);
5) attorneys fees in the amount of fifty thousand pesos (P50,000.00);
6) compensation for loss of earning capacity in the amount of three hundred twenty-
one thousand eight hundred seventy pesos and twelve centavos (P321,870.12);
and
7) the costs of suit.
SO ORDERED.
VICTORY LINER, INC. petitioner, vs. HEIRS OF ANDRES MALECDAN, respondents.

DECISION
MENDOZA, J.:

This is a petition for review of the decision[1] of the Eighth Division of the Court of Appeals,
which affirmed the decision[2] of the Regional Trial Court of Baguio City, Branch 5, in Civil
Case No. 3082-R, ordering petitioner and its driver, Ricardo Joson, Jr., to pay damages to the
heirs of Andres Malecdan, who had been killed after being hit by a bus while attempting to
cross the National Highway in Barangay Nungnungan 2 in Cauayan, Isabela.
The facts of the case are as follows:
Petitioner is a common carrier. Private respondent Elena Malecdan is the widow of the
deceased, while private respondents Veronica, Virginia, Mary Pauline, Arthur, Viola, Manuel
and Valentin Malecdan are their children.
Andres Malecdan was a 75 year-old farmer residing in Barangay Nungnungan 2,
Municipality of Cauayan, Province of Isabela.[3] On July 15, 1994, at around 7:00 p.m., while
Andres was crossing the National Highway on his way home from the farm, a Dalin Liner bus
on the southbound lane stopped to allow him and his carabao to pass. However, as Andres
was crossing the highway, a bus of petitioner Victory Liner, driven by Ricardo C. Joson, Jr.,
bypassed the Dalin bus. In so doing, respondent hit the old man and the carabao on which
he was riding. As a result, Andres Malecdan was thrown off the carabao, while the beast
toppled over.[4] The Victory Liner bus sped past the old man, while the Dalin bus proceeded
to its destination without helping him.
The incident was witnessed by Andres Malecdans neighbor, Virgilio Lorena, who was
resting in a nearby waiting shed after working on his farm. Malecdan sustained a wound on
his left shoulder, from which bone fragments protruded. He was taken by Lorena and another
person to the Cagayan District Hospital where he died a few hours after arrival. [5] The carabao
also died soon afterwards.[6] Lorena executed a sworn statement before the police
authorities. Subsequently, a criminal complaint for reckless imprudence resulting in homicide
and damage to property was filed against the Victory Liner bus driver Ricardo Joson, Jr. [7]
On October 5, 1994, private respondents brought this suit for damages in the Regional
Trial Court, Branch 5, Baguio City,[8] which, in a decision rendered on July 17, 2000, found
the driver guilty of gross negligence in the operation of his vehicle and Victory Liner, Inc. also
guilty of gross negligence in the selection and supervision of Joson, Jr. Petitioner and its driver
were held liable for damages. The dispositive portion of the trial courts decision reads:

WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and
severally to the plaintiffs the amounts of:

a. P50,000.00 as death indemnity;

b. P88,339.00 for actual damages;

c. P200,000.00 for moral damages;

d. P50,000.00 as exemplary damages;

e. Thirty percent (30%) as attorneys fees of whatever amount that can be collected by the
plaintiff; and

f. The costs of the suit.

The counterclaim of the defendant Victory Liner, Inc. against the plaintiffs and the third-
party complaint of the same defendant against the Zenith Insurance Corporation are
dismissed.

SO ORDERED.[9]

On appeal, the decision was affirmed by the Court of Appeals, with the modification that
the award of attorneys fees was fixed at P50,000.00.[10]
Hence, this appeal raising the following issues:
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
THE APPEALED DECISION OF THE REGIONAL TRIAL COURT
GRANTING P200,000.00 AS MORAL DAMAGES WHICH IS DOUBLE
THE P100,000.00 AS PRAYED FOR BY THE PRIVATE RESPONDENTS IN THEIR
COMPLAINT AND IN GRANTING ACTUAL DAMAGES NOT SUPPORTED BY OFFICIAL
RECEIPTS AND SPENT WAY BEYOND THE BURIAL OF THE DECEASED VICTIM.
II. WHETHER OR NOT THE AFFIRMATION BY THE HONORABLE COURT OF APPEALS
OF THE APPEALED DECISION OF THE REGIONAL TRIAL COURT GRANTING THE
AWARD OF MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES WHICH
WERE NOT PROVED AND CONSIDERING THAT THERE IS NO FINDING OF BAD
FAITH AND GROSS NEGLIGENCE ON THE PART OF THE PETITIONER WAS NOT
ESTABLISHED, IS IN ACCORD WITH LAW AND JURISPRUDENCE.
III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
THE APPEALED DECISION OF THE REGIONAL TRIAL COURT WHICH DISREGARDED
THE APPELLANTS TESTIMONIAL AND DOCUMENTARY EVIDENCE THAT IT HAS
EXERCISED EXTRAORDINARY DILIGENCE IN THE SELECTION AND SUPERVISION
OF ITS EMPLOYEES, OR STATED DIFFERENTLY, WHETHER OR NOT THE
AFFIRMATION BY THE COURT OF APPEALS OF THE APPEALED DECISION OF THE
TRIAL COURT THAT IS CONTRARY TO LAW AND JURISPRUDENCE CONSTITUTES
GRAVE ABUSE AND EXCESS OF JURISDICTION.[11]
We find the appealed decision to be in order.
First. Victory Liner, Inc. no longer questions the findings of the Regional Trial Court that
Andres Malecdan was injured as a result of the gross negligence of its driver, Ricardo Joson,
Jr. What petitioner now questions is the finding that it (petitioner) failed to exercise the
diligence of a good father of the family in the selection and supervision of its
employee. Petitioner argues,
With all due respect, the assignment of three inspectors to check and remind the drivers
of petitioner Victory Liner of its policies in a two-and-a-half hour driving distance, the
installation of tachometers to monitor the speed of the bus all throughout the trip, the periodic
monitoring and checking of the trips from one station to another through a trip ticket from
station to station, the regular periodic conducting of safety and defensive driving [training
sessions] for its drivers are concrete and physical proofs of the formulated operating
standards, the implementation and monitoring of the same, designed for the exercise of due
diligence of a good father of a family in the supervision of its employees. [12]
 It explained that it did not present bus driver Joson, Jr. on the witness stands because
he had been dismissed from the company after the incident, which it found was a breach in
the company regulations.Petitioner blames private respondents for the death of their father,
Andres Malecdan, who was already 75 years old, for allowing him to plough their field by
himself.[13]
The contention has no merit.
Article 2176 provides:

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

Article 2180 provides for the solidary liability of an employer for the quasi-delict
committed by an employee. The responsibility of employers for the negligence of their
employees in the performance of their duties is primary and, therefore, the injured party may
recover from the employers directly, regardless of the solvency of their employees. [14] The
rationale for the rule on vicarious liability has been explained thus:
What has emerged as the modern justification for vicarious liability is a rule of policy, a
deliberate allocation of a risk. The losses caused by the torts of employees, which as a
practical matter are sure to occur in the conduct of the employers enterprise, are placed upon
that enterprise itself, as a required cost of doing business. They are placed upon the employer
because, having engaged in an enterprise, which will on the basis of all past experience
involve harm to others through the tort of employees, and sought to profit by it, it is just that
he, rather than the innocent injured plaintiff, should bear them; and because he is better able
to absorb them and to distribute them, through prices, rates or liability insurance, to the
public, and so to shift them to society, to the community at large. Added to this is the
makeweight argument that an employer who is held strictly liable is under the greatest
incentive to be careful in the selection, instruction and supervision of his servants, and to take
every precaution to see that the enterprise is conducted safely.[15]
Employers may be relieved of responsibility for the negligent acts of their employees
acting within the scope of their assigned task only if they can show that they observed all the
diligence of a good father of a family to prevent damage. [16] For this purpose, they have the
burden of proving that they have indeed exercised such diligence, both in the selection of the
employee and in the supervision of the performance of his duties.[17]
In the selection of prospective employees, employers are required to examine them as
to their qualifications, experience and service records.[18] With respect to the supervision of
employees, employers must formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for breaches thereof.[19] These facts must
be shown by concrete proof, including documentary evidence.[20]
In the instant case, petitioner presented the results of Joson, Jr.s written
examination,[21] actual driving tests,[22] x-ray examination,[23] psychological
examination, [24]
NBI clearance, [25]
physical examination,[26]hematology
examination,[27] urinalysis,[28] student driver training,[29] shop training,[30] birth
certificate,[31] high school diploma[32] and reports from the General Maintenance Manager and
the Personnel Manager showing that he had passed all the tests and training sessions and
was ready to work as a professional driver.[33] However, as the trial court noted, petitioner
did not present proof that Joson, Jr. had nine years of driving experience.[34]
 Petitioner also presented testimonial evidence that drivers of the company were given
seminars on driving safety at least twice a year.[35] Again, however, as the trial court noted
there is no record of Joson, Jr. ever attending such a seminar. [36] Petitioner likewise failed to
establish the speed of its buses during its daily trips or to submit in evidence the trip tickets,
speed meters and reports of field inspectors. The finding of the trial court that petitioners bus
was running at a very fast speed when it overtook the Dalin bus and hit the deceased was
not disputed by petitioner. For these reasons, we hold that the trial court did not err in finding
petitioner to be negligent in the supervision of its driver Joson, Jr.
Second. To justify an award of actual damages, there should be proof of the actual
amount of loss incurred in connection with the death, wake or burial of the victim. [37] We
cannot take into account receipts showing expenses incurred some time after the burial of
the victim, such as expenses relating to the 9th day, 40th day and 1st year death
anniversaries.[38] In this case, the trial court awarded P88,339.00 as actual damages. While
these were duly supported by receipts, these included the amount of P5,900.00, the cost of
one pig which had been butchered for the 9 th day death anniversary of the deceased. This
item cannot be allowed. We, therefore, reduce the amount of actual damages
to P82,439.00.00. The award of P200,000.00 for moral damages should likewise be
reduced. The trial court found that the wife and children of the deceased underwent intense
moral suffering as a result of the latters death.[39] Under Art. 2206 of the Civil Code, the
spouse, legitimate children and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased. Under
the circumstances of this case an award of P100,000.00 would be in keeping with the purpose
of the law in allowing moral damages.[40]
On the other hand, the award of P50,000.00 for indemnity is in accordance with current
rulings of the Court.[41]
Art. 2231 provides that exemplary damages may be recovered in cases involving quasi-
delicts if the defendant acted with gross negligence. Exemplary damages are imposed not to
enrich one party or impoverish another but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions.[42] In this case, petitioners driver Joson, Jr. was
grossly negligent in driving at such a high speed along the national highway and overtaking
another vehicle which had stopped to allow a pedestrian to cross. Worse, after the accident,
Joson, Jr. did not stop the bus to help the victim. Under the circumstances, we believe that
the trial courts award of P50,000.00 as exemplary damages is proper.
Finally, private respondents are entitled to attorneys fees. Under Art. 2008 of the Civil
Code, attorneys fees may be recovered when, as in the instant case, exemplary damages are
awarded. In the recent case of Metro Manila Transit Corporation v. Court of Appeals,[43] we
held an award of P50,000.00 as attorneys fees to be reasonable. Hence, private respondents
are entitled to attorneys fees in that amount.
WHEREFORE, the decision of the Court of Appeals, dated January 17, 2002, is hereby
AFFIRMED, with the MODIFICATION that petitioner Victory Liner, Inc. is ordered to pay the
following amounts to the respondent heirs of Andres Malecdan:

1. Death indemnity in the amount of Fifty Thousand Pesos (P50,000.00);

2. Actual damages in the amount of Eighty-Two Thousand Four Hundred Thirty-Nine Pesos
(P82,439.00);

3. Moral damages in the amount of One Hundred Thousand Pesos (P100,000.00);

4. Exemplary damages in the amount of Fifty Thousand Pesos (P50,000.00);

5. Attorneys fees in the amount of Fifty Thousand Pesos (P50,000.00); and

6. Costs of suit.

SO ORDERED.
G.R. No. L-25142 March 25, 1975

PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-

appellants,
vs.
PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO
PINEDA, defendants-appellees.

Angel A. Sison for plaintiffs-appellants.

Fidel Zosimo U. Canilao for defendants-appellees.

AQUINO, J.:ñé+.£ªwph!1

Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law
from the order of the Court of First Instance of Tarlac, dismissing their complaint against
Archimedes J. Balingit.

The dismissal was based on the ground that Balingit as the manager of Phil-American
Forwarders, Inc., which together with Fernando Pineda and Balingit, was sued for damages
in an action based on quasi-delict or culpa aquiliana, is not the manager of an establishment
contemplated in article 2180 of the Civil Code (Civil Case No. 3865).

In the complaint for damages filed by the bus company and Pangalangan against Phil-
American Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962,
Pineda drove recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the
national highway at Sto. Tomas, Pampanga. The truck bumped the bus driven by
Pangalangan, which was owned by Philippine Rabbit Bus Lines, Inc. As a result of the
bumping, Pangalangan suffered injuries and the bus was damaged and could not be used
for seventy-nine days, thus depriving the company of earnings amounting to P8,665.51.
Balingit was the manager of Phil-American Forwarders, Inc.

Among the defenses interposed by the defendants in their answer was that Balingit was not
Pineda's employer.

Balingit moved that the complaint against him be dismissed on the ground that the bus
company and the bus driver had no cause of action against him. As already stated, the
lower court dismissed the action as to Balingit. The bus company and its driver appealed.

The Civil Code provides:têñ.£îhqwâ£

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.
 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 xxx 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 xxx xxx

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage. (1903a)

The novel and unprecedented legal issue in this appeal is whether the terms "employers"
and "owners and managers of an establishment or enterprise" (dueños o directores de un
establicimiento o empresa) used in article 2180 of the Civil Code, formerly article 1903 of
the old Code, embrace the manager of a corporation owning a truck, the reckless operation
of which allegedly resulted in the vehicular accident from which the damage arose.

We are of the opinion that those terms do not include the manager of a corporation. It may
be gathered from the context of article 2180 that the term "manager" ("director" in the
Spanish version) is used in the sense of "employer".

Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be
fastened on Balingit as manager of Phil-American Forwarders, Inc., in connection with the
vehicular accident already mentioned because he himself may be regarded as an employee
or dependiente of his employer, Phil-American Forwarders, Inc.

Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria

establecida en el num 3.0 del (art.) 1903, el director de un periodico explotado por una
sociedad, porque cualquiera que sea su jerarquia y aunque Ileve la direccion de
determinadas convicciones politicas no por eso deja de estar subordinado a la superior
autoridad de la Empresa" (Decision of Spanish Supreme Court dated December 6, 1912
cited in 12 Manresa, Codigo Civil Español 5th Ed. 662; 1913 Enciclopedia Juridica Española
992).

The bus company and its driver, in their appellants' brief, injected a new factual issue which
was not alleged in their complaint. They argue that Phil- American Forwarders, Inc. is
merely a business conduit of Balingit because out of its capital stock with a par value of
P41,200, Balingit and his wife had subscribed P40,000 and they paid P10,000 on their
subscription, while the other incorporators, namely, Rodolfo Limjuco, Ponciano Caparas and
Rafael Suntay paid P250.25 and P25, respectively.
That argument implies that the veil of corporate fiction should be pierced and that Phil-
American Forwarders, Inc. and Balingit and his wife should be treated as one and the same
civil personality.

We cannot countenance that argument in this appeal. It was not raised in the lower court.
The case has to be decided on the basis of the pleadings filed in the trial court where it was
assumed that Phil-American Forwarders, Inc. has a personality separate and distinct from
that of the Balingit spouses.

The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was
raised in the lower court and which is within the issues framed by the parties (Sec. 18, Rule
46, Rules of Court).

When a party deliberately adopts a certain theory and the case is decided upon that theory
in the court below, he will not be permitted to change his theory on appeal because, to
permit him to do so, could be unfair to the adverse party (2 Moran's Comments on the
Rules of Court, 1970 Ed. p. 505).

WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-
appellants.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio and Fernandez, JJ., concur.1äwphï1.ñët

SPS. BUENAVENTURA JAYME G.R. No. 163609
AND ROSARIO JAYME,
Petitioners,
Present:
- versus - YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
RODRIGO APOSTOL, FIDEL CHICO-NAZARIO,
LOZANO, ERNESTO SIMBULAN, NACHURA, and
MAYOR FERNANDO Q. MIGUEL, REYES, JJ.
MUNICIPALITY OF KORONADAL
(NOW CITY OF KORONADAL),
PROVINCE OF SOUTH COTABATO,
represented by the MUNICIPAL
TREASURER and/or MUNICIPAL
MAYOR FERNANDO Q. MIGUEL,
and THE FIRST INTEGRATED Promulgated:
BONDING AND INSURANCE
COMPANY, INC. ,
Respondents. November 27, 2008

x--------------------------------------------------x

DECISION

REYES, R.T., J.:

MAY a municipal mayor be held solidarily liable for the negligent acts of the driver assigned
to him, which resulted in the death of a minor pedestrian?

Challenged in this petition for review on certiorari is the Decision[1] of the Court of Appeals
(CA) which reversed and set aside the decision of the Regional Trial Court (RTC),
Polomolok, CotabatoCity, Branch 39, insofar as defendant Mayor Fernando Q. Miguel is
concerned. The CA absolved Mayor Miguel from any liability since it was not he, but
the Municipality of Koronadal, that was the employer of the negligent driver.

The Facts
On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu
pick-up truck driven by Fidel Lozano, an employee of the Municipality of Koronadal.[2] The
pick-up truck was registered under the name of Rodrigo Apostol, but it was then in the
possession of Ernesto Simbulan.[3] Lozano borrowed the pick-up truck from Simbulan to bring
Miguel to BuayanAirport at General Santos City to catch his Manila flight.[4]

The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing
the National Highway in Poblacion, Polomolok, South Cotabato.[5] The intensity of the collision
sent Marvin some fifty (50) meters away from the point of impact, a clear indication that
Lozano was driving at a very high speed at the time of the accident.[6]

Marvin sustained severe head injuries with subdural hematoma and diffused cerebral
contusion.[7] He was initially treated at the Howard Hubbard Memorial Hospital.[8] Due to the
seriousness of his injuries, he was airlifted to
the Ricardo Limso Medical Center in Davao City for more intensive treatment.[9] Despite
medical attention, Marvin expired six (6) days after the accident.[10]

Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a
complaint for damages with the RTC against respondents.[11] In their complaint, they prayed
that all respondents be held solidarily liable for their loss. They pointed out that that
proximate cause of Marvins death was Lozanos negligent and reckless operation of the
vehicle. They prayed for actual, moral, and exemplary damages, attorneys fees, and litigation
expenses.

In their respective Answers, all respondents denied liability for Marvins death. Apostol
and Simbulan averred that Lozano took the pick-up truck without their consent. Likewise,
Miguel and Lozano pointed out that Marvins sudden sprint across the highway made it
impossible to avoid the accident. Yet, Miguel denied being on board the vehicle when it hit
Marvin. The Municipality of Koronadal adopted the answer of Lozano and Miguel. As for First
Integrated Bonding and Insurance Company, Inc., the vehicle insurer, it insisted that its
liability is contributory and is only conditioned on the right of the insured. Since the insured
did not file a claim within the prescribed period, any cause of action against it had prescribed.

RTC Disposition
 On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the
dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal

cannot be held liable for the damages incurred by other defendant (sic) being
an agency of the State performing a (sic) governmental functions. The same
with defendant Hermogenes Simbulan, not being the owner of the subject
vehicle, he is absolved of any liability.
The complaint against defendant First Integrated Bonding Insurance Company,
Inc. is hereby ordered dismissed there being no cause of action against said
insurance company.

However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor

Fernando Miguel of Koronadal, South Cotabato, are hereby ordered jointly and
severally to pay the plaintiff (sic) the following sums:

1. One Hundred Seventy Three Thousand One Hundred

One and Forty Centavos (P173,101.40) Pesos as actual
damages with legal interest of 12% per annum computed
from February 11, 1989 until fully paid;
2. Fifty Thousand (P50,000.00) Pesos as moral damages;
3. Twenty Thousand (P20,000.00) Pesos as exemplary damages;
4. Twenty Thousand (P20,000.00) Pesos as Attorneys fees;
5. Fifty Thousand (P50,000.00) Pesos for the death of Marvin
Jayme;
6. Three Thousand (P3,000.00) as litigation expenses; and
7. To pay the cost of this suit.

SO ORDERED.[12]

Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA.

CA Disposition

In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozanos
employer and, hence, solidarily liable for the latters negligent act. Records showed that
the Municipality of Koronadal was the drivers true and lawful employer. Mayor Miguel also
denied that he did not exercise due care and diligence in the supervision of Lozano. The
incident, although unfortunate, was unexpected and cannot be attributed to him.

On October 22, 2003, the CA granted the appeal, disposing as follows:

 WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE,
insofar as defendant-appellant Mayor Fernando Q. Miguel is concerned, and the
complaint against him is DISMISSED.

IT IS SO ORDERED.[13]

The CA held that Mayor Miguel should not be held liable for damages for the death of
Marvin Jayme. Said the appellate court:

Moreover, plaintiffs-appellees admitted that Mayor Miguel was not the

employer of Lozano. Thus, paragraph 9 of the complaint alleged that
the Municipality of Koronadal was the employer of both Mayor Miguel
and Lozano. Not being the employer of Lozano, Mayor Miguel could not thus
be held liable for the damages caused by the former. Mayor Miguel was a
mere passenger in the Isuzu pick-up at the time of the
accident.[14] (Emphasis supplied)

The CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly
and severally liable with the driver for damages incurred by passengers or third persons as a
consequence of injuries or death sustained in the operation of the vehicle.

Issues

The spouses Jayme have resorted to the present recourse and assign to the CA the
following errors:

I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT MAYOR
FERNANDO MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF MARVIN
JAYME WHICH CONCLUSION IS CONTRARY TO LAW AND THE SETTLED
PRONOUNCEMENTS OF THIS HONORABLE TRIBUNAL;

II.
THE FINDINGS OF FACTS OF THE HONORABLE COURT OF
APPEALS ARE CONTRARY TO THE FINDINGS OF THE TRIAL
COURT AND ARE CONTRADICTED BY THE EVIDENCE ON RECORD; MOREOVER,
THE CONCLUSIONS DRAWN BY THE HONORABLE COURT OF
APPEALS ARE ALL BASED ON CONJECTURES AND SURMISES AND AGAINST
ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHICH URGENTLY CALL FOR
AN EXERCISE OF THIS HONORABLE COURTS SUPERVISION.[15]

Our Ruling
The doctrine of vicarious liability or imputed liability finds no application in the
present case.

Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He
was not a mere passenger, but instead one who had direct control and supervision over
Lozano during the time of the accident. According to petitioners, the element of direct control
is not negated by the fact that Lozanos employer was the Municipality of Koronadal. Mayor
Miguel, being Lozanos superior, still had control over the manner the vehicle was operated.

Article 2180[16] of the Civil Code provides that a person is not only liable for ones own
quasi-delictual acts, but also for those persons for whom one is responsible for. This liability
is popularly known as vicarious or imputed liability. To sustain claims against employers for
the acts of their employees, the following requisites must be established: (1) That the
employee was chosen by the employer personally or through another; (2) That the service to
be rendered in accordance with orders which the employer has the authority to give at all
times; and (3) That the illicit act of the employee was on the occasion or by reason of the
functions entrusted to him.[17]

Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180,
it must be established that the injurious or tortuous act was committed at the time the
employee was performing his functions.[18]

Furthermore, the employer-employee relationship cannot be assumed. It is incumbent

upon the plaintiff to prove the relationship by preponderant evidence. In Belen v.
Belen,[19] this Court ruled that it was enough for defendant to deny an alleged employment
relationship. The defendant is under no obligation to prove the negative averment. This Court
said:

It is an old and well-settled rule of the courts that the burden of proving
the action is upon the plaintiff, and that if he fails satisfactorily to show the
facts upon which he bases his claim, the defendant is under no obligation to
prove his exceptions. This rue is in harmony with the provisions of Section 297
of the Code of Civil Procedure holding that each party must prove his own
affirmative allegations, etc.[20]
 In resolving the present controversy, it is imperative to find out if Mayor Miguel is,
indeed, the employer of Lozano and therefore liable for the negligent acts of the latter. To
determine the existence of an employment relationship, We rely on the four-fold test. This
involves: (1) the employers power of selection; (2) payment of wages or other remuneration;
(3) the employers right to control the method of doing the work; and (4) the employers right
of suspension or dismissal.[21]

Applying the foregoing test, the CA correctly held that it was

the Municipality of Koronadal which was the lawful employer of Lozano at the time of the
accident. It is uncontested that Lozano was employed as a driver by the municipality. That he
was subsequently assigned to Mayor Miguel during the time of the accident is of no
moment. This Court has, on several occasions, held that an employer-employee relationship
still exists even if the employee was loaned by the employer to another person or entity
because control over the employee subsists.[22] In the case under review,
the Municipality of Koronadal remains to be Lozanos employer notwithstanding Lozanos
assignment to Mayor Miguel.

Spouses Jayme argued that Mayor Miguel had at least supervision and control over
Lozano and how the latter operated or drove the Isuzu pick-up during the time of the
accident. They, however, failed to buttress this claim.

Even assuming arguendo that Mayor Miguel had authority to give instructions or
directions to Lozano, he still can not be held liable. In Benson v. Sorrell,[23] the New England
Supreme Court ruled that mere giving of directions to the driver does not establish that the
passenger has control over the vehicle. Neither does it render one the employer of the
driver. This Court, in Soliman, Jr. v. Tuazon,[24] ruled in a similar vein, to wit:

x x x The fact that a client company may give instructions or directions to the
security guards assigned to it, does not, by itself, render the client
responsible as an employer of the security guards concerned and liable for
their wrongful acts and omissions. Those instructions or directions are
ordinarily no more than requests commonly envisaged in the contract for
services entered into with the security agency. x x x[25](Emphasis supplied)

Significantly, no negligence may be imputed against a fellow employee although the

person may have the right to control the manner of the vehicles operation. [26] In the absence
of an employer-employee relationship establishing vicarious liability, the drivers negligence
should not be attributed to a fellow employee who only happens to be an occupant of the
vehicle.[27] Whatever right of control the occupant may have over the driver is not sufficient
by itself to justify an application of the doctrine of vicarious liability. Handley v. Lombardi[28] is
instructive on this exception to the rule on vicarious liability:

Plaintiff was not the master or principal of the driver of the truck, but
only an intermediate and superior employee or agent. This being so, the doctrine
of respondeat superior or qui facit per alium is not properly applicable to
him. His power to direct and control the driver was not as master, but only by
virtue of the fact that they were both employed by Kruse, and the further fact
that as Kruses agent he was delegated Kruses authority over the driver. x x x

In the case of actionable negligence, the rule is well settled both in this
state and elsewhere that the negligence of a subordinate employee or subagent
is not to be imputed to a superior employee or agent, but only to the master or
principal. (Hilton v. Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425]; Guild
v. Brown, 115 Cal. App. 374 [1 Pac. (2d) 528]; Ellis v. Southern Ry. Co., 72 S.
C. 464 [2 L. R. A. (N. S.) 378, 52 S. E. 228]; Thurman v. Pittsburg & M. Copper
Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor. Jur., p. 829; and see the elaborate
note in 61 A. L. R. 277, and particularly that part commencing at p. 290.) We
can see no logicalreason for drawing any distinction in this regard between
actionable negligence and contributory negligence. x x x[29]

The rule was reiterated in Bryant v. Pacific Elec. Ry. Co.[30] and again in Sichterman v.
Hollingshead Co.[31]

In Swanson v. McQuown,[32] a case involving a military officer who happened to be

riding in a car driven by a subordinate later involved in an accident, the Colorado Supreme
Court adhered to the general rule that a public official is not liable for the wrongful acts of his
subordinates on a vicarious basis since the relationship is not a true master-servant
situation.[33] The court went on to rule that the only exception is when they cooperate in the
act complained of, or direct or encourage it.[34]

In the case at bar, Mayor Miguel was neither Lozanos employer nor the vehicles
registered owner. There existed no causal relationship between him and Lozano or the vehicle
used that will make him accountable for Marvins death. Mayor Miguel was a mere passenger
at the time of the accident.

Parenthetically, it has been held that the failure of a passenger to assist the driver, by
providing him warnings or by serving as lookout does not make the passenger liable for the
latters negligent acts.[35] The drivers duty is not one that may be delegated to others.[36]
As correctly held by the trial court, the true and lawful employer of Lozano is
the Municipality of Koronadal. Unfortunately for Spouses Jayme, the municipality may not be
sued because it is an agency of the State engaged in governmental functions and, hence,
immune from suit. This immunity is illustrated in Municipality of San Fernando, La Union v.
Firme,[37] where this Court held:

It has already been remarked that municipal corporations are suable because
their charters grant them the competence to sue and be sued. Nevertheless,
they are generally not liable for torts committed by them in the discharge of
governmental functions and can only be held answerable only if it can be
shown that they were acting in proprietary capacity. In permitting such entities
to be sued, the State merely gives the claimant the right to show that the
defendant was not acting in governmental capacity when the injury was
committed or that the case comes under the exceptions recognized by
law. Failing this, the claimant cannot recover.[38]

Verily, liability attaches to the registered owner, the negligent driver and his direct
employer. The CA observation along this line are worth restating:

Settled is the rule that the registered owner of a vehicle is jointly and severally
liable with the driver for damages incurred by passengers and third persons as
a consequence of injuries or death sustained in the operation of said
vehicles. Regardless of who the actual owner of the vehicle is, the operator of
record continues to be the operator of the vehicle as regards the public and
third persons, and as such is directly and primarily responsible for the
consequences incident (sic) to its operation x x x.[39]

The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice
demands that only those liable under our laws be held accountable for Marvins demise. Justice
can not sway in favor of petitioners simply to assuage their pain and loss. The law on the
matter is clear: only the negligent driver, the drivers employer, and the registered owner of
the vehicle are liable for the death of a third person resulting from the negligent operation of
the vehicle.

WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.

SO ORDERED.
G.R. No. 82248 January 30, 1992

ERNESTO MARTIN, petitioner,

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

Roberto M. Cabangis for petitioner.

Benjamin R. Reonal for private respondent.

CRUZ, J.:

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

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

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

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

The petition has merit.

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

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

The above rule is applicable only if there is an employer-employee relationship although it is

not necessary that the employer be engaged in any business or industry. It differs in this
sense from Article 103 of the Revised Penal Code, which requires that the employer be
engaged in an industry to be subsidiarily liable for the felony committed by his employee in
the course of his employment.

Whether or not engaged in any business or industry, the employer under Article 2180 is
liable for the torts committed by his employees within the scope of their assigned task. But
it is necessary first to establish the employment relationship. Once this is done, the plaintiff
must show, to hold the employer liable, that the employee was acting within the scope of
his assigned task when the tort complained of was committed. It is only then that the
defendant, as employer, may find it necessary to interpose the defense of due diligence in
the selection and supervision of the employee as allowed in that article. 3

In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the
defendant was the employer of Nestor Martin at the time of the accident. The trial court
merely presumed the existence of the employer-employee relationship and held that the
petitioner had not refuted that presumption. It noted that although the defendant alleged
that he was not Nestor Martin's employer, "he did not present any proof to substantiate his
allegation."

As the trial court put it:

There is no need to stretch one's imagination to realize that a car owner

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

A presumption is defined as an inference as to the existence of a fact not actually known,

arising from its usual connection with another which is known, 4 or a conjecture based on
past experience as to what course human affairs ordinarily take. 5 It is either a
presumption juris, or of law, or a presumption hominis, or of fact. 6

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

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

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

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

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

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

It is worth mentioning in this connection that

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

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

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

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

ROSENDO C. CARTICIANO and ZACARIAS A. CARTICIANO, petitioners, vs. MARIO
NUVAL, respondent.

DECISION

PANGANIBAN, J.:

To hold an employer liable for the negligent acts of the employee, it is enough to prove that
the latter was hired to drive the formers motor vehicle. It is not necessary to show, in
addition, that the employers children were aboard the jeep when the accident
happened. Once the driver is shown to be negligent, the burden of proof to free the
employer from liability shifts to the latter.

Statement of the Case

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court,
assailing the November 10, 1999 Decision[2] of the Court of Appeals (CA)[3] in CA-GR CV No.
52316, which disposed as follows:

WHEREFORE, [the] foregoing considered, the appealed decision is hereby AFFIRMED insofar
as defendant Darwin is concerned and REVERSED and SET-ASIDE as it pertains to
defendant-appellant Nuval. Defendant-appellant Nuval is hereby absolved of any civil
liability and the complaint against him is hereby DISMISSED.[4]

On the other hand, the trial court[5] ruled in this wise:

ACCORDINGLY, judgment is hereby rendered in favor of plaintiffs and against defendants,

ordering the latter to pay the former jointly and severally the following:

1) The amount of P160,715.19 as actual damage for the medical treatment so far of plaintiff
Zacarias Carticiano;

2) The amount of P100,000.00 to compensate the income and opportunities plaintiff

Zacarias lost as a result of the incident;

3) The amount of P173,788.00 for the damages sustained by the Ford Laser;

4) The amount of P200,000.00 as moral damages;

5) The amount of P100,000.00 as exemplary damages;

6) The amount of P100,000.00 as attorneys fees and expenses of litigation.

With costs.

SO ORDERED.

The Facts

The facts are summarized succinctly by the Court of Appeals as follows:

"On September 3, 1992 at about 9:30 in the evening, plaintiff Zacarias Carticiano was on
his way home to Imus, Cavite. Plaintiff Zacarias was driving his fathers (plaintiff Rosendo
Carticiano) Ford Laser car, traversing the coastal roads of Longos, Bacoor, Cavite.

On the same date and time, defendant Nuvals owner-type Jeep, then driven by defendant
Darwin was traveling on the opposite direction going to Paraaque.
When the two cars were about to pass one another, defendant Darwin veered his vehicle to
his left going to the center island of the highway and occupied the lane which plaintiff
Zacarias was traversing.

As a result thereof, plaintiff Zacarias Ford Laser collided head-on with defendant Nuvals
Jeep. Defendant Darwin immediately fled from the scene.

Plaintiff Zacarias was taken out [of] the car by residents of the area and was brought to the
hospital by Eduard Tangan, a Narcom agent who happened to pass by the place. Plaintiff
Zacarias suffered multiple fracture on his left leg and other injuries in his body. Plaintiff
Zacarias underwent a leg operation and physical therapy to repair the damaged leg.

Defendant Nuval offered P100,000.00 as compensation for the injuries caused. Plaintiffs
refused to accept the amount.

On this account, plaintiffs filed a criminal suit against defendant Darwin. Plaintiffs also filed
this present civil suit against defendants for damages.

Plaintiffs alleged that the proximate cause of the accident is defendants Darwin recklessness
in driving defendant Nuvals jeep; that on account of said recklessness of defendant Darwin,
plaintiff suffered damages; that defendant Darwin was an employee of defendant Nuval at
the time of accident; that defendant Nuval did not exercise due diligence in the supervision
of his employee; that defendants should he held liable for damages.

Defendant Nuval on the other hand insisted that he cannot be held answerable for the acts
of defendant Darwin; that defendant Darwin was not an employee of defendant Nuval at the
time of the accident; that defendant Darwin was hired only as casual and has worked with
defendant Nuvals company only for five days; that at the time of the accident, defendant
Darwin was no longer connected with defendant Nuvals company; that defendant Darwin
was not authorized to drive the vehicle of defendant Nuval; that defendant Nuval tried to
locate defendant Darwin but the latter could no longer be found; that defendant Nuval
cannot be held liable for damages.

Defendant Darwin [h]as failed to file his answer within the reglementary
period. Consequently, he was declared in default. Trial of the case proceeded.[6]

Ruling of the Court of Appeals

The Court of Appeals explained that in order to hold an employer liable for the negligent
acts of an employee under Article 2180 of the Civil Code, it must be shown that the
employee was acting within the scope of his assigned task when the tort complained of was
committed.[7]

The employer in this case, Respondent Mario Nuval, cannot be held liable for the tort
committed by Darwin. First, appellants did not present evidence showing that the driver was
indeed an employee of respondent at the time the accident occurred. And second, even
assuming arguendo that Darwin was in fact an employee of Nuval, it was not shown that the
former was acting within the scope of his assigned task when the incident happened. Thus,
the requisites for holding an employer liable for the tort committed by an employee were
not satisfied.

Hence, this appeal.[8]

Issues
Petitioners present the following issues:

A. Whether or not Defendant Darwin was in fact an employee of Defendant Nuval;

B. Whether or not Defendant Nuval was negligent in the selection and supervision of his
employees;

C. Whether or not Defendant Nuval was grossly negligent in the safekeeping of the key to
his owner-type jeep and of said vehicle itself;

D. Whether or not respondent must be held liable for the damages and injuries suffered by
appellees; [and]

E. Whether or not findings of facts of the Court of Appeals are subject to exceptions.[9]

For brevity, Item A will be taken up as the first issue; while B, C, D and E will be discussed
together as the second issue, since they all directly pertain to respondents vicarious liability.

The Courts Ruling

The Petition is meritorious.

First Issue: No Proof That Employment Was Terminated

Respondent maintains that on the date[10] the accident happened, Darwin was no longer his
employee because the latters services had already been terminated. Nuval adds that Darwin
was hired for a period of only four to six days. To substantiate this claim, the former
presented payroll and employment records showing that the latter was no longer his
employee.

We disagree. The only proof proferred by Respondent Nuval to show that Darwin was no
longer his employee was the payroll in which the latters name was not included. However,
as revealed by the testimonies of the witnesses presented during trial, respondent had other
employees working for him who were not listed in the payroll either. The trial court
explained as follows:

It surfaced that the payroll and daily time records presented by defendant Nuval [were] not
reliable proofs of the names and number of employees that defendant Nuval had at the time
of the incident in view of the testimonies of witnesses for defendant Nuval tending to show
that there were more employees of defendant Nuval who were not in the payroll. [11]

The rather easy access which Darwin had to the keys to the vehicle of Nuval further
weakened the latters cause. First, nobody questioned the fact that the former had freely
entered respondents house where the keys to the vehicle were kept. The theory of Nuval
that Darwin must have stolen the keys as well as the vehicle is rather farfetched and not
supported by any proof whatsoever. It is obviously an afterthought concocted to present
some semblance of a defense. Second, both respondent and his employees who testified did
not act as if the vehicle had been stolen. He had not reported the alleged theft of his
vehicle. Neither did he search nor ask his employees to search for the supposedly stolen
vehicle. In fact, he testified that his employees had told him that the keys and the vehicle
had merely probably been stolen by Darwin.

Atty. Bobadilia: Did you ask among your employees who gave the key to Darwin?

Mario Nuval: I asked them, sir.

Atty. Bobadilla: What was the reply of your employees?

M. Nuval: According to my employees he stole the key of the jeepney at home.

Atty. Abas: I disagree with the interpretation of the interpreter because the answer of the
witness is ninanak yata.

Interpreter: I agree, your Honor.

Court: So, what is the correct interpretation?

A: According to my employees perhaps the key was stolen, or perhaps Darwin stole the key
to the jeep.[12]

From the totality of the evidence, we are convinced that Darwin was Nuvals driver at the
time of the accident.

Second to Fourth Issues: Employers Liability

The CA agreed with the theory of respondent that he could not be held liable for the
negligent acts of his employee because Darwin was not acting within the scope of his
assigned tasks when the damage occurred. Respondent adds that he observed the diligence
of a good father of a family and was not negligent in safeguarding the keys to the said
vehicle.

Article 2180 of the Civil Code provides that employers shall be liable for damages caused by
their employees acting within the scope of their assigned tasks. The said provision is
reproduced below:

ART. 2180. The obligation imposed by article 2176 is demandable not only for ones own
acts or omissions, but also for those of persons for whom one is responsible.

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

Guardians are liable for damages caused by the minors or incapacitated persons who are
under their authority and live in their company.

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.

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

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.

The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent
damage.[13] (Italics supplied)
The facts established in the case at bar show that Darwin was acting within the scope of the
authority given him when the collision occurred. That he had been hired only to bring
respondents children to and from school must be rejected. True, this may have been one of
his assigned tasks, but no convincing proof was presented showing that it was
his only task. His authority was to drive Nuvals vehicle. Third parties are not bound by the
allegation that the driver was authorized to operate the jeep only when the employers
children were on board the vehicle. Giving credence to this outlandish theory would enable
employers to escape their legal liabilities with impunity. Such loophole is easy to concoct
and is simply unacceptable.

The claim of respondent that he had exercised the diligence of a good father of a family is
not borne out by the evidence. Neither is it supported by logic. His main defense that at the
time of the accident Darwin was no longer his employee, having been merely hired for a few
days, is inconsistent with his other argument of due diligence in the selection of an
employee.

Once a driver is proven negligent in causing damages, the law presumes the vehicle owner
equally negligent and imposes upon the latter the burden of proving proper selection of
employee as a defense.[14] Respondent failed to show that he had satisfactorily discharged
this burden.

No Proof of Contributory Negligence

Respondent Nuvals accusation that Petitioner Zacarias Carticiano is guilty of contributory

negligence by failing to stop his car or to evade the oncoming jeep is untenable. Both the
trial and the appellate courts found that the accident was caused by the fact that Darwins
jeep suddenly veered towards Zacarias lane when the vehicles were about to pass each
other, thus making it difficult if not impossible for petitioner to avoid the head-on
collission. Nuval utterly failed to present sufficient evidence to show that Zacarias could
have evaded the jeep. Given the distance between the vehicles and the speed at which they
were travelling, the former was not able to demonstrate convincingly that the latter could
have minimized the damage complained of.

Review of Factual Findings

Generally, the factual findings of lower courts are accorded great respect by this
Court. However, the above rule is subject to certain exceptions, one of which is when the
two lower courts findings oppose each other.[15]

In the present case, there is a clear conflict between the findings of the trial court and those
of the CA. Such conflict hinges on whether it was sufficiently proven that the employment of
Darwin had indeed been terminated by respondent, and whether the former was acting
within the scope of his assigned tasks at the time the collision occurred. The resolution of
both of these pivotal factual issues is determinative of respondents vicarious liability for the
injuries caused by Darwin. It is thus necessary for this Court to pore over the evidence
adduced, as it did already.

Damages

Article 2199 of the Civil Code allows the aggrieved party to recover the pecuniary loss that
he has suffered.
ART. 2199. Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages.

Based on the above, Petitioner Zacarias is entitled to indemnification for actual damages
caused by the negligence of Darwin, for which the latters employer, Respondent Nuval, is
solidarily liable. And as found by the trial court, petitioner is entitled to P160,715.19 for his
medical treatment, as testified to by Dr. Eduardo Arandia. In the same vein, both
petitioners are also entitled to P173,788, which represents the costs incurred for the repair
of the damaged vehicle.[16]

The Civil Code allows indemnification for lost profit or income,[17] but petitioners failed to
adduce sufficient proof of such loss.

However, moral damages are in order, based on Articles 2217 and 2219 of the Civil Code
which respectively provide:

ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of the defendants wrongful act or omission.

ART. 2219. Moral damages may be recovered in the following and analogous cases:

xxxxxxxxx

(2) Quasi-delicts causing physical injuries x x x

As a direct result of the collision, petitioner suffered physically. It is also true that he
experienced and will continue to experience social humiliation and ridicule for having his left
leg shorter than the right which causes him to limp when walking. For the above, we agree
with the trial court that Petitioner Zacarias is entitled to an award of moral damages.

Exemplary damages and attorneys fees are likewise authorized by the following provisions
of the Civil Code:

ART. 2229. Exemplary or corrective damages are imposed, by way of example or correction
for the public good, in addition to the moral, temperate, liquidated or compensatory
damages.

ART. 2234. While the amount of the exemplary damages need not be proved, the plaintiff
must show that he is entitled to moral, temperate or compensatory damages before the
court may consider the question of whether or not exemplary damages should be
awarded. In case liquidated damages have been agreed upon, although no proof of loss is
necessary in order that such liquidated damages may be recovered, nevertheless, before
the court may consider the question of granting exemplary in addition to the liquidated
damages, the plaintiff must show that he would be entitled to moral, temperate or
compensatory damages were it not for the stipulation for liquidated damages.

ART. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded x x x.[18]

As held by the trial court, respondents refusal to answer adequately for the damages forced
petitioners to litigate and incur expenses. And to serve as an example for the public good,
exemplary damages are affirmed, since Petitioner Zacarias has already shown that he is
entitled to compensatory and moral damages in accordance with Article 2234 of the Civil
Code.

WHEREFORE, the Petition is hereby GRANTED. The assailed Decision is REVERSED and SET
ASIDE and the trial courts Decision REINSTATED, except that the award of P100,000 for lost
income or opportunities is DELETED.

SO ORDERED.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

G.R. No. 66207 May 18, 1992

MAXIMINO SOLIMAN, JR., represented by his judicial guardian VIRGINIA C.

SOLIMAN, petitioner,
vs.
HON. JUDGE RAMON TUAZON, Presiding Judge of Branch LXI, Regional Trial Court
of Region III, Angeles City, and the REPUBLIC CENTRAL COLLEGES, represented by
its President, respondents.

Mariano Y. Navarro for Republic Central Colleges.

RESOLUTION

FELICIANO, J.:

On 22 March 1983, petitioner Soliman, Jr. filed a civil complaint for damages against private
respondent Republic Central Colleges ("Colleges"), the R.L. Security Agency Inc. and one
Jimmy B. Solomon, a security guard, as defendants. The complaint alleged that:

. . . on 13 August 1982, in the morning thereof, while the plaintiff was in the
campus ground and premises of the defendant, REPUBLIC CENTRAL
COLLEGES, as he was and is still a regular enrolled student of said school
taking his morning classes, the defendant, JIMMY B. SOLOMON, who was on
said date and hour in the premises of said school performing his duties and
obligations as a duly appointed security guard under the employment,
supervision and control of his employer-defendant R.L. SECURITY AGENCY,
INC., headed by Mr. Benjamin Serrano, without any provocation, in a wanton,
fraudulent, reckless, oppressive or malevolent manner, with intent to kill,
attack, assault, strike and shoot the plaintiff on the abdomen with a .38
Caliber Revolver, a deadly weapon, which ordinarily such wound sustained
would have caused plaintiff's death were it not for the timely medical
assistance given to him. The plaintiff was treated and confined at Angeles
Medical Center, Angeles City, and, as per doctor's opinion, the plaintiff may
not be able to attend to his regular classes and will be incapacitated in the
performance of his usual work for a duration of from three to four months
before his wounds would be completely healed. 1

Private respondent Colleges filed a motion to dismiss, contending that the complaint stated
no cause of action against it. Private respondent argued that it is free from any liability for
the injuries sustained by petitioner student for the reason that private respondent school
was not the employer of the security guard charged, Jimmy Solomon, and hence was not
responsible for any wrongful act of Solomon. Private respondent school further argued that
Article 2180, 7th paragraph, of the Civil Code did not apply, since said paragraph holds
teachers and heads of establishment of arts and trades liable for damages caused by their
pupils and students or apprentices, while security guard Jimmy Solomon was not a pupil,
student or apprentice of the school.

In an order dated 29 November 1983, respondent Judge granted private respondent

school's motion to dismiss, holding that security guard Jimmy Solomon was not an
employee of the school which accordingly could not be held liable for his acts or omissions.
Petitioner moved for reconsideration, without success.
In this Petition for Certiorari and Prohibition, it is contended that respondent trial judge
committed a grave abuse of discretion when he refused to apply the provisions of Article
2180, as well as those of Articles 349, 350 and 352, of the Civil Code and granted the
school's motion to dismiss.

Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted by one
against another by fault or negligence exists not only for one's own act or omission, but also
for acts or omissions of a person for whom one is by law responsible. Among the persons
held vicariously responsible for acts or omissions of another person are the following:

xxx xxx 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 or industry.

xxx xxx xxx

Lastly, teachers or heads of establishments of arts and trades shall be liable

for damages caused by their pupils, their students or apprentices, so long as
they remain in their custody.

xxx xxx xxx

The first paragraph quoted above offers no basis for holding the Colleges liable for the
alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner Soliman,
Jr. Private respondent school was not the employer of Jimmy Solomon. The employer of
Jimmy Solomon was the R.L. Security Agency Inc., while the school was the client or
customer of the R.L. Security Agency Inc. It is settled that where the security agency, as
here, recruits, hires and assigns the work of its watchmen or security guards, the agency is
the employer of such guards or watchmen. 2 Liability for illegal or harmful acts committed
by the security guards attaches to the employer agency, and not to the clients or customers
of such agency. 3 As a general rule, a client or customer of a security agency has no hand
in selecting who among the pool of security guards or watchmen employed by the agency
shall be assigned to it; the duty to observe the diligence of a good father of a family in the
selection of the guards cannot, in the ordinary course of events, be demanded from the
client whose premises or property are protected by the security guards. The fact that a
client company may give instructions or directions to the security guards assigned to it,
does not, by itself, render the client responsible as an employer of the security guards
concerned and liable for their wrongful acts or omissions. Those instructions or directions
are ordinarily no more than requests commonly envisaged in the contract for services
entered into with the security agency. There being no employer-employee relationship
between the Colleges and Jimmy Solomon, petitioner student cannot impose vicarious
liability upon the Colleges for the acts of security guard Solomon.

Since there is no question that Jimmy Solomon was not a pupil or student or an apprentice
of the Colleges, he being in fact an employee of the R.L. Security Agency Inc., the other
above-quoted paragraph of Article 2180 of the Civil Code is similarly not available for
imposing liability upon the Republic Central Colleges for the acts or omissions of Jimmy
Solomon.
The relevant portions of the other Articles of the Civil Code invoked by petitioner are as
follows:

Art. 349. The following persons shall exercise substitute parental authority:

xxx xxx xxx

(2) Teachers and professors;

xxx xxx xxx

(4) Directors of trade establishments with regard to apprentices;

xxx xxx xxx

Art. 350. The persons named in the preceding article shall exercise
reasonable supervision over the conduct of the child.

xxx xxx xxx

Art. 352. The relations between teacher and pupil, professor and student are
fixed by government regulations and those of each school or institution. In no
case shall corporal punishment be countenanced. The teacher or professor
shall cultivate the best potentialities of the heart and mind of the pupil or
student.

In Palisoc v. Brillantes, 4 invoked by petitioner, the Court held the owner and president of a
school of arts and trades known as the "Manila Technical Institute," Quezon Blvd., Manila,
responsible in damages for the death of Dominador Palisoc, a student of Institute, which
resulted from fist blows delivered by Virgilio L. Daffon, another student of the Institute. It
will be seen that the facts of Palisoc v. Brillantes brought it expressly within the 7th
paragraph of Article 2180, quoted above; but those facts are entirely different from the
facts existing in the instant case.

Persons exercising substitute parental authority are made responsible for damage inflicted
upon a third person by the child or person subject to such substitute parental authority. In
the instant case, as already noted, Jimmy Solomon who committed allegedly tortious acts
resulting in injury to petitioner, was not a pupil, student or apprentice of the Republic
Central Colleges; the school had no substitute parental authority over Solomon.

Clearly, within the confines of its limited logic, i.e., treating the petitioner's claim as one
based wholly and exclusively on Article 2180 of the Civil Code, the order of the respondent
trial judge was correct. Does it follow, however, that respondent Colleges could not be held
liable upon any other basis in law, for or in respect of the injury sustained by petitioner, so
as to entitle respondent school to dismissal of petitioner's complaint in respect of itself?

The very recent case of the Philippine School of Business Administration (PSBA) v. Court of
Appeals, 5 requires us to give a negative answer to that question.

In PSBA, the Court held that Article 2180 of the Civil Code was not applicable where a
student had been injured by one who was an outsider or by one over whom the school did
not exercise any custody or control or supervision. At the same time, however, the Court
stressed that an implied contract may be held to be established between a school which
accepts students for enrollment, on the one hand, and the students who are enrolled, on
the other hand, which contract results in obligations for both parties:

When an academic institution accepts students for enrollment, there is

established a contract between them, resulting in bilateral obligations which
parties are bound to comply with. For its part, the school undertakes to
provide the student with an education that would presumably suffice to equip
him with the necessary tools and skills to pursue higher education or a
profession. On the other hand, the student covenants to abide by the school's
academic requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of

providing their students with an atmosphere that promotes or assists in
attaining its primary undertaking of imparting knowledge. Certainly, no
student can absorb the intricacies of physics or higher mathematics or explore
the realm of the arts and other sciences when bullets are flying or grenades
exploding in the air or where there looms around the school premises a
constant threat to life and limb. Necessarily, the school must ensure that
adequate steps are taken to maintain peace and order within the campus
premises and to prevent the breakdown thereof. 6

In that case, the Court was careful to point out that:

In the circumstances obtaining in the case at bar, however, there is, as yet,
no finding that the contract between the school and Bautista had been
breached thru the former's negligence in providing proper security measures.
This would be for the trial court to determine. And, even if there be a finding
of negligence, the same could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the negligence of the school
would not be relevant absent a contract. In fact, that negligence becomes
material only because of the contractual relation between PSBA and Bautista.
In other words, a contractual relation is a condition sine qua non to the
school's liability. The negligence of the school cannot exist independently of
the contract, unless the negligence occurs under the circumstances set out in
Article 21 of the Civil Code.

The Court is not unmindful of the attendant difficulties posed by the obligation
of schools, above-mentioned, for conceptually a school, like a common
carrier, cannot be an insurer of its students against all risks. This is specially
true in the populous student communities of the so-called "university belt" in
Manila where there have been reported several incidents ranging from gang
wars to other forms of hooliganism. It would not be equitable to expect of
schools to anticipate all types of violent trespass upon their premises, for
notwithstanding the security measures installed, the same may still fail
against an individual or group determined to carry out a nefarious deed inside
school premises and environs. Should this be the case, the school may still
avoid liability by proving that the breach of its contractual obligation to the
students was not due to its negligence, here statutorily defined to be the
omission of that degree of diligence which is required by the nature of
 obligation and corresponding to the circumstances of person, time and
place. 7

In the PSBA case, the trial court had denied the school's motion to dismiss the complaint
against it, and both the Court of Appeals and this Court affirmed the trial court's order. In
the case at bar, the court a quo granted the motion to dismiss filed by respondent Colleges,
upon the assumption that petitioner's cause of action was based, and could have been
based, only on Article 2180 of the Civil Code. As PSBA, however, states, acts which are
tortious or allegedly tortious in character may at the same time constitute breach of a
contractual, or other legal, obligation. Respondent trial judge was in serious error when he
supposed that petitioner could have no cause of action other than one based on Article 2180
of the Civil Code. Respondent trial judge should not have granted the motion to dismiss but
rather should have, in the interest of justice, allowed petitioner to prove acts constituting
breach of an obligation ex contractu or ex lege on the part of respondent Colleges.

In line, therefore, with the most recent jurisprudence of this Court, and in order to avoid a
possible substantial miscarriage of justice, and putting aside technical considerations, we
consider that respondent trial judge committed serious error correctible by this Court in the
instant case.

ACCORDINGLY, the Court Resolved to GRANT DUE COURSE to the Petition, to TREAT the
comment of respondent Colleges as its answer, and to REVERSE and SET ASIDE the Order
dated 29 November 1983. This case is REMANDED to the court a quo for further
proceedings consistent with this Resolution.

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

G.R. No. L-12986 March 31, 1966

THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF
DOMINGA ONG, petitioners-appellants,
vs.
CALTEX (PHIL.), INC., MATEO BOQUIREN and THE COURT OF
APPEALS, respondents-appellees.

Ross, Selph, Carrascoso and Janda for the respondents.

Bernabe Africa, etc. for the petitioners.

MAKALINTAL., J.:

This case is before us on a petition for review of the decision of the Court of Appeals, which
affirmed that of the Court of First Instance of Manila dismissing petitioners' second amended
complaint against respondents.

The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears
that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the
corner of Antipolo street 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
neighboring houses, including the personal properties and effects inside them. Their owners,
among them petitioners here, sued respondents Caltex (Phil.), Inc. and Mateo Boquiren, the
first as alleged owner of the station and the second as its agent in charge of operation.
Negligence on the part of both of them was attributed as the cause of the fire.

The trial court and the Court of Appeals found that petitioners failed to prove negligence and
that respondents had exercised due care in the premises and with respect to the supervision
of their employees.

The first question before Us refers to the admissibility of certain reports on the fire prepared
by the Manila Police and Fire Departments and by a certain Captain Tinio of the Armed
Forces of the Philippines. Portions of the first two reports are as follows:

1. Police Department report: —

Investigation disclosed that at about 4:00 P.M. March 18, 1948, while
Leandro Flores was transferring gasoline from a tank truck, plate No. T-5292
into the underground tank of the Caltex Gasoline Station located at the corner
of Rizal Avenue and Antipolo Street, this City, an unknown Filipino lighted a
cigarette and threw the burning match stick near the main valve of the said
underground tank. Due to the gasoline fumes, fire suddenly blazed. Quick
action of Leandro Flores in pulling off the gasoline hose connecting the truck
with the underground tank prevented a terrific explosion. However, the
flames scattered due to the hose from which the gasoline was spouting. It
burned the truck and the following accessorias and residences.

2. The Fire Department report: —

 In connection with their allegation that the premises was (sic) subleased for the
installation of a coca-cola and cigarette stand, the complainants furnished this Office
a copy of a photograph taken during the fire and which is submitted herewith. it
appears in this picture that there are in the premises a coca-cola cooler and a rack
which according to information gathered in the neighborhood contained cigarettes
and matches, installed between the gasoline pumps and the underground tanks.

The report of Captain Tinio reproduced information given by a certain Benito Morales
regarding the history of the gasoline station and what the chief of the fire department had
told him on the same subject.

The foregoing reports were ruled out as "double hearsay" by the Court of Appeals and hence
inadmissible. This ruling is now assigned as error. It is contended: first, that said reports
were admitted by the trial court without objection on the part of respondents; secondly,
that with respect to the police report (Exhibit V-Africa) which appears signed by a Detective
Zapanta allegedly "for Salvador Capacillo," the latter was presented as witness but
respondents waived their right to cross-examine him although they had the opportunity to
do so; and thirdly, that in any event the said reports are admissible as an exception to the
hearsay rule under section 35 of Rule 123, now Rule 130.

The first contention is not borne out by the record. The transcript of the hearing of
September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as
evidence, were objected to by counsel for each of respondents on the ground that they were
hearsay and that they were "irrelevant, immaterial and impertinent." Indeed, in the court's
resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the admission of
the others, including the disputed ones, carried no such explanation.

On the second point, although Detective Capacillo did take the witness stand, he was not
examined and he did not testify as to the facts mentioned in his alleged report (signed by
Detective Zapanta). All he said was that he was one of those who investigated "the location
of the fire and, if possible, gather witnesses as to the occurrence, and that he brought the
report with him. There was nothing, therefore, on which he need be cross-examined; and
the contents of the report, as to which he did not testify, did not thereby become competent
evidence. And even if he had testified, his testimony would still have been objectionable as
far as information gathered by him from third persons was concerned.

Petitioners maintain, however, that the reports in themselves, that is, without further
testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which
provides that "entries in official records made in the performance of his duty by a public
officer of the Philippines, or by a person in the performance of a duty specially enjoined by
law, are prima facie evidence of the facts therein stated."

There are three requisites for admissibility under the rule just mentioned: (a) that the entry
was made by a public officer, or by another person specially enjoined by law to do so; (b)
that it was made by the public officer in the performance of his duties, or by such other
person in the performance of a duty specially enjoined by law; and (c) that the public officer
or other person had sufficient knowledge of the facts by him stated, which must have been
acquired by him personally or through official information (Moran, Comments on the Rules
of Court, Vol. 3 [1957] p. 398).

Of the three requisites just stated, only the last need be considered here. Obviously the
material facts recited in the reports as to the cause and circumstances of the fire were not
within the personal knowledge of the officers who conducted the investigation. Was
knowledge of such facts, however, acquired by them through official information? As to
some facts the sources thereof are not even identified. Others are attributed to Leopoldo
Medina, referred to as an employee at the gas station were the fire occurred; to Leandro
Flores, driver of the tank truck from which gasoline was being transferred at the time to the
underground tank of the station; and to respondent Mateo Boquiren, who could not,
according to Exhibit V-Africa, give any reason as to the origin of the fire. To qualify their
statements as "official information" acquired by the officers who prepared the reports, the
persons who made the statements not only must have personal knowledge of the facts
stated but must have the duty to give such statements for record. 1

The reports in question do not constitute an exception to the hearsay rule; the facts stated
therein were not acquired by the reporting officers through official information, not having
been given by the informants pursuant to any duty to do so.

The next question is 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
appellees. Both the trial court and the appellate court refused to apply the doctrine in the
instant case on the grounds that "as to (its) applicability ... in the Philippines, there seems
to he nothing definite," and that while the rules do not prohibit its adoption in appropriate
cases, "in the case at bar, however, we find no practical use for such doctrine." The
question deserves more than such summary dismissal. The doctrine has actually been
applied in this jurisdiction, in the case of Espiritu vs. Philippine Power and Development Co.
(CA-G.R. No. 3240-R, September 20, 1949), wherein the decision of the Court of Appeals
was penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court.

The facts of that case are stated in the decision as follows:

In the afternoon of May 5, 1946, while the plaintiff-appellee and other companions
were loading grass between the municipalities of Bay and Calauan, in the province of
Laguna, with clear weather and without any wind blowing, an electric transmission
wire, installed and maintained by the defendant Philippine Power and Development
Co., Inc. alongside the road, suddenly parted, and one of the broken ends hit the
head of the plaintiff as he was about to board the truck. As a result, plaintiff received
the full shock of 4,400 volts carried by the wire and was knocked unconscious to the
ground. The electric charge coursed through his body and caused extensive and
serious multiple burns from skull to legs, leaving the bone exposed in some parts
and causing intense pain and wounds that were not completely healed when the case
was tried on June 18, 1947, over one year after the mishap.

The defendant therein disclaimed liability on the ground that the plaintiff had failed to show
any specific act of negligence, but the appellate court overruled the defense under the
doctrine of res ipsa loquitur. The court said:

The first point is directed against the sufficiency of plaintiff's evidence to place
appellant on its defense. While it is the rule, as contended by the appellant, that in
case of noncontractual negligence, or culpa aquiliana, the burden of proof is on the
plaintiff to establish that the proximate cause of his injury was the negligence of the
defendant, it is also a recognized principal that "where the thing which caused injury,
without fault of the injured person, is under the exclusive control of the defendant
and the injury is such as in the ordinary course of things does not occur if he having
 such control use proper care, it affords reasonable evidence, in the absence of the
explanation, that the injury arose from defendant's want of care."

And the burden of evidence is shifted to him to establish that he has observed due
care and diligence. (San Juan Light & Transit Co. v. Requena, 244, U.S. 89, 56 L. ed.
680.) This rule is known by the name of res ipsa loquitur (the transaction speaks for
itself), and is peculiarly applicable to the case at bar, where it is unquestioned that
the plaintiff had every right to be on the highway, and the electric wire was under
the sole control of defendant company. In the ordinary course of events, electric
wires do not part suddenly in fair weather and injure people, unless they are
subjected to unusual strain and stress or there are defects in their installation,
maintenance and supervision; just as barrels do not ordinarily roll out of the
warehouse windows to injure passersby, unless some one was negligent. (Byrne v.
Boadle, 2 H & Co. 722; 159 Eng. Reprint 299, the leading case that established that
rule). Consequently, in the absence of contributory negligence (which is admittedly
not present), the fact that the wire snapped suffices to raise a reasonable
presumption of negligence in its installation, care and maintenance. Thereafter, as
observed by Chief Baron Pollock, "if there are any facts inconsistent with negligence,
it is for the defendant to prove."

It is true of course that decisions of the Court of Appeals do not lay down doctrines binding
on the Supreme Court, but we do not consider this a reason for not applying the particular
doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible material, in
the storage and sale of which extreme care must be taken. On the other hand, fire is not
considered a fortuitous event, as it arises almost invariably from some act of man. A case
strikingly similar to the one before Us is Jones vs. Shell Petroleum Corporation, et al., 171
So. 447:

Arthur O. Jones is the owner of a building in the city of Hammon which in the year
1934 was leased to the Shell Petroleum Corporation for a gasoline filling station. On
October 8, 1934, during the term of the lease, while gasoline was being transferred
from the tank wagon, also operated by the Shell Petroleum Corporation, to the
underground tank of the station, a fire started with resulting damages to the building
owned by Jones. Alleging that the damages to his building amounted to $516.95,
Jones sued the Shell Petroleum Corporation for the recovery of that amount. The
judge of the district court, after hearing the testimony, concluded that plaintiff was
entitled to a recovery and rendered judgment in his favor for $427.82. The Court of
Appeals for the First Circuit reversed this judgment, on the ground the testimony
failed to show with reasonable certainty any negligence on the part of the Shell
Petroleum Corporation or any of its agents or employees. Plaintiff applied to this
Court for a Writ of Review which was granted, and the case is now before us for
decision.1äwphï1.ñët

In resolving the issue of negligence, the Supreme Court of Louisiana held:

Plaintiff's petition contains two distinct charges of negligence — one relating to the
cause of the fire and the other relating to the spreading of the gasoline about the
filling station.

Other than an expert to assess the damages caused plaintiff's building by the fire, no
witnesses were placed on the stand by the defendant.
 Taking up plaintiff's charge of negligence relating to the cause of the fire, we find it
established by the record that the filling station and the tank truck were under the
control of the defendant and operated by its agents or employees. We further find
from the uncontradicted testimony of plaintiff's witnesses that fire started in the
underground tank attached to the filling station while it was being filled from the
tank truck and while both the tank and the truck were in charge of and being
operated by the agents or employees of the defendant, extended to the hose and
tank truck, and was communicated from the burning hose, tank truck, and escaping
gasoline to the building owned by the plaintiff.

Predicated on these circumstances and the further circumstance of defendant's

failure to explain the cause of the fire or to show its lack of knowledge of the cause,
plaintiff has evoked the doctrine of res ipsa loquitur. There are many cases in which
the doctrine may be successfully invoked and this, we think, is one of them.

Where the thing which caused the injury complained of is shown to be under the
management of defendant or his servants and the accident is such as in the ordinary
course of things does not happen if those who have its management or control use
proper care, it affords reasonable evidence, in absence of explanation by defendant,
that the accident arose from want of care. (45 C.J. #768, p. 1193).

This statement of the rule of res ipsa loquitur has been widely approved and adopted
by the courts of last resort. Some of the cases in this jurisdiction in which the
doctrine has been applied are the following, viz.: Maus v. Broderick, 51 La. Ann.
1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So. 731, 64
L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La. 63, 38
So. 892; Bents v. Page, 115 La. 560, 39 So. 599.

The principle enunciated in the aforequoted case applies with equal force here. The gasoline
station, with all its appliances, equipment and employees, was under the control of
appellees. 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 appellees 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.

In the report submitted by Captain Leoncio Mariano of the Manila Police Department (Exh.
X-1 Africa) the following appears:

Investigation of the basic complaint disclosed that the Caltex Gasoline Station
complained of occupies a lot approximately 10 m x 10 m at the southwest corner of
Rizal Avenue and Antipolo. The location is within a very busy business district near
the Obrero Market, a railroad crossing and very thickly populated neighborhood
where a great number of people mill around t

until

gasoline

tever be theWactjvities of these peopleor lighting a cigarette cannot be excluded and

this constitute a secondary hazard to its operation which in turn endangers the entire
neighborhood to conflagration.
 Furthermore, aside from precautions already taken by its operator the concrete walls
south and west adjoining the neighborhood are only 2-1/2 meters high at most and
cannot avoid the flames from leaping over it in case of fire.

Records show that there have been two cases of fire which caused not only material
damages but desperation and also panic in the neighborhood.

Although the soft drinks stand had been eliminated, this gasoline service station is
also used by its operator as a garage and repair shop for his fleet of taxicabs
numbering ten or more, adding another risk to the possible outbreak of fire at this
already small but crowded gasoline station.

The foregoing report, having been submitted by a police officer in the performance of his
duties on the basis of his own personal observation of the facts reported, may properly be
considered as an exception to the hearsay rule. These facts, descriptive of the location and
objective circumstances surrounding the operation of the gasoline station in question,
strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since on
their face they called for more stringent measures of caution than those which would satisfy
the standard of due diligence under ordinary circumstances. There is no more eloquent
demonstration of this than the statement of Leandro Flores before the police investigator.
Flores was the driver of the gasoline tank wagon who, alone and without assistance, was
transferring the contents thereof into the underground storage when the fire broke out. He
said: "Before loading the underground tank there were no people, but while the loading was
going on, there were people who went to drink coca-cola (at the coca-cola stand) which is
about a meter from the hole leading to the underground tank." He added that when the
tank was almost filled he went to the tank truck to close the valve, and while he had his
back turned to the "manhole" he, heard someone shout "fire."

Even then the fire possibly would not have spread to the neighboring houses were it not for
another negligent omission on the part of defendants, namely, their failure to provide a
concrete wall high enough to prevent the flames from leaping over it. As it was the concrete
wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized
iron sheets, which would predictably crumple and melt when subjected to intense heat.
Defendants' negligence, therefore, was not only with respect to the cause of the fire but
also with respect to the spread thereof to the neighboring houses.

There is an admission on the part of Boquiren in his amended answer to the second
amended complaint that "the fire was caused through the acts of a stranger who, without
authority, or permission of answering defendant, passed through the gasoline station and
negligently threw a lighted match in the premises." No evidence on this point was adduced,
but assuming the allegation to be true — certainly any unfavorable inference from the
admission may be taken against Boquiren — it does not extenuate his negligence. A
decision of the Supreme Court of Texas, upon facts analogous to those of the present case,
states the rule which we find acceptable here. "It is the rule that those who distribute a
dangerous article or agent, owe a degree of protection to the public proportionate to and
commensurate with a danger involved ... we think it is the generally accepted rule as
applied to torts that 'if the effects of the actor's negligent conduct actively and continuously
operate to bring about harm to another, the fact that the active and substantially
simultaneous operation of the effects of a third person's innocent, tortious or criminal act is
also a substantial factor in bringing about the harm, does not protect the actor from
liability.' (Restatement of the Law of Torts, vol. 2, p. 1184, #439). Stated in another way,
"The intention of an unforeseen and unexpected cause, is not sufficient to relieve a
wrongdoer from consequences of negligence, if such negligence directly and proximately
cooperates with the independent cause in the resulting injury." (MacAfee, et al. vs. Traver's
Gas Corporation, 153 S.W. 2nd 442.)

The next issue is whether Caltex should be held liable for the damages caused to appellants.
This issue depends on whether Boquiren was an independent contractor, as held by the
Court of Appeals, or an agent of Caltex. This question, in the light of the facts not
controverted, is one of law and hence may be passed upon by this Court. These facts are:
(1) Boquiren made an admission that he was an agent of Caltex; (2) at the time of the fire
Caltex owned the gasoline station and all the equipment therein; (3) Caltex exercised
control over Boquiren in the management of the state; (4) the delivery truck used in
delivering gasoline to the station had the name of CALTEX painted on it; and (5) the license
to store gasoline at the station was in the name of Caltex, which paid the license fees.
(Exhibit T-Africa; Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).

In Boquiren's amended answer to the second amended complaint, he denied that he

directed one of his drivers to remove gasoline from the truck into the tank and alleged that
the "alleged driver, if one there was, was not in his employ, the driver being an employee of
the Caltex (Phil.) Inc. and/or the owners of the gasoline station." It is true that Boquiren
later on amended his answer, and that among the changes was one to the effect that he
was not acting as agent of Caltex. But then again, in his motion to dismiss appellants'
second amended complaint the ground alleged was that it stated no cause of action since
under the allegations thereof he was merely acting as agent of Caltex, such that he could
not have incurred personal liability. A motion to dismiss on this ground is deemed to be an
admission of the facts alleged in the complaint.

Caltex admits that it owned the gasoline station as well as the equipment therein, but
claims that the business conducted at the service station in question was owned and
operated by Boquiren. But Caltex did not present any contract with Boquiren that would
reveal the nature of their relationship at the time of the fire. There must have been one in
existence at that time. Instead, what was presented was a license agreement manifestly
tailored for purposes of this case, since it was entered into shortly before the expiration of
the one-year period it was intended to operate. This so-called license agreement (Exhibit 5-
Caltex) was executed on November 29, 1948, but made effective as of January 1, 1948 so
as to cover the date of the fire, namely, March 18, 1948. This retroactivity provision is quite
significant, and gives rise to the conclusion that it was designed precisely to free Caltex
from any responsibility with respect to the fire, as shown by the clause that Caltex "shall not
be liable for any injury to person or property while in the property herein licensed, it being
understood and agreed that LICENSEE (Boquiren) is not an employee, representative or
agent of LICENSOR (Caltex)."

But even if the license agreement were to govern, Boquiren can hardly be considered an
independent contractor. Under that agreement Boquiren would pay Caltex the purely
nominal sum of P1.00 for the use of the premises and all the equipment therein. He could
sell only Caltex Products. Maintenance of the station and its equipment was subject to the
approval, in other words control, of Caltex. Boquiren could not assign or transfer his rights
as licensee without the consent of Caltex. The license agreement was supposed to be from
January 1, 1948 to December 31, 1948, and thereafter until terminated by Caltex upon two
days prior written notice. Caltex could at any time cancel and terminate the agreement in
case Boquiren ceased to sell Caltex products, or did not conduct the business with due
diligence, in the judgment of Caltex. Termination of the contract was therefore a right
granted only to Caltex but not to Boquiren. These provisions of the contract show the extent
of the control of Caltex over Boquiren. The control was such that the latter was virtually an
employee of the former.

Taking into consideration the fact that the operator owed his position to the company
and the latter could remove him or terminate his services at will; that the service
station belonged to the company and bore its tradename and the operator sold only
the products of the company; that the equipment used by the operator belonged to
the company and were just loaned to the operator and the company took charge of
their repair and maintenance; that an employee of the company supervised the
operator and conducted periodic inspection of the company's gasoline and service
station; that the price of the products sold by the operator was fixed by the company
and not by the operator; and that the receipts signed by the operator indicated that
he was a mere agent, the finding of the Court of Appeals that the operator was an
agent of the company and not an independent contractor should not be disturbed.

To determine the nature of a contract courts do not have or are not bound to rely
upon the name or title given it by the contracting parties, should thereby a
controversy as to what they really had intended to enter into, but the way the
contracting parties do or perform their respective obligations stipulated or agreed
upon may be shown and inquired into, and should such performance conflict with the
name or title given the contract by the parties, the former must prevail over the
latter. (Shell Company of the Philippines, Ltd. vs. Firemens' Insurance Company of
Newark, New Jersey, 100 Phil. 757).

The written contract was apparently drawn for the purpose of creating the apparent
relationship of employer and independent contractor, and of avoiding liability for the
negligence of the employees about the station; but the company was not satisfied to
allow such relationship to exist. The evidence shows that it immediately assumed
control, and proceeded to direct the method by which the work contracted for should
be performed. By reserving the right to terminate the contract at will, it retained the
means of compelling submission to its orders. Having elected to assume control and
to direct the means and methods by which the work has to be performed, it must be
held liable for the negligence of those performing service under its direction. We
think the evidence was sufficient to sustain the verdict of the jury. (Gulf Refining
Company v. Rogers, 57 S.W. 2d, 183).

Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no
cash invoices were presented to show that Boquiren had bought said gasoline from Caltex.
Neither was there a sales contract to prove the same.

As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the
amount of P2,000.00 collected by them on the insurance of the house. The deduction is now
challenged as erroneous on the ground that Article 2207 of the New Civil Code, which
provides for the subrogation of the insurer to the rights of the insured, was not yet in effect
when the loss took place. However, regardless of the silence of the law on this point at that
time, the amount that should be recovered be measured by the damages actually suffered,
otherwise the principle prohibiting unjust enrichment would be violated. With respect to the
claim of the heirs of Ong P7,500.00 was adjudged by the lower court on the basis of the
assessed value of the property destroyed, namely, P1,500.00, disregarding the testimony of
one of the Ong children that said property was worth P4,000.00. We agree that the court
erred, since it is of common knowledge that the assessment for taxation purposes is not an
accurate gauge of fair market value, and in this case should not prevail over positive
evidence of such value. The heirs of Ong are therefore entitled to P10,000.00.

Wherefore, the decision appealed from is reversed and respondents-appellees are held liable
solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80 and
P10,000.00, respectively, with interest from the filing of the complaint, and costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.
Dizon, J., took no part.

G.R. No. 75112 August 17, 1992

FILAMER CHRISTIAN INSTITUTE, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his
capacity as Judge of the Regional Trial Court, Branch XIV, Roxas City and
POTENCIANO KAPUNAN, SR., respondents.

Bedona & Bedona Law Office for petitioner.

Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the
decision rendered by this Court on October 16, 1990 (Filamer Christian Institute v. Court of
Appeals, 190 SCRA 477) reviewing the appellate court's conclusion that there exists an
employer-employee relationship between the petitioner and its co-defendant Funtecha. The
Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the
grounds that the latter was not an authorized driver for whose acts the petitioner shall be
directly and primarily answerable, and that Funtecha was merely a working scholar who,
under Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor
Code is not considered an employee of the petitioner.

The private respondents assert that the circumstances obtaining in the present case call for
the application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of
the petitioner. The private respondents maintain that under Article 2180 an injured party
shall have recourse against the servant as well as the petitioner for whom, at the time of
the incident, the servant was performing an act in furtherance of the interest and for the
benefit of the petitioner. Funtecha allegedly did not steal the school jeep nor use it for a joy
ride without the knowledge of the school authorities.

After a re-examination of the laws relevant to the facts found by the trial court and the
appellate court, the Court reconsiders its decision. We reinstate the Court of Appeals'
decision penned by the late Justice Desiderio Jurado and concurred in by Justices Jose C.
Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions, the appellate court
affirmed the trial court decision which ordered the payment of the P20,000.00 liability in the
Zenith Insurance Corporation policy, P10,000.00 moral damages, P4,000.00 litigation and
actual expenses, and P3,000.00 attorney's fees.

It is undisputed that Funtecha was a working student, being a part-time janitor and a
scholar of petitioner Filamer. He was, in relation to the school, an employee even if he was
assigned to clean the school premises for only two (2) hours in the morning of each school
day.

Having a student driver's license, Funtecha requested the driver, Allan Masa, and was
allowed, to take over the vehicle while the latter was on his way home one late afternoon. It
is significant to note that the place where Allan lives is also the house of his father, the
school president, Agustin Masa. Moreover, it is also the house where Funtecha was allowed
free board while he was a student of Filamer Christian Institute.

Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a
sharp dangerous curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79)
According to Allan's testimony, a fast moving truck with glaring lights nearly hit them so
that they had to swerve to the right to avoid a collision. Upon swerving, they heard a sound
as if something had bumped against the vehicle, but they did not stop to check. Actually,
the Pinoy jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his
lane in the direction against vehicular traffic, and hit him. Allan affirmed that Funtecha
followed his advise to swerve to the right. (Ibid., p. 79) At the time of the incident (6:30
P.M.) in Roxas City, the jeep had only one functioning headlight.

Allan testified that he was the driver and at the same time a security guard of the
petitioner-school. He further said that there was no specific time for him to be off-duty and
that after driving the students home at 5:00 in the afternoon, he still had to go back to
school and then drive home using the same vehicle.

Driving the vehicle to and from the house of the school president where both Allan and
Funtecha reside is an act in furtherance of the interest of the petitioner-school. Allan's job
demands that he drive home the school jeep so he can use it to fetch students in the
morning of the next school day.

It is indubitable under the circumstances that the school president had knowledge that the
jeep was routinely driven home for the said purpose. Moreover, it is not improbable that the
school president also had knowledge of Funtecha's possession of a student driver's license
and his desire to undergo driving lessons during the time that he was not in his classrooms.

In learning how to drive while taking the vehicle home in the direction of Allan's house,
Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose of
his enjoyment or for a "frolic of his own" but ultimately, for the service for which the jeep
was intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R.
577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v.
Fieldmen's Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained
to conclude that the act of Funtecha in taking over the steering wheel was one done for and
in behalf of his employer for which act the petitioner-school cannot deny any responsibility
by arguing that it was done beyond the scope of his janitorial duties. The clause "within the
scope of their assigned tasks" for purposes of raising the presumption of liability of an
employer, includes any act done by an employee, in furtherance of the interests of the
employer or for the account of the employer at the time of the infliction of the injury or
damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if somehow, the
employee driving the vehicle derived some benefit from the act, the existence of a
presumptive liability of the employer is determined by answering the question of whether or
not the servant was at the time of the accident performing any act in furtherance of his
master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v.
Gavett, 71 P 2d 937 [1937])

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the
petitioner anchors its defense, was promulgated by the Secretary of Labor and Employment
only for the purpose of administering and enforcing the provisions of the Labor Code on
conditions of employment. Particularly, Rule X of Book III provides guidelines on the
manner by which the powers of the Labor Secretary shall be exercised; on what records
should be kept; maintained and preserved; on payroll; and on the exclusion of working
scholars from, and inclusion of resident physicians in the employment coverage as far as
compliance with the substantive labor provisions on working conditions, rest periods, and
wages, is concerned.

In other words, Rule X is merely a guide to the enforcement of the substantive law on labor.
The Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the
Rules is not the decisive law in a civil suit for damages instituted by an injured person
during a vehicular accident against a working student of a school and against the school
itself.

The present case does not deal with a labor dispute on conditions of employment between
an alleged employee and an alleged employer. It invokes a claim brought by one for
damages for injury caused by the patently negligent acts of a person, against both doer-
employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be used by an employer as a shield to
avoid liability under the substantive provisions of the Civil Code.

There is evidence to show that there exists in the present case an extra-contractual
obligation arising from the negligence or reckless imprudence of a person "whose acts or
omissions are imputable, by a legal fiction, to other(s) who are in a position to exercise an
absolute or limited control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])

Funtecha is an employee of petitioner Filamer. He need not have an official appointment for
a driver's position in order that the petitioner may be held responsible for his grossly
negligent act, it being sufficient that the act of driving at the time of the incident was for the
benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or was not
acting within the scope of his janitorial duties does not relieve the petitioner of the burden
of rebutting the presumption juris tantum that there was negligence on its part either in the
selection of a servant or employee, or in the supervision over him. The petitioner has failed
to show proof of its having exercised the required diligence of a good father of a family over
its employees Funtecha and Allan.

The Court reiterates that supervision includes the formulation of suitable rules and
regulations for the guidance of its employees and the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has relations
through his employees. (Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix
Construction, v. Intermediate Appellate Court, 148 SCRA 353 [1987])

An employer is expected to impose upon its employees the necessary discipline called for in
the performance of any act indispensable to the business and beneficial to their employer.

In the present case, the petitioner has not shown that it has set forth such rules and
guidelines as would prohibit any one of its employees from taking control over its vehicles if
one is not the official driver or prohibiting the driver and son of the Filamer president from
authorizing another employee to drive the school vehicle. Furthermore, the petitioner has
failed to prove that it had imposed sanctions or warned its employees against the use of its
vehicles by persons other than the driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled
manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768,
772 [1918]). In the absence of evidence that the petitioner had exercised the diligence of a
good father of a family in the supervision of its employees, the law imposes upon it the
vicarious liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263
[1976]; Poblete v. Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176
SCRA 792 [1989]; Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989];
Pantranco North Express, Inc. v. Baesa, 179 SCRA 384 [1989]) The liability of the employer
is, under Article 2180, primary and solidary. However, the employer shall have recourse
against the negligent employee for whatever damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a
party defendant in the civil case for damages. This is quite understandable considering that
as far as the injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was
Funtecha who was the one driving the vehicle and presumably was one authorized by the
school to drive. The plaintiff and his heirs should not now be left to suffer without
simultaneous recourse against the petitioner for the consequent injury caused by a janitor
doing a driving chore for the petitioner even for a short while. For the purpose of recovering
damages under the prevailing circumstances, it is enough that the plaintiff and the private
respondent heirs were able to establish the existence of employer-employee relationship
between Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act
not for an independent purpose of his own but in furtherance of the business of his
employer. A position of responsibility on the part of the petitioner has thus been
satisfactorily demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is
hereby GRANTED. The decision of the respondent appellate court affirming the trial court
decision is REINSTATED.

SO ORDERED.

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and

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

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

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

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

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

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

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

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

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

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

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

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

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latters personal
use outside of regular working hours is generally not liable for the employees negligent
operation of the vehicle during the period of permissive use, even where the employer
contemplates that a regularly assigned motor vehicle will be used by the employee for
personal as well as business purposes and there is some incidental benefit to the
employer. Even where the employees personal purpose in using the vehicle has been
accomplished and he has started the return trip to his house where the vehicle is
normally kept, it has been held that he has not resumed his employment, and the
employer is not liable for the employees negligent operation of the vehicle during the
return trip.[15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit
based on the doctrine of respondeat superior, not on the principle of bonus pater
familias as in ours. Whether the fault or negligence of the employee is conclusive on his
employer as in American law or jurisprudence, or merely gives rise to the
presumption juris tantum of negligence on the part of the employer as in ours, it is
indispensable that the employee was acting in his employers business or within the scope
of his assigned task.[16]
In the case at bar, it is undisputed that ABAD did some overtime work at the
petitioners office, which was located in Cabangcalan, Mandaue City. Thereafter, he went
to Goldies Restaurant in Fuente Osmea, Cebu City, which is about seven kilometers away
from petitioners place of business.[17] A witness for the private respondents, a sidewalk
vendor, testified that Fuente Osmea is a lively place even at dawn because Goldies
Restaurant and Back Street were still open and people were drinking thereat. Moreover,
prostitutes, pimps, and drug addicts littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It
was when ABAD was leaving the restaurant that the incident in question occurred. That
same witness for the private respondents testified that at the time of the vehicular
accident, ABAD was with a woman in his car, who then shouted: Daddy, Daddy![19] This
woman could not have been ABADs daughter, for ABAD was only 29 years old at the
time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying
out a personal purpose not in line with his duties at the time he figured in a vehicular
accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal
working hours. ABADs working day had ended; his overtime work had already been
completed. His being at a place which, as petitioner put it, was known as a haven for
prostitutes, pimps, and drug pushers and addicts, had no connection to petitioners
business; neither had it any relation to his duties as a manager. Rather, using his service
vehicle even for personal purposes was a form of a fringe benefit or one of the perks
attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the
functions entrusted to him, petitioner CASTILEX had no duty to show that it exercised
the diligence of a good father of a family in providing ABAD with a service vehicle. Thus,
justice and equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of ABAD in driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution
of the Court of Appeals is AFFIRMED with the modification that petitioner Castilex
Industrial Corporation be absolved of any liability for the damages caused by its
employee, Jose Benjamin Abad.
SO ORDERED.
[G.R. No. L-9147. November 29, 1956.]
RAFAELA CAMPO, ERNESTO GILUANO, REMEDIOS GILUANO, ROSALINA GILUANO,
and FELIX GILUANO, Plaintiffs-Appellees, vs. JUAN CAMAROTE and GREGORIO
GEMILGA, Defendants. JUAN CAMAROTE, Appellant.
 DECISION
LABRADOR, J.:
Juan Camarote was in 1953 the registered owner of a jeep with plate license DV-807 while
Gregorio Gemilga, a duly licensed (professional) driver with license No. 77675, was his driver.
On August 30, 1953, as Gemilga drove the jeep along the road in Davao, it bumped against
the rear of another which two passengers had just boarded. As a result of the impact Felix
Giluano suffered many physical injuries and he later died. So on October 26 a criminal
information was filed against Gemilga. The trial was scheduled for December 11, 1953, but
on December 5, 1953 Gemilga pleaded guilty to the information and was sentenced to
imprisonment and indemnity of P3,000. No execution of the indemnity was asked for and
none was issued.
On October 19, 1953, before Gemilga entered his plea of guilty the present action was
instituted in the Court of First Instance of Davao by the heirs of the deceased Giluano against
Juan Camarote, the owner of the jeep, and Gemilga, the driver. The case was submitted for
judgment upon a stipulation of facts, the most important of which are set forth in the above
statement. On the basis of the stipulation, judgment was entered
for Plaintiff against Defendants sentencing them to pay Plaintiff P6,000 as damages and P500
as attorney’s fee. Against this judgment this appeal was presented.
The principal contentions of the Defendants Juan Camarote
are:chanroblesvirtuallawlibrary (1) that his liability as owner of the jeep is only subsidiary,
and (2) that if the action is against him for his negligence, he is not guilty of such negligence
but exercised the diligence of a good father of a family because he was not in the jeep at the
time of the accident and the driver of the jeep whom he employed is a competent driver.
There is no question that the basis of the action is the supposed negligence or lack of good
diligence on the part of the owner of the vehicle. Thus the complaint alleges —
“ cralaw and neither the operator (owner) observed the due care and diligence of a good
father of a family in the employment of the driver Gregorio Gamilga cralaw” (Paragraph 5.)
The law which defines the scope of the liability of a car owner in relation to accidents and
injuries caused by the vehicle driven by another is Article 2180 of the Civil Code which
provides:chanroblesvirtuallawlibrary
“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 xxx 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 or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.”.
Under the civil code of Spain the provisions governing the case were articles 1903 to 1910.
Article 1903 of said code provides as follows:chanroblesvirtuallawlibrary
“The obligation imposed by the next preceding article is enforcible, not only for personal acts
and omissions, but also for those of persons for whom another is responsible.
The father, or in case of his death, or incapacity, the mother, is liable for any damages caused
by the minor children who live with them.
Guardians are liable for damages done by minors or incapacitated persons subject to their
authority and living with them.
Owners or directors of any establishment or business are, in the same way, liable for any
damages caused by their employees while engaged in the branch of the service in which
employed, or on occasion of the performance of their duties.
The State is subject to the same liability when it acts through a special agent, but not if the
damage shall have bean caused by the official upon whom properly devolved the duty of doing
the act performed, in which case the provisions or the next preceding article shall be
applicable.
Finally, teachers or directors of arts and trades are liable for any damages caused by their
pupils or apprentices while they are under their custody.
The liability imposed by this article shall cease in case the persons subject thereto prove that
they exercise all the diligence of a good father of a family to prevent the damage.”
A comparison between the above Article and Article 2180 of the Civil Code of the Philippines
shows that paragraph 5 of the latter is not contained in the former. This paragraph reads as
follows:chanroblesvirtuallawlibrary
“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.”
Rulings under the old provision (Article 1903) are to the effect that the owner of a vehicle will
not be liable if at the time of the accident causing injury to a third person the owner of the
vehicle is not present therein, because he does not fall within the list of persons enumerated
in Article 1903 of the Civil Code (Johnson vs. David, 5 Phil. 663; chan
roblesvirtualawlibraryChapman vs. Underwood, 27 Phil. 374; chan
roblesvirtualawlibraryMarquez vs. Castillo, 40 Off. Gaz. No. 5, 204). Under the new Civil Code,
however, the owner of the vehicle is included among the persons who may respond for the
acts of their employees who cause damage to third persons in the course of their employment.
By reason of this newly inserted provision the owner of a jeep driven by another becomes
responsible for the driver’s negligence under the terms and circumstances specified in the last
paragraph of article 2180. In accordance with this paragraph the owner of the vehicle is
responsible unless he proves that he exercised the diligence of a good father of a family to
prevent the damage. But in the case at bar, Camarote, the jeepney owner, was not in the
jeep; chan roblesvirtualawlibraryand the only manner in which he could have avoided damage
to third persons would have been by the exercise by him of the diligence of a good father of
a family in the choice or selection of his driver. Did he satisfy the requirement of the law in
this case?
Defendant Juan Camarote argues that the mere fact that the driver was a professional driver
is a sufficient exercise of the diligence required of a good father of a family, which would
exempt him from responsibility. We think that this is a mistaken view of the law, taking into
account the fact, of which we take judicial notice, that licenses are easy to obtain and no strict
examination is required before professional driver’s licenses are given, and that the holding
of a driver’s license is no guarantee or assurance of the carefulness of the holder of the
license. In order that the Defendantmay be considered as having exercised all diligence of a
good father of a family, he should not have been satisfied with the mere possession of a
professional driver’s license; chan roblesvirtualawlibraryhe should have carefully examined
the applicant for employment as to his qualifications, his experience and record of
service. Defendant-Appellant did not take these steps, which are considered essential, and
we must hold that he has failed to exercise all due diligence required of a good father of a
family in the choice or selection of his driver.
The reason for the law is obvious. It is indeed difficult for any person injured by the
carelessness of a driver to prove the negligence or lack of due diligence of the owner of the
vehicle in the choice of the driver. Were we to require the injured party to prove the owner’s
lack of diligence, the right will in many cases prove illusory, as seldom does a person in the
community, especially in the cities, have the opportunity to observe the conduct of all possible
car owners therein. So the law imposes the burden of proof of innocence on the vehicle owner.
If the driver is negligent and causes damage, the law presumes that the owner was negligent
and imposes upon him the burden of proving the contrary.
Finding that the conclusion of the trial judge as to Defendant- Appellant’s responsibility is
correct, we hereby affirm the decision, with costs against Defendant-Appellant.

THE HEIRS OF THE LATE RUBEN G.R. No. 116121

REINOSO, SR., represented by
Ruben Reinoso Jr.,

Petitioners, Present:

CARPIO,* J.

- versus - VELASCO, JR., Chairperson,

PERALTA,

ABAD, and

MENDOZA, JJ.

COURT OF APPEALS, PONCIANO

TAPALES, JOSE GUBALLA, and
FILWRITERS GUARANTY ASSURANCE
CORPORATION,* *

Respondent.

Promulgated:

July 18, 2011

x -------------------------------------------------------------------------------------x
 DECISION

MENDOZA, J.:

Before the Court is a petition for review assailing the May 20, 1994 Decision [1] and
June 30, 1994 Resolution[2] of the Court of Appeals (CA), in CA-G.R. CV No. 19395, which set
aside the March 22, 1988 Decision of the Regional Trial Court, Branch 8, Manila (RTC) for
non-payment of docket fees. The dispositive portion of the CA decision reads:
IN VIEW OF ALL THE FOREGOING, the decision appealed from is SET
ASIDE and REVERSED and the complaint in this case is ordered DISMISSED.

No costs pronouncement.

SO ORDERED.

The complaint for damages arose from the collision of a passenger jeepney and a truck at
around 7:00 oclock in the evening of June 14, 1979 along E. Rodriguez Avenue, Quezon City.
As a result, a passenger of the jeepney, Ruben Reinoso, Sr. (Reinoso), was killed. The
passenger jeepney was owned by Ponciano Tapales (Tapales) and driven by Alejandro
Santos (Santos), while the truck was owned by Jose Guballa (Guballa) and driven by Mariano
Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for damages
against Tapales and Guballa. In turn, Guballa filed a third party complaint against Filwriters
Guaranty Assurance Corporation (FGAC) under Policy Number OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the petitioners and against
Guballa. The decision in part, reads:

In favor of herein plaintiffs and against defendant Jose Guballa:

1. For the death of Ruben Reinoso, Sr. ₱30,000.00

2. Loss of earnings (monthly income at the time of death 120,000.00

(₱2,000.00 Court used ₱1,000.00 only per month (or
₱12,000.00 only per year) & victim then being 55 at death
had ten (10) years life expectancy

3. Mortuary, Medical & funeral expenses and all incidental 15,000.00

expenses in the wake in serving those who condoled..
4. Moral damages .. 50,000.00
5. Exemplary damages 25,000.00
 6. Litigation expenses . 15,000.00
7. Attorneys fees 25,000.00
Or a total of ₱250,000.00
For damages to property:

In favor of defendant Ponciano Tapales and against defendant Jose Guballa:

1. Actual damages for repair is already awarded to

defendant-cross-claimant Ponciano Tapales by Br. 9, RTC-
Malolos, Bulacan (Vide: Exh. 1-G-Tapales); hence, cannot
recover twice.
2. Compensatory damages (earnings at ₱150.00 per day) ₱9,000.00
and for two (2) months jeepney stayed at the repair shop.
3. Moral damages ... 10,000.00
4. Exemplary damages . 10,000.00
5. Attorneys fees 15,000.00

or a total of ₱44,000.00

Under the 3rd party complaint against 3rd party defendant Filwriters Guaranty
Assurance Corporation, the Court hereby renders judgment in favor of said
3rd party plaintiff by way of 3rd party liability under policy No. OV-09527 in the
amount of ₱50,000.00 undertaking plus ₱10,000.00 as and for attorneys fees.

For all the foregoing, it is the well considered view of the Court that plaintiffs,
defendant Ponciano Tapales and 3rd Party plaintiff Jose Guballa established
their claims as specified above, respectively. Totality of evidence
preponderance in their favor.

JUDGMENT

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

In favor of plaintiffs for the death of Ruben Reinoso, Sr.₱250,000.00;

In favor of defendant Ponciano Tapales due to damage of his passenger

jeepney.₱44,000.00;

In favor of defendant Jose Guballa under Policy No. OV-

09527....₱60,000.00;

All the specified accounts with 6% legal rate of interest per annum from
date of complaint until fully paid (Reformina vs. Tomol, 139 SCRA 260; and
finally;

Costs of suit.

SO ORDERED.[3]
On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the RTC
decision and dismissed the complaint on the ground of non-payment of docket fees pursuant
to the doctrine laid down in Manchester v. CA.[4] In addition, the CA ruled that since
prescription had set in, petitioners could no longer pay the required docket fees. [5]

Petitioners filed a motion for reconsideration of the CA decision but it was denied in a
resolution dated June 30, 1994.[6] Hence, this appeal, anchored on the following

GROUNDS:

A. The Court of Appeals MISAPPLIED THE RULING of the Supreme Court

in the case of Manchester Corporation vs. Court of Appeals to this case.

B. The issue on the specification of the damages appearing in the

prayer of the Complaint was NEVER PLACED IN ISSUE BY ANY OF THE
PARTIES IN THE COURT OF ORIGIN (REGIONAL TRIAL COURT) NOR IN
THE COURT OF APPEALS.

C. The issues of the case revolve around the more substantial issue as
to the negligence of the private respondents and their culpability to
petitioners.[7]
The petitioners argue that the ruling in Manchester should not have been applied
retroactively in this case, since it was filed prior to the promulgation of
the Manchester decision in 1987. They plead that though this Court stated that failure to state
the correct amount of damages would lead to the dismissal of the complaint, said doctrine
should be applied prospectively.

Moreover, the petitioners assert that at the time of the filing of the complaint in 1979, they
were not certain of the amount of damages they were entitled to, because the amount of the
lost income would still be finally determined in the course of the trial of the case. They claim
that the jurisdiction of the trial court remains even if there was failure to pay the correct filing
fee as long as the correct amount would be paid subsequently.

Finally, the petitioners stress that the alleged defect was never put in issue either in the RTC
or in the CA.

The Court finds merit in the petition.

The rule is that payment in full of the docket fees within the prescribed period is
mandatory.[8] In Manchester v. Court of Appeals,[9] it was held that a court acquires
jurisdiction over any case only upon the payment of the prescribed docket fee. The strict
application of this rule was, however, relaxed two (2) years after in the case of Sun Insurance
Office, Ltd. v. Asuncion,[10] wherein the Court decreed that where the initiatory pleading is
not accompanied by the payment of the docket fee, the court may allow payment of the fee
within a reasonable period of time, but in no case beyond the applicable prescriptive or
reglementary period. This ruling was made on the premise that the plaintiff had demonstrated
his willingness to abide by the rules by paying the additional docket fees required. [11] Thus,
in the more recent case of United Overseas Bank v. Ros,[12] the Court explained that where
the party does not deliberately intend to defraud the court in payment of docket fees, and
manifests its willingness to abide by the rules by paying additional docket fees when required
by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict
regulations set in Manchester, will apply. It has been on record that the Court, in several
instances, allowed the relaxation of the rule on non-payment of docket fees in order to afford
the parties the opportunity to fully ventilate their cases on the merits. In the case of La Salette
College v. Pilotin,[13] the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of

appellate docket fees, we also recognize that its strict application is qualified
by the following: first, failure to pay those fees within the reglementary period
allows only discretionary, not automatic, dismissal; second, such power should
be used by the court in conjunction with its exercise of sound discretion in
accordance with the tenets of justice and fair play, as well as with a great deal
of circumspection in consideration of all attendant circumstances.[14]

While there is a crying need to unclog court dockets on the one hand, there is, on the
other, a greater demand for resolving genuine disputes fairly and equitably, [15] for it is far
better to dispose of a case on the merit which is a primordial end, rather than on a technicality
that may result in injustice.

In this case, it cannot be denied that the case was litigated before the RTC and said
trial court had already rendered a decision. While it was at that level, the matter of non-
payment of docket fees was never an issue. It was only the CA which motu propio dismissed
the case for said reason.
Considering the foregoing, there is a need to suspend the strict application of the rules
so that the petitioners would be able to fully and finally prosecute their claim on the merits at
the appellate level rather than fail to secure justice on a technicality, for, indeed, the general
objective of procedure is to facilitate the application of justice to the rival claims of contending
parties, bearing always in mind that procedure is not to hinder but to promote the
administration of justice.[16]

The Court also takes into account the fact that the case was filed before
the Manchester ruling came out. Even if said ruling could be applied retroactively, liberality
should be accorded to the petitioners in view of the recency then of the ruling. Leniency
because of recency was applied to the cases of Far Eastern Shipping Company v. Court of
Appeals[17] and Spouses Jimmy and Patri Chan v. RTC of Zamboanga.[18] In the case of Mactan
Cebu International Airport Authority v. Mangubat (Mactan),[19] it was stated that the intent of
the Court is clear to afford litigants full opportunity to comply with the new rules and to temper
enforcement of sanctions in view of the recency of the changes introduced by the new
rules. In Mactan, the Office of the Solicitor General (OSG) also failed to pay the correct docket
fees on time.

We held in another case:

x x x It bears stressing that the rules of procedure are merely tools

designed to facilitate the attainment of justice. They were conceived and
promulgated to effectively aid the court in the dispensation of
justice. Courts are not slaves to or robots of technical rules, shorn of judicial
discretion. In rendering justice, courts have always been, as they ought to
be, conscientiously guided by the norm that, on the balance, technicalities
take a backseat against substantive rights, and not the other way
around. Thus, if the application of the Rules would tend to frustrate rather
than promote justice, it is always within the power of the Court to suspend
the Rules, or except a particular case from its operation.[20]

The petitioners, however, are liable for the difference between the actual fees paid and
the correct payable docket fees to be assessed by the clerk of court which shall constitute a
lien on the judgment pursuant to Section 2 of Rule 141 which provides:
SEC. 2. Fees in lien. Where the court in its final judgment awards a
claim not alleged, or a relief different from, or more than that claimed in
the pleading, the party concerned shall pay the additional fees which shall
constitute a lien on the judgment in satisfaction of said lien. The clerk of
court shall assess and collect the corresponding fees.

As the Court has taken the position that it would be grossly unjust if petitioners claim
would be dismissed on a strict application of the Manchester doctrine, the appropriate action,
under ordinary circumstances, would be for the Court to remand the case to the CA.
Considering, however, that the case at bench has been pending for more than 30 years and
the records thereof are already before this Court, a remand of the case to the CA would only
unnecessarily prolong its resolution. In the higher interest of substantial justice and to spare
the parties from further delay, the Court will resolve the case on the merits.

The facts are beyond dispute. Reinoso, the jeepney passenger, died as a result of the
collision of a jeepney and a truck on June 14, 1979 at around 7:00 oclock in the evening
along E. Rodriguez Avenue, Quezon City. It was established that the primary cause of the
injury or damage was the negligence of the truck driver who was driving it at a very fast pace.
Based on the sketch and spot report of the police authorities and the narration of
the jeepney driver and his passengers, the collision was brought about because the truck
driver suddenly swerved to, and encroached on, the left side portion of the road in an attempt
to avoid a wooden barricade, hitting the passenger jeepney as a consequence. The analysis
of the RTC appears in its decision as follows:
Perusal and careful analysis of evidence adduced as well as proper
consideration of all the circumstances and factors bearing on the issue as to
who is responsible for the instant vehicular mishap convince and persuade this
Court that preponderance of proof is in favor of plaintiffs and defendant
Ponciano Tapales. The greater mass of evidence spread on the records and its
influence support plaintiffs plaint including that of defendant Tapales.
The Land Transportation and Traffic Rule (R.A. No. 4136), reads as
follows:

Sec. 37. Driving on right side of highway. Unless a different

course of action is required in the interest of the safety and the security
of life, person or property, or because of unreasonable difficulty of
operation in compliance therewith, every person operating a motor
vehicle or an animal drawn vehicle on highway shall pass to the right
when meeting persons or vehicles coming toward him, and to the left
when overtaking persons or vehicles going the same direction, and
when turning to the left in going from one highway to another, every
vehicle shall be conducted to the right of the center of the intersection
of the highway.
Having in mind the foregoing provision of law, this Court is convinced
of the veracity of the version of the passenger jeepney driver Alejandro Santos,
(plaintiffs and Tapales witness) that while running on lane No. 4 westward
bound towards Ortigas Avenue at between 30-40 kms. per hour (63-64 tsn,
Jan. 6, 1984) the sand & gravel truck from the opposite direction driven by
Mariano Geronimo, the headlights of which the former had seen while still at a
distance of about 30-40 meters from the wooden barricade astride lanes 1 and
2, upon reaching said wooden block suddenly swerved to the left into lanes 3
and 4 at high speed napakabilis po ng dating ng truck. (29 tsn, Sept. 26, 1985)
in the process hitting them (Jeepney passenger) at the left side up to where
the reserve tire was in an oblique manner pahilis (57 tsn, Sept. 26, 1985). The
jeepney after it was bumped by the truck due to the strong impact was thrown
resting on its right side while the left side was on top of the Bangketa (side
walk). The passengers of the jeepney and its driver were injured including two
passengers who died. The left side of the jeepney suffered considerable
damage as seen in the picture (Exhs. 4 & 5-Tapales, pages 331-332, records)
taken while at the repair shop.
The Court is convinced of the narration of Santos to the effect that the
gravel & sand truck was running in high speed on the good portion of E.
Rodriguez Avenue (lane 1 & 2) before the wooden barricade and (having in
mind that it had just delivered its load at the Corinthian Gardens) so that when
suddenly confronted with the wooden obstacle before it had to avoid the same
in a manner of a reflex reaction or knee-jerk response by forthwith swerving
to his left into the right lanes (lanes 3 & 4). At the time of the bumping, the
jeepney was running on its right lane No. 4 and even during the moments
 before said bumping, moving at moderate speed thereon since lane No. 3 was
then somewhat rough because being repaired also according to Mondalia who
has no reason to prevaricate being herself one of those seriously injured. The
narration of Santos and Mondalia are convincing and consistent in depicting the
true facts of the case untainted by vacillation and therefore, worthy to be relied
upon. Their story is forfeited and confirmed by the sketch drawn by the
investigating officer Pfc. F. Amaba, Traffic Division, NPD, Quezon City who
rushed to the scene of the mishap (Vide: Resolution of Asst fiscal Elizabeth B.
Reyes marked as Exhs. 7, 7-A, 7-B-Tapales, pp. 166-168, records; the Certified
Copy found on pages 598-600, ibid, with the attached police sketch of Pfc.
Amaba, marked as Exh. 8-Tapales on page 169, ibid; certified copy of which is
on page 594, ibid) indicating the fact that the bumping indeed occurred at lane
No. 4 and showing how the gavel & sand truck is positioned in relation to the
jeepney. The said police sketch having been made right after the accident is a
piece of evidence worthy to be relied upon showing the true facts of the
bumping-occurrence. The rule that official duty had been performed (Sec.5(m),
R-131, and also Sec. 38, R-a30, Rev. Rules of Court) there being no evidence
adduced and made of record to the contrary is that said circumstance involving
the two vehicles had been the result of an official investigation and must be
taken as true by this Court.[21]

While ending up on the opposite lane is not conclusive proof of fault in automobile
collisions,[22] the position of the two vehicles, as depicted in the sketch of the police officers,
clearly shows that it was the truck that hit the jeepney. The evidentiary records disclosed that
the truck was speeding along E. Rodriguez, heading towards Santolan Street, while the
passenger jeepney was coming from the opposite direction. When the truck reached a certain
point near the Meralco Post No. J9-450, the front portion of the truck hit the left middle side
portion of the passenger jeepney, causing damage to both vehicles and injuries to the driver
and passengers of the jeepney. The truck driver should have been more careful, because, at
that time, a portion of E. Rodriguez Avenue was under repair and a wooden barricade was
placed in the middle thereof.

The Court likewise sustains the finding of the RTC that the truck owner, Guballa, failed
to rebut the presumption of negligence in the hiring and supervision of his employee. Article
2176, in relation to Article 2180 of the 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.

xxxx

Art. 2180. The obligation imposed by Art. 2176 is demandable not only
for ones own acts or omissions but also for those of persons for whom one is
responsible.
xxxx
 Employers shall be liable for the damage 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.
xxxx

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage.

Whenever an employees negligence causes damage or injury to another, there instantly

arises a presumption juris tantum that the employer failed to exercise diligentissimi patris
families in the selection or supervision of his employee.[23] Thus, in the selection of
prospective employees, employers are required to examine them as to their qualification,
experience and service record. With respect to the supervision of employees, employers must
formulate standard operating procedures, monitor their implementation, and impose
disciplinary measures for breaches thereof. These facts must be shown by concrete proof,
including documentary evidence.[24] Thus, the RTC committed no error in finding that the
evidence presented by respondent Guballa was wanting. It ruled:

x x x. As expected, defendant Jose Guballa, attempted to overthrow this

presumption of negligence by showing that he had exercised the due diligence
required of him by seeing to it that the driver must check the vital parts of the
vehicle he is assigned to before he leaves the compound like the oil, water,
brakes, gasoline, horn (9 tsn, July 17, 1986); and that Geronimo had been
driving for him sometime in 1976 until the collision in litigation came about (5-
6 tsn, ibid); that whenever his trucks gets out of the compound to make
deliveries, it is always accompanied with two (2) helpers (16-17 tsn, ibid). This
was all which he considered as selection and supervision in compliance with
the law to free himself from any responsibility. This Court then cannot consider
the foregoing as equivalent to an exercise of all the care of a good father of a
family in the selection and supervision of his driver Mariano Geronimo. [25]

WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and June 30,
1994 Resolution of the Court of Appeals are REVERSED and SET ASIDE and the March 22,
1988 Decision of the Regional Trial Court, Branch 8, Manila, is REINSTATED.

SO ORDERED.
G.R. No. 150157 January 25, 2007

MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., Petitioners,

vs.
MODESTO CALAUNAN, Respondent.

DECISION

CHICO-NAZARIO, J.:

Assailed before Us is the decision1 of the Court of Appeals in CA-G.R. CV No. 55909 which
affirmed in toto the decision2 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.

The factual antecedents are as follows:

The vehicles involved in this case are: (1) Philippine Rabbit Bus No. 353 with plate number
CVD-478, owned by petitioner PRBLI and driven by petitioner Mauricio Manliclic; and (2)
owner-type jeep with plate number PER-290, owned by respondent Modesto Calaunan and
driven by Marcelo Mendoza.

At around 6:00 to 7:00 o’clock in the morning of 12 July 1988, respondent Calaunan,
together with Marcelo Mendoza, was on his way to Manila from Pangasinan on board his
owner-type jeep. The Philippine Rabbit Bus was likewise bound for Manila from Concepcion,
Tarlac. At approximately Kilometer 40 of the North Luzon Expressway in Barangay
Lalangan, Plaridel, Bulacan, the two vehicles collided. 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.

By reason of such collision, 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, docketed as Crim. Case No. 684-M-89. Subsequently on 2 December
1991, respondent filed a complaint for damages against petitioners Manliclic and PRBLI
before the RTC of Dagupan City, docketed as Civil Case No. D-10086. The criminal case was
tried ahead of the civil case. Among those who testified in the criminal case were
respondent Calaunan, Marcelo Mendoza and Fernando Ramos.

In the civil case (now before this Court), the parties admitted the following:

1. The parties agreed on the capacity of the parties to sue and be sued as well as the
venue and the identities of the vehicles involved;

2. The identity of the drivers and the fact that they are duly licensed;
 3. The date and place of the vehicular collision;

4. The extent of the injuries suffered by plaintiff Modesto Calaunan and the existence
of the medical certificate;

5. That both vehicles were going towards the south; the private jeep being ahead of
the bus;

6. That the weather was fair and the road was well paved and straight, although
there was a ditch on the right side where the jeep fell into. 3

When the civil case was heard, counsel for respondent prayed that the transcripts of
stenographic notes (TSNs)4 of the testimonies of respondent Calaunan, Marcelo Mendoza
and Fernando Ramos 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.

Francisco Tuliao testified that his brother-in-law, respondent Calaunan, left for abroad
sometime in November, 1989 and has not returned since then. Rogelio Ramos took the
stand and said that his brother, Fernando Ramos, left for Amman, Jordan, to work. Rosalia
Mendoza testified that her husband, Marcelo Mendoza, left their residence to look for a job.
She narrated that she thought her husband went to his hometown in Panique, Tarlac, when
he did not return after one month. She went to her husband’s hometown to look for him but
she was informed that he did not go there.1awphil.net

The trial court subpoenaed the Clerk of Court of Branch 8, RTC, Malolos, Bulacan, the court
where Criminal Case No. 684-M-89 was tried, to bring the TSNs of the testimonies of
respondent Calaunan,5 Marcelo Mendoza6 and Fernando Ramos7 in said case, together with
other documentary evidence marked therein. Instead of the Branch Clerk of Court, it was
Enrique Santos Guevara, Court Interpreter, who appeared before the court and identified
the TSNs of the three afore-named witnesses and other pertinent documents he had
brought.8 Counsel for respondent wanted to mark other TSNs and documents from the said
criminal case to be adopted in the instant case, but since the same were not brought to the
trial court, counsel for petitioners compromised that said TSNs and documents could be
offered by counsel for respondent as rebuttal evidence.

For the defendants, petitioner Manliclic and bus conductor Oscar Buan testified. The TSN 9 of
the testimony of Donato Ganiban, investigator of the PRBLI, in Criminal Case No. 684-M-89
was marked and allowed to be adopted in the civil case on the ground that he was already
dead.

Respondent further marked, among other documents, as rebuttal evidence, the TSNs 10 of
the testimonies of Donato Ganiban, Oscar Buan and petitioner Manliclic in Criminal Case No.
684-M-89.

The disagreement arises from the question: Who is to be held liable for the collision?

Respondent insists it was petitioner Manliclic who should be liable while the latter is resolute
in saying it was the former who caused the smash up.

The versions of the parties are summarized by the trial court as follows:
The parties differed only on the manner the collision between the two (2) vehicles took
place. According to the plaintiff and his driver, the jeep was cruising at the speed of 60 to
70 kilometers per hour on the slow lane of the expressway when the Philippine Rabbit Bus
overtook the jeep and in the process of overtaking the jeep, the Philippine Rabbit Bus hit
the rear of the jeep on the left side. At the time the Philippine Rabbit Bus hit the jeep, it was
about to overtake the jeep. In other words, the Philippine Rabbit Bus was still at the back of
the jeep when the jeep was hit. Fernando Ramos corroborated the testimony of the plaintiff
and Marcelo Mendoza. He said that he was on another jeep following the Philippine Rabbit
Bus and the jeep of plaintiff when the incident took place. He said, the jeep of the plaintiff
overtook them and the said jeep of the plaintiff was followed by the Philippine Rabbit Bus
which was running very fast. The bus also overtook the jeep in which he was riding. After
that, he heard a loud sound. He saw the jeep of the plaintiff swerved to the right on a
grassy portion of the road. The Philippine Rabbit Bus stopped and they overtook the
Philippine Rabbit Bus so that it could not moved (sic), meaning they stopped in front of the
Philippine Rabbit Bus. He testified that the jeep of plaintiff swerved to the right because it
was bumped by the Philippine Rabbit bus from behind.

Both Mauricio Manliclic and his driver, Oscar Buan admitted that the Philippine Rabbit Bus
bumped the jeep in question. However, they explained that when the Philippine Rabbit bus
was about to go to the left lane to overtake the jeep, the latter jeep swerved to the left
because it was to overtake another jeep in front of it. Such was their testimony before the
RTC in Malolos in the criminal case and before this Court in the instant case. [Thus, which of
the two versions of the manner how the collision took place was correct, would be
determinative of who between the two drivers was negligent in the operation of their
respective vehicles.]11

Petitioner PRBLI maintained that it observed and exercised the diligence of a good father of
a family in the selection and supervision of its employee, specifically petitioner Manliclic.

On 22 July 1996, the trial court rendered its decision in favor of respondent Calaunan and
against petitioners Manliclic and PRBLI. The dispositive portion of its decision reads:

WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants
ordering the said defendants to pay plaintiff 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 another P100,000.00 as
exemplary damages and P15,000.00 as attorney’s fees, including appearance fees of the
lawyer. In addition, the defendants are also to pay costs.12

Petitioners appealed the decision via Notice of Appeal to the Court of Appeals. 13

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.14

Petitioners are now before us by way of petition for review assailing the decision of the
Court of Appeals. They assign as errors the following:

I
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S QUESTIONABLE ADMISSION IN EVIDENCE OF THE TSN’s AND OTHER DOCUMENTS
PRESENTED IN THE CRIMINAL CASE.

II

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S RELIANCE ON THE VERSION OF THE RESPONDENT ON HOW THE ACCIDENT
SUPPOSEDLY OCCURRED.

III

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S UNFAIR DISREGARD OF HEREIN PETITIONER PRBL’s DEFENSE OF EXERCISE OF
DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES.

IV

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S QUESTIONABLE AWARD OF DAMAGES AND ATTORNEY’S FEE.

With the passing away of respondent Calaunan during the pendency of this appeal with this
Court, we granted the Motion for the Substitution of Respondent filed by his wife, Mrs.
Precila Zarate Vda. De Calaunan, and children, Virgilio Calaunan, Carmelita Honeycomb,
Evelyn Calaunan, Marko Calaunan and Liwayway Calaunan.15

In their Reply to respondent’s Comment, petitioners informed this Court of a Decision 16 of

the Court of Appeals acquitting petitioner Manliclic of the charge17 of Reckless Imprudence
Resulting in Damage to Property with Physical Injuries attaching thereto a photocopy
thereof.

On the first assigned error, petitioners argue that the TSNs containing the testimonies of
respondent Calaunan,18Marcelo Mendoza19 and Fernando Ramos20 should not be admitted in
evidence for failure of respondent to comply with the requisites of Section 47, Rule 130 of
the Rules of Court.

For Section 47, Rule 13021 to apply, the following requisites must be satisfied: (a) the
witness is dead or unable to testify; (b) his testimony or deposition was given in a former
case or proceeding, judicial or administrative, between the same parties or those
representing the same interests; (c) the former case involved the same subject as that in
the present case, although on different causes of action; (d) the issue testified to by the
witness in the former trial is the same issue involved in the present case; and (e) the
adverse party had an opportunity to cross-examine the witness in the former case.22

Admittedly, respondent failed to show the concurrence of all the requisites set forth by the
Rules for a testimony given in a former case or proceeding to be admissible as an exception
to the hearsay rule. Petitioner PRBLI, not being a party in Criminal Case No. 684-M-89, had
no opportunity to cross-examine the three witnesses in said case. The criminal case was
filed exclusively against petitioner Manliclic, petitioner PRBLI’s employee. The cases dealing
with the subsidiary liability of employers uniformly declare that, strictly speaking, they are
not parties to the criminal cases instituted against their employees.23
Notwithstanding the fact that petitioner PRBLI was not a party in said criminal case, the
testimonies of the three witnesses are still admissible on the ground that petitioner PRBLI
failed to object on their admissibility.

It is elementary that an objection shall be made at the time when an alleged inadmissible
document is offered in evidence; otherwise, the objection shall be treated as waived, since
the right to object is merely a privilege which the party may waive. Thus, a failure to except
to the evidence because it does not conform to the statute is a waiver of the provisions of
the law. Even assuming ex gratia argumenti that these documents are inadmissible for
being hearsay, but on account of failure to object thereto, the same may be admitted and
considered as sufficient to prove the facts therein asserted.24 Hearsay evidence alone may
be insufficient to establish a fact in a suit but, when no objection is made thereto, it is, like
any other evidence, to be considered and given the importance it deserves. 25

In the case at bar, petitioner PRBLI did not object to the TSNs containing the testimonies of
respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case when the
same were offered in evidence in the trial court. In fact, the TSNs of the testimonies of
Calaunan and Mendoza were admitted by both petitioners. 26 Moreover, petitioner PRBLI
even offered in evidence the TSN containing the testimony of Donato Ganiban in the
criminal case. If petitioner PRBLI argues that the TSNs of the testimonies of plaintiff’s
witnesses in the criminal case should not be admitted in the instant case, why then did it
offer the TSN of the testimony of Ganiban which was given in the criminal case? It appears
that petitioner PRBLI wants to have its cake and eat it too. It cannot argue that the TSNs of
the testimonies of the witnesses of the adverse party in the criminal case should not be
admitted and at the same time insist that the TSN of the testimony of the witness for the
accused be admitted in its favor. To disallow admission in evidence of the TSNs of the
testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case and to
admit the TSN of the testimony of Ganiban would be unfair.

We do not subscribe to petitioner PRBLI’s argument that it will be denied due process when
the TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the
criminal case are to be admitted in the civil case. It is too late for petitioner PRBLI to raise
denial of due process in relation to Section 47, Rule 130 of the Rules of Court, as a ground
for objecting to the admissibility of the TSNs. For failure to object at the proper time, it
waived its right to object that the TSNs did not comply with Section 47.

In Mangio v. Court of Appeals,27 this Court, through Associate Justice Reynato S.

Puno,28 admitted in evidence a TSN of the testimony of a witness in another case despite
therein petitioner’s assertion that he would be denied due process. In admitting the TSN,
the Court ruled that the raising of denial of due process in relation to Section 47, Rule 130
of the Rules of Court, as a ground for objecting to the admissibility of the TSN was belatedly
done. In so doing, therein petitioner waived his right to object based on said ground.

Petitioners contend that the documents in the criminal case should not have been admitted
in the instant civil case because Section 47 of Rule 130 refers only to "testimony or
deposition." We find such contention to be untenable. Though said section speaks only of
testimony and deposition, it does not mean that documents from a former case or
proceeding cannot be admitted. Said documents can be admitted they being part of the
testimonies of witnesses that have been admitted. Accordingly, they shall be given the
same weight as that to which the testimony may be entitled.29
On the second assigned error, petitioners contend that the version of petitioner Manliclic as
to how the accident occurred is more credible than respondent’s version. They anchor their
contention on the fact that petitioner Manliclic was acquitted by the Court of Appeals of the
charge of Reckless Imprudence Resulting in Damage to Property with Physical Injuries.

To be resolved by the Court is the effect of petitioner Manliclic’s acquittal in the civil case.

From the complaint, it can be gathered that the civil case for damages was one arising
from, or based on, quasi-delict.30 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. The allegations read:

"4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff was on board the
above-described motor vehicle travelling at a moderate speed along the North Luzon
Expressway heading South towards Manila together with MARCELO MENDOZA, who
was then driving the same;

"5. That approximately at kilometer 40 of the North Luzon Express Way, the above-
described motor vehicle was suddenly bumped from behind by a Philippine Rabbit
Bus with Body No. 353 and with plate No. CVD 478 then being driven by one
Mauricio Manliclic of San Jose, Concepcion, Tarlac, who was then travelling recklessly
at a very fast speed and had apparently lost control of his vehicle;

"6. That as a result of the impact of the collision the above-described motor vehicle
was forced off the North Luzon Express Way towards the rightside where it fell on its
driver’s side on a ditch, and that as a consequence, the above-described motor
vehicle which maybe valued at EIGHTY THOUSAND PESOS (P80,000) was rendered a
total wreck as shown by pictures to be presented during the pre-trial and trial of this
case;

"7. That also as a result of said incident, plaintiff sustained bodily injuries which
compounded plaintiff’s frail physical condition and required his hospitalization from
July 12, 1988 up to and until July 22, 1988, copy of the medical certificate is hereto
attached as Annex "A" and made an integral part hereof;

"8. That the vehicular collision resulting in the total wreckage of the above-described
motor vehicle as well as bodily (sic) sustained by plaintiff, was solely due to the
reckless imprudence of the defendant driver Mauricio Manliclic who drove his
Philippine Rabbit Bus No. 353 at a fast speed without due regard or observance of
existing traffic rules and regulations;

"9. That defendant Philippine Rabbit Bus Line Corporation failed to exercise the
diligence of a good father of (sic) family in the selection and supervision of its
drivers; x x x"31

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?

In exonerating petitioner Manliclic in the criminal case, the Court of Appeals said:
To the following findings of the court a quo, to wit: that accused-appellant was negligent
"when the bus he was driving bumped the jeep from behind"; that "the proximate cause of
the accident was his having driven the bus at a great speed while closely following the
jeep"; x x x

We do not agree.

The swerving of Calaunan’s jeep when it tried to overtake the vehicle in front of it was
beyond the control of accused-appellant.

xxxx

Absent evidence of negligence, therefore, accused-appellant cannot be held liable for

Reckless Imprudence Resulting in Damage to Property with Physical Injuries as defined in
Article 365 of the Revised Penal Code.32

From the foregoing declaration of the Court of Appeals, it appears that petitioner Manliclic
was acquitted not on reasonable doubt, but on the ground that he is not the author of the
act complained of which is based on Section 2(b) of Rule 111 of the Rules of Criminal
Procedure which 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.33

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.34 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.35

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. 36 An acquittal or
conviction in the criminal case is entirely irrelevant in the civil case37 based on quasi-delict
or culpa aquiliana.

Petitioners ask us to give credence to their version of how the collision occurred and to
disregard that of respondent’s. Petitioners insist that while the PRBLI bus was in the process
of overtaking respondent’s jeep, the latter, without warning, suddenly swerved to the left
(fast) lane in order to overtake another jeep ahead of it, thus causing the collision.

As a general rule, questions of fact may not be raised in a petition for review. The factual
findings of the trial court, especially when affirmed by the appellate court, are binding and
conclusive on the Supreme Court.38 Not being a trier of facts, this Court will not allow a
review thereof unless:

(1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2)
the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6)
the Court of Appeals went beyond the issues of the case and its findings are contrary to the
admissions of both appellant and appellees; (7) the findings of fact of the Court of Appeals
are contrary to those of the trial court; (8) said findings of fact are conclusions without
citation of specific evidence on which they are based; (9) the facts set forth in the petition
as well as in the petitioner's main and reply briefs are not disputed by the respondents; and
(10) the findings of fact of the Court of Appeals are premised on the supposed absence of
evidence and contradicted by the evidence on record.39

After going over the evidence on record, we do not find any of the exceptions that would
warrant our departure from the general rule. We fully agree in the finding of the trial court,
as affirmed by the Court of Appeals, that it was petitioner Manliclic who was negligent in
driving the PRBLI bus which was the cause of the collision. In giving credence to the version
of the respondent, the trial court has this say:

x x x Thus, which of the two versions of the manner how the collision took place was
correct, would be determinative of who between the two drivers was negligent in the
operation of their respective vehicle.

In this regard, it should be noted that in the statement of Mauricio Manliclic (Exh. 15) given
to the Philippine Rabbit Investigator CV Cabading no mention was made by him about the
fact that the driver of the jeep was overtaking another jeep when the collision took place.
The allegation that another jeep was being overtaken by the jeep of Calaunan was testified
to by him only in Crim. Case No. 684-M-89 before the Regional Trial Court in Malolos,
Bulacan and before this Court. Evidently, it was a product of an afterthought on the part of
Mauricio Manliclic so that he could explain why he should not be held responsible for the
incident. His attempt to veer away from the truth was also apparent when it would be
considered that in his statement given to the Philippine Rabbit Investigator CV Cabading
(Exh. 15), he alleged that the Philippine Rabbit Bus bumped the jeep of Calaunan while the
Philippine Rabbit Bus was behind the said jeep. In his testimony before the Regional Trial
Court in Malolos, Bulacan as well as in this Court, he alleged that the Philippine Rabbit Bus
was already on the left side of the jeep when the collision took place. For this inconsistency
between his statement and testimony, his explanation regarding the manner of how the
collision between the jeep and the bus took place should be taken with caution. It might be
true that in the statement of Oscar Buan given to the Philippine Rabbit Investigator CV
Cabading, it was mentioned by the former that the jeep of plaintiff was in the act of
overtaking another jeep when the collision between the latter jeep and the Philippine Rabbit
Bus took place. But the fact, however, that his statement was given on July 15, 1988, one
day after Mauricio Manliclic gave his statement should not escape attention. The one-day
difference between the giving of the two statements would be significant enough to
entertain the possibility of Oscar Buan having received legal advise before giving his
statement. Apart from that, as between his statement and the statement of Manliclic
himself, the statement of the latter should prevail. Besides, in his Affidavit of March 10,
1989, (Exh. 14), the unreliability of the statement of Oscar Buan (Exh. 13) given to CV
Cabading rear its "ugly head" when he did not mention in said affidavit that the jeep of
Calaunan was trying to overtake another jeep when the collision between the jeep in
question and the Philippine Rabbit bus took place.

xxxx

If one would believe the testimony of the defendant, Mauricio Manliclic, and his conductor,
Oscar Buan, that the Philippine Rabbit Bus was already somewhat parallel to the jeep when
the collision took place, the point of collision on the jeep should have been somewhat on the
left side thereof rather than on its rear. Furthermore, the jeep should have fallen on the
road itself rather than having been forced off the road. Useless, likewise to emphasize that
the Philippine Rabbit was running very fast as testified to by Ramos which was not
controverted by the defendants.40

Having ruled that it was petitioner Manliclic’s negligence that caused the smash up, there
arises the juris tantum presumption that the employer is negligent, rebuttable only by proof
of observance of the diligence of a good father of a family.41 Under Article 218042 of the New
Civil Code, when an injury is caused by the negligence of the employee, there instantly
arises a presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee, or in supervision over him after
selection or both. The liability of the employer under Article 2180 is direct and immediate; it
is not conditioned upon prior recourse against the negligent employee and a prior showing
of the insolvency of such employee. Therefore, it is incumbent upon the private respondents
to prove that they exercised the diligence of a good father of a family in the selection and
supervision of their employee.43

In the case at bar, petitioner PRBLI maintains that it had shown that it exercised the
required diligence in the selection and supervision of its employees, particularly petitioner
Manliclic. In the matter of selection, it showed the screening process that petitioner Manliclic
underwent before he became a regular driver. As to the exercise of due diligence in the
supervision of its employees, it argues that presence of ready investigators (Ganiban and
Cabading) is sufficient proof that it exercised the required due diligence in the supervision of
its employees.

In the selection of prospective employees, employers are required to examine them as to

their qualifications, experience and service records. In the supervision of employees, the
employer must formulate standard operating procedures, monitor their implementation and
impose disciplinary measures for the breach thereof. To fend off vicarious liability,
employers must submit concrete proof, including documentary evidence, that they complied
with everything that was incumbent on them.44

In Metro Manila Transit Corporation v. Court of Appeals,45 it was explained that:

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

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

We emphatically reiterate our holding, as a warning to all employers, that "the formulation
of various company policies on safety without showing that they were being complied with is
not sufficient to exempt petitioner from liability arising from negligence of its employees. It
is incumbent upon petitioner to show that in recruiting and employing the erring driver the
recruitment procedures and company policies on efficiency and safety were followed." x x x.

The trial court found that petitioner PRBLI exercised the diligence of a good father of a
family in the selection but not in the supervision of its employees. It expounded as follows:

From the evidence of the defendants, it seems that the Philippine Rabbit Bus Lines has a
very good procedure of recruiting its driver as well as in the maintenance of its vehicles.
There is no evidence though that it is as good in the supervision of its personnel. There has
been no iota of evidence introduced by it that there are rules promulgated by the bus
company regarding the safe operation of its vehicle and in the way its driver should manage
and operate the vehicles assigned to them. There is no showing that somebody in the bus
company has been employed to oversee how its driver should behave while operating their
vehicles without courting incidents similar to the herein case. In regard to supervision, it is
not difficult to observe that the Philippine Rabbit Bus Lines, Inc. has been negligent as an
employer and it should be made responsible for the acts of its employees, particularly the
driver involved in this case.

We agree. The presence of ready investigators after the occurrence of the accident is not
enough to exempt petitioner PRBLI from liability arising from the negligence of petitioner
Manliclic. Same does not comply with the guidelines set forth in the cases above-mentioned.
The presence of the investigators after the accident is not enough supervision. Regular
supervision of employees, that is, prior to any accident, should have been shown and
established. This, petitioner failed to do. The lack of supervision can further be seen by the
fact that there is only one set of manual containing the rules and regulations for all the
drivers of PRBLI. 46 How then can all the drivers of petitioner PRBLI know and be continually
informed of the rules and regulations when only one manual is being lent to all the drivers?

For failure to adduce proof that it exercised the diligence of a good father of a family in the
selection and supervision of its employees, petitioner PRBLI is held solidarily responsible for
the damages caused by petitioner Manliclic’s negligence.

We now go to the award of damages. The trial court correctly awarded the amount
of P40,838.00 as actual damages representing the amount paid by respondent for the
towing and repair of his jeep.47 As regards the awards for moral and exemplary damages,
same, under the circumstances, must be modified. The P100,000.00 awarded by the trial
court as moral damages must be reduced to P50,000.00.48 Exemplary damages are imposed
by way of example or correction for the public good. 49 The amount awarded by the trial
court must, likewise, be lowered to P50,000.00.50 The award of P15,000.00 for attorney’s
fees and expenses of litigation is in order and authorized by law. 51

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.

SO ORDERED.
 G.R. No. L-10074 December 24, 1915

KENJIRO KARABAYASHI, Plaintiff-Appellee, vs. THE MANILA RAILROAD CO.,

defendant, and BACHRACH GARAGE & TAXICAB CO., Defendant-Appellant.

G.R. No. L-10075 December 24, 1915

TAKUTARU UYEHARA, Plaintiff-Appellee, vs. THE MANILA RAILROAD CO., defendant,

and BACHRACH GARAGE & TAXICAB CO., Defendant-Appellant.

D.R. Williams for appellant.

Rohde and Wright for appellees.

MORELAND, J.:

The three cases dealt with in this decision differ in their facts only with respect to the injury
suffered by the respective plaintiffs. The law applicable to them is the same and, at the
request of counsel, they will be decided at the same time. Plaintiffs claim damages against
both the railroad and the garage company because of injuries suffered by them in a collision
between a train owned by and operated over tracks belonging to the railroad company and
an automobile the property of the Bachrach Garage & Taxicab
Co.chanroblesvirtualawlibrary chanrobles virtual law library

On January 2, 1913, the plaintiffs, together with three companions, hired an automobile
from the defendant taxicab company for a trip to Cavite Viejo. The automobile was secured
at a certain price hour and was driven and controlled by a chauffeur supplied by the taxicab
company. The journey to Cavite Viejo was made without incident but, on the return trip,
while crossing the tracks of defendant railroad company in the barrio of San Juan,
municipality of Cavite Viejo, the automobile was struck by a train and the plaintiffs
injured.chanroblesvirtualawlibrary chanrobles virtual law library

The trial court dismissed the complaint on the merits as to the Manila Railroad Company
and held the defendant taxicab company liable for damages to the plaintiffs in various
amounts. The taxicab company appealed.chanroblesvirtualawlibrary chanrobles virtual law
library

It appears from the record, and was found by the trial court, that the driver of the
automobile drove his machine upon the railroad tracks without observing the precautions
which ordinary care and prudence would require, without reducing speed and without taking
any precaution looking to determining whether there was danger from a train or locomotive.
The trial court accordingly found that the driver was guilty of gross negligence and that said
negligence was the proximate cause of the accident. It also found that the driver had been,
in effect, instructed by the taxicab company to approach and pass over railroad tracks in the
manner and form followed and observed on the occasion in question, and that, for that
reason, the taxicab company was liable for the damages
caused.chanroblesvirtualawlibrary chanrobles virtual law library
Several errors are assigned by the appellant. The first one relates to the finding of the trial
court: "That the driver of the automobile did not slacken speed, which was fast, upon
approaching the railroad crossing, which was clearly visible and had to be approached on an
upward grade, or take any other precaution to avert accident. ... and I can but conclude
that the driver of the automobile was grossly negligent and careless in not taking such
precaution as would have notified him of the coming of the train. On the contrary, he
proceeded with reckless speed and regardless of possible or threatened danger. If he had
been driving the automobile at a proper rate of speed for going over railroad crossing he
could easily have stopped before going over the railroad crossing after seeing the
train."chanrobles virtual law library

The argument of the appellant which is devoted to this findings seems to admit impliedly at
least that the driver of the automobile maintained his rate of speed as he approached and
went upon the railroad crossing; and that he took no precaution to ascertain the approach
of a train.chanroblesvirtualawlibrary chanrobles virtual law library

The appellant contended on the trial and offered evidence to prove that, on approaching the
railroad crossing from the direction in which the automobile was travelling at the time, the
view of the railroad tracks in both directions was obstructed by bushes and trees growing
alongside thereof, and that it was impossible for a person approaching the crossing even
though on guard, to detect by sight the approach of a train. If that were the case, it was
clearly the duty of the driver to reduce the speed of his car and the noise thereof to such an
extent that he would be able to determine from the unrestricted and uninterrupted use of all
his faculties whether or not a train was near. It is the law that a person must use ordinary
care and prudence in passing over a railroad crossing. While we are not prepared to lay
down any absolute rule as to what precise acts of precaution are necessary to be done or
left undone by a person who may have need to pass over a railroad crossing, we may say
that it is always incumbent on him to use ordinary care and diligence. What acts are
necessary to constitute such care and diligence must depend on the circumstances of each
particular case. The degree of care differs in different cases. Greater care is necessary in
crossing a road where the cars are running at a high rate of speed and close together than
where they are running at less speed and remote from one another. But in every case due
care should be exercised. It is very possible that where, on approaching a crossing, the view
of the tracks in both directions is unobstructed for such a distance as to render it perfectly
safe to pass over without the use of any other faculty than sight, such use alone is sufficient
and it is not necessary to stop or even to slacken speed or listen. On the other hand, where
the view of the tracks is obstructed, them it is driver's duty to slacken speed, to reduce the
noise, if any, of the vehicle, to look and to listen, if necessary, or do any other act
necessary to determine that a train is not in dangerous proximity to the
crossing.chanroblesvirtualawlibrary chanrobles virtual law library

In the case at bar the appellant's own showing is to the effect that the view of the track in
the direction from which the train was coming was obstructed in such manner that neither
the track nor a train could be seen as a traveler approached the crossing; and yet, in spite
of that fact, the chauffeur drove upon the tracks without investigation or precaution of any
kind. The very fact that a train was approaching and was so near as to collide with the
automobile is strong evidence of the fact that no precautions were taken to determine that
fact. It is undoubted that if the driver had taken the simplest means of permitting his own
faculties to exercise themselves fairly, there would have been no accident, as the presence
of the train would have been discovered in an instant; but he chose, rather, to give his
senses no opportunity to protect him or his passengers and drove on the track at full speed
with all the noise which an automobile produces at such speed on an upgrade and the sense
of hearing impaired by the rush of the wind. Railroad trains rarely pass over tracks without
noise and their presence, generally speaking, is easily detected by persons who take
ordinary precautions.chanroblesvirtualawlibrary chanrobles virtual law library

Under this assignment the appellant's main effort is being to the demonstration of the fact
that there was a custom established among automobile drivers of Manila by which they
habitually drove their cars over railroad crossings in the manner in which the automobile
was driven by defendant's servant on the occasion in controversy. To prove that custom
counsel presents the evidence of the president of the defendant company, Mr. Bachrach,
who testified on the trial that all of his drivers, including the one in charge of the car on the
night of the accident, operated cars in that manner and that it was the custom among
automobile drivers generally. Counsel also cites the testimony of the witness Palido, living
near the scene of the accident, who testified that, as a general rule, automobiles passed
over the railroad crossing without changing speed. This testimony was corroborated by the
defendant company's driver who had the automobile in charge at the time of the
occurrence. Basing himself on this alleged custom counsel contends that "When a person
does what is usual and customary, i. e., proceeds as he and others engaged in a like
occupation have been accustomed to proceed, the action cannot be characterized as
reckless, nor, strictly speaking as negligent." To this the obvious reply may be made, for the
moment admitting the existence of the custom, that a practice which is dangerous to
human life cannot ripen into a custom which will protect anyone who follows it. To go upon
a railroad crossing without making any effort to ascertain the approach of a train is so
hazardous an act and one so dangerous to life, that no one may be permitted to excuse
himself who does it, provided injury result. One who performs an act so inherently
dangerous cannot, when an accident occurs, take refuge behind the plea that others have
performed the same act safely.chanroblesvirtualawlibrary chanrobles virtual law library

Under the second error assigned, the appellant contends with much vigor that the plaintiffs
cannot recover for the reason that the negligence of the driver of the automobile, if any,
was imputable to them, they having permitted the driver to approach and pass over the
railroad crossing without the use of ordinary care and diligence to determine the proximity
of a train or locomotive, and having made no effort to caution or instruct him or compel him
to take reasonable care in making the crossing. With this contention we cannot agree. We
think the better rule, and one more consonant with the weight of authority, is that a person
who hires a public automobile and gives the driver direction as to the place to which he
wishes to be conveyed, but exercise no other control over the conduct of the driver, is not
responsible for acts of negligence of the latter or prevented from recovering for injuries
suffered from a collision between the automobile and a train, caused by the negligence
either of the locomotive engineer or the automobile driver. (Little vs. Hackett, 116 U.S.,
366.) The theory on which the negligence of the driver has in some instances been imputed
to the occupant of the vehicle is that, having trusted the driver by selecting the particular
conveyance, the plaintiff so far identified himself with the owner and his servants that, in
case of injury resulting from their negligence, he was considered a party thereto. This was
the theory upon which the case of Thorogood vs. Bryan (8 C.B., 115) was decided, which is
the leading case in favor of the principle contended for by appellant. The Supreme Court of
the United States, however, in Little vs. Hackett (116 U.S., 366), had this to say concerning
the ground on which the Thorogood case was decided: "The truth is, the decision in
Thorogood vs. Bryan rests upon indefensible ground. The identification of the passenger
with the negligent driver or the owner, without his personal cooperation or encouragement,
is a gratuitous assumption. There is no such identity. The parties are not in the same
position. The owner of public conveyance is a carrier, and the driver or the servant of the
passenger, and his asserted identity with them is contradicted by the daily experience of the
world."chanrobles virtual law library
Further discussing the same question the court said: "There is no distinction in principle
whether the passenger be on public conveyance like a railroad train or an omnibus, or be on
a hack hired from a public stand in the street for a drive. Those on a hack do not become
responsible for the negligence of the driver if they exercise no control over him further than
to indicate the route they wish to travel or the places to which they wish to go. If he is their
agent so that his negligence can be imputed to them to prevent their recovery against a
third party, he must be their agent in all other respects, so far as the management of the
carriage is concerned, and responsibility to third parties would attach to them for injuries
caused by his negligence in the course of his employment. But, as we have already stated,
responsibility cannot, within any recognized rules of law, be fastened upon one who has in
no way interfered with and the with and controlled in the matter causing the injury. From
the simple fact of hiring the carriage or riding in it no such liability can arise. The party
hiring or riding must in some way have cooperated in producing the injury complained of
before he incur any liability for it. 'If the law were otherwise,' as said by Mr. Justice Depue
in his elaborate opinion in the latest case in New Jersey, 'not only the hirer of the coach but
also all the passengers in it would be under a constraint to mount the box and superintend
the conduct of the driver in the management and control of his team, or be put for remedy
exclusively to an action against the irresponsible driver or equally irresponsible owner of a
coach taken, it may be, from a coach stand, for the consequences of an injury which was
the product of the cooperating wrongful acts of the driver and of a third person, and that
too, though the passengers were ignorant of the character of the driver, and of the
responsibility of the owner of the team, and strangers to the route over which they were to
be carried.' (New York, Lake Erie & Western Railroad vs. Steinbrenner, 47 N.J.L. [18
Vroom], 161, 171.)"chanrobles virtual law library

We are of the opinion, therefore, that the rule is as we have stated it. Ordinarily where one
rides in public vehicle with the driver thereof and is injured by the negligence of a third
person, to which negligence that of the driver contributes his contributory negligence is not
imputable to the passenger unless said passenger has or is in the position to have and
exercise some control over the driver with reference to the matter wherein he was
negligent. Whether the person injured exercises any control over the conduct of the driver
further than to indicate the place to which he wishes to drive is a question of fact to be
determined by the trial court on all of the evidence in the case. (Duval vs. Railroad Co., 134
N. C., 331; Hampel vs. Detroit etc. R. R. Co., 110 Am. St. Rep., 275; Cotton vs. Willmar
etc. R. R. Co., 99 Minn., 366; Shultz vs. Old Colony Street Ry. Co., 193 Mass., 309;
Wilson vs. Puget Sound Elec. Ry. Co., 52 Wash., 522; Johnson vs. Coey, 237 Ill., 88;
Hinduvs. Steere, 209 Mass. 442.)chanrobles virtual law library

The appellant assigns as the third error the finding of the trial court "that the defendant
Manila Railroad Company was not guilty of negligence which contributed to the causing of
the accident complained of."chanrobles virtual law library

In this connection it appears that, prior to the beginning of the action now before us, two
actions were instituted, both growing out of the accident which forms the basis of the
actions before us: (1) A criminal action against the engineer of the train, in which the
engineer was acquitted; and (2) a civil action for damages by the garage and taxicab
company, the appellant herein, against the defendant railroad company, for damages to the
automobile which was destroyed as a result of the accident, in which judgment was for
defendant. There is evidence in the record showing that the locomotive engineer gave due
and timely signals on approaching the crossing in question. The trial court found that the
employees of the railroad company fully performed their duty as the train approached the
crossing on the night in question and that, therefore, the railroad company in nowise
contributed to the accident. We do not believe that the record will justify us in a reversal of
this finding. There is abundant evidence to support it and we have nothing before us by
which that evidence may be impeached. That the bell was rung and the whistle was blown
on nearing the crossing, giving due and timely warning to all persons approaching, was
testified to not only by servants of the corporation but by passengers on the train. We find
nothing in the record which materially impairs the credibility of these witnesses or to show
that their evidence is improbable or unreasonable; and we would be going far under such
circumstances in discarding it and reversing a judgment based
thereon.chanroblesvirtualawlibrary chanrobles virtual law library

The appellant under this assignment of error presents other facts which he claims show
necessarily that the company was negligent. He asserts: "(1) That this accident occurred in
the heart of the barrio of San Juan (Cavite Viejo), within approximately one hundred meters
of the railroad station, that is, in a populous community; (2) that the railroad company did
not maintain either a flagman or protecting gates at the grade crossing where the accident
occurred, while the sign "Railroad Crossing" was broken on the side toward the road; (3)
that trees and undergrowth had been permitted to grow on and adjoining the right of way
and houses were constructed thereon, in such manner as to obstruct the view of persons
approaching the railroad track until within a few meters thereof; and (4) that the approach
to the crossing is twisting, and on either side thereof are ditches about two meters
deep."chanrobles virtual law library

With respect to the existence of trees and undergrowth on the railroad company's right of
way, the evidence is conflicting, plaintiff maintaining and attempting to prove that such
trees and undergrowth existed, while defendant company contended and offered evidence
to show that no such growth existed at the time of the accident. On this conflict of evidence
the trial court found: "Evidence on the part of the defendant Bachrach Garage & Taxicab Co.
is to the effect that the view from the crossing along the track towards Manila was
obstructed by bushes growing on the railroad right to way along the track, while the
preponderance of the evidence discloses that for a distance of twelve or fifteen meters from
the a view of the track for a considerable distance is wholly unobstructed, and I can but
conclude that the driver of the unobstructed, and I can but conclude that the driver of the
automobile was grossly negligent and careless in not taking such precaution as would have
notified him of the coming of the train. On the contrary, he proceeded with reckless speed
and regardless of possible or threatened danger."chanrobles virtual law library

Here again we are met with a contradiction in the evidence of witnesses who, so far as
appears, are equally entitled to credit, which conflict has been resolved by the trial court in
favor of the witnesses for the defendant railroad company. Counsel for appellant has failed
to give any reason why we should we should accept the testimony of appellant's witnesses
rather than those of the railroad company and he has also neglected to point out any error
committed by the trial court in making its finding in this regard. A careful examination of
the record discloses no reason why the judgment of the trial court on this point should be
disturbed, there appearing nothing on which we could base a judgment declaring that the
trial court erred in making its decision.chanroblesvirtualawlibrary chanrobles virtual law
library

As to the other facts set forth on which appellant predicates negligence on the part of the
railroad company, we find them, even if admitted, to be insufficient to establish negligence.
It is not negligence on the part of the railroad company to maintain grade crossing, even in
populous district; nor is it negligence not to maintain a flagman at such crossing. It is true
that a railroad company is held to greater caution in the more thronged streets of the
densely populated portions of the city than in the less frequented streets in suburban parts
or in towns; but this does not mean that it is negligence to maintain grade crossing in such
densely populated portions or that it is negligence not to maintain a flagman at crossings
located in such districts. It simply means that the company in operating its trains over such
crossings must exercise care commensurate with the use of crossings in any given
locality.chanroblesvirtualawlibrary chanrobles virtual law library

The main contention of the appellant is based on the claim that, even admitting as proved
all of the facts alleged by the plaintiffs, the appellant is not liable. It is maintained that up to
the time the accident occurred the defendant taxicab company had fully performed its duty
to the public, it being undisputed in the record that the driver was competent and had a
long and satisfactory record, having driven cars for the defendant for 5 or 6 years without
accident or misadventure, and that his negligence, if any, in attempting to pass over the
crossing on the occasion before us, cannot legally be imputed to the taxicab company so as
to make it liable for the damages resulting therefrom. In supporting of this argument the
case of Johnson vs. David (5 Phil., Rep., 663), is cited as determinative of the question
under consideration. The appellant, however, having denied the fact of negligence, we
might, before entering on a discussion of the applicability of the principles enunciated in
Johnson vs. David to the facts before us, repeat what we have already said, that it appears
from the record, and was found by the trial court, that the driver of the automobile drove
his machine upon the railroad tracks without observing the precautions which ordinary care
and prudence would have required. He made substantially no effort toward ascertaining
whether there was danger from a train or locomotive. The trial court found, as was quite
necessary under the facts, that the driver was guilty of gross negligence and that such
negligence was the proximate cause of the accident. It also found that the taxicab company
had permitted its drivers to approach and pass over railroad tracks in the manner and form
followed and observed on the occasion in question until it had become a custom among its
drivers, known and sanctioned by the company; and that, for that reason, the taxicab
company was liable for the damages caused. We are of the opinion that the trial court is
fully supported in the finding that the conduct of the officials of the taxicab company, and
notably the president thereof, amounted, in law, to a sanction of the custom established
among its automobile drivers in passing over railroad crossings. Counsel is met, therefore,
at the opening of his discussion on this branch of the case, with the question: Did the
defendant taxicab company fully discharge its duty when it furnished a suitable and proper
car and selected driver who had been with the company for 5 or 6 years and who had not
had an accident or misadventure before? We think not. It was the duty of the company not
only to furnish a suitable and proper car and select a competent operator, but also to
supervise and, where necessary, instruct him
properly.chanroblesvirtualawlibrary chanrobles virtual law library

Returning now to the applicability of the case of Johnson vs. David to the facts before
us:chanrobles virtual law library

The Civil Code, in dealing with the liability of a master for the negligent acts of his servant,
makes a distinction between private individuals and public enterprises. (Art. 1903, Civil
Code.) That article, together with the preceding article, is as follows:

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.chanroblesvirtualawlibrary chanrobles virtual law library
ART. 1903. The obligation imposed by the preceding article is demandable, not only for
personal acts and omissions, but also for the persons for whom they should be
responsible.chanroblesvirtualawlibrary chanrobles virtual law library

The father, and on his death or incapacity the mother is liable for the damages caused by
the minors who live with them.chanroblesvirtualawlibrary chanrobles virtual law library

Guardians are liable for the damages caused by minors or incapacitated persons who are
under their authority and live with them.chanroblesvirtualawlibrary chanrobles virtual law
library

Owners or directors of an establishment or enterprise are equally liable for the damages
caused by their employees in the service of the branches in which the latter may be
employed or on account of their duties.chanroblesvirtualawlibrary chanrobles virtual law
library

The State is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the act
performed, in which case the provisions of the proceeding article shall be
applicable.chanroblesvirtualawlibrary chanrobles virtual law library

Finally, master or directors of arts and trades are liable for the damages caused by their
pupils or apprentices while they are under their
custody.chanroblesvirtualawlibrary chanrobles virtual law library

The liability referred to in this articles 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.

These two articles are found under chapter 2, title 16, of the Civil Code, dealing with
"obligations which arise from fault or negligence;" and set out the cases, generally
speaking, in which the master is liable for the acts of his servant. That chapter also contains
articles providing for liability for negligent acts of servants in special cases, among them
1905, which provides that "the possessor of an animal, or the one who uses it, is liable for
the damages it may cause even when said animal escapes from him or strays," but that this
liability shall cease "in the case the damage should arise from force majeure or from the
fault of the person who may have suffered it;" 1906, which declares that "the owner of a
game preserve shall be liable for damages caused by the game to neighboring estates,
should he not have done what may have been necessary to avoid increase of the same or
should he have hindered the efforts of the owners of said estates to hunt;" 1907, which
provides for the liability of the owner of a building "for damages which may result from the
collapse of the whole or a part thereof, if it should occur through the absence of necessary
repairs;" 1908, which states that "owners shall be liable for damages caused by the
explosion of machines which may not have been cared for with due diligence, and been
placed in a safe and proper place;" "by excessive smoke, which may be noxious to persons
of property;" "by the fall of trees, located in places of transit, when not caused by force
majeure;" "by the emanations of sewers or deposits of infectious matters, when constructed
without precautions proper for the place where they are located;" and "the head of a family
who dwells in a house, or in a part of the same, is liable for the damages by the things
which may be thrown or which may fall therefrom."chanrobles virtual law library

These are the only cases under the Civil Code in which damages may be recovered from the
master for the negligent of his servant. As is seen from a reading of article 1903, a person
being driven about by his servant's negligent acts except under certain circumstances.
(Chapman vs. Underwood, 27 Phil., Rep., 374; Johnson vs. David, supra.) On the other
hand, the master is liable for the negligent acts of his servant where he is the owner or
director of a business or enterprise and the negligent acts are committed while the servant
is engaged in his master's employment as such owner.chanroblesvirtualawlibrary chanrobles
virtual law library

The distinction made in the Code has been observed, as would naturally be expected, by the
decisions of this court. In the case of Johnson vs. David, supra, we held that the defendant
was not liable for the acts of his servant in negligently driving a horse and carriage against
plaintiff, who was at the time riding a bicycle in the streets of Manila, throwing him to the
ground and injuring him and his bicycle. It appeared in that case that the vehicle was
owned by the defendant, that it was being driven by the defendant's coachman on the
private affairs of the owner, that it was not a public conveyance driven for hire or as a part
of a business or enterprise. In that case we said: "It would seem, from an examination of
these various provisions, that the obligation to respond for the negligent acts of another
was limited to the particular cases mentioned; in other words, we are of the opinion and so
hold that it was the intention of the legislature in enacting said chapter 2 to enumerate all
the persons for whose negligent acts third persons are responsible. Article 1902 provides
when a person himself is liable for negligence. Articles 1903, 1904, 1905, 1906, 1907,
1908, and 1910 provide when a person shall be liable for injuries caused, not by his own
negligence but by the negligence of other persons or things.

xxx xxx xxx

These sections do not include a liability on the part of the plaintiff for injuries resulting from
acts of negligence such as are complained of in the present cause . . . ."chanrobles virtual
law library

These case of Chapman vs. Underwood, (27 Phil., Rep., 374) was similar in its facts and the
principles governing it, to that of Johnson vs. David. In that case the plaintiff, while about to
board a street car, was struck by an automobile which, at the time, was being driven on the
wrong side of the street. The automobile was in charge of the servant of the owner, who
was present in the automobile at the time the accident occurred. The automobile was not a
part of defendant's business nor was it being used at the time as a part or adjunct of any
business or enterprise owned or conducted by him. Although the act of the driver was
negligent, and was so declared by this court, it was, nevertheless, held that the master was
not liable for the results of the act. We said:

The defendant, however, is not responsible for the negligence of his driver, under the facts
and circumstances of this case. As we have said in the case of Johnson vs. David (5 Phil.,
Rep., 663), the driver does not fall within the list of person in article 1903 of the Civil Code
for whose acts the defendant would be responsible.chanroblesvirtualawlibrary chanrobles
virtual law library

Although in the David case the owner of the vehicle was not present at the time the alleged
negligent acts were committed by the driver, the same rule applies where the owner is
present, unless the negligent acts of the driver are continued for such a length of time as to
give the owner a reasonable opportunity to observe them and to direct his driver to desist
therefrom. An owner who sits in his automobile, or other vehicle, and permits his driver to
continue in a violation of the law by the performance of negligent acts, after he has had a
reasonable opportunity to observe them and to direct that the driver, becomes himself
responsible for such acts. The owner of an automobile who permits his chauffeur to drive up
the Escolta, for example, at a speed of 60 miles an hour, without any effort to stop him,
although he has had a reasonable opportunity to do so, becomes himself responsible, both
criminally and civilly, for the results produced by the acts of his chauffeur. On the other
hand, if the driver, by a sudden act of negligence, and without the owner having a
reasonable opportunity to prevent the act or its continuance, injures a person or violates the
criminal law, the owner of the automobile, although present therein at the time the act was
committed, is not responsible, either civilly or criminally, therefor. The act complained of
must be continued in the presence of the owner for such a length of time that the owner, by
his acquiescence, makes his driver's act his own.chanroblesvirtualawlibrary chanrobles
virtual law library

In the case before us it does not appear from the record that, from the time the automobile
took the wrong side of the road to the commission of the injury, sufficient time intervened
to afford the defendant an opportunity correct the act of his driver. Instead, it appears with
fair clearness that the interval between the turning out to meet and pass the street car and
the happening of the accident was so short as not to be sufficient to charge defendant with
the negligence of the driver.

The case of Bahia vs. Litonjua and Leynes (30 Phil., Rep., 624), was a case of a different
character. There an automobile was being operated by the defendant as a public vehicle
carrying passengers from Balayan to Tuy (Province of Batangas) and return for hire. On one
to the trips, the machine, by reason of a defect in the steering gear, refused to respond to
the guidance of the driver and, as a result a child was run over and killed. That case, as is
seem at a glance, is quite different from the case of Johnson vs. David and that of
Chapman vs. Underwood, in that the automobile was operated as a business or enterprise
on which the defendant had entered for gain; and this is the particular distinction which is
made in article 1903 of the Civil Code which holds the masters responsible for the negligent
acts of the servant when the master is the owner "of an establishment or enterprise," and
the acts complained of are committed within the scope of the servant's employment in such
business. In the case under discussion we held that, in addition to the requirement to
furnish and use proper and safe machines, it was the duty of a person or corporation
operating automobiles for hire to exercise ordinary care and diligence in the selection of the
drivers of his or its automobiles and in supervision over them while in his or its employ,
including the promulgation of proper rules and regulations and the formulation and due
publication of proper instructions for their guidance in cases where such rules, regulations
and the formulation and due publication of proper instructions for their guidance in cases
where such rules, regulations and instruction are necessary. Discussion article 1903 of the
Civil Code, which, as we have seen, not only established liability in case of negligence but
also provides when that liability ceases, the court in that case said:

From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in the selection of the selection
of the servant or employee or in supervision over him after the selection, or both; and (2)
that that presumption is juris tantum and not juris et de jure and consequently may be
rebutted. It follows necessarily that if the employer shows to the satisfaction of the court
that in selection and supervision he has exercised the care and diligence of a good father of
a family, the presumption is overcome and he is relieved from
liability.chanroblesvirtualawlibrary chanrobles virtual law library
This theory bases the responsibility of the master ultimately on his own negligence and not
on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is,
of course, in striking contrast to the American doctrine that, in relations with strangers, the
negligence of the servant is conclusively the negligence of the
master.chanroblesvirtualawlibrary chanrobles virtual law library

In the case before us the death of the child caused by a defect in the steering gear of the
automobile immediately raised the presumption that Leynes was negligent in selecting a
defective automobile or in his failure to maintain it in good condition after selection and the
burden of proof was on him to show that he had exercised the care of a good father of a
family.

In that case we further said: "From the commencement of the use of the machine until the
accident occurred sufficient time had not elapsed to require an examination of the machine
by the defendant as a part of his duty of inspection and supervision. While it does not
appear that the defendant formulated rules and regulations for the guidance of the drivers
and gave them proper instructions, designed for the protection of the public and the
passengers, the evidence shows, as we have seen, that the death of the child was not
caused by a failure to promulgate rules and regulations. It was caused by a defect in the
machine as to which the defendant has shown himself free from responsibility."chanrobles
virtual law library

We, therefore, see that taxicab company did not perform its full duty when it furnished a
safe and proper car and a driver with a long and satisfactory record. It failed to comply with
one of the essential requirements of the law of negligence in this jurisdiction, that of
supervision and instruction, including the promulgation of proper rules and regulations and
the formulation and publication of proper instructions for their guidance in cases where such
rules and regulations and instructions are necessary. To repeat, it was found by the trial
court, and that finding is fully sustained by the record, that it was the custom of the driver
who operated the machine on the night of the accident, to approach and pass over railroad
crossings without adequate precautions, and that such custom was known to and had been
sanctioned by the officials of the taxicab company, the president of the company testifying
that none of its drivers, especially the one who operated the car on the night of the
accident, were accustomed to stop or even reduce speed or take any other precaution in
approaching and passing over railroad crossings, no matter of what nature, unless they
heard "the signal of a car." He testified that he himself had ridden behind several of his
drivers, among them the one who handled the automobile on the night of the accident, and
that it was settled practice, to which he made no objection and as to which he gave no
instructions, to approach and pass over railroad crossings without any effort to ascertain the
proximity of a train. These facts and circumstances bring the case within the doctrine
enunciated in the Litonjua case to which reference has already been made, and, at the
same time, remove it from that class of cases governed by Johnson vs. David. Not only has
the defendant taxicab company failed to rebut the presumption of negligence arising from
the carelessness of its servant, but it has, in effect, made those negligent acts its own by
having observed and known the custom of its drivers without disapproving it and without
issuing instructions designed to supersede it.chanroblesvirtualawlibrary chanrobles virtual
law library

We are of the opinion that the trial court erred in fixing the amount of damages which the
plaintiffs suffered. Under the law, each of the plaintiffs, is entitled to recover the time,
doctors' bills and hospital bills and hospital bills and medicines, and any other item of
expense which it was found necessary to undergo by reason of the damages
sustained.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff Butaro Yamada is entitled to be reimbursed for his hospital bill of P49, for the
P50 which he paid to Dr. Strahan, and for the loss of time which he suffered at the rate of
P100 a month. The trial court allowed him for certain alleged fees of doctors and expenses
in hospitals and at hot springs in Japan. He was also allowed P150 alleged by him to have
been paid to a Japanese doctor in Manila. We do not believe that the record warrants these
allowances. As to the expenses in Japan, we may say that the injury occurred to plaintiff on
the 2nd of January and he remained in Manila for nearly 6 months before going to Japan.
According to the testimony of Dr. Strahan the plaintiff was in good physical condition long
before he left this country for Japan. His testimony is to the effect that the plaintiff suffered
no permanent injuries, the damage being limited to temporary shocks and bruises, and that
he would be ready for his usual occupation in about 3 months. According to plaintiff's own
testimony he went back to work 2 months after the injury, but, claiming he still felt pains,
went to Japan. We do not believe that we ought to accept the plaintiff's bare statement as
to his physical condition after leaving the Philippine Islands in defiance of the testimony of
Dr. Strahan as to his physical condition 3 months after the injury was received and
particularly in view of the fact that he returned to work at the end of 2 months. As to the
P150 alleged to have been paid to a Japanese doctor in Manila, we have grave doubts
whether he had sufficiently proved that item of expenditure. He does not give the name of
the physician to whom he paid the money and he presents no receipt or voucher from the
person whom he paid. He made no memorandum of the payment at the time or of the
person to whom he paid it or of the date on which it was paid. All of his testimony relating
to the items which constitute his damage was based on a memorandum made from memory
on the morning of the trial. It seems to us that where the sources of knowledge are to so
large an extent within the knowledge and control of the person who presents the evidence,
he should be held rather strictly to presenting the best evidence that the circumstances
permit. If he had offered the Japanese doctor as a witness or if he had even produced
receipts from him, the matter would have borne quite a different
aspect.chanroblesvirtualawlibrary chanrobles virtual law library

We are accordingly of the opinion that the judgment in favor of this plaintiff should consist
simply of the loss of time, amounting to 2 months at P100 a month, his hospital bill of P49
and his doctor's bill of P50, in all P299, with costs.chanroblesvirtualawlibrary chanrobles
virtual law library

With respect to the plaintiff Takutaru Uyehara, the judgment in his favor must be also
modified. Concerning his condition we have substantially the same testimony by the same
doctor that we had in the case of Yamada. There were no permanent injuries. The plaintiff
suffered merely from shock and bruises. He was quite recovered in 3 months. It appears
that he was earning P200 a month at the time of his injury and that his hospital expense,
including attendance of a physician, was P350. We are satisfied from the record that he is
entitled to P600 for 3 months' loss of wages and to P350 for hospital expenses and medical
attendance. As to the claim for P150 paid to a Japanese doctor, we have in substance the
same circumstances found in connection with the claim of the plaintiff Yamada, - no name,
no date, no memorandum, no receipt; nothing but the testimony of the plaintiff himself
based upon date prepared from memory. It is worthy of note also that both this plaintiff and
plaintiff Yamada claim to have paid exactly the same amount to Japanese doctors in
Manila.chanroblesvirtualawlibrary chanrobles virtual law library
Judgment is hereby rendered in favor of the plaintiff Takutaru Uyehara for the sum of P950,
and costs.chanroblesvirtualawlibrary chanrobles virtual law library

With respect to the judgment in favor of the plaintiff Kenjiro Karabayashi, we are clear that
it must be reduced in amount. This plaintiff was able, immediately after the accident
occurred, to move about readily an to assist his injured companions. He did not go to a
hospital, or, so far as appeared, consult a physician until some time after the accident. He
alleges that he paid to Japanese doctors P310 and to massage doctors P130, and that he
paid P365 for medicines. The injury was received on the 2d of January, 1913, and this
caution was commenced in October of the same year. It seem to us incredible that the
plaintiff, who suffered and suffers from no physical injury testified to by any physician,
should have paid out during that time more than P800 for medicines and doctors. That sum
exceeds the sums claimed to have been paid out by the other plaintiffs, who were so badly
injured that they were carried in a semiconscious condition to the hospital and were unable
to move without assistance for some days.chanroblesvirtualawlibrary chanrobles virtual law
library

This plaintiff complains of loss of memory as the only result of his injuries and claims that
he is unable to obtain a salary equivalent to that which he was receiving before the
accident. He presents no evidence of such loss of memory except his own statement, his
physical condition at the time of the trial being apparently perfect and there being at that
time no evidence, as he himself admitted, of loss of memory. He presented no doctor to
testify as to services rendered, indeed, he does not even furnish the name of the person to
whom the money was paid, and he shows no receipts and produces no evidence except his
own statement with respect to the amount paid out for medicines. We believe that, under
this testimony, no damages should be allowed to this plaintiff except possibly salary for the
short period during which, by reason of shock, he may have been unable to render active
service. He testified that he lost two and one-half months' time, during which he did not
work at all, and that his services were worth P160 a
month.chanroblesvirtualawlibrary chanrobles virtual law library

The judgment of the Court of First Instance with respect to this plaintiff, Kenjiro
Karabayashi, is modified and judgment in his favor and against the Bachrach Garage &
Taxicab Co. for P400 is hereby decreed, with costs.chanroblesvirtualawlibrary chanrobles
virtual law library

It may be urged that the reductions in the amounts allowed the several plaintiffs by the trial
court are arbitrary, the evidence as to the damages sustained being uncontradicted and the
trial court having based its judgment thereon. It is clear, however, that we are in no way
interfering with the rule so many times laid down by this court that we will not interfere with
the judgment of the trial court as to the credibility of witnesses except where it appears that
the court overlooked or misapplied facts or circumstances of weight and influence appearing
in the case. Here the trial court seems to have overlooked those facts and circumstances
top which we have adverted and which we have made the basis of the modification. It
nowhere appears in the decision of the trial court or elsewhere in the record that it took any
of those facts and circumstances into consideration. So
ordered.chanroblesvirtualawlibrary chanrobles virtual law library
 [G.R. Nos. 79050-51. November 14, 1989.]

PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru

her personal guardian FRANCISCA O. BASCOS, FE O. ICO, in her behalf and in
behalf of her minor children, namely ERWIN, OLIVE, EDMUNDO and SHARON
ICO, Respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. — The
doctrine of last clear chance applies only in a situation where the defendant, having the last
fair chance to avoid the impending harm and failed to do so, becomes liable for all the
consequences of the accident notwithstanding the prior negligence of the plaintiff.

2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that the doctrine
of last clear chance may be applied, it must be shown that the person who allegedly had the
last opportunity to avert the accident was aware of the existence of the peril or with
exercise of due care should have been aware of it.

3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY

AVAILABLE MEANS. — This doctrine of last chance has no application to a case where a
person is to act instantaneously, and if the injury cannot be avoided by using all means
available after the peril is or should have been discovered.

4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY
OR A STOP INTERSECTION. — Section 43 (c), Article III, Chapter IV of Republic Act No.
1436 cannot apply to case a bar where at the time of the accident, the jeepney had already
crossed the intersection.

5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A finding of

negligence on the part of the driver establishes a presumption that the employer has been
negligent and the latter has the burden of proof that it has exercised due negligence not
only in the selection of its employees but also in adequately supervising their work.

6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. —

Plaintiff’s failure to present documentary evidence to support their claim for damages for
loss of earning capacity of the deceased victim does not bar recovery of the damages, if
such loss may be based sufficiently on their testimonies.

7. ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a person was
fixed by this Court at (P30,000.00).

DECISION

CORTES, J.:
In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the
decision of the Court of Appeals in CA-G.R. No. 05494-95 which affirmed the decisions of
the Court of First Instance of Rosales, Pangasinan in Civil Case No. 561-R and Civil Case No.
589-R wherein PANTRANCO was ordered to pay damages and attorney’s fees to herein
private respondents.chanrobles virtual lawlibrary

The pertinent fact are as follows:chanrob1es virtual 1aw library

At about 7:00 o’clock in the morning of June 12, 1981, the spouses Ceasar and Marilyn
Baesa and their children Harold Jim, Marcelino and Maricar, together with spouses David Ico
and Fe O. Ico with their son Erwin Ico and seven other persons, were aboard a passenger
jeepney on their way to a picnic at Malalam River, Ilagan, Isabela, to celebrate the fifth
wedding anniversary of Ceasar and Marilyn Baesa.

The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David
Ico, who was also the registered owner thereof. From Ilagan, Isabela, they proceeded to
Barrio Capayacan to deliver some viands to one Mrs. Bascos and thenceforth to San Felipe,
taking the highway going to Malalam River. Upon reaching the highway, the jeepney turned
right and proceeded to Malalam River at a speed of about 20 kph. While they were
proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on its regular
route to Manila, encroached on the jeepney’s lane while negotiating a curve, and collided
with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their
children, Harold Jim and Marcelino Baesa, died while the rest of the passengers suffered
injuries. The jeepney was extensively damaged. After the accident the driver of the
PANTRANCO Bus, Ambrosio Ramirez, boarded a car and proceeded to Santiago, Isabela.
From that time on up to the present, Ramirez has never been seen and has apparently
remained in hiding.

All the victims and/or their surviving heirs except herein private respondents settled the
case amicably under the "No Fault" insurance coverage of PANTRANCO.

Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for
her minor children, filed separate actions for damages arising from quasi-delict against
PANTRANCO, respectively docketed as Civil Case No. 561-R and 589-R of the Court of First
Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico’s alleged negligence as
the proximate cause of the accident, invoked the defense of due diligence in the selection
and supervision of its driver, Ambrosio Ramirez.chanroblesvirtualawlibrary

On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding
the total amount of Two Million Three Hundred Four Thousand Six Hundred Forty-Seven
(P2,304,647.00) as damages, plus 10% thereof as attorney’s fees and costs to Maricar
Baesa in Civil Case No. 561-R, and the total amount of Six Hundred Fifty Two Thousand Six
Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as attorney’s
fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases were
consolidated and the Court of Appeals modified the decision of the trial court by ordering
PANTRANCO to pay the total amount of One Million One Hundred Eighty-Nine Thousand
Nine Hundred Twenty Seven Pesos (P1,189,927.00) as damages, plus Twenty Thousand
Pesos (P20,000.00) as attorney’s fees to Maricar Baesa, and the total amount of Three
Hundred Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos (P10,000.00)
as attorney’s fees to Fe Ico and her children, and to pay the costs in both cases. The
dispositive portion of the assailed decision reads as follows:chanrob1es virtual 1aw library

WHEREFORE, the decision appealed from is hereby modified by ordering the defendant
PANTRANCO North Express, Inc. to pay:chanrob1es virtual 1aw library

I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following
damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of Ceasar Baesa — P30,000.00;

B) As compensatory damages for the death of Marilyn Baesa — P30,000.00;

C) As compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa —
P30,000.00;

D) For the loss of earnings of Ceasar Baesa — P630,000.00;

E) For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F) For the burial expenses of the deceased Ceasar and Marilyn Baesa — P41,200.00;

G) For hospitalization expenses of Maricar Baesa — P3,727.00;

H) As moral damages — P50,000.00;

I) As attorney’s fees — P20,000.00;

II. The plaintiffs in Civil Case No. 589-R, the following damages:chanrob1es virtual 1aw
library

A) As compensatory damages for the death of David Ico — P30,000.00;

B) For loss of earning capacity of David Ico — P252,000.00;

C) As moral damages for the death of David Ico and the injury of Fe Ico — P30,000.00

D) As payment for the jeepney — P20,000.00;

E) For the hospitalization of Fe Ico — P12,000.000;

F) And for attorney’s fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and
the medical expenses in the sum of P3,273.55, should be deducted from the award in her
favor.chanrobles virtual lawlibrary

All the foregoing amounts herein awarded except the costs shall earn interest at the legal
rate from date of this decision until fully paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.]
PANTRANCO filed a motion for reconsideration of the Court of Appeal’s decision, but on June
26, 1987, it denied the same for lack of merit. PANTRANCO then filed the instant petition for
review.

Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance"
against the jeepney driver. Petitioner claims that under the circumstances of the case, it
was the driver of the passenger jeepney who had the last clear chance to avoid the collision
and was therefore negligent in failing to utilize with reasonable care and competence his
then existing opportunity to avoid the harm.

The doctrine of the last clear chance was defined by this Court in the case of Ong v.
Metropolitan Water District, 104 Phil. 397 (1958), in this wise:chanrob1es virtual 1aw
library

The doctrine of the 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.

The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent
negligence but the defendant, who had the last fair chance to avoid the impending harm
and failed to do so, is made liable for all the consequences of the accident notwithstanding
the prior negligence of the plaintiff [Picart v. Smith, 37 Phil. 809 (1918); Glan People’s
Lumber and Hardware, Et. Al. v. Intermediate Appellate Court, Cecilia Alferez Vda. de
Calibo, Et Al., G.R. No. 70493, May 18, 1989]. The subsequent negligence of the defendant
in failing to exercise ordinary care to avoid injury to plaintiff becomes the immediate or
proximate cause of the accident which intervenes between the accident and the more
remote negligence of the plaintiff, thus making the defendant liable to the plaintiff [Picart v.
Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a defendant
liable to a plaintiff who was guilty of prior or antecedent negligence, although it may also be
raised as a defense to defeat claim for damages.chanrobles lawlibrary : rednad

To avoid liability for the negligence of its driver, petitioner claims that the original
negligence of its driver was not the proximate cause of the accident and that the sole
proximate cause was the supervening negligence of the jeepney driver David Ico in failing
to avoid the accident. It is petitioner’s position that even assuming arguendo, that the bus
encroached into the lane of the jeepney, the driver of the latter could have swerved the
jeepney towards the spacious dirt shoulder on his right without danger to himself or his
passengers.

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner’s contention, the doctrine of "last clear chance" finds no
application in this case. For the doctrine to be applicable, it is necessary to show that the
person who allegedly had the last opportunity to avert the accident was aware of the
existence of the peril or should, with exercise of due care, have been aware of it. One
cannot be expected to avoid an accident or injury if he does not know or could not have
known the existence of the peril. In this case, there is nothing to show that the jeepney
driver David Ico knew of the impending danger. When he saw at a distance that the
approaching bus was encroaching on his lane, he did not immediately swerve the jeepney to
the dirt shoulder on his right since he must have assumed that the bus driver will return the
bus to its own lane upon seeing the jeepney approaching from the opposite direction. As
held by this Court in the case of Vda. De Bonifacio v. BLTB, G.R. No. L-26810, August 31,
1970, 34 SCRA 618, a motorist who is properly proceeding on his own side of the highway
is generally entitled to assume that an approaching vehicle coming towards him on the
wrong side, will return to his proper lane of traffic. There was nothing to indicate to David
Ico that the bus could not return to its own lane or was prevented from returning to the
proper lane by anything beyond the control of its driver. Leo Marantan, an alternate driver
of the Pantranco bus who was seated beside the driver Ramirez at the time of the accident,
testified that Ramirez had no choice but to swerve the steering wheel to the left and
encroach on the jeepney’s lane because there was a steep precipice on the right [CA
Decision, p. 2; Rollo, p. 45]. However, this is belied by the evidence on record which clearly
shows that there was enough space to swerve the bus back to its own lane without any
danger [CA Decision, p. 7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time of the
accident the Pantranco bus was speeding towards Manila [CA Decision, p. 2; Rollo, p. 45].
By the time David Ico must have realized that the bus was not returning to its own lane, it
was already too late to swerve the jeepney to his right to prevent an accident. The speed at
which the approaching bus was running prevented David Ico from swerving the jeepney to
the right shoulder of the road in time to avoid the collision. Thus, even assuming that the
jeepney driver perceived the danger a few seconds before the actual collision, he had no
opportunity to avoid it. This Court has held that 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" [Ong v. Metropolitan Water District, supra].chanrobles.com : virtual law library

Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c),
Article III Chapter IV of Republic Act No. 4136 * which provides that the driver of a vehicle
entering a through highway or a stop intersection shall yield the right of way to all vehicles
approaching in either direction on such through highway.

Petitioner’s misplaced reliance on the aforesaid law is readily apparent in this case. The
cited law itself provides that it applies only to vehicles entering a through highway or a stop
intersection. At the time of the accident, the jeepney had already crossed the intersection
and was on its way to Malalam River. Petitioner itself cited Fe Ico’s testimony that the
accident occurred after the jeepney had travelled a distance of about two (2) meters from
the point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the witness for the
petitioner, Leo Marantan, testified that both vehicles were coming from opposite directions
[CA Decision, p. 7; Rollo, p. 50], clearly indicating that the jeepney had already crossed the
intersection.

Considering the foregoing, the Court finds that the negligence of petitioner’s driver in
encroaching into the lane of the incoming jeepney and in failing to return the bus to its own
lane immediately upon seeing the jeepney coming from the opposite direction was the sole
and proximate cause of the accident without which the collision would not have occurred.
There was no supervening or intervening negligence on the part of the jeepney driver which
would have made the prior negligence of petitioner’s driver a mere remote cause of the
accident.
 II

On the issue of its liability as an employer, petitioner claims that it had observed the
diligence of a good father of a family to prevent damage, conformably to the last paragraph
of Article 2180 of the Civil Code. Petitioner adduced evidence to show that in hiring its
drivers, the latter are required to have professional driver’s license and police clearance.
The drivers must also pass written examinations, interviews and practical driving tests, and
are required to undergo a six-month training period. Rodrigo San Pedro, petitioner’s
Training Coordinator, testified on petitioner’s policy of conducting regular and continuing
training programs and safety seminars for its drivers, conductors, inspectors and
supervisors at a frequency rate of at least two (2) seminars a month.

On this point, the Court quotes with approval the following findings of the trial court which
was adopted by the Court of Appeals in its challenged decision:chanrob1es virtual 1aw
library

When an injury is caused by the negligence of an employee, there instantly arises a

presumption that the employer has been negligent either in the selection of his employees
or in the supervision over their acts. Although this presumption is only a disputable
presumption which could be overcome by proof of diligence of a good father of a family, this
Court believes that the evidence submitted by the defendant to show that it exercised the
diligence of a good father of a family in the case of Ramirez, as a company driver is far from
sufficient. No support evidence has been adduced. The professional driver’s license of
Ramirez has not been produced. There is no proof that he is between 25 to 38 years old.
There is also no proof as to his educational attainment, his age, his weight and the fact that
he is married or not. Neither are the result of the written test, psychological and physical
test, among other tests, have been submitted in evidence [sic]. His NBI or police clearances
and clearances from previous employment were not marked in evidence. No evidence was
presented that Ramirez actually and really attended the seminars. Vital evidence should
have been the certificate of attendance or certificate of participation or evidence of such
participation like a logbook signed by the trainees when they attended the seminars. If such
records are not available, the testimony of the classmates that Ramirez was their classmate
in said seminar (should have been presented) [CA Decision, pp. 8-9; Rollo, pp. 51-
52].chanrobles law library

Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its
driver only means that he underwent the same rigid selection process and was subjected to
the same strict supervision imposed by petitioner on all applicants and employees. It is
argued by the petitioner that unless proven otherwise, it is presumed that petitioner
observed its usual recruitment procedure and company polices on safety and efficiency
[Petition, p. 20; Rollo, p. 37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the
presumption of negligence on the part of petitioner and the burden of proving that it
exercised due diligence not only in the selection of its employees but also in adequately
supervising their work rests with the petitioner [Lilius v. Manila Railroad Company, 59 Phil.
758 (1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA 623]. Contrary to
petitioner’s claim, there is no presumption that the usual recruitment procedures and safety
standards were observed. The mere issuance of rules and regulations and the formulation of
various company policies on safety, without showing that they are being complied with, are
not sufficient to exempt petitioner from liability arising from the negligence of its employee.
It is incumbent upon petitioner to show that in recruiting and employing the erring driver,
the recruitment procedures and company policies on efficiency and safety were followed.
Petitioner failed to do this. Hence, the Court finds no cogent reason to disturb the finding of
both the trial court and the Court of Appeals that the evidence presented by the petitioner,
which consists mainly of the uncorroborated testimony of its Training Coordinator, is
insufficient to overcome the presumption of negligence against petitioner.cralawnad

III

On the question of damages, petitioner claims that the Court of Appeals erred in fixing the
damages for the loss of earning capacity of the deceased victims. Petitioner assails
respondent court’s findings because no documentary evidence in support thereof, such as
income tax returns, pay-rolls, pay slips or invoices obtained in the usual course of business,
were presented [Petition, p. 22; Rollo, p. 39]. Petitioner argues that the "bare and self-
serving testimonies of the wife of the deceased David Ico and the mother of the deceased
Marilyn Baesa . . . have no probative value to sustain in law the Court of Appeals’ conclusion
on the respective earnings of the deceased victims." [Petition, pp. 21-22; Rollo, pp. 38-39.]
It is petitioner’s contention that the evidence presented by the private respondent does not
meet the requirements of clear and satisfactory evidence to prove actual and compensatory
damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the amount
of damages for the loss of earning capacity of the deceased victims. While it is true that
private respondents should have presented documentary evidence to support their claim for
damages for loss of earning capacity of the deceased victims, the absence thereof does not
necessarily bar the recovery of the damages in question. The testimony of Fe Ico and
Francisca Bascos as to the earning capacity of David Ico, and the spouses Baesa,
respectively, are sufficient to establish a basis from which the court can make a fair and
reasonable estimate of the damages for the loss of earning capacity of the three deceased
victims. Moreover, in fixing the damages for loss of earning capacity of a deceased victim,
the court can consider the nature of his occupation, his educational attainment and the
state of his health at the time of death.

In the instant case, David Ico was thirty eight (38) years old at the time of his death in
1981 and was driving his own passenger jeepney. The spouses Ceasar and Marilyn Baesa
were both thirty (30) years old at the time of their death. Ceasar Baesa was a commerce
degree holder and the proprietor of the Cauayan Press, printer of the Cauayan Valley
Newspaper and the Valley Times at Cauayan, Isabela. Marilyn Baesa graduated as a nurse
in 1976 and at the time of her death, was the company nurse, personnel manager,
treasurer and cashier of the Ilagan Press at Ilagan, Isabela. Respondent court duly
considered these factors, together with the uncontradicted testimonies of Fe Ico and
Francisca Bascos, in fixing the amount of damages for the loss of earning capacity of David
Ico and the spouses Baesa.chanrobles.com:cralaw:red

However, it should be pointed out that the Court of Appeals committed error in fixing the
compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa. Respondent
court awarded to plaintiff (private respondent) Maricar Baesa Thirty Thousand Pesos
(P30,000.00) as "compensatory damages for the death of Harold Jim Baesa and Marcelino
Baesa." [CA Decision, p. 14; Rollo, 57]. In other words, the Court of Appeals awarded only
Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold Jim Baesa and
another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa. This is
clearly erroneous. In the case of People v. de la Fuente, G.R. Nos. 63251-52, December 29,
1983, 126 SCRA 518, the indemnity for the death of a person was fixed by this Court at
Thirty Thousand Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore be awarded
Sixty Thousand Pesos (P60,000.00) as indemnity for the death of her brothers, Harold Jim
Baesa and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the death of each
brother.

The other items of damages awarded by respondent court which were not challenged by the
petitioner are hereby affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent
Court of Appeals is hereby AFFIRMED with the modification that the amount of
compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa are
increased to Thirty Thousand Pesos (P30,000.00) each.chanrobles law library

SO ORDERED.

Fernan (C.J.), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

RAYMUNDO ODANI SECOSA, EL BUENASENSO SY and DASSAD
WAREHOUSING and PORT SERVICES, INCORPORATED, petitioners, vs. HEIRS
OF ERWIN SUAREZ FRANCISCO, respondents.

DECISION
YNARES-SANTIAGO, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking the reversal of
the decision[1] of the Court of Appeals dated February 27, 2003 in CA-G.R. CV No. 61868,
which affirmed in toto theJune 19, 1998 decision[2] of Branch 20 of the Regional Trial Court
of Manila in Civil Case No. 96-79554.
The facts are as follows:
On June 27, 1996, at around 4:00 p.m., Erwin Suarez Francisco, an eighteen year old
third year physical therapy student of the Manila Central University, was riding a motorcycle
along Radial 10 Avenue, near the Veteran Shipyard Gate in the City of Manila. At the same
time, petitioner, Raymundo Odani Secosa, was driving an Isuzu cargo truck with plate number
PCU-253 on the same road. The truck was owned by petitioner, Dassad Warehousing and Port
Services, Inc.
Traveling behind the motorcycle driven by Francisco was a sand and gravel truck, which
in turn was being tailed by the Isuzu truck driven by Secosa. The three vehicles were
traversing the southbound lane at a fairly high speed. When Secosa overtook the sand and
gravel truck, he bumped the motorcycle causing Francisco to fall. The rear wheels of the Isuzu
truck then ran over Francisco, which resulted in his instantaneous death. Fearing for his life,
petitioner Secosa left his truck and fled the scene of the collision. [3]
Respondents, the parents of Erwin Francisco, thus filed an action for damages against
Raymond Odani Secosa, Dassad Warehousing and Port Services, Inc. and Dassads president,
El Buenasucenso Sy.The complaint was docketed as Civil Case No. 96-79554 of the RTC
of Manila, Branch 20.
On June 19, 1998, after a full-blown trial, the court a quo rendered a decision in favor of
herein respondents, the dispositive portion of which states:

WHEREFORE, premised on the foregoing, judgment is hereby rendered in favor of the

plaintiffs ordering the defendants to pay plaintiffs jointly and severally:

1. The sum of P55,000.00 as actual and compensatory damages;

2. The sum of P20,000.00 for the repair of the motorcycle;

3. The sum of P100,000.00 for the loss of earning capacity;

4. The sum of P500,000.00 as moral damages;

5. The sum of P50,000.00 as exemplary damages;

6. The sum of P50,000.00 as attorneys fees plus cost of suit.

SO ORDERED.
 Petitioners appealed the decision to the Court of Appeals, which affirmed the appealed
decision in toto.[4]
Hence the present petition, based on the following arguments:
I.

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT AFFIRMED THE DECISION OF THE
TRIAL COURT THAT PETITIONER DASSAD DID NOT EXERCISE THE DILIGENCE OF A GOOD
FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES WHICH IS
NOT IN ACCORDANCE WITH ARTICLE 2180 OF THE NEW CIVIL CODE AND RELATED
JURISPRUDENCE ON THE MATTER.

II.

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT AFFIRMED THE DECISION OF THE
TRIAL COURT IN HOLDING PETITIONER EL BUENASENSO SY SOLIDARILY LIABLE WITH
PETITIONERS DASSAD AND SECOSA IN VIOLATION OF THE CORPORATION LAW AND
RELATED JURISPRUDENCE ON THE MATTER.

III.

THE JUDGMENT OF THE TRIAL COURT AS AFFIRMED BY THE COURT OF APPEALS

AWARDING P500,000.00 AS MORAL DAMAGES IS MANIFESTLY ABSURD, MISTAKEN AND
UNJUST.[5]

The petition is partly impressed with merit.

On the issue of whether petitioner Dassad Warehousing and Port Services, Inc. exercised
the diligence of a good father of a family in the selection and supervision of its employees,
we find the assailed decision to be in full accord with pertinent provisions of law and
established jurisprudence.
Article 2176 of the Civil Code provides:

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

On the other hand, Article 2180, in pertinent part, states:

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 x x x.

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 x x x.

The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.
 Based on the foregoing provisions, when an injury is caused by the negligence of an
employee, there instantly arises a presumption that there was 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 it exercised the care and diligence of a good father of a family in the selection
and supervision of his employee. Hence, to evade solidary liability for quasi-delict committed
by an employee, the employer must adduce sufficient proof that it exercised such degree of
care.[6]
How does an employer prove that he indeed exercised the diligence of a good father of a
family in the selection and supervision of his employee? The case of Metro Manila Transit
Corporation v. Court of Appeals[7] is instructive:

In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue
has the burden of presenting at the trial such amount of evidence required by law to obtain
a favorable judgment[8] . . . In making proof in its or his case, it is paramount that the best
and most complete evidence is formally entered.[9]

Coming now to the case at bar, while there is no rule which requires that testimonial
evidence, to hold sway, must be corroborated by documentary evidence, inasmuch as the
witnesses testimonies dwelt on mere generalities, we cannot consider the same as
sufficiently persuasive proof that there was observance of due diligence in the selection and
supervision of employees. Petitioners attempt to prove its deligentissimi patris familias in
the selection and supervision of employees through oral evidence must fail as it was unable
to buttress the same with any other evidence, object or documentary, which might obviate
the apparent biased nature of the testimony.[10]

Our view that the evidence for petitioner MMTC falls short of the required evidentiary
quantum as would convincingly and undoubtedly prove its observance of the diligence of a
good father of a family has its precursor in the underlying rationale pronounced in the
earlier case of Central Taxicab Corp. vs. Ex-Meralco Employees Transportation Co., et
al.,[11] set amidst an almost identical factual setting, where we held that:

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

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

The above-quoted ruling was reiterated in a recent case again involving the Metro Manila
Transit Corporation,[12] thus:
In the selection of prospective employees, employers are required to examine them as to
their qualifications, experience, and service records.[13] 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.

In this case, MMTC sought to prove that it exercised the diligence of a good father of a
family with respect to the selection of employees by presenting mainly testimonial evidence
on its hiring procedure. According to MMTC, applicants are required to submit professional
driving licenses, certifications of work experience, and clearances from the National Bureau
of Investigation; to undergo tests of their driving skills, concentration, reflexes, and vision;
and, to complete training programs on traffic rules, vehicle maintenance, and standard
operating procedures during emergency cases.

xxxxxxxxx

Although testimonies were offered that in the case of Pedro Musa all these precautions were
followed, the records of his interview, of the results of his examinations, and of his service
were not presented. . . [T]here is no record that Musa attended such training programs and
passed the said examinations before he was employed. No proof was presented that Musa
did not have any record of traffic violations. Nor were records of daily inspections, allegedly
conducted by supervisors, ever presented. . . The failure of MMTC to present such
documentary proof puts in doubt the credibility of its witnesses.

Jurisprudentially, therefore, the employer must not merely present testimonial evidence
to prove that he observed the diligence of a good father of a family in the selection and
supervision of his employee, but he must also support such testimonial evidence with concrete
or documentary evidence. The reason for this is to obviate the biased nature of the employers
testimony or that of his witnesses.[14]
Applying the foregoing doctrines to the present case, we hold that petitioner Dassad
Warehousing and Port Services, Inc. failed to conclusively prove that it had exercised the
requisite diligence of a good father of a family in the selection and supervision of its
employees.
Edilberto Duerme, the lone witness presented by Dassad Warehousing and Port Services,
Inc. to support its position that it had exercised the diligence of a good father of a family in
the selection and supervision of its employees, testified that he was the one who
recommended petitioner Raymundo Secosa as a driver to Dassad Warehousing and Port
Services, Inc.; that it was his duty to scrutinize the capabilities of drivers; and that he believed
petitioner to be physically and mentally fit for he had undergone rigid training and attended
the PPA safety seminar.[15]
Petitioner Dassad Warehousing and Port Services, Inc. failed to support the testimony of
its lone witness with documentary evidence which would have strengthened its claim of due
diligence in the selection and supervision of its employees. Such an omission is fatal to its
position, on account of which, Dassad can be rightfully held solidarily liable with its co-
petitioner Raymundo Secosa for the damages suffered by the heirs of Erwin Francisco.
However, we find that petitioner El Buenasenso Sy cannot be held solidarily liable with
his co-petitioners. While it may be true that Sy is the president of petitioner Dassad
Warehousing and Port Services, Inc., such fact is not by itself sufficient to hold him solidarily
liable for the liabilities adjudged against his co-petitioners.
 It is a settled precept in this jurisdiction that a corporation is invested by law with a
personality separate from that of its stockholders or members. [16] It has a personality
separate and distinct from those of the persons composing it as well as from that of any other
entity to which it may be related. Mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a corporation is not in itself sufficient
ground for disregarding the separate corporate personality.[17] A corporations authority to act
and its liability for its actions are separate and apart from the individuals who own it. [18]
The so-called veil of corporation fiction treats as separate and distinct the affairs of a
corporation and its officers and stockholders. As a general rule, a corporation will be looked
upon as a legal entity, unless and until sufficient reason to the contrary appears. When the
notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or
defend crime, the law will regard the corporation as an association of persons. [19] Also, the
corporate entity may be disregarded in the interest of justice in such cases as fraud that may
work inequities among members of the corporation internally, involving no rights of the public
or third persons. In both instances, there must have been fraud and proof of it. For the
separate juridical personality of a corporation to be disregarded, the wrongdoing must be
clearly and convincingly established.[20] It cannot be presumed.[21]
The records of this case are bereft of any evidence tending to show the presence of any
grounds enumerated above that will justify the piercing of the veil of corporate fiction such
as to hold the president of Dassad Warehousing and Port Services, Inc. solidarily liable with
it.
The Isuzu cargo truck which ran over Erwin Francisco was registered in the name of
Dassad Warehousing and Port Services, Inc., and not in the name of El Buenasenso
Sy. Raymundo Secosa is an employee of Dassad Warehousing and Port Services, Inc. and not
of El Buenasenso Sy. All these things, when taken collectively, point toward El Buenasenso
Sys exclusion from liability for damages arising from the death of Erwin Francisco.
Having both found Raymundo Secosa and Dassad Warehousing and Port Services, Inc.
liable for negligence for the death of Erwin Francisco on June 27, 1996, we now consider the
question of moral damages which his parents, herein respondents, are entitled to
recover. Petitioners assail the award of moral damages of P500,000.00 for being manifestly
absurd, mistaken and unjust. We are not persuaded.
Under Article 2206, the spouse, legitimate and illegitimate descendants and ascendants
of the deceased may demand moral damages for mental anguish for the death of the
deceased. The reason for the grant of moral damages has been explained in this wise:

. . . the award of moral damages is aimed at a restoration, within the limits possible, of the
spiritual status quo ante; and therefore, it must be proportionate to the suffering inflicted.
The intensity of the pain experienced by the relatives of the victim is proportionate to the
intensity of affection for him and bears no relation whatsoever with the wealth or means of
the offender.[22]

In the instant case, the spouses Francisco presented evidence of the searing pain that
they felt when the premature loss of their son was relayed to them. That pain was highly
evident in the testimony of the father who was forever deprived of a son, a son whose
untimely death came at that point when the latter was nearing the culmination of every
parents wish to educate their children. The death of Francis has indeed left a void in the lives
of the respondents. Antonio Francisco testified on the effect of the death of his son, Francis,
in this manner:
 Q: (Atty. Balanag): What did you do when you learned that your son was killed
on June 27, 1996?
A: (ANTONIO FRANCISCO): I boxed the door and pushed the image of St. Nio telling
why this happened to us.
Q: Mr. Witness, how did you feel when you learned of the untimely death of your
son, Erwin Suares (sic)?
A: Masakit po ang mawalan ng anak. Its really hard for me, the thought that my son
is dead.
xxxxxxxxx
Q: How did your family react to the death of Erwin Suarez Francisco?
A: All of my family and relatives were felt (sic) sorrow because they knew that my
son is (sic) good.
Q: We know that it is impossible to put money terms(s) [on] the life of [a] human,
but since you are now in court and if you were to ask this court how much would
you and your family compensate? (sic)
A: Even if they pay me millions, they cannot remove the anguish of my son (sic). [23]
Moral damages are emphatically not intended to enrich a plaintiff at the expense of the
defendant. They are awarded to allow the former to obtain means, diversion or amusements
that will serve to alleviate the moral suffering he has undergone due to the defendants
culpable action and must, perforce, be proportional to the suffering inflicted.[24] We have
previously held as proper an award of P500,000.00 as moral damages to the heirs of a
deceased family member who died in a vehicular accident. In our 2002 decision in Metro
Manila Transit Corporation v. Court of Appeals, et al.,[25] we affirmed the award of moral
damages of P500,000.00 to the heirs of the victim, a mother, who died from injuries she
sustained when a bus driven by an employee of the petitioner hit her. In the case at bar, we
likewise affirm the portion of the assailed decision awarding the moral damages.
Since the petitioners did not question the other damages adjudged against them by
the court a quo, we affirm the award of these damages to the respondents.
WHEREFORE, the petition is DENIED. The assailed decision is AFFIRMED with
the MODIFICATION that petitioner El Buenasenso Sy is ABSOLVED from any liability adjudged
against his co-petitioners in this case.
Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Carpio, and Azcuna, JJ., concur.

G.R. No. 116617 November 16, 1998

METRO MANILA TRANSIT CORPORATION (MMTC), PEDRO A. MUSA, CONRADO

TOLENTINO, FELICIANA CELEBRADO and THE GOVERNMENT SERVICE INSURANCE
SYSTEM, petitioners,
vs.
COURT OF APPEALS, SPS. RODOLFO V. ROSALES and LILY R. ROSALES, respondents.

G.R. No. 126395 November 16, 1998

RODOLFO V. ROSALES, and LILY R. ROSALES, petitioners,
vs.
THE COURT OF APPEALS, METRO MANILA TRANSIT CORPORATION, (MMTC) PEDRO
A. MUSA, CONRADO TOLENTINO, FELICIANA CELEBRADO and THE GOVERNMENT
SERVICE INSURANCE SYSTEM, respondents.

MENDOZA, J.:

These are appeals brought, on the one hand, by the Metro Manila Transit Corporation
(MMTC) and Pedro Musa and, on the other, by the spouses Rodolfo V. Rosales and Lily R.
Rosales from the decision,1 dated August 5, 1994, of the Court of Appeals, which
affirmed with modification the judgment of the Regional Trial Court of Quezon City
holding MMTC and Musa liable to the spouses Rosales for actual, moral, and
exemplary damages, attorney's fees, and the costs of suit for the death of the
latter's daughter. MMTC and Musa in G.R. No. 116617 appeal insofar as they are
held liable for damages, while the spouses Rosales in G.R. No. 126395 appeal
insofar as the amounts awarded are concerned.

The facts are as follows:

MMTC is the operator of a fleet of passenger buses within the Metro Manila area.
Musa was its driver assigned to MMTC Bus No. 27. The spouses Rosales were
parents of Liza Rosalie, a third-year high school student at the University of the
Philippines Integrated School.

At around a quarter past one in the afternoon of August 9, 1986, MMTC Bus No. 27,
which was driven by Musa, hit Liza Rosalie who was then crossing Katipunan
Avenue in Quezon City. An eye witness said the girl was already near the center of
the street when the bus, then bound for the south, hit her. 2 She fell to the ground
upon impact, rolled between the two front wheels of the bus, and was run over by
the left rear tires thereof.3 Her body was dragged several meters away from the
point of impact. Liza Rosalie was taken to the Philippine Heart Center, 4 but efforts
to revive her proved futile.

Pedro Musa was found guilty of reckless imprudence resulting in homicide and
sentenced to imprisonment for a term of 2 years and 4 months, as minimum, to 6
years, as maximum, by the Regional Trial Court of Quezon
City.5 The trial court found:

All told, this Court, therefore, holds that the accused, who was then,
the driver of MMTC Bus No. 027, is criminally responsible for the
death of the girl victim in violation of Article 365 (2) of the Revised
Penal Code. For, in the light of the evidence that the girl victim was
already at the center of the Katipunan Road when she was bumped,
and, therefore, already past the right lane when the MMTC Bus No.
027 was supposed to have passed; and, since the said bus was then
running at a speed of about 25 kilometers per hour which is
inappropriate since Katipunan road is a busy street, there is,
consequently, sufficient proof to show that the accused was careless,
reckless and imprudent in the operation of his MMTC Bus No. 027,
 which is made more evident by the circumstance that the accused did
not blow his horn at the time of the accident, and he did not even
know that he had bumped the girl victim and had ran over her,
demonstrating thereby that he did not exercise diligence and take the
necessary precaution to avoid injury to persons in the operation of his
vehicle, as, in fact, he ran over the girl victim who died as a result
thereof. 6

The spouses Rosales filed an independent civil action for damages against MMTC,
Musa, MMTC Acting General Manager Conrado Tolentino, and the Government
Service Insurance System (GSIS). They subsequently amended their complaint to
include Feliciana Celebrado, a dispatcher of the MMTC, as a defendant therein. The
counsel of MMTC and Musa attempted to introduce testimony that Musa was not
negligent in driving Bus No. 27 but was told by the trial judge:

COURT:

That is it. You can now limit your question to the other defendant
here but to re-try again the actual facts of the accident, this Court
would not be in the position. It would be improper for this Court to
make any findings with respect to the negligence of herein driver.
You ask questions only regarding the civil aspect as to the other
defendant but not as to the
accused. 7

The counsel submitted to the ruling of the court. 8

In a decision rendered on March 6, 1990, the Regional Trial Court of Quezon City
found MMTC and Musa guilty of negligence and ordered them to pay damages and
attorney's fees, as follows:

WHEREFORE, foregoing premises considered, judgment is hereby

rendered ordering defendant Metro Manila Transit Corporation
primarily and defendant Pedro Musa subsidiarily liable to plaintiffs-
spouses Rodolfo V. Rosales and Lily R. Rosales as follows:

1. Actual damages in the amount of P150,000.00;

2. Moral damages in the amount of P500,000.00;

3. Exemplary damages in the amount of P100,000.00;

4. Attorney's fees in the amount of P50,000.00; and

5. Costs of suit.9

Both parties appealed to the Court of Appeals. On August 5, 1994, the Court of
Appeals affirmed the decision of the trial court with the following modification:

WHEREFORE, except for the modification deleting the award of

P150,000.00 as actual damages and awarding in lieu thereof the
 amount of P30,000.00 as death indemnity, the decision appealed from
is, in all other aspects, hereby AFFIRMED. 10

The spouses Rosales filed a motion for reconsideration, which the appellate court,
in a resolution, dated September 12, 1996, partly granted by increasing the
indemnity for the death of Liza Rosalie from P30,000.00 to P50,000.00. Hence,
these appeals.

In G.R. No. 116617, MMTC and Musa assail the decision of the Court of Appeals on
the following grounds:

PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE

COURT A QUO'SDECISION PARTICULARLY IN NOT HOLDING THAT
APPELLANT MMTC EXERCISED THE DILIGENCE OF A GOOD FATHER OF
A FAMILY IN THE SELECTION AND SUPERVISION OF ITS DRIVERS.
THIS BEING THE CASE, APPELLANT MMTC IS ENTITLED TO BE
ABSOLVED FROM ANY LIABILITY OR AT LEAST TO A REDUCTION OF
THE RECOVERABLE DAMAGES.

THE PUBLIC RESPONDENT COURT OF APPEALS, JUST LIKE THE

COURT A QUO, OVERLOOKED THE FACT THAT PETITIONER MMTC, A
GOVERNMENT-OWNED CORPORATION, COMMITTED NO FRAUD,
MALICE, BAD FAITH, NOR WANTON, FRAUDULENT, OPPRESSIVE AND
MALEVOLENT ACTUATIONS AGAINST HEREIN RESPONDENTS-
APPELLEES.

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING

THE COURT A QUO'SDECISION TO HOLD PETITIONER-APPELLANT
MMTC PRIMARILY LIABLE TO PRIVATE RESPONDENTS-APPELLEES IN
THE AMOUNT OF P500,000 AS MORAL DAMAGES, P100,000 AS
EXEMPLARY DAMAGES AND P30,000 BY WAY OF DEATH INDEMNITY.

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING

THE COURT A QUO'S DECISION IN RENDERING JUDGMENT FOR
ATTORNEY'S FEES IN THE AMOUNT OF P50,000.00 IN FAVOR OF
PRIVATE RESPONDENTS-APPELLEES.

On the other hand, in G.R. No. 126395, the spouses Rosales contend:

The Court of Appeals erred in:

First, considering that death indemnity which this Honorable Court

set at P50,000.00 is akin to actual damages;

Second, not increasing the amount of damages awarded;

Third, refusing to hold all the defendants, now private respondents,

solidarily liable.

MMTC and Musa do not specifically question the findings of the Court of Appeals
and the Regional Trial Court of Quezon City that Liza Rosalie was hit by MMTC Bus
No. 27. Nonetheless, their petition contains discussions which cast doubts on this
point. 11 Not only can they not do this as the rule is that an appellant may not be
heard on a question not specifically assigned as error, but the rule giving great
weight, and even finality, to the factual conclusions of the Court of Appeals which
affirm those of the trial court bars a reversal of the finding of liability against
petitioners MMTC and Musa. Only where it is shown that such findings are
whimsical, capricious, and arbitrary can they be overturned. To the contrary, the
findings of both the Court of Appeals and the Regional Trial Court are solidly
anchored on the evidence submitted by the parties. We, therefore, regard them as
conclusive in resolving the petitions at bar. 12 Indeed, as already stated,
petitioners' counsel submitted to the ruling of the court that the finding of the trial
court in the criminal case was conclusive on them with regard to the questions of
whether Liza Rosalie was hit by MMTC Bus No. 27 and whether its driver was
negligent. Rather, the issue in this case turns on Art. 2180 of the Civil Code, which
provides that "employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry." The
responsibility of employers for the negligence of their employees in the
performance of their duties is primary, that is, the injured party may recover from
the employers directly, regardless of the solvency of their employees. 13 The
rationale for the rule on vicarious liability has been adumbrated thus:

What has emerged as the modern justification for vicarious liability is

a rule of policy, a deliberate allocation of a risk. The losses caused by
the torts of employees, which as a practical matter are sure to occur
in the conduct of the employer's enterprise, are placed upon that
enterprise itself, as a required cost of doing business. They are placed
upon the employer because, having engaged in an enterprise, which
will on the basis of all past experience involve harm to others through
the tort of employees, and sought to profit by it, it is just that he,
rather than the innocent injured plaintiff, should bear them; and
because he is better able to absorb them, and to distribute them,
through prides, rates or liability insurance, to the public, and so to
shift them to society, to the community at large. Added to this is the
makeweight argument that an employer who is held strictly liable is
under the greatest incentive to be careful in the selection, instruction
and supervision of his servants, and to take every precaution to see
that the enterprise is conducted safely. 14

In Campo v. Camarote, 15
we explained the basis of the presumption of negligence
in this wise:

The reason for the law is obvious. It is indeed difficult for any person
injured by the carelessness of a driver to prove the negligence or lack
of due diligence of the owner of the vehicle in the choice of the driver.
Were we to require the injured party to prove the owner's lack of
diligence, the right will in many cases prove illusory, as seldom does
a person in the community, especially in the cities, have the
opportunity to observe the conduct of all possible car owners therein.
So the law imposes the burden of proof of innocence on the vehicle
owner. If the driver is negligent and causes damage, the law
 presumes that the owner was negligent and imposes upon him the
burden of proving the contrary.

Employers may be relieved of responsibility for the negligent acts of their

employees within the scope of their assigned tasks only if they can show that
"they observed all the diligence of a good father of a family to prevent
damage."16 For this purpose, they have the burden of proving that they have
indeed exercised such diligence, both in the selection of the employee who
committed the quasi-delict and in the supervision of the performance of his duties.

In the selection of prospective employees, employers are required to examine

them as to their qualifications, experience, and service records. 17 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. 18 To establish these factors in a trial
involving the issue of vicarious liability, employers must submit concrete proof,
including documentary evidence. 19

In this case, MMTC sought to prove that it exercised the diligence of a good father
of a family with respect to the selection of employees by presenting mainly
testimonial evidence on its hiring procedure. According to MMTC, applicants are
required to submit professional driving licenses, certifications of work experience,
and clearances from the National Bureau of Investigation; to undergo tests of their
driving skills, concentration, reflexes, and vision; and, to complete training
programs on traffic rules, vehicle maintenance, and standard operating
procedures during emergency cases. 20

MMTC's evidence consists entirely of testimonial evidence (1) that transport

supervisors are assigned to oversee field operations in designated areas; (2) that
the maintenance department daily inspects the engines of the vehicles; and, (3)
that for infraction of company rules there are corresponding penalties. 21Although
testimonies were offered that in the case of Pedro Musa all these precautions were
followed, 22 the records of his interview, of the results of his examinations, and of
his service were not presented.

MMTC submitted brochures and programs of seminars for prospective employees

on vehicle maintenance, traffic regulations, and driving skills and claimed that
applicants are given tests to determine driving skills, concentration, reflexes, and
vision, 23 but there is no record that Musa attended such training programs and
passed the said examinations before he was employed. No proof was presented
that Musa did not have any record of traffic violations. Nor were records of daily
inspections, allegedly conducted by supervisors, ever presented.

Normally, employers' keep files concerning the qualifications, work experience,

training evaluation, and discipline of their employees. The failure of MMTC to
present such documentary proof puts in doubt the credibility of its witnesses.
What was said in Central Taxicab Corporation v. Ex-Meralco Employees
Transportation Corporation 24 applies to this case:

This witness spoke of an affidavit of experience which a driver-

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

....

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

The failure of the defendant company to produce in court any record

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

It is noteworthy that, in another case involving MMTC, testimonial evidence of

identical content, which MMTC presented to show that it exercised the diligence of
a good father of a family in the selection and supervision of employees and thus
avoid vicarious liability for the negligent acts of its employees, was held to be
insufficient to overcome the presumption of negligence against it. In Metro Manila
Transit Corp. v. Court of Appeals, 25 this Court said:

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

Having found both MMTC and its driver Pedro Musa liable for negligence for the
death of Liza Rosalie on August 9, 1986; we now consider the question of damages
which her parents, the spouses Rosales, are entitled to recover, which is the
subject of the appeal in G.R. No. 126395.

Indemnity for Death. Art. 2206 provides for the payment of indemnity for death
caused by a crime or quasi-delict. Initially fixed in said article of the Civil Code at
P3,000.00, the amount of the indemnity has through the years been gradually
increased based on the value of the peso. At present, it is fixed at
P50,000.00. 26 To conform to this new ruling, the Court of Appeals correctly
increased the indemnity it had originally ordered the spouses Rosales to be paid
from P30,000.00 to P50,000.00 in its resolution, dated September 12, 1996.
Actual Damages. Art. 2199 provides that "except as provided by law or by
stipulation, one is entitled to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved." The spouses Rosales are claiming
actual damages in the amount of P239,245.40. However, during the trial, they
submitted receipts showing that expenses for the funeral, wake, and interment of
Liza Rosalie amounted only to P60,226.65 itemized as follows: 27

Medical Attendance P 739.65

Funeral Services 5,100.00

Wreaths 2,500.00

Embalment 1,000.00

Obituaries 7,125.00

Interment fees 2,350.00

Expenses during wake 14,935.00

Mourning clothes 5,000.00

Photography 3,500.00

Video Coverage 10,000.00

Printing of invitation cards 7,977.00

TOTAL 60,226.65

Hence, apart from the indemnity for death, the spouses Rosales are entitled to
recover the above amount as actual damages.

Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate
descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased." The reason for the grant
of moral damages has been explained thus:

. . . the award of moral damages is aimed at a restoration, within the

limits of the possible, of the spiritual status quo ante; and therefore,
it must be proportionate to the suffering inflicted. The intensity of the
pain experienced by the relatives of the victim is proportionate to the
intensity of affection for him and bears no relation whatsoever with
the wealth or means of the offender. 28

In the instant case, the spouses Rosales presented evidence of the intense moral
suffering they had gone through as a result of the loss of Liza Rosalie who was
their youngest child. Rodolfo Rosales recounted the place of Liza Rosalie in the
family and their relationship with her in the following words:
 Q: Mr. Rosales, how was Liza to you as a daughter?

A: Well, Liza as a daughter was the greatest joy of the

family; she was our pride, and everybody loved her — all
her brothers and sisters — because she was sweet and
unspoiled. . . . She was soft-spoken to all of us; and she
still slept with us at night although she had her own
room. Sometimes in the middle of the night she would
open our door and ask if she could sleep with us. So we
let her sleep with us, as she was the youngest. 29

The death of Liza Rosalie left a void in their lives. Rodolfo Rosales testified on the
devastating effect of the death of Liza Rosalie:

Q: And after she died, what changes, if any, did you feel
in your family?

A: Well, there is something hollow in our family,

something is missing. She used to greet me when I came
home and smell if I was drunk and would tell me to dress
up and take a shower before her mommy could see me.
She would call me up at the office and say: "Daddy, come
home, please help me with my homework." Now, all
these things, I am missing, you know. . . I do not feel
like going home early. Sometimes my wife would
complain and ask: "Where did you go?" But I cannot
explain to her how I feel. 30

Lily Rosales described life without Liza Rosalie thus:

Q: Now, your life without Liza, how would you describe

it, Dr. Rosales?

A: You know it is very hard to describe. The family was

broken apart. We could not go together because we
remember Liza. Every time we go to the cemetery we try
as much as possible not to go together. So, we go to the
cemetery one at a time, sometimes, my husband and I,
or my son and another one, but we never go together
because we remember Liza. But before her death we
would always be together, the whole family on weekends
and on our days off. My husband works very hard, I also
work very hard and my children go to school. They study
very hard. Now we cannot go together on outings
because of the absence of Liza. 31

The spouses Rosales claim moral damages in the amount of P5,000,000.00.

In People v. Teehankee, Jr.,32this Court awarded P1 million as moral damages to
the heirs of a seventeen-year-old girl who was murdered. This amount seems
reasonable to us as moral damages for the loss of a minor child, whether he or she
was a victim of a crime or a quasi-delict. Hence, we hold that the MMTC and Musa
are solidarily liable to the spouses Rosales in the amount of P1,000,000.00 as
moral damages for the death of Liza Rosalie.

Exemplary Damages. Art. 2231 provides that exemplary damages may be

recovered in cases involving quasi-delicts if "the defendant acted with gross
negligence." This circumstance obtains in the instant case. The records indicate
that at the time of the mishap, there was a pending criminal case against Musa for
reckless imprudence resulting in slight physical injuries with another branch of the
Regional Trial Court, Quezon City. 33 The evidence also shows that he failed to stop
his vehicle at once even after eye witnesses shouted at him. The spouses Rosales
claim exemplary damages in the amount of P5,000,000.00. Under the
circumstances, we deem it reasonable to award the spouses Rosales exemplary
damages in the amount of five hundred thousand pesos (P500,000.00).

Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as
in the instant case, exemplary damages are awarded. In the recent case
of Sulpicio Lines, Inc. v. Court of Appeals, 34 which involved the death of a minor
child in the sinking of a vessel, we held an award of P50,000.00 as attorney's fees
to be reasonable. Hence, we affirm the award of attorney's fees made by the Court
of Appeals to the spouses Rosales in that amount.

Compensation for Loss of Earning Capacity. Art. 2206 of the Civil Code provides
that in addition to the indemnity for death caused by a crime or quasi delict, the
"defendant shall be liable for the loss of the earning capacity of the deceased, and
the indemnity shall be paid to the heirs of the latter; . . ." Compensation of this
nature is awarded not for loss of earnings but for loss of capacity to earn
money. 35Evidence must be presented that the victim, if not yet employed at the
time of death, was reasonably certain to complete training for a specific
profession. 36 In People v. Teehankee 37 no award of compensation for loss of
earning capacity was granted to the heirs of a college freshman because there was
no sufficient evidence on record to show that the victim would eventually become
a professional pilot. 38 But compensation should be allowed for loss of earning
capacity resulting from the death of a minor who has not yet commenced
employment or training for a specific profession if sufficient evidence is presented
to establish the amount thereof. In the United States it has been observed:

This raises the broader question of the proper measure of damages in

death cases involving children, housewives, the old, and others who
do not have market income so that there is no pecuniary loss to
survivors or to the estate of the decedent. The traditional approach
was to award no or merely nominal damages in such cases. . . .
Increasingly, however, courts allow expert testimony to be used to
project those lost earnings. 39

Thus, in Haumersen v. Ford Motor Co., 40 the court allowed the heirs of a seven-
year-old boy who was killed in a car accident to recover compensation for loss of
earning capacity:

Considerable evidence was presented by plaintiffs in an effort to give

the jury a foundation on which to make an award. Briefly stated, this
evidence showed Charles Haumersen was a seven-year-old of above
average characteristics. He was described as "very intelligent" and
 "all-American." He received high marks in school. He was active in
church affairs and participated in recreational and athletic events,
often with, children older than himself. In addition, he had an unusual
talent for creating numerous cartoons and other drawings, some of
which plaintiffs introduced at trial.

The record does not disclose passion and prejudice. The key question
is whether the verdict of $100,000 has support in the evidence.

Upon analysis of the record, we conclude that we should not disturb

the award.

The argument for allowing compensation for loss of earning capacity of a minor is
even stronger if he or she was a student, whether already training for a specific
profession or still engaged in general studies. InKrohmer v. Dahl, 41 the court, in
affirming the award by the jury of $85,000.00 to the heirs of an eighteen-year-old
college freshman who died of carbon monoxide poisoning, stated as follows:

There are numerous cases that have held admissible evidence of

prospective earnings of a student or trainee. . . . The appellants
contend that such evidence is not admissible unless the course under
study relates to a given occupation or profession and it is shown that
the student is reasonably certain to follow that occupation or
profession. It is true that the majority of these decisions deal with
students who are studying for a specific occupation or profession.
However, not one of these cases indicate that evidence of one's
education as a guide to future earnings is not admissible where the
student is engaged in general studies or whose education does not
relate to a specific occupation.

In sharp contrast with the situation obtaining in People v. Teehankee, where the
prosecution merely presented evidence to show the fact of the victim's graduation
from high school and the fact of his enrollment in a flying school, spouses Rosales
did not content themselves with simply establishing Liza Rosalie's enrollment at
UP Integrated School. They presented evidence to show that Liza Rosalie was a
good student, promising artist, and obedient child. She consistently performed
well in her studies since grade school. 42 A survey taken in 1984 when Liza Rosalie
was twelve years old showed that she had good study habits and
attitudes. 43 Cleofe Chi, guidance counselor of the University of the Philippines
Integrated School, described Liza Rosalie as personable, well-liked, and with a
balanced personality. 44 Professor Alfredo Rebillon, a faculty member of the
University of the Philippines College of Fine Arts, who organized workshops which
Liza Rosalie attended in 1982 and 1983, testified that Liza Rosalie had the
potential of eventually becoming an artist. 45 Professor Rebillon's testimony is
more than sufficiently established by the 51 samples of Liza Rosalie's watercolor,
charcoal, and pencil drawings submitted as exhibits by the spouses
Rosales. 46 Neither MMTC nor Pedro Musa controverted this evidence.

Considering her good academic record, extra-curricular activities, and varied

interests, it is reasonable to assume that Liza Rosalie would have enjoyed a
successful professional career had it not been for her untimely death. Hence, it is
proper that compensation for loss of earning capacity should be awarded to her
heirs in accordance with the formula established in decided cases 47
for computing
net earning capacity, to wit:

Net Earning = Life [Gross Necessary

Capacity Expectancy x [Annual — Living

[Income Expenses

Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of

eighty (80) and the age of the deceased.48 Since Liza Rosalie was 16 at the time of
her death, her life expectancy was 44 more years. 49 Her projected gross annual
income, computed based on the minimum wage for workers in the non-agricultural
sector in effect at the time of her death, 50 then fixed at P37.00, 51 is
P14,630.46. 52 Allowing for necessary living expenses of fifty percent (50%) of her
projected gross annual income, 53 her total net earning capacity amounts to
P321,870.12. 54

Finally, the spouses Rosales argue that the Court of Appeals erred in absolving
Conrado Tolentino, Feliciana Celebrado, and the GSIS of liability. The Spouses
Rosales alleged that Tolentino, as Acting General Manager of the MMTC, and
Celebrado, as a dispatcher thereof, were charged with the supervision of Musa and
should, therefore, be held vicariously liable under Art. 2180 of the Civil Code. With
respect to the GSIS, they contend that it was the insurer in a contract for third
party liability it had with the MMTC.

Although the fourth paragraph of Art. 2180 mentions "managers" among those
made responsible for the negligent acts of others, it is settled that this term is
used in the said provision in the sense of "employers." 55 Thus, Tolentino and
Celebrado cannot be held liable for the tort of Pedro Musa.

In Vda. de Maglana v. Consolacion, 56 it was ruled that an insurer in an indemnity

contract for third party liability is directly liable to the injured party up to the
extent specified in the agreement, but it cannot be held solidarily liable beyond
that amount. The GSIS admitted in its answer that it was the insurer of the MMTC
for third party liability with respect to MMTC Bus No. 27 to the extent of
P50,000.00. 57 Hence, the spouses Rosales have the option either to claim the said
amount from the GSIS and the balance of the award from MMTC and Musa or to
enforce the entire judgment against the latter, subject to reimbursement from the
former to the extent of the insurance coverage. 58

One last word. The Regional Trial Court of Quezon City erred in holding MMTC
primarily and Musa secondarily liable for damages arising from the death of Liza
Rosalie. It was error for the appellate court to affirm this aspect of the trial court's
decision.

As already stated, MMTC is primarily liable for damages for the negligence of its
employee in view of Art. 2180. Pursuant to Art. 2181, it can recover from its
employee what it may pay. This does not make the employee's liability subsidiary.
It only means that if the judgment for damages is satisfied by the common carrier,
the latter has a right to recover what it has paid from its employee who committed
the fault or negligence which gave rise to the action based on quasi-
delict. 59 Hence, the spouses Rosales have the option of enforcing the judgment
against either MMTC or Musa.

From another point of view, Art. 2194 provides that "the responsibility of two or
more persons who are liable for a quasi-delict is solidary." We ruled in Gelisan v.
Alday 60 that "the registered owner/operator of a public service vehicle is jointly
and severally liable with the driver for damages incurred by passengers or third
persons as a consequence of injuries sustained in the operation of said vehicle."
In Baliwag Transit Inc. v. Court of Appeals 61 it was held that "to
escape solidary liability for a quasi-delict committed by an employee, the employer
must adduce sufficient proof that it exercised such degree of care." Finally, we
held in the recent case of Philtranco Service Enterprises, Inc. v. Court of
Appeals 62 that "the liability of the registered owner of a public service vehicle . . .
for damages arising from the tortious acts of the driver is primary, direct, and
joint and several or solidary with the driver."

WHEREFORE, the decision of the Court of Appeals is SET ASIDE and another one is
RENDERED holding the Metro Manila Transit Corporation and Pedro Musa jointly
and severally liable for the death of Liza Rosalie R. Rosales and ORDERING them
as such to pay to the spouses Rodolfo V. Rosales and Lily R. Rosales the following
amounts:

1) death indemnity in the amount of fifty-thousand pesos (P50,000,00);

2) actual damages in the amount of sixty thousand two hundred twenty six pesos
and sixty five centavos (P60,226.65);

3) moral damages in the amount of one million pesos (P1,000,000.00);

4) exemplary damages in the amount of five hundred thousand pesos

(P500,000.00);

5) attorney's fees in the amount of fifty thousand pesos (P50,000.00);

6) compensation for loss of earning capacity in the amount of three hundred

twenty-one thousand eight hundred seventy pesos and twelve centavos
(P321,870.12); and

7) the costs of suit.

SO ORDERED.
G.R. No. 60506 August 6, 1992

FIGURACION VDA. DE MAGLANA, EDITHA M. CRUZ, ERLINDA M. MASESAR,

LEONILA M. MALLARI, GILDA ANTONIO and the minors LEAH, LOPE, JR., and
ELVIRA, all surnamed MAGLANA, herein represented by their mother, FIGURACION
VDA. DE MAGLANA, petitioners,
vs.
HONORABLE FRANCISCO Z. CONSOLACION, Presiding Judge of Davao City, Branch
II, and AFISCO INSURANCE CORPORATION, respondents.

Jose B. Guyo for petitioners.

Angel E. Fernandez for private respondent.

ROMERO, J.:

The nature of the liability of an insurer sued together with the insured/operator-owner of a
common carrier which figured in an accident causing the death of a third person is sought to
be defined in this petition for certiorari.

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

. . . Lope Maglana was an employee of the Bureau of Customs whose work

station was at Lasa, here in Davao City. On December 20, 1978, early
morning, Lope Maglana was on his way to his work station, driving a
motorcycle owned by the Bureau of Customs. At Km. 7, Lanang, he met an
accident that resulted in his death. He died on the spot. The PUJ jeep that
bumped the deceased was driven by Pepito Into, operated and owned by
defendant Destrajo. From the investigation conducted by the traffic
investigator, the PUJ jeep was overtaking another passenger jeep that was
going towards the city poblacion. While overtaking, the PUJ jeep of defendant
Destrajo running abreast with the overtaken jeep, bumped the motorcycle
driven by the deceased who was going towards the direction of Lasa, Davao
City. The point of impact was on the lane of the motorcycle and the deceased
was thrown from the road and met his untimely death. 1

Consequently, the heirs of Lope Maglana, Sr., here petitioners, filed an action for damages
and attorney's fees against operator Patricio Destrajo and the Afisco Insurance Corporation
(AFISCO for brevity) before the then Court of First Instance of Davao, Branch II. An
information for homicide thru reckless imprudence was also filed against Pepito Into.

During the pendency of the civil case, Into was sentenced to suffer an indeterminate penalty
of one (1) year, eight (8) months and one (1) day of prision correccional, as minimum, to
four (4) years, nine (9) months and eleven (11) days of prision correccional, as maximum,
with all the accessory penalties provided by law, and to indemnify the heirs of Lope
Maglana, Sr. in the amount of twelve thousand pesos (P12,000.00) with subsidiary
imprisonment in case of insolvency, plus five thousand pesos (P5,000.00) in the concept of
moral and exemplary damages with costs. No appeal was interposed by accused who later
applied for probation. 2
On December 14, 1981, the lower court rendered a decision finding that Destrajo had not
exercised sufficient diligence as the operator of the jeepney. The dispositive portion of the
decision reads:

WHEREFORE, the Court finds judgment in favor of the plaintiffs against

defendant Destrajo, ordering him to pay plaintiffs the sum of P28,000.00 for
loss of income; to pay plaintiffs the sum of P12,000.00 which amount shall be
deducted in the event judgment in Criminal Case No. 3527-D against the
driver, accused Into, shall have been enforced; to pay plaintiffs the sum of
P5,901.70 representing funeral and burial expenses of the deceased; to pay
plaintiffs the sum of P5,000.00 as moral damages which shall be deducted in
the event judgment (sic) in Criminal Case No. 3527-D against the driver,
accused Into; to pay plaintiffs the sum of P3,000.00 as attorney's fees and to
pay the costs of suit.

The defendant insurance company is ordered to reimburse defendant Destrajo

whatever amounts the latter shall have paid only up to the extent of its
insurance coverage.

SO ORDERED. 3

Petitioners filed a motion for the reconsideration of the second paragraph of the dispositive
portion of the decision contending that AFISCO should not merely be held secondarily liable
because the Insurance Code provides that the insurer's liability is "direct and primary and/or
jointly and severally with the operator of the vehicle, although only up to the extent of the
insurance coverage." 4 Hence, they argued that the P20,000.00 coverage of the insurance
policy issued by AFISCO, should have been awarded in their favor.

In its comment on the motion for reconsideration, AFISCO argued that since the Insurance
Code does not expressly provide for a solidary obligation, the presumption is that the
obligation is joint.

In its Order of February 9, 1982, the lower court denied the motion for reconsideration
ruling that since the insurance contract "is in the nature of suretyship, then the liability of
the insurer is secondary only up to the extent of the insurance coverage." 5

Petitioners filed a second motion for reconsideration reiterating that the liability of the
insurer is direct, primary and solidary with the jeepney operator because the petitioners
became direct beneficiaries under the provision of the policy which, in effect, is a
stipulation pour autrui. 6 This motion was likewise denied for lack of merit.

Hence, petitioners filed the instant petition for certiorari which, although it does not seek
the reversal of the lower court's decision in its entirety, prays for the setting aside or
modification of the second paragraph of the dispositive portion of said decision. Petitioners
reassert their position that the insurance company is directly and solidarily liable with the
negligent operator up to the extent of its insurance coverage.

We grant the petition.

The particular provision of the insurance policy on which petitioners base their claim is as
follows:
 Sec. 1 — LIABILITY TO THE PUBLIC

1. The Company will, subject to the Limits of Liability, pay all sums necessary
to discharge liability of the insured in respect of

(a) death of or bodily injury to any THIRD PARTY

(b) . . . .

2. . . . .

3. In the event of the death of any person entitled to indemnity under this
Policy, the Company will, in respect of the liability incurred to such person
indemnify his personal representatives in terms of, and subject to the terms
and conditions hereof. 7

The above-quoted provision leads to no other conclusion but that AFISCO can be held
directly liable by petitioners. As this Court ruled in Shafer vs. Judge, RTC of Olongapo City,
Br. 75, "[w]here an insurance policy insures directly against liability, the insurer's liability
accrues immediately upon the occurrence of the injury or even upon which the liability
depends, and does not depend on the recovery of judgment by the injured party against the
insured." 8 The underlying reason behind the third party liability (TPL) of the Compulsory
Motor Vehicle Liability Insurance is "to protect injured persons against the insolvency of the
insured who causes such injury, and to give such injured person a certain beneficial interest
in the proceeds of the policy . . ." 9 Since petitioners had received from AFISCO the sum of
P5,000.00 under the no-fault clause, AFISCO's liability is now limited to P15,000.00.

However, we cannot agree that AFISCO is likewise solidarily liable with Destrajo. In Malayan
Insurance Co., Inc. v. Court of Appeals, 10 this Court had the opportunity to resolve the
issue as to the nature of the liability of the insurer and the insured vis-a-vis the third party
injured in an accident. We categorically ruled thus:

While it is true that where the insurance contract provides for indemnity
against liability to third persons, such third persons can directly sue the
insurer, however, the direct liability of the insurer under indemnity contracts
against third party liability does not mean that the insurer can be held
solidarily liable with the insured and/or the other parties found at fault. The
liability of the insurer is based on contract; that of the insured is based on
tort.

In the case at bar, petitioner as insurer of Sio Choy, is liable to respondent

Vallejos (the injured third party), but it cannot, as incorrectly held by the trial
court, be made "solidarily" liable with the two principal tortfeasors, namely
respondents Sio Choy and San Leon Rice Mill, Inc. For if petitioner-insurer
were solidarily liable with said, two (2) respondents by reason of the
indemnity contract against third party liability — under which an insurer can
be directly sued by a third party — this will result in a violation of the
principles underlying solidary obligation and insurance contracts. (emphasis
supplied)
The Court then proceeded to distinguish the extent of the liability and manner of enforcing
the same in ordinary contracts from that of insurance contracts. While in solidary
obligations, the creditor may enforce the entire obligation against one of the solidary
debtors, in an insurance contract, the insurer undertakes for a consideration to indemnify
the insured against loss, damage or liability arising from an unknown or contingent
event. 11 Thus, petitioner therein, which, under the insurance contract is liable only up to
P20,000.00, can not be made solidarily liable with the insured for the entire obligation of
P29,013.00 otherwise there would result "an evident breach of the concept of solidary
obligation."

Similarly, petitioners herein cannot validly claim that AFISCO, whose liability under the
insurance policy is also P20,000.00, can be held solidarily liable with Destrajo for the total
amount of P53,901.70 in accordance with the decision of the lower court. Since under both
the law and the insurance policy, AFISCO's liability is only up to P20,000.00, the second
paragraph of the dispositive portion of the decision in question may have unwittingly sown
confusion among the petitioners and their counsel. What should have been clearly stressed
as to leave no room for doubt was the liability of AFISCO under the explicit terms of the
insurance contract.

In fine, we conclude that the liability of AFISCO based on the insurance contract is direct,
but not solidary with that of Destrajo which is based on Article 2180 of the Civil Code. 12 As
such, petitioners have the option either to claim the P15,000 from AFISCO and the balance
from Destrajo or enforce the entire judgment from Destrajo subject to reimbursement from
AFISCO to the extent of the insurance coverage.

While the petition seeks a definitive ruling only on the nature of AFISCO's liability, we
noticed that the lower court erred in the computation of the probable loss of income. Using
the formula: 2/3 of (80-56) x P12,000.00, it awarded P28,800.00. 13 Upon recomputation,
the correct amount is P192,000.00. Being a "plain error," we opt to correct the
same. 14 Furthermore, in accordance with prevailing jurisprudence, the death indemnity is
hereby increased to P50,000.00. 15

WHEREFORE, premises considered, the present petition is hereby GRANTED. The award of
P28,800.00 representing loss of income is INCREASED to P192,000.00 and the death
indemnity of P12,000.00 to P50,000.00.

SO ORDERED.

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

G.R. No. L-9605 September 30, 1957

GAUDIOSO EREZO, ET AL., plaintiff-appellee,

vs.
AGUEDO JEPTE, defendant-appellant.

Gesolgon, Matti and Custodio for appellees.

Aguedo Y. Jepte in his own behalf.

LABRADOR, J.:

Appeal from a judgment of the Court of First Instance of Manila ordering defendant to pay
plaintiff Gaudioso Erezo P3,000 on the death of Ernesto Erezo, son of plaintiff Gaudioso
Erezo.

Defendant-appellant is the registered owner of a six by six truck bearing plate No. TC-1253.
On August, 9, 1949, while the same was being driven by Rodolfo Espino y Garcia, it collided
with a taxicab at the intersection of San Andres and Dakota Streets, Manila. As the truck
went off the street, it hit Ernesto Erezo and another, and the former suffered injuries, as a
result of which he died. The driver was prosecuted for homicide through reckless negligence
in criminal case No. 10663 of the Court of First Instance of Manila. The accused pleaded
guilty and was sentenced to suffer imprisonment and to pay the heirs of Ernesto Erezo the
sum of P3,000. As the amount of the judgment could not be enforced against him, plaintiff
brought this action against the registered owner of the truck, the defendant-appellant. The
circumstances material to the case are stated by the court in its decision.

The defendant does not deny at the time of the fatal accident the cargo truck driven
by Rodolfo Espino y Garcia was registered in his name. He, however, claims that the
vehicle belonged to the Port Brokerage, of which he was the broker at the time of the
accident. He explained, and his explanation was corroborated by Policarpio Franco,
the manager of the corporation, that the trucks of the corporation were registered in
his name as a convenient arrangement so as to enable the corporation to pay the
registration fee with his backpay as a pre-war government employee. Franco,
however, admitted that the arrangement was not known to the Motor Vehicle Office.

The trial court held that as the defendant-appellant represented himself to be the owner of
the truck and the Motor Vehicle Office, relying on his representation, registered the vehicles
in his name, the Government and all persons affected by the representation had the right to
rely on his declaration of ownership and registration. It, therefore, held that the defendant-
appellant is liable because he cannot be permitted to repudiate his own declaration. (Section
68 [a], Rule 123, and Art. 1431, New Civil Code.).

Against the judgment, the defendant has prosecuted this appeal claiming that at the time of
the accident the relation of employer and employee between the driver and defendant-
appellant was not established, it having been proved at the trial that the owner of the truck
was the Port Brokerage, of which defendant-appellant was merely a broker. We find no
merit or justice in the above contention. In previous decisions, We already have held that
the registered owner of a certificate of public convenience is liable to the public for the
injuries or damages suffered by passengers or third persons caused by the operation of said
vehicle, even though the same had been transferred to a third person. (Montoya vs.
Ignacio, 94 Phil., 182, 50 Off. Gaz., 108; Roque vs. Malibay Transit Inc.,1 G. R. No. L- 8561,
November 18,1955; Vda. de Medina vs. Cresencia, 99 Phil., 506, 52 Off. Gaz., [10],
4606.)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 this 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. What is the legal basis for his
(defendant-appellant's) liability?.

There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he
is the registered owner in the Motor Vehicle Office. Should he not be allowed to prove the
truth, that he had sold it to another and thus shift the responsibility for the injury to the real
and actual owner? The defendant holds the affirmative of this proposition; the trial court
held the negative.

The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no vehicle may be
used or operated upon any public highway unless the same is properly registered. It has
been stated that the system of licensing and the requirement that each machine must carry
a registration number, conspicuously displayed, is one of the precautions taken to reduce
the danger of injury to pedestrians and other travelers from the careless management of
automobiles, and to furnish a means of ascertaining the identity of persons violating the
laws and ordinances, regulating the speed and operation of machines upon the highways (2
R. C. L. 1176). Not only are vehicles to be registered and that no motor vehicles are to be
used or operated without being properly registered for the current year, but that dealers in
motor vehicles shall furnish the Motor Vehicles Office a report showing the name and
address of each purchaser of motor vehicle during the previous month and the
manufacturer's serial number and motor number. (Section 5 [c], Act. No. 3992, as
amended.).

Registration is required not to make said registration the operative act by which ownership
in vehicles is transferred, as in land registration cases, because the administrative
proceeding of registration does not bear any essential relation to the contract of sale
between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the
use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended).The main aim of motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by the vehicles on the public
highways, responsibility therefore can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public highways caused accidents
or injuries to pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall those circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for damages or injuries
caused on public highways.

One of the principal purposes of motor vehicles legislation is identification of the

vehicle and of the operator, in case of accident; and another is that the knowledge
that means of detection are always available may act as a deterrent from lax
observance of the law and of the rules of conservative and safe operation. Whatever
purpose there may be in these statutes, it is subordinate at the last to the primary
purpose of rendering it certain that the violator of the law or of the rules of safety
shall not escape because of lack of means to discover him." The purpose of the
statute is thwarted, and the displayed number becomes a "snare and delusion," if
courts will entertain such defenses as that put forward by appellee in this case. No
responsible person or corporation could be held liable for the most outrageous acts
of negligence, if they should be allowed to place a "middleman" between them and
the public, and escape liability by the manner in which they recompense their
servants. (King vs. Brenham Automobile Co., 145 S. W. 278,279.)

With the above policy in mind, the question that defendant-appellant poses is: should not
be registered owner be allowed at the trial to prove who the actual and real owner is, and in
accordance with such proof escape or evade responsibility and lay the same on the person
actually owning the vehicle? We hold with the trial court that the laws does not allow him to
do so; the law, with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner allowed to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him, by collusion with others or
otherwise, to escape said responsibility and transfer the same to an indefinite person, or to
one who possesses no property with which to respond financially for the damage or injury
done. A victim of recklessness on the public highways is usually without means to discover
or identify the person actually causing the injury or damage. He has no means other than
by a recourse to the registration in the Motor Vehicles Office to determine who is the owner.
The protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership. If the
policy of the law is to be enforced and carried out, the registered owner should be allowed
to prove the contrary to the prejudice of the person injured that is, to prove that a third
person or another has become the owner, so that he may thereby be relieved of the
responsibility to the injured person.1âwphïl.nêt

The above policy and application of the law may appear quite harsh and would seem to
conflict with truth and justice. We do not think it is so. 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.1âwphïl.nêt
Bengzon, Paras, C.J., Bautista Angelo, Concepcion, Reyes, J. B. L., and Felix, JJ., concur.
Montemayor, J., concurs in the result.
 MA. LIZA FRANCO-CRUZ, G.R. No. 172238
Petitioner,
Present:

- versus - QUISUMBING, J., Chairperson,

TINGA,
CARPIO MORALES,
THE COURT OF APPEALS, VICTORY VELASCO, JR., and
LINER, INC., MARITES M. GANELO, BRION, JJ.
CATHERINE C. SANTOS, and MA.
THERESA Q. FABIAN,
Respondents. Promulgated:
September 17, 2008

x--------------------------------------------------x

DECISION

CARPIO MORALES, J.:

On January 4, 1998, a Franco Transit bus bearing license plate number AVC 228 collided
with the rear portions of a bus and truck wrecker both owned by respondent Victory Liner, Inc.
(Victory Liner) which were stalled along kilometer 63, North Expressway, San Felipe, San
Fernando, Pampanga. The collision damaged both vehicles of Victory Liner and killed Manuel
Fabian, Rodel Ganelo, Caesar Santos, and Michael Figueroa. The driver of the Franco Transit
bus likewise died in the accident.

On February 11, 1998, Victory Liner and respondents Marites M. Ganelo, Catherine C.
Santos, and Ma. Theresa Q. Fabian (Ma. Theresa) the surviving spouses of Rodel Ganelo,
Caesar Santos, and Manuel Fabian, respectively filed before the Regional Trial Court (RTC)
of Caloocan City a complaint (Civil Case No. C-18212),[1] for damages against Maria[2] Liza
Franco-Cruz (petitioner), alleged to be the registered owner and operator of public
transportation utilities and whose bus is known as and by the name of FRANCO TRANSIT and
which she has been operating prior to January 4, 1998.[3]

Respondents claimed that petitioner failed to exercise the diligence of a good father of
a family in the selection and supervision of the driver of the Franco Transit bus. [4]

In her Answer,[5] petitioner, after denying the material allegations of the Complaint,
alleged as among her Affirmative Defenses that she is not the real party-in-interest and,
therefore, the complaint stated no cause of action against her, hence, must be dismissed; that
the owner and the management of the bus involved in the case have always exercised the due
diligence of a good father of a family in the selection and supervision of their employees; and
that the proximate cause of the collision was the negligence and recklessness of a third party,
the driver of a Philippine Rabbit bus.[6]

Petitioner and her counsel failed to appear during the pre-trial scheduled on June 5,
1998 despite due notice thereof, albeit her counsel filed on even date an urgent motion to
postpone. The motion was denied, however, and petitioner was declared as in default
[sic]. Respondents at once started presenting evidence ex-parte.[7]

On June 23, 1998, petitioner filed a Motion for Reconsideration[8] of the June 5,
1998 order declaring her as in default, alleging that, inter alia, she had meritorious defenses
that included her not being the real party-in-interest as she is not the registered owner of the
Franco Transit bus[9] but Felicisima R. Franco, in support of which she attached a Certificate of
Registration issued on October 28, 1988 in the name of Felicisima R. Franco.[10]

Petitioners Motion for Reconsideration was denied by the trial court by Order[11] of July
20, 1998 in this wise:

Indeed, a cursory examination of the instant motion will readily show

that it was filed in patent violation of the provision of the rules.

While the movant alleged that [she] has a meritorious defense which
would justify the granting of [her] motion, [she] nevertheless failed to submit
an Affidavit of Merit. Worst, the motion was not even verified.[12] (Emphasis
and underscoring supplied)

Petitioner thereafter filed an Omnibus Motion[13] alleging that it was error to declare her
as in default for the declaration as in default of a defendant who fails to attend pre-trial had
been eliminated in the 1997 Rules of Civil Procedure. She thus prayed that she be allowed to
participate in the proceedings and to present evidence on her affirmative defenses. The
Omnibus Motion was denied for failure of petitioners counsel to appear at the hearing
thereon.[14]

After respondents rested their case, Branch 121 of the Caloocan City RTC, by
Decision[15] dated March 30, 1999, found that, inter alia, the negligence of the driver of the
Franco Transit bus resulted in the accident which the defendant [-herein petitioner] failed to
rebut and that, moreover, the defendant [-herein petitioner] totally failed to present evidence
to overthrow the presumption of negligence against her pursuant to Article 2180 of the Civil
Code.[16] It thus rendered judgment in favor of respondents, disposing as follows:

WHEREFORE, premises considered, judgment is hereby rendered

against MARIA LIZA FRANCO-CRUZ, operator of FRANCO TRANSIT, ordering
her:

1) To pay P50,000.00 each by way of actual damages and lost

income to plaintiffs Marites M. Ganelo, Catherine C. Santos and
Ma. Theresa Q. Fabian;

2) To pay moral damages to the above-named plaintiffs in the

amount of P100,000.00;

3) To pay actual damages in the amount of P515,631.00 to

plaintiff Victory Liner, Inc., and lost income in the amount of
P50,000.00;

4) To pay attorneys fees of P50,000.00 and the costs of the suit.

SO ORDERED.[17]

Respondent Ma. Theresa filed a Motion for Partial Reconsideration and

Clarification. [18]
Petitioner filed a Motion for Reconsideration [19]
of the trial courts
decision reiterating her plea that she is not the real party-in-interest against whom the action
should be brought, she again submitting the Certification of Registration of the bus in the
name of Felicisima R. Franco, together with an Official Receipt of payment as Annex A to the
motion.

By Order[20] dated June 25, 1999, the trial court denied Ma. Theresas partial motion
for reconsideration but clarified that the attorneys fees should be divided according to the
following proportion: three-fourths (3/4) for Atty. Atilano Huaben B. Lim who represented
three of the plaintiffs and one-fourth (1/4) for Atty. Roberto A. Unciano who represented
plaintiff Ma. Theresa Q. Fabian.[21]

Respecting petitioners Motion for Reconsideration of the decision, the trial court denied
the same for having been filed beyond the 15-day reglementary period, it having been
filed only on the 18th day (May 17, 1999) following the receipt by petitioners counsel of a copy
of the decision on April 29, 1999.[22]
 On petitioners appeal,[23] the Court of Appeals, by Decision[24] of September 22, 2005,
dismissed the same after noting that her motion for reconsideration of the trial courts decision
was filed only on the 18th day following receipt by her counsel of a copy of the decision. The
appellate court thus held that the trial courts decision had become final and executory. [25]

Her Motion for Reconsideration[26] of the appellate courts Decision having been
denied,[27] petitioner filed the present Petition for Certiorari.[28]

One of the requirements for certiorari to lie is that there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law. [29] Any judgment which finally
disposes of a case, leaving nothing more for the court to do in respect thereto such as the
judgment of the Court of Appeals dismissing petitioners appeal as she had lost the right
thereto is appealable.[30]Petitioners remedy is, therefore, appeal, not certiorari.
As a general rule, the requirements for perfecting an appeal within the reglementary
period specified in law must be strictly followed,[31] appeal not being a constitutional right but
a mere statutory privilege.[32] The perfection of an appeal in the manner and within the period
permitted by law is thus not only mandatory, but also jurisdictional.[33]

Petitioner argues, however, that:

The ruling of the respondent Court of Appeals contained in its questioned

Decision dated March 30, 1999 that the Petitioner had lost her right to appeal
is a patent nullity. What the respondent Court of Appeals missed is the fact
that before the period to appeal or file a Motion for Reconsideration expire[d],
respondent Ma. Theresa Q. Fabian filed a Partial Motion for Reconsideration of
the Decision of the lower court dated March 30, 1999, which motion asserted
that the lower court erred in not awarding indemnity for the death of each
victims [sic] to the plaintiffs and that it failed to clarify the award of attorneys
fees of P50,000.00 as to its awardees and its division. With the filing of such
Partial Motion for Reconsideration by respondent Ma. Theresa Q. Fabian which
prayed for the modification and clarification of the Decision dated March 30,
1999, then, the said decision did not become final.[34] (Underscoring supplied)

In the case at bar, the records show that petitioners counsel indeed received notice of
the trial courts decision on April 29, 1999.[35] Following Rule 37, Section 1 vis--vis Rule 41,
Section 3 of the Rules of Court, petitioner had 15 days or until May 14, 1999 to file a motion
for reconsideration or notice of appeal. She filed a motion for reconsideration on May 17,
1999, thus rendering the trial courts decision as to her final and executory. Testate Estate of
Manuel v. Biascan[36] so teaches:
 It is well-settled that judgments or orders become final and executory
by operation of law and not by judicial declaration. Thus, finality of a judgment
becomes a fact upon the lapse of the reglementary period of appeal if no appeal
is perfected or [no] motion for reconsideration or new trial is filed. The trial
court need not even pronounce the finality of the order as the same becomes
final by operation of law. In fact, the trial court could not even validly entertain
a motion for reconsideration after the lapse of the period for taking an appeal. x
x x The subsequent filing of a motion for reconsideration cannot disturb
the finality of the judgment or order.[37] (Emphasis and underscoring
supplied)

The filing of a motion for reconsideration by respondent Ma. Theresa within the
reglementary period prevented, with respect to her, the decision from becoming final, but not
with respect to petitioner.

In Bank of the Philippine Islands v. Far East Molasses Corporation, [38] this Court,
passing on Section 3, Rule 41 of the Rules of Court which provides that [t]he appeal shall be
taken within fifteen (15) days from notice of the judgment or final order appealed
from (underscoring supplied), held:

x x x the commencement of the period to appeal x x x should x x x be

reckoned x x x from the respective dates each of the parties received a copy of
the decision. Therefore, each party has a different period within which to
appeal, unless, of course, all of them received their copies on the same date
and none filed a motion for reconsideration.[39] (Emphasis and underscoring
supplied)

Since each party has a different period within which to appeal, the timely filing of a
motion for reconsideration by one party does not interrupt the other or another partys period
of appeal.

In petitioners case, her Motion for Reconsideration of the trial courts decision was filed
three days after the expiration of the reglementary period for the purpose, hence, the Court
of Appeals dismissal of her appeal was in order.

The faux pas or negligence of petitioners counsel, however, in failing to file a timely
motion for reconsideration should not be taken against her. Ordinarily, the negligence of
counsel binds the client.[40] However, this Court has recognized the following exceptions to this
rule: (1) where reckless or gross negligence of counsel deprives the client of due process of
law; (2) when its application will result in outright deprivation of the clients liberty or property;
or (3) where the interests of justice require.[41] In the case at bar, the application of the rule
would result in petitioner being held liable for the damages suffered by respondents even
without them having established the basis of her liability, thus depriving her of due process of
law.

Compounding petitioners plight is the trial courts procedural error which precluded
petitioner from presenting evidence in her behalf.[42] The trial court denied her motion for
reconsideration of its order declaring her as in default on the ground that she failed to submit
an affidavit of merit respecting her claim that she had meritorious defenses. This ratio is, of
course, erroneous, for an affidavit of merit is not required to support a motion for
reconsideration of an order allowing the ex-parte presentation of evidence by the plaintiff, the
defenses having already been laid down in the answer[43] as in petitioners case.

Petitioner, early on in the Affirmative Defenses segment of her Answer, already

disclaimed the allegation in respondents complaint that she is the registered owner of the
bus, hence, not a real party-in-interest-ground to dismiss the complaint for lack of cause of
action. She raised it again in her Motion for Reconsideration from the order declaring her as
in default, to which motion she in fact attached the Certificate of Registration showing that
the bus was registered in the name of Felicisima R. Franco. Thus, petitioner had alleged and
shown her meritorious defense by submitting the Certificate of Registration of the bus, which
is evidence that she is not the registered owner of the bus, or that something would be gained
by setting aside the order declaring her as in default.[44]

On the merits of the case, a review of the evidence for respondents shows that
individual respondents took the witness stand to testify on the damages they suffered. [45] And
they presented the Victory Liner bus inspector;[46] SPO2 Edgardo F. Balajadia (Balajadia) who
investigated the site of the accident right after it happened; [47] the Victory Liner maintenance
foreman regarding the damage sustained by the Victory Liner vehicles; [48] the death
certificates of Rodel Ganelo and Caesar Santos;[49] the marriage certificate of respondent
Marites Ganelo;[50] Balajadias Traffic Accident Report;[51] photographs of the damaged
vehicles;[52] and the damage report showing the expenses incurred in repairing both damaged
vehicles.[53]

There was no attempt, however, on the part of any of the witnesses for respondents,
to controvert petitioners affirmative defense that there is no cause of action against her, she
not being the registered owner of the Franco Transit bus, even despite her submission of the
bus Certificate of Registration in the name of Felicisima R. Franco which is conclusive proof
of ownership.

Respondents, in maintaining their cause of action against petitioner, relied on the

January 4, 1998 Traffic Accident Report[54] of Balajadia, who conducted a spot investigation
after the occurrence of the accident,[55] wherein he stated that the Franco Transit bus
was [r]egistered under the name of Marializa Franco-Cruz of Batac, Ilocos
Norte. (Emphasis supplied) How Balajadia arrived at such statement, he did not indicate in
his Report. Neither did he pass on it when he took the witness stand on February 11, 1999.[56]

Rule 130, Section 44 of the Rules of Court, provides:

SEC. 44. Entries in official records. Entries in official records made in the
performance of his duty by a public officer of the Philippines, or by a person in
the performance of a duty specially enjoined by law, are prima facie evidence
of the facts therein stated. (Italics in the original)

For the entries in Balajadias Report to qualify as prima facie evidence of the facts
therein stated, the following conditions must be present:

x x x (a) that the entry was made by a public officer, or by another

person specially enjoined by the law to do so; (b) that it was made by the public
officer in the performance of his duties or by such other person in the
performance of a duty enjoined by law; and (c) that the public officer or other
person had sufficient knowledge of the facts by him stated, which must have
been acquired by him personally or through official
information.[57] (Underscoring supplied)

Balajadias statement that the Franco Transit bus was [r]egistered under the name of
Marializa Franco-Cruz of Batac, Ilocos Norte was not shown, however, to have been based on
his personal knowledge or that he had sufficient knowledge thereof acquired by him personally
or officially.

It bears emphasis that the presentation by respondents of evidence ex-parte did not
relieve them of the burden of proving their claims against petitioner.
 As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or nature of the case, asserts an affirmative
issue. Contentions must be proved by competent evidence and reliance must
be had on the strength of the partys own evidence and not upon the weakness
of the opponents defense. This applies with more vigor where, as in the
instant case, the plaintiff was allowed to present evidence ex
parte. The plaintiff is not automatically entitled to the relief prayed for. The
law gives the defendant some measure of protection as the plaintiff must still
prove the allegations in the complaint.Favorable relief can be granted only after
the court is convinced that the facts proven by the plaintiff warrant such
relief. Indeed, the party alleging a fact has the burden of proving it and a mere
allegation is not evidence.[58] (Emphasis and underscoring supplied)

Respondents having failed to discharge the onus of proving that petitioner was, at the
time of the accident, the registered owner of the bus, it was error for the trial court to credit
respondents evidence.

Just as it was error for it to hold that the defendant [-herein

petitioner] failed 1) to rebut the evidence showing the accident was the result of the
negligence of the Franco Transit bus driver and 2) to present evidence to overthrow the
presumption of negligence against her pursuant to Article 2180 of the Civil Code in light of its
order allowing respondents to present evidence ex-parte and denying petitioners pleas to be
allowed to participate in the proceedings and present evidence on her affirmative defenses.

The trial courts decision in favor of respondents must thus be set aside.

Given the attendant facts and circumstances, in the interest of justice, this Court
resolves to remand the case to the trial court to afford petitioner her right to due process.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals

dated September 22, 2005 dismissing petitioners appeal from the decision of Branch 121 of
the Caloocan City Regional Trial Court is SET ASIDE. The decision of the trial court is
vacated. Civil Case No. C-18212 is REMANDED to Branch 121 of
the Regional Trial Court of Caloocan City which is hereby directed to allow petitioner to
present evidence on her affirmative defenses and/or rebut respondents evidence and to allow
respondents to submit additional evidence if necessary and/or they so desire.

SO ORDERED.
 FILCAR TRANSPORT SERVICES, G.R. No. 174156
Petitioner,
Present:

CARPIO, J., Chairperson,

BRION,
- versus - PEREZ,
SERENO, and
REYES, JJ.

Promulgated:
JOSE A. ESPINAS,
Respondent. June 20, 2012

x------------------------------------------------------------------------------------x

DECISION

BRION, J.:

We resolve the present petition for review on certiorari[1] filed by petitioner Filcar Transport
Services (Filcar), challenging the decision[2] and the resolution[3] of the Court of Appeals (CA)
in CA-G.R. SP No. 86603.

The facts of the case, gathered from the records, are briefly summarized below.

On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car
along Leon Guinto Street in Manila. Upon reaching the intersection of Leon Guinto and
President Quirino Streets, Espinas stopped his car. When the signal light turned green, he
proceeded to cross the intersection. He was already in the middle of the intersection when
another car, traversing President Quirino Street and going to Roxas Boulevard, suddenly hit
and bumped his car. As a result of the impact, Espinas car turned clockwise. The other car
escaped from the scene of the incident, but Espinas was able to get its plate number.

After verifying with the Land Transportation Office, Espinas learned that the owner of the
other car, with plate number UCF-545, is Filcar.
Espinas sent several letters to Filcar and to its President and General Manager Carmen Flor,
demanding payment for the damages sustained by his car. On May 31, 2001, Espinas filed a
complaint for damages against Filcar and Carmen Flor before the Metropolitan Trial Court
(MeTC) of Manila, and the case was raffled to Branch 13. In the complaint, Espinas demanded
that Filcar and Carmen Flor pay the amount of P97,910.00, representing actual damages
sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped
Espinas car, the car was assigned to its Corporate Secretary Atty. Candido Flor, the husband
of Carmen Flor. Filcar further stated that when the incident happened, the car was being
driven by Atty. Flors personal driver, Timoteo Floresca.

Atty. Flor, for his part, alleged that when the incident occurred, he was attending a
birthday celebration at a nearby hotel, and it was only later that night when he noticed a
small dent on and the cracked signal light of the car. On seeing the dent and the crack, Atty.
Flor allegedly asked Floresca what happened, and the driver replied that it was a result of a
hit and run while the car was parked in front of Bogota on Pedro Gil Avenue, Manila.

Filcar denied any liability to Espinas and claimed that the incident was not due to its
fault or negligence since Floresca was not its employee but that of Atty. Flor. Filcar and
Carmen Flor both said that they always exercised the due diligence required of a good father
of a family in leasing or assigning their vehicles to third parties.

The MeTC Decision

The MeTC, in its decision dated January 20, 2004,[4] ruled in favor of Espinas, and ordered
Filcar and Carmen Flor, jointly and severally, to pay Espinas P97,910.00 as actual damages,
representing the cost of repair, with interest at 6% per annum from the date the complaint
was filed; P50,000.00 as moral damages; P20,000.00 as exemplary damages;
and P20,000.00 as attorneys fees. The MeTC ruled that Filcar, as the registered owner of the
vehicle, is primarily responsible for damages resulting from the vehicles operation.

The RTC Decision

The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate
jurisdiction, affirmed the MeTC decision.[5] The RTC ruled that Filcar failed to prove that
Floresca was not its employee as no proof was adduced that Floresca was personally hired by
Atty. Flor. The RTC agreed with the MeTC that the registered owner of a vehicle is directly
and primarily liable for the damages sustained by third persons as a consequence of the
negligent or careless operation of a vehicle registered in its name. The RTC added that the
victim of recklessness on the public highways is without means to discover or identify the
person actually causing the injury or damage. Thus, the only recourse is to determine the
owner, through the vehicles registration, and to hold him responsible for the damages.

The CA Decision

On appeal, the CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC
decision by ruling that Carmen Flor, President and General Manager of Filcar, is not personally
liable to Espinas. The appellate court pointed out that, subject to recognized exceptions, the
liability of a corporation is not the liability of its corporate officers because a corporate entity
subject to well-recognized exceptions has a separate and distinct personality from its officers
and shareholders. Since the circumstances in the case at bar do not fall under the exceptions
recognized by law, the CA concluded that the liability for damages cannot attach to Carmen
Flor.

The CA, however, affirmed the liability of Filcar to pay Espinas damages. According to
the CA, even assuming that there had been no employer-employee relationship between Filcar
and the driver of the vehicle, Floresca, the former can be held liable under the registered
owner rule.

The CA relied on the rule that the registered owner of a vehicle is directly and primarily
responsible to the public and to third persons while the vehicle is being operated. Citing Erezo,
et al. v. Jepte,[6] the CA said that the rationale behind the rule is to avoid circumstances where
vehicles running on public highways cause accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant means of
identification. In Erezo, the Court said that the main aim of motor vehicle registration is to
identify the owner, so that if a vehicle causes damage or injury to pedestrians or other
vehicles, responsibility can be traced to a definite individual and that individual is the
registered owner of the vehicle.[7]

The CA did not accept Filcars argument that it cannot be held liable for damages
because the driver of the vehicle was not its employee. In so ruling, the CA cited the case
of Villanueva v. Domingo[8] where the Court said that the question of whether the driver was
authorized by the actual owner is irrelevant in determining the primary and direct
responsibility of the registered owner of a vehicle for accidents, injuries and deaths caused
by the operation of his vehicle.

Filcar filed a motion for reconsideration which the CA denied in its Resolution dated
July 6, 2006.

Hence, the present petition.

The Issue
Simply stated, the issue for the consideration of this Court is: whether Filcar, as
registered owner of the motor vehicle which figured in an accident, may be held liable for the
damages caused to Espinas.

Our Ruling

The petition is without merit.

Filcar, as registered owner, is deemed the

employer of the driver, Floresca, and is thus
vicariously liable under Article 2176 in relation
with Article 2180 of the Civil Code

It is undisputed that Filcar is the registered owner of the motor vehicle which hit and
caused damage to Espinas car; and it is on the basis of this fact that we hold Filcar primarily
and directly liable to Espinas for damages.

As a general rule, one is only responsible for his own act or omission. [9] Thus, a person
will generally be held liable only for the torts committed by himself and not by another. This
general rule is laid down in Article 2176 of the Civil Code, which provides to wit:

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 a quasi-delict and is governed by the provisions of this
Chapter.
Based on the above-cited article, the obligation to indemnify another for damage caused by
ones act or omission is imposed upon the tortfeasor himself, i.e., the person who committed
the negligent act or omission. The law, however, provides for exceptions when it makes
certain persons liable for the act or omission of another.

One exception is an employer who is made vicariously liable for the tort committed by
his employee. Article 2180 of the Civil Code states:

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.

xxxx

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.

xxxx

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father of
a family to prevent damage.

Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated
on an employees act or omission may be instituted against the employer who is held liable
for the negligent act or omission committed by his employee.

Although the employer is not the actual tortfeasor, the law makes him vicariously liable
on the basis of the civil law principle of pater familias for failure to exercise due care and
vigilance over the acts of ones subordinates to prevent damage to another. [10] In the last
paragraph of Article 2180 of the Civil Code, the employer may invoke the defense that he
observed all the diligence of a good father of a family to prevent damage.

As its core defense, Filcar contends that Article 2176, in relation with Article 2180, of
the Civil Code is inapplicable because it presupposes the existence of an employer-employee
relationship. According to Filcar, it cannot be held liable under the subject provisions because
the driver of its vehicle at the time of the accident, Floresca, is not its employee but that of
its Corporate Secretary, Atty. Flor.

We cannot agree. It is well settled that in case of motor vehicle mishaps, the
registered owner of the motor vehicle is considered as the employer of the
tortfeasor-driver, and is made primarily liable for the tort committed by the latter under
Article 2176, in relation with Article 2180, of the Civil Code.

In Equitable Leasing Corporation v. Suyom,[11] we ruled that in so far as third persons

are concerned, the registered owner of the motor vehicle is the employer of the
negligent driver, and the actual employer is considered merely as an agent of such
owner.
In that case, a tractor registered in the name of Equitable Leasing Corporation
(Equitable) figured in an accident, killing and seriously injuring several persons. As part of its
defense, Equitable claimed that the tractor was initially leased to Mr. Edwin Lim under a Lease
Agreement, which agreement has been overtaken by a Deed of Sale entered into by Equitable
and Ecatine Corporation (Ecatine). Equitable argued that it cannot be held liable for damages
because the tractor had already been sold to Ecatine at the time of the accident and the
negligent driver was not its employee but of Ecatine.

In upholding the liability of Equitable, as registered owner of the tractor, this Court
said that regardless of sales made of a motor vehicle, the registered owner is the lawful
operator insofar as the public and third persons are concerned; consequently, it is directly
and primarily responsible for the consequences of its operation. [12] The Court further stated
that [i]n contemplation of law, the owner/operator of record is the employer of the
driver, the actual operator and employer being considered as merely
its agent.[13] Thus, Equitable, as the registered owner of the tractor, was considered under
the law on quasi delict to be the employer of the driver, Raul Tutor; Ecatine, Tutors actual
employer, was deemed merely as an agent of Equitable.

Thus, it is clear that for the purpose of holding the registered owner of the motor
vehicle primarily and directly liable for damages under Article 2176, in relation with Article
2180, of the Civil Code, the existence of an employer-employee relationship, as it is
understood in labor relations law, is not required. It is sufficient to establish that Filcar is the
registered owner of the motor vehicle causing damage in order that it may be held vicariously
liable under Article 2180 of the Civil Code.
Rationale for holding the registered owner
vicariously liable

The rationale for the rule that a registered owner is vicariously liable for damages
caused by the operation of his motor vehicle is explained by the principle behind motor vehicle
registration, which has been discussed by this Court in Erezo, and cited by the CA in its
decision:

The main aim of motor vehicle registration is to identify the owner so

that if any accident happens, or that any damage or injury is caused by
the vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner. Instances are numerous
where vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that the motor
vehicle registration is primarily ordained, in the interest of the determination of
persons responsible for damages or injuries caused on public
highways. [emphasis ours]

Thus, whether there is an employer-employee relationship between the registered

owner and the driver is irrelevant in determining the liability of the registered owner who the
law holds primarily and directly responsible for any accident, injury or death caused by the
operation of the vehicle in the streets and highways.

As explained by this Court in Erezo, the general public policy involved in motor vehicle
registration is the protection of innocent third persons who may have no means of identifying
public road malefactors and, therefore, would find it difficult if not impossible to seek redress
for damages they may sustain in accidents resulting in deaths, injuries and other damages;
by fixing the person held primarily and directly liable for the damages sustained by victims of
road mishaps, the law ensures that relief will always be available to them.

To identify the person primarily and directly responsible for the damages would also
prevent a situation where a registered owner of a motor vehicle can easily escape liability by
passing on the blame to another who may have no means to answer for the damages caused,
thereby defeating the claims of victims of road accidents. We take note that some motor
vehicles running on our roads are driven not by their registered owners, but by employed
drivers who, in most instances, do not have the financial means to pay for the damages
caused in case of accidents.

These same principles apply by analogy to the case at bar. Filcar should not be
permitted to evade its liability for damages by conveniently passing on the blame to another
party; in this case, its Corporate Secretary, Atty. Flor and his alleged driver, Floresca.
Following our reasoning in Equitable, the agreement between Filcar and Atty. Flor to assign
the motor vehicle to the latter does not bind Espinas who was not a party to and has no
knowledge of the agreement, and whose only recourse is to the motor vehicle registration.

Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that
the employee acts beyond the scope of his assigned task or that it exercised the due diligence
of a good father of a family to prevent damage - because the motor vehicle registration law,
to a certain extent, modified Article 2180 of the Civil Code by making these defenses
unavailable to the registered owner of the motor vehicle. Thus, for as long as Filcar is the
registered owner of the car involved in the vehicular accident, it could not escape primary
liability for the damages caused to Espinas.

The public interest involved in this case must not be underestimated. Road safety is
one of the most common problems that must be addressed in this country. We are not
unaware of news of road accidents involving reckless drivers victimizing our citizens. Just
recently, such pervasive recklessness among most drivers took the life of a professor of our
state university.[14] What is most disturbing is that our existing laws do not seem to deter
these road malefactors from committing acts of recklessness.

We understand that the solution to the problem does not stop with legislation. An
effective administration and enforcement of the laws must be ensured to reinforce discipline
among drivers and to remind owners of motor vehicles to exercise due diligence and vigilance
over the acts of their drivers to prevent damage to others.
Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is irrelevant
in arriving at the conclusion that Filcar is primarily and directly liable for the damages
sustained by Espinas. While Republic Act No. 4136 or the Land Transportation and Traffic
Code does not contain any provision on the liability of registered owners in case of motor
vehicle mishaps, Article 2176, in relation with Article 2180, of the Civil Code imposes an
obligation upon Filcar, as registered owner, to answer for the damages caused to Espinas car.
This interpretation is consistent with the strong public policy of maintaining road safety,
thereby reinforcing the aim of the State to promote the responsible operation of motor
vehicles by its citizens.

This does not mean, however, that Filcar is left without any recourse against the actual
employer of the driver and the driver himself. Under the civil law principle of unjust
enrichment, the registered owner of the motor vehicle has a right to be indemnified by the
actual employer of the driver of the amount that he may be required to pay as damages for
the injury caused to another.

The set-up may be inconvenient for the registered owner of the motor vehicle, but the
inconvenience cannot outweigh the more important public policy being advanced by the law
in this case which is the protection of innocent persons who may be victims of reckless drivers
and irresponsible motor vehicle owners.

WHEREFORE, the petition is DENIED. The decision dated February 16, 2006 and the
resolution dated July 6, 2006 of the Court of Appeals are AFFIRMED. Costs against petitioner
Filcar Transport Services.

SO ORDERED.
 [G.R. No. 143360. September 5, 2002]

EQUITABLE LEASING CORPORATION, petitioner, vs. LUCITA SUYOM, MARISSA

ENANO, MYRNA TAMAYO and FELIX OLEDAN, respondents.

DECISION
PANGANIBAN, J.:

In an action based on quasi delict, the registered owner of a motor vehicle is solidarily
liable for the injuries and damages caused by the negligence of the driver, in spite of the fact
that the vehicle may have already been the subject of an unregistered Deed of Sale in favor
of another person. Unless registered with the Land Transportation Office, the sale -- while
valid and binding between the parties -- does not affect third parties, especially the victims
of accidents involving the said transport equipment. Thus, in the present case, petitioner,
which is the registered owner, is liable for the acts of the driver employed by its former lessee
who has become the owner of that vehicle by virtue of an unregistered Deed of Sale.

Statement of the Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the May
12, 2000 Decision[1] of the Court of Appeals[2] (CA) in CA-GR CV No. 55474. The decretal
portion of the Decision reads as follows:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of
merit. The assailed decision, dated May 5, 1997, of the Regional Trial Court of Manila,
Branch 14, in Civil Case No. 95-73522, is hereby AFFIRMED with MODIFICATION that
the award of attorneys fees is DELETED.[3]

On the other hand, in Civil Case No. 95-73522, the Regional Trial Court (RTC) of Manila
(Branch 14) had earlier disposed in this wise:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendant Equitable Leasing Corporation ordering said defendant to pay to the plaintiffs the
following:

A. TO MYRNA TAMAYO

1. the sum of P50,000.00 for the death of Reniel Tamayo;

2. P50,000.00 as moral damages; and

3. P56,000.00 for the damage to the store and its contents, and funeral expenses.

B. TO FELIX OLEDAN

1. the sum of P50,000.00 for the death of Felmarie Oledan;

2. P50,000.00 as moral damages; and

3. P30,000.00 for medical expenses, and funeral expenses.

C. TO MARISSA ENANO

1. P7,000.00 as actual damages

D. TO LUCITA SUYOM

1. The sum of P5,000.00 for the medical treatment of her two sons.

The sum of P120,000.00 as and for attorneys fees.[4]

The Facts

On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house
cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house
was destroyed. Pinned to death under the engine of the tractor were Respondent Myrna
Tamayos son, Reniel Tamayo, and Respondent Felix Oledans daughter, Felmarie
Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons
of Respondent Lucita Suyom.
Tutor was charged with and later convicted of reckless imprudence resulting in multiple
homicide and multiple physical injuries in Criminal Case No. 296094-SA, Metropolitan Trial
Court of Manila, Branch 12.[5]
Upon verification with the Land Transportation Office, respondents were furnished a copy
of Official Receipt No. 62204139[6] and Certificate of Registration No. 08262797,[7] showing
that the registered owner of the tractor was Equitable Leasing Corporation/leased to Edwin
Lim. On April 15, 1995, respondents filed against Raul Tutor, Ecatine Corporation (Ecatine)
and Equitable Leasing Corporation (Equitable) a Complaint[8] for damages docketed as Civil
Case No. 95-73522 in the RTC of Manila, Branch 14.
The trial court, upon motion of plaintiffs counsel, issued an Order dropping Raul Tutor,
Ecatine and Edwin Lim from the Complaint, because they could not be located and served
with summonses.[9] On the other hand, in its Answer with Counterclaim,[10] petitioner alleged
that the vehicle had already been sold to Ecatine and that the former was no longer in
possession and control thereof at the time of the incident.It also claimed that Tutor was an
employee, not of Equitable, but of Ecatine.
After trial on the merits, the RTC rendered its Decision ordering petitioner to pay actual
and moral damages and attorneys fees to respondents. It held that since the Deed of Sale
between petitioner and Ecatine had not been registered with the Land Transportation Office
(LTO), the legal owner was still Equitable.[11] Thus, petitioner was liable to respondents.[12]

Ruling of the Court of Appeals

 Sustaining the RTC, the CA held that petitioner was still to be legally deemed the
owner/operator of the tractor, even if that vehicle had been the subject of a Deed of Sale in
favor of Ecatine on December 9, 1992. The reason cited by the CA was that the Certificate of
Registration on file with the LTO still remained in petitioners name. [13] In order that a transfer
of ownership of a motor vehicle can bind third persons, it must be duly recorded in the LTO. [14]
The CA likewise upheld respondents claim for moral damages against petitioner because
the appellate court considered Tutor, the driver of the tractor, to be an agent of the registered
owner/operator.[15]
Hence, this Petition.[16]

Issues

In its Memorandum, petitioner raises the following issues for the Courts consideration:
I

Whether or not the Court of Appeals and the trial court gravely erred when they decided
and held that petitioner [was] liable for damages suffered by private respondents in an
action based on quasi delict for the negligent acts of a driver who [was] not the employee of
the petitioner.

II

Whether or not the Court of Appeals and the trial court gravely erred when they awarded
moral damages to private respondents despite their failure to prove that the injuries they
suffered were brought by petitioners wrongful act.[17]

This Courts Ruling

The Petition has no merit.

First Issue:
Liability for Wrongful Acts

Petitioner contends that it should not be held liable for the damages sustained by
respondents and that arose from the negligence of the driver of the Fuso Road Tractor, which
it had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor,
the driver of the vehicle, it could not have controlled or supervised him.[18]
We are not persuaded. In negligence cases, the aggrieved party may sue the negligent
party under (1) Article 100[19] of the Revised Penal Code, for civil liability ex delicto; or (2)
under Article 2176[20] of the Civil Code, for civil liability ex quasi delicto.[21]
Furthermore, under Article 103 of the Revised Penal Code, employers may be
held subsidiarily liable for felonies committed by their employees in the discharge of the
latters duties.[22] This liability attaches when the employees who are convicted of crimes
committed in the performance of their work are found to be insolvent and are thus unable to
satisfy the civil liability adjudged.[23]
On the other hand, under Article 2176 in relation to Article 2180[24] of the Civil Code, an
action predicated on quasi delict may be instituted against the employer for an employees act
or omission. The liability for the negligent conduct of the subordinate
is direct and primary, but is subject to the defense of due diligence in the selection and
supervision of the employee.[25] The enforcement of the judgment against the employer for
an action based on Article 2176 does not require the employee to be insolvent, since the
liability of the former is solidary -- the latter being statutorily considered a joint
tortfeasor.[26] To sustain a claim based on quasi delict, the following requisites must be
proven: (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.[27]
These two causes of action (ex delicto or ex quasi delicto) may be availed of, subject to
the caveat[28] that the offended party cannot recover damages twice for the same act or
omission or under both causes.[29] Since these two civil liabilities are distinct and independent
of each other, the failure to recover in one will not necessarily preclude recovery in the
other.[30]
In the instant case, respondents -- having failed to recover anything in the criminal case
-- elected to file a separate civil action for damages, based on quasi delict under Article 2176
of the Civil Code.[31] The evidence is clear that the deaths and the injuries suffered by
respondents and their kins were due to the fault of the driver of the Fuso tractor.
Dated June 4, 1991, the Lease Agreement [32] between petitioner and Edwin Lim
stipulated that it is the intention of the parties to enter into a FINANCE LEASE
AGREEMENT.[33] Under such scheme, ownership of the subject tractor was to be registered in
the name of petitioner, until the value of the vehicle has been fully paid by Edwin
Lim.[34] Further, in the Lease Schedule,[35] the monthly rental for the tractor was stipulated,
and the term of the Lease was scheduled to expire on December 4, 1992. After a few months,
Lim completed the payments to cover the full price of the tractor.[36] Thus, on December 9,
1992, a Deed of Sale[37] over the tractor was executed by petitioner in favor of Ecatine
represented by Edwin Lim. However, the Deed was not registered with the LTO.
We hold petitioner liable for the deaths and the injuries complained of, because it was
the registered owner of the tractor at the time of the accident on July 17, 1994.[38] The Court
has consistently ruled that, regardless of sales made of a motor vehicle, the registered owner
is the lawful operator insofar as the public and third persons are concerned; consequently, it
is directly and primarily responsible for the consequences of its operation. [39] In contemplation
of law, the owner/operator of record is the employer of the driver, the actual operator and
employer being considered as merely its agent.[40] The same principle applies even if the
registered owner of any vehicle does not use it for public service. [41]
Since Equitable remained the registered owner of the tractor, it could not escape primary
liability for the deaths and the injuries arising from the negligence of the driver. [42]
The finance-lease agreement between Equitable on the one hand and Lim or Ecatine on
the other has already been superseded by the sale. In any event, it does not bind third
persons. The rationale for this rule has been aptly explained in Erezo v. Jepte,[43] which we
quote hereunder:

x x x. The main aim of motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by the vehicle on the public
highways, responsibility therefor can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public highways caused accidents
or injuries to pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for damages or injuries
caused on public highways.[44]

Further, petitioners insistence on FGU Insurance Corp. v. Court of Appeals is

misplaced.[45] First, in FGU Insurance, the registered vehicle owner, which was engaged in a
rent-a-car business, rented out the car. In this case, the registered owner of the truck, which
is engaged in the business of financing motor vehicle acquisitions, has actually sold the truck
to Ecatine, which in turn employed Tutor. Second, in FGU Insurance, the registered owner of
the vehicle was not held responsible for the negligent acts of the person who rented one of
its cars, because Article 2180 of the Civil Code was not applicable. We held that no vinculum
juris as employer and employee existed between the owner and the driver. [46] In this case,
the registered owner of the tractor is considered under the law to be the employer of the
driver, while the actual operator is deemed to be its agent.[47] Thus, Equitable, the registered
owner of the tractor, is -- for purposes of the law on quasi delict -- the employer of Raul
Tutor, the driver of the tractor. Ecatine, Tutors actual employer, is deemed as merely an
agent of Equitable.[48]
True, the LTO Certificate of Registration, dated 5/31/91, qualifies the name of the
registered owner as EQUITABLE LEASING CORPORATION/Leased to Edwin Lim. But the lease
agreement between Equitable and Lim has been overtaken by the Deed of Sale on December
9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this
quasi delict suit, it definitely binds petitioner because, unlike them, it is a party to it.
We must stress that the failure of Equitable and/or Ecatine to register the sale with the
LTO should not prejudice respondents, who have the legal right to rely on the legal principle
that the registered vehicle owner is liable for the damages caused by the negligence of the
driver. Petitioner cannot hide behind its allegation that Tutor was the employee of
Ecatine. This will effectively prevent respondents from recovering their losses on the basis of
the inaction or fault of petitioner in failing to register the sale. The non-registration is the fault
of petitioner, which should thus face the legal consequences thereof.

Second Issue:
Moral Damages

Petitioner further claims that it is not liable for moral damages, because respondents
failed to establish or show the causal connection or relation between the factual basis of their
claim and their wrongful act or omission, if any. [49]
Moral damages are not punitive in nature, but are designed to compensate [50] and
alleviate in some way the physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury
unjustly caused a person.[51] Although incapable of pecuniary computation, moral damages
must nevertheless be somehow proportional to and in approximation of the suffering
inflicted.[52] This is so because moral damages are in the category of an award designed to
compensate the claimant for actual injury suffered, not to impose a penalty on the
wrongdoer.[53]
 Viewed as an action for quasi delict, the present case falls squarely within the purview of
Article 2219 (2),[54] which provides for the payment of moral damages in cases of quasi
delict.[55] Having established the liability of petitioner as the registered owner of the
vehicle,[56] respondents have satisfactorily shown the existence of the factual basis for the
award[57] and its causal connection to the acts of Raul Tutor, who is deemed as petitioners
employee.[58] Indeed, the damages and injuries suffered by respondents were the proximate
result of petitioners tortious act or omission.[59]
Further, no proof of pecuniary loss is necessary in order that moral damages may be
awarded, the amount of indemnity being left to the discretion of the court. [60] The evidence
gives no ground for doubt that such discretion was properly and judiciously exercised by the
trial court.[61] The award is in fact consistent with the rule that moral damages are not
intended to enrich the injured party, but to alleviate the moral suffering undergone by that
party by reason of the defendants culpable action.[62]
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.
SO ORDERED.
Puno, (Chairman), Corona, and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., on leave.
G.R. No. 162267 July 4, 2008

PCI LEASING AND FINANCE, INC., petitioner,

vs.
UCPB GENERAL INSURANCE CO., INC., respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking a reversal of the Decision1 of the Court of Appeals (CA) dated December 12, 2003
affirming with modification the Decision of the Regional Trial Court (RTC) of Makati City
which ordered petitioner and Renato Gonzaga (Gonzaga) to pay, jointly and severally,
respondent the amount of P244,500.00 plus interest; and the CA Resolution 2 dated
February 18, 2004 denying petitioner's Motion for Reconsideration.

The facts, as found by the CA, are undisputed:

On October 19, 1990 at about 10:30 p.m., a Mitsubishi Lancer car with Plate Number
PHD-206 owned by United Coconut Planters Bank was traversing the Laurel Highway,
Barangay Balintawak, Lipa City. The car was insured with plantiff-appellee [UCPB
General Insurance Inc.], then driven by Flaviano Isaac with Conrado Geronimo, the
Asst. Manager of said bank, was hit and bumped by an 18-wheeler Fuso Tanker
Truck with Plate No. PJE-737 and Trailer Plate No. NVM-133, owned by defendants-
appellants PCI Leasing & Finance, Inc. allegedly leased to and operated by
defendant-appellant Superior Gas & Equitable Co., Inc. (SUGECO) and driven by its
employee, defendant appellant Renato Gonzaga.

The impact caused heavy damage to the Mitsubishi Lancer car resulting in an
explosion of the rear part of the car. The driver and passenger suffered physical
injuries. However, the driver defendant-appellant Gonzaga continued on its [sic] way
to its [sic] destination and did not bother to bring his victims to the hospital.

Plaintiff-appellee paid the assured UCPB the amount of P244,500.00 representing the
insurance coverage of the damaged car.

As the 18-wheeler truck is registered under the name of PCI Leasing, repeated
demands were made by plaintiff-appellee for the payment of the aforesaid amounts.
However, no payment was made. Thus, plaintiff-appellee filed the instant case on
March 13, 1991.3

PCI Leasing and Finance, Inc., (petitioner) interposed the defense that it could not be held
liable for the collision, since the driver of the truck, Gonzaga, was not its employee, but that
of its co-defendant Superior Gas & Equitable Co., Inc. (SUGECO).4 In fact, it was SUGECO,
and not petitioner, that was the actual operator of the truck, pursuant to a Contract of
Lease signed by petitioner and SUGECO.5 Petitioner, however, admitted that it was the
owner of the truck in question.6

After trial, the RTC rendered its Decision dated April 15, 1999,7 the dispositive portion of
which reads:
 WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff
UCPB General Insurance [respondent], ordering the defendants PCI Leasing and
Finance, Inc., [petitioner] and Renato Gonzaga, to pay jointly and severally the
former the following amounts: the principal amount of P244,500.00 with 12%
interest as of the filing of this complaint until the same is paid; P50,000.00 as
attorney's fees; and P20,000.00 as costs of suit.

SO ORDERED.8

Aggrieved by the decision of the trial court, petitioner appealed to the CA.

In its Decision dated December 12, 2003, the CA affirmed the RTC's decision, with certain
modifications, as follows:

WHEREFORE, the appealed decision dated April 15, 1999 is hereby AFFIRMED with
modification that the award of attorney's fees is hereby deleted and the rate of
interest shall be six percent (6%) per annum computed from the time of the filing of
the complaint in the trial court until the finality of the judgment. If the adjudged
principal and the interest remain unpaid thereafter, the interest rate shall be twelve
percent (12%) per annum computed from the time the judgment becomes final and
executory until it is fully satisfied.

SO ORDERED.9

Petitioner filed a Motion for Reconsideration which the CA denied in its Resolution dated
February 18, 2004.

Hence, herein Petition for Review.

The issues raised by petitioner are purely legal:

Whether petitioner, as registered owner of a motor vehicle that figured in a quasi-

delict may be held liable, jointly and severally, with the driver thereof, for the
damages caused to third parties.

Whether petitioner, as a financing company, is absolved from liability by the

enactment of Republic Act (R.A.) No. 8556, or the Financing Company Act of 1998.

Anent the first issue, the CA found petitioner liable for the damage caused by the collision
since under the Public Service Act, if the property covered by a franchise is transferred or
leased to another without obtaining the requisite approval, the transfer is not binding on the
Public Service Commission and, in contemplation of law, the grantee continues to be
responsible under the franchise in relation to the operation of the vehicle, such as damage
or injury to third parties due to collisions.10

Petitioner claims that the CA's reliance on the Public Service Act is misplaced, since the said
law applies only to cases involving common carriers, or those which have franchises to
operate as public utilities. In contrast, the case before this Court involves a private
commercial vehicle for business use, which is not offered for service to the general public.11
Petitioner's contention has partial merit, as indeed, the vehicles involved in the case at bar
are not common carriers, which makes the Public Service Act inapplicable.

However, the registered owner of the vehicle driven by a negligent driver may still be held
liable under applicable jurisprudence involving laws on compulsory motor vehicle
registration and the liabilities of employers for quasi-delicts under the Civil Code.

The principle of holding the registered owner of a vehicle liable for quasi-delicts resulting
from its use is well-established in jurisprudence. Erezo v. Jepte,12 with Justice Labrador
as ponente, wisely explained the reason behind this principle, thus:

Registration is required not to make said registration the operative act by which
ownership in vehicles is transferred, as in land registration cases, because the
administrative proceeding of registration does not bear any essential relation to the
contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil.
888), but to permit the use and operation of the vehicle upon any public highway
(section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle
registration is to identify the owner so that if any accident happens, or that any
damage or injury is caused by the vehicle on the public highways, responsibility
therefor can be fixed on a definite individual, the registered owner. Instances are
numerous where vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or drivers,
or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is
primarily ordained, in the interest of the determination of persons responsible for
damages or injuries caused on public highways.

"'One of the principal purposes of motor vehicles legislation is identification of

the vehicle and of the operator, in case of accident; and another is that the
knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative and
safe operation. Whatever purpose there may be in these statutes, it is
subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of
means to discover him.' The purpose of the statute is thwarted, and the
displayed number becomes a 'snare and delusion,' if courts would entertain
such defenses as that put forward by appellee in this case. No responsible
person or corporation could be held liable for the most outrageous acts of
negligence, if they should be allowed to place a 'middleman' between them
and the public, and escape liability by the manner in which they recompense
their servants." (King vs. Brenham Automobile Co., 145 S.W. 278, 279.)

With the above policy in mind, the question that defendant-appellant poses is:
should not the registered owner be allowed at the trial to prove who the actual and
real owner is, and in accordance with such proof escape or evade responsibility and
lay the same on the person actually owning the vehicle? We hold with the trial court
that the law does not allow him to do so; the law, with its aim and policy in mind,
does not relieve him directly of the responsibility that the law fixes and places upon
him as an incident or consequence of registration. Were a registered owner allowed
to evade responsibility by proving who the supposed transferee or owner is, it would
be easy for him, by collusion with others or otherwise, to escape said responsibility
and transfer the same to an indefinite person, or to one who possesses no property
 with which to respond financially for the damage or injury done. A victim of
recklessness on the public highways is usually without means to discover or identify
the person actually causing the injury or damage. He has no means other than by a
recourse to the registration in the Motor Vehicles Office to determine who is the
owner. The protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by disproving his
ownership. If the policy of the law is to be enforced and carried out, the registered
owner should not be allowed to prove the contrary to the prejudice of the person
injured, that is, to prove that a third person or another has become the owner, so
that he may thereby be relieved of the responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem
to conflict with truth and justice. We do not think it is so. 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.13

The case is still good law and has been consistently cited in subsequent cases. 14 Thus, there
is no good reason to depart from its tenets.

For damage or injuries arising out of negligence in the operation of a motor vehicle, the
registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if
the aggrieved party seeks relief based on a delict or crime under Articles 100 and 103 of the
Revised Penal Code; or 2) solidarily, if the complainant seeks relief based on a quasi-
delict under Articles 2176 and 2180 of the Civil Code. It is the option of the plaintiff whether
to waive completely the filing of the civil action, or institute it with the criminal action, or file
it separately or independently of a criminal action;15 his only limitation is that he cannot
recover damages twice for the same act or omission of the defendant.16

In case a separate civil action is filed, the long-standing principle is that the registered
owner of a motor vehicle is primarily and directly responsible for the consequences of its
operation, including the negligence of the driver, with respect to the public and all third
persons.17 In contemplation of law, the registered owner of a motor vehicle is the employer
of its driver, with the actual operator and employer, such as a lessee, being considered as
merely the owner's agent.18 This being the case, even if a sale has been executed before a
tortious incident, the sale, if unregistered, has no effect as to the right of the public and
third persons to recover from the registered owner.19 The public has the right to
conclusively presume that the registered owner is the real owner, and may sue
accordingly.20

In the case now before the Court, there is not even a sale of the vehicle involved, but a
mere lease, which remained unregistered up to the time of the occurrence of the quasi-
delict that gave rise to the case. Since a lease, unlike a sale, does not even involve a
transfer of title or ownership, but the mere use or enjoyment of property, there is more
reason, therefore, in this instance to uphold the policy behind the law, which is to protect
the unwitting public and provide it with a definite person to make accountable for losses or
injuries suffered in vehicular accidents.21 This is and has always been the rationale behind
compulsory motor vehicle registration under the Land Transportation and Traffic Code and
similar laws, which, as early as Erezo, has been guiding the courts in their disposition of
cases involving motor vehicular incidents. It is also important to emphasize that such
principles apply to all vehicles in general, not just those offered for public service or utility. 22

The Court recognizes that the business of financing companies has a legitimate and
commendable purpose.23 In earlier cases, it considered a financial lease or financing lease a
legal contract,24 though subject to the restrictions of the so-called Recto Law or Articles
1484 and 1485 of the Civil Code.25 In previous cases, the Court adopted the statutory
definition of a financial lease or financing lease, as:

[A] mode of extending credit through a non-cancelable lease contract under which
the lessor purchases or acquires, at the instance of the lessee, machinery,
equipment, motor vehicles, appliances, business and office machines, and other
movable or immovable property in consideration of the periodic payment by the
lessee of a fixed amount of money sufficient to amortize at least seventy (70%) of
the purchase price or acquisition cost, including any incidental expenses and a
margin of profit over an obligatory period of not less than two (2) years during which
the lessee has the right to hold and use the leased property, x x x but with no
obligation or option on his part to purchase the leased property from the owner-
lessor at the end of the lease contract. 26

Petitioner presented a lengthy discussion of the purported trend in other jurisdictions, which
apparently tends to favor absolving financing companies from liability for the consequences
of quasi-delictual acts or omissions involving financially leased property.27 The petition adds
that these developments have been legislated in our jurisdiction in Republic Act (R.A.) No.
8556,28 which provides:

Section 12. Liability of lessors. - Financing companies shall not be liable for loss,
damage or injury caused by a motor vehicle, aircraft, vessel, equipment, machinery
or other property leased to a third person or entity except when the motor vehicle,
aircraft, vessel, equipment or other property is operated by the financing company,
its employees or agents at the time of the loss, damage or injury.1avvphi1

Petitioner's argument that the enactment of R.A. No. 8556, especially its addition of the new
Sec. 12 to the old law, is deemed to have absolved petitioner from liability, fails to convince
the Court.

These developments, indeed, point to a seeming emancipation of financing companies from

the obligation to compensate claimants for losses suffered from the operation of vehicles
covered by their lease. Such, however, are not applicable to petitioner and do not exonerate
it from liability in the present case.

The new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions, do not
supersede or repeal the law on compulsory motor vehicle registration. No part of the law
expressly repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise known as
the Land Transportation and Traffic Code, to wit:
 Sec. 5. Compulsory registration of motor vehicles. - (a) All motor vehicles and
trailer of any type used or operated on or upon any highway of the Philippines must
be registered with the Bureau of Land Transportation (now the Land Transportation
Office, per Executive Order No. 125, January 30, 1987, and Executive Order No.
125-A, April 13, 1987) for the current year in accordance with the provisions of this
Act.

xxxx

(e) Encumbrances of motor vehicles. - Mortgages, attachments, and other

encumbrances of motor vehicles, in order to be valid against third parties must
be recorded in the Bureau (now the Land Transportation Office). Voluntary
transactions or voluntary encumbrances shall likewise be properly recorded on the
face of all outstanding copies of the certificates of registration of the vehicle
concerned.

Cancellation or foreclosure of such mortgages, attachments, and other

encumbrances shall likewise be recorded, and in the absence of such cancellation, no
certificate of registration shall be issued without the corresponding notation of
mortgage, attachment and/or other encumbrances.

x x x x (Emphasis supplied)

Neither is there an implied repeal of R.A. No. 4136. As a rule, repeal by implication is
frowned upon, unless there is clear showing that the later statute is so irreconcilably
inconsistent and repugnant to the existing law that they cannot be reconciled and made to
stand together.29 There is nothing in R.A. No. 4136 that is inconsistent and incapable of
reconciliation.

Thus, the rule remains the same: a sale, lease, or financial lease, for that matter, that is not
registered with the Land Transportation Office, still does not bind third persons who are
aggrieved in tortious incidents, for the latter need only to rely on the public registration of a
motor vehicle as conclusive evidence of ownership.30 A lease such as the one involved in the
instant case is an encumbrance in contemplation of law, which needs to be registered in
order for it to bind third parties.31 Under this policy, the evil sought to be avoided is the
exacerbation of the suffering of victims of tragic vehicular accidents in not being able to
identify a guilty party. A contrary ruling will not serve the ends of justice. The failure to
register a lease, sale, transfer or encumbrance, should not benefit the parties responsible,
to the prejudice of innocent victims.

The non-registration of the lease contract between petitioner and its lessee precludes the
former from enjoying the benefits under Section 12 of R.A. No. 8556.

This ruling may appear too severe and unpalatable to leasing and financing companies, but
the Court believes that petitioner and other companies so situated are not entirely left
without recourse. They may resort to third-party complaints against their lessees or
whoever are the actual operators of their vehicles. In the case at bar, there is, in fact, a
provision in the lease contract between petitioner and SUGECO to the effect that the latter
shall indemnify and hold the former free and harmless from any "liabilities, damages, suits,
claims or judgments" arising from the latter's use of the motor vehicle. 32 Whether petitioner
would act against SUGECO based on this provision is its own option.
The burden of registration of the lease contract is minuscule compared to the chaos that
may result if registered owners or operators of vehicles are freed from such responsibility.
Petitioner pays the price for its failure to obey the law on compulsory registration of motor
vehicles for registration is a pre-requisite for any person to even enjoy the privilege of
putting a vehicle on public roads.

WHEREFORE, the petition is DENIED. The Decision dated December 12, 2003 and
Resolution dated February 18, 2004 of the Court of Appeals are AFFIRMED.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

CONRADO AGUILAR, SR., petitioner, vs. COMMERCIAL SAVINGS BANK and
FERDINAND BORJA, respondents.

DECISION
QUISUMBING, J.:

This petition[1] seeks to annul and set aside the decision dated October 16, 1996, of the
Court of Appeals in CA-G.R. CV No. 48793, reversing the decision of the Regional Trial Court
of Makati, Branch 59, and dismissing the complaint insofar as respondent Commercial Savings
Bank is concerned.
The facts in this case are uncomplicated.
Petitioner Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., the victim in a
vehicular accident involving a Lancer car registered in the name of respondent bank, but
driven by co-respondent Ferdinand G. Borja.
On September 8, 1984, at around 11:15 P.M., Aguilar, Jr. and his companions, among
them Nestor Semella, had just finished their snack at the Uncle Watts Bakery along Zapote-
Alabang Road. As they crossed the road, a Lancer with plate no. NNP 349 and driven by
Ferdinand Borja, overtook a passenger jeepney. In so doing, the Lancer hit Aguilar and
Semella. Aguilar was thrown upwards and smashed against the windshield of the Lancer,
which did not stop. Aguilar and Semella were then brought to the Perpetual Help Hospital at
Pamplona, Las Pias, where Aguilar was pronounced dead on arrival.
On July 29, 1985, petitioner filed a complaint for damages against respondents in the
Regional Trial Court of Makati, Branch 59. Borja did not file his answer within the reglementary
period, hence, he was declared in default by the trial court.
At the trial, respondent bank admitted that the Lancer was registered in its name at the
time of the incident. Petitioners counsel also showed that Borja was negligent in driving the
car.
On June 14, 1991, the trial court held defendants (herein respondents) liable for Aguilars
death, in its decision that reads:

Premises considered, judgment is hereby rendered ordering the defendants, jointly and
severally, to pay to the plaintiff the following:

1. The amount of P18,900.00 representing actual expenses incurred by the plaintiff;

2. The amount of P50,000.00 representing moral damages;

3. The amount of P100,000.00 representing loss of earning capacity of the deceased victim,
Conrado Aguilar, Jr.

4. The sum of P20,000.00 representing attorneys fees; and

5. With costs against the defendants.

Defendant banks counterclaim is ordered DISMISSED for lack of merit.

On the cross-claim of the defendant bank, the cross-defendant Ferdinand Borja is hereby
ordered to pay the cross-claimant Comsavings Bank whatever amount the latter may have
paid or is required to pay to the plaintiff by virtue of this decision.

SO ORDERED.[2]

The trial court declared that Borjas negligence, carelessness and imprudence caused the
victims death. It also found that Borja was an assistant vice president of respondent bank at
the time of the incident. It held that under Art. 2180[3] of the Civil Code, the negligence of
the employee is presumed to be that of the employer, whose liability is primary and direct;
and that respondent bank failed to exercise due diligence in the selection of its employees.
Respondent bank appealed to the Court of Appeals.
The Court of Appeals found the appeal meritorious. It said that before it can apply Art.
2180 on which private respondent anchored its claim of the banks negligence, petitioner must
first establish that Borja acted on the occasion or by reason of the functions entrusted to him
by his employer. The appellate court found no evidence that Borja had acted as respondent
banks assistant vice-president at the time of the mishap. The Court of Appeals reversed the
trial courts decision, thus:

WHEREFORE, the appealed decision is reversed only insofar as defendant-appellant bank is

concerned. The complaint against it is DISMISSED. No award of damages on said appellants
counterclaim.

No costs.

SO ORDERED.[4]

Petitioners motion for reconsideration was denied. Hence, this petition where petitioner
avers that:

THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENT COMSAVINGS IS NOT

LIABLE FOR DAMAGES DESPITE THE ESTABLISHED FACT THAT RESPONDENT COMSAVINGS
IS THE REGISTERED OWNER OF THE CAR THAT HIT AND KILLED PETITIONERS SON WHICH
FINDING, COUPLED WITH THE DISMISSAL OF THE COMPLAINT AGAINST RESPONDENT
COMSAVINGS, IS CONTRARY TO LAW AND EXISTING JURISPRUDENCE.[5]

The sole issue is whether or not respondent bank, as the Lancers registered owner, is
liable for damages.
Petitioner states that the Court of Appeals erred when it disregarded the fact that
respondent bank was the registered owner of the car and concluded that the bank was not
liable since there was no iota of evidence that Borja was performing his assigned task at the
time of the incident.[6] He insists that the existence or absence of employer-employee
relationship between the bank and Borja is immaterial in this case for the registered owner of
a motor vehicle is legally liable for the damages incurred by third persons for injuries sustained
in the operation of said vehicle.
Respondent bank counters that the appellate courts decision is well supported by law and
jurisprudence. According to respondent bank, under Article 2180 of the Civil Code, when the
negligent employee commits the act outside the actual performance of his assigned tasks or
duties, the employer has no vicarious liability. Further, the bank insists that it is not liable
since at the time of the accident, Borja was driving the Lancer in his private capacity and was
not performing functions in furtherance of the interest of Comsavings Bank. Additionally,
according to the bank, Borja already bought the car on installment basis. Hence, at the time
of the incident, the bank concluded it was no longer the owner of the car.[7]
We are, however, unimpressed by respondent banks disquisition. It goes against
established jurisprudence.
In BA Finance Corporation vs. Court of Appeals, 215 SCRA 715, we had already held that
the registered owner of any vehicle, even if not for public service, is primarily responsible to
third persons for deaths, injuries and damages it caused. This is true even if the vehicle is
leased to third persons. In that case, petitioners Isuzu ten-wheeler truck driven by an
employee of a certain Lino Castro met an accident. Neither the driver nor Lino Castro was
connected to petitioner, for at the time of the incident, the truck was on lease to Rock
Component Philippines, Inc. The Court held petitioner liable as the trucks registered owner,
despite the absence of employer-employee relationship between petitioner and the
driver. Though petitioner in said case had a right of reimbursement against Rock Component
for the total amount of its liability, the Court per Melo, J. made clear petitioner remained
legally responsible to the victim of vehicular mishap on the basis of jurisprudential dogmas.
As early as Erezo vs. Jepte, 102 Phil. 103, the Court through Labrador, J. had synthesized
the rationale for holding the registered owner of a vehicle directly liable. There we said:

Registration is required not to make said registration the operative act by which ownership
in vehicles is transferred, as in land registration cases, because the administrative
proceeding of registration does not bear any essential relation to the contract of sale
between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the
use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended.) The main aim of motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by the vehicle on the public
highways, responsibility therefor can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public highways caused accidents
or injuries to pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for damages or injuries
caused on public highways.

One of the principal purposes of motor vehicles legislation is identification of the vehicle and
of the operator, in case of accident; and another is that the knowledge that means of
detection are always available may act as a deterrent from lax observance of the law and of
the rules of conservative and safe operation. Whatever purpose there may be in these
statutes, it is subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of means to
discover him. The purpose of the statute is thwarted, and the displayed number becomes a
snare and delusion, if courts would entertain such defenses as that put forward by appellee
in this case. No responsible person or corporation could be held liable for the most
outrageous acts of negligence, if they should be allowed to place a middleman between
them and the public, and escape liability by the manner in which they recompense their
servants. (King vs. Brenham Automobile Co., 145 S.W. 278, 279.)

With the above policy in mind, the question that defendant-appellant poses is: should not
the registered owner be allowed at the trial to prove who the actual and real owner is, and
in accordance with such proof escape or evade responsibility and lay the same on the
person actually owning the vehicle? We hold with the trial court that the law does not allow
him to do so; the law, with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner allowed to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him, by collusion with others or
otherwise, to escape said responsibility and transfer the same to an indefinite person, or to
one who possesses no property with which to respond financially for the damage or injury
done. A victim of recklessness on the public highways is usually without means to discover
or identify the person actually causing the injury or damage. He has no means other than
by a recourse to the registration in the Motor Vehicles Office to determine who is the
owner. The protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership. If the
policy of the law is to be enforced and carried out, the registered owner should not be
allowed to prove the contrary to the prejudice of the person injured, that is, to prove that a
third person or another has become the owner, so that he may thereby be relieved of the
responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem to
conflict with truth and justice. We do not think it is so. 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.[8]

The rationale well postulated in Erezo applies in the present case. Thus far no change in
jurisprudence has been brought to our attention. In our view, respondent bank, as the
registered owner of the vehicle, is primarily liable for Aguilar, Jr.s death. The Court of Appeals
erred when it concluded that the bank was not liable simply because (a) petitioner did not
prove that Borja was acting as the banks vice president at the time of the accident; and (b)
Borja had, according to respondent bank, already bought the car at the time of the
mishap. For as long as the respondent bank remained the registered owner of the car involved
in the vehicular accident, it could not escape primary liability for the death of petitioners son.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals
dated October 16, 1996 in CA-G.R. CV No. 48793 is REVERSED. The judgment of the Regional
Trial Court of Makati, Branch 59 in Civil Case No. 11231 is UPHELD. Costs against respondent
bank.
SO ORDERED.
Bellosillo (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.
 [G.R. No. 144274. September 20, 2004]

NOSTRADAMUS VILLANUEVA petitioner, vs. PRISCILLA R. DOMINGO and LEANDRO

LUIS R. DOMINGO, respondents.

DECISION
CORONA, J.:

This is a petition to review the decision[1] of the Court of Appeals in CA-G.R. CV No. 52203
affirming in turn the decision of the trial court finding petitioner liable to respondent for
damages. The dispositive portion read:

WHEREFORE, the appealed decision is hereby AFFIRMED except the award of attorneys fees
including appearance fees which is DELETED.

SO ORDERED.[2]

The facts of the case, as summarized by the Court of Appeals, are as follows:

[Respondent] Priscilla R. Domingo is the registered owner of a silver Mitsubishi Lancer Car
model 1980 bearing plate No. NDW 781 91 with [co-respondent] Leandro Luis R. Domingo
as authorized driver. [Petitioner] Nostradamus Villanueva was then the registered owner of
a green Mitsubishi Lancer bearing Plate No. PHK 201 91.

On 22 October 1991 at about 9:45 in the evening, following a green traffic light,
[respondent] Priscilla Domingos silver Lancer car with Plate No. NDW 781 91 then driven by
[co-respondent] Leandro Luis R. Domingo was cruising along the middle lane of South
Superhighway at moderate speed from north to south. Suddenly, a green Mitsubishi Lancer
with plate No. PHK 201 91 driven by Renato Dela Cruz Ocfemia darted from Vito Cruz Street
towards the South Superhighway directly into the path of NDW 781 91 thereby hitting and
bumping its left front portion. As a result of the impact, NDW 781 91 hit two (2) parked
vehicles at the roadside, the second hitting another parked car in front of it.

Per Traffic Accident Report prepared by Traffic Investigator Pfc. Patrocinio N. Acido, Renato
dela Cruz Ocfemia was driving with expired license and positive for alcoholic breath. Hence,
Manila Assistant City Prosecutor Oscar A. Pascua recommended the filing of information for
reckless imprudence resulting to (sic) 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 for Ocfemia, all the 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. For her part, 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 91)
[Albert Jaucian] for whom she had been working as agent/seller. On the other hand, 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 subsidiary 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.[3]

After trial, the trial court found petitioner liable and ordered him to pay respondent actual,
moral and exemplary damages plus appearance and attorneys fees:

WHEREFORE, judgment is hereby rendered for the plaintiffs, ordering Nostradamus

Villanueva to pay the amount of P99,580 as actual damages, P25,000.00 as moral
damages, P25,000.00 as exemplary damages and attorneys fees in the amount
of P10,000.00 plus appearance fees of P500.00 per hearing with legal interest counted from
the date of judgment. In conformity with the law on equity and in accordance with the
ruling in First Malayan Lending and Finance Corporation vs. Court of Appeals (supra), Albert
Jaucian is hereby ordered to indemnify Nostradamus Villanueva for whatever amount the
latter is hereby ordered to pay under the judgment.

SO ORDERED.[4]

The CA upheld the trial courts decision but deleted the award for appearance and
attorneys fees because the justification for the grant was not stated in the body of the
decision. Thus, this petition for review which raises a singular 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 LATTERS CONSENT AND
KNOWLEDGE?[5]

Yes.

We have consistently ruled that the registered owner of any vehicle is directly and
primarily responsible to the public and third persons while it is being operated. [6] The rationale
behind such doctrine was explained way back in 1957 in Erezo vs. Jepte[7]:

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. What is the legal basis for his
(defendant-appellants) liability?

There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he
is the registered owner in the Motor Vehicles Office. Should he not be allowed to prove the
truth, that he had sold it to another and thus shift the responsibility for the injury to the real
and actual owner? The defendant holds the affirmative of this proposition; the trial court
held the negative.

The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no vehicle may be
used or operated upon any public highway unless the same is property registered. It has
been stated that the system of licensing and the requirement that each machine must carry
a registration number, conspicuously displayed, is one of the precautions taken to reduce
the danger of injury to pedestrians and other travelers from the careless management of
automobiles. And to furnish a means of ascertaining the identity of persons violating the
laws and ordinances, regulating the speed and operation of machines upon the highways (2
R.C.L. 1176). Not only are vehicles to be registered and that no motor vehicles are to be
used or operated without being properly registered for the current year, but that dealers in
motor vehicles shall furnish thee Motor Vehicles Office a report showing the name and
address of each purchaser of motor vehicle during the previous month and the
manufacturers serial number and motor number. (Section 5(c), Act No. 3992, as amended.)

Registration is required not to make said registration the operative act by which ownership
in vehicles is transferred, as in land registration cases, because the administrative
proceeding of registration does not bear any essential relation to the contract of sale
between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the
use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended). The main aim of motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by the vehicle on the public
highways, responsibility therefore can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public highways caused accidents
or injuries to pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for damages or injuries
caused on public highways:

One of the principal purposes of motor vehicles legislation is identification of the vehicle and
of the operator, in case of accident; and another is that the knowledge that means of
detection are always available may act as a deterrent from lax observance of the law and of
the rules of conservative and safe operation. Whatever purpose there may be in these
statutes, it is subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of means to
discover him. The purpose of the statute is thwarted, and the displayed number becomes a
share and delusion, if courts would entertain such defenses as that put forward by appellee
in this case. No responsible person or corporation could be held liable for the most
outrageous acts of negligence, if they should be allowed to pace a middleman between them
and the public, and escape liability by the manner in which they recompense servants. (King
vs. Brenham Automobile Co., Inc. 145 S.W. 278, 279.)

With the above policy in mind, the question that defendant-appellant poses is: should not
the registered owner be allowed at the trial to prove who the actual and real owner is, and
in accordance with such proof escape or evade responsibility by and lay the same on the
person actually owning the vehicle? We hold with the trial court that the law does not allow
him to do so; the law, with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner allowed to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him, by collusion with others or
otherwise, to escape said responsibility and transfer the same to an indefinite person, or to
one who possesses no property with which to respond financially for the damage or injury
done. A victim of recklessness on the public highways is usually without means to discover
or identify the person actually causing the injury or damage. He has no means other than
by a recourse to the registration in the Motor Vehicles Office to determine who is the owner.
The protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership. If the
policy of the law is to be enforced and carried out, the registered owner should not be
allowed to prove the contrary to the prejudice of the person injured, that is, to prove that a
third person or another has become the owner, so that he may thereby be relieved of the
responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem to
conflict with truth and justice. We do not think it is so. 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.[8]

Petitioner insists that he is not liable for damages since the driver of the vehicle at the
time of the accident was not an authorized driver of the new (actual) owner of the vehicle.
He claims that the ruling in First Malayan Leasing and Finance Corporation vs. CA [9] implies
that to hold the registered owner liable for damages, the driver of the vehicle must have been
authorized, allowed and permitted by its actual owner to operate and drive it. Thus, if the
vehicle is driven without the knowledge and consent of the actual owner, then the registered
owner cannot be held liable for damages.
He further argues that this was the underlying theory behind Duavit vs. CA[10] wherein
the court absolved the registered owner from liability after finding that the vehicle was
virtually stolen from the owners garage by a person who was neither authorized nor employed
by the owner. Petitioner concludes that the ruling in Duavit and not the one in First
Malayan should be applicable to him.
Petitioners argument lacks merit. Whether the driver is authorized or not by the actual
owner is irrelevant to determining the liability of the registered owner who the law holds
primarily and directly responsible for any accident, injury or death caused by the operation of
the vehicle in the streets and highways. To require the driver of the vehicle to be authorized
by the actual owner before the registeredowner can be held accountable is to defeat the very
purpose why motor vehicle legislations are enacted in the first place.
 Furthermore, there is nothing in First Malayan which even remotely suggests that the
driver must be authorized before the registered owner can be held accountable. In First
Malayan, the registered owner, First Malayan Corporation, was held liable for damages arising
from the accident even if the vehicle involved was already owned by another party:

This Court has consistently ruled that regardless of who the actual owner is of a motor
vehicle might be, the registered owner is the operator of the same with respect to the public
and third persons, and as such, directly and primarily responsible for the consequences of
its operation. In contemplation of law, the owner/operator of record is the employer of the
driver, the actual operator and employer being considered merely as his agent (MYC-Agro-
Industrial Corporation vs. Vda. de Caldo, 132 SCRA 10, citing Vargas vs. Langcay, 6 SCRA
174; Tamayo vs. Aquino, 105 Phil. 949).

We believe that it is immaterial whether or not the driver was actually employed by the
operator of record. It is even not necessary to prove who the actual owner of the vehicle
and the employer of the driver is. Granting that, in this case, the father of the driver is the
actual owner and that he is the actual employer, following the well-settled principle that the
operator of record continues to be the operator of the vehicle in contemplation of law, as
regards the public and third person, and as such is responsible for the consequences
incident to its operation, we must hold and consider such owner-operator of record as the
employer, in contemplation of law, of the driver. And, to give effect to this policy of law as
enunciated in the above cited decisions of this Court, we must now extend the same and
consider the actual operator and employer as the agent of the operator of record. [11]

Contrary to petitioners position, the First Malayan ruling is applicable to him since the
case involves the same set of facts ― the registered owner had previously sold the vehicle to
someone else and was being driven by an employee of the new (actual) owner. Duavit is
inapplicable since the vehicle there was not transferred to another; the registered and the
actual owner was one and the same person. Besides, in Duavit, the defense of the registered
owner, Gilberto Duavit, was that the vehicle was practically stolen from his garage by Oscar
Sabiano, as affirmed by the latter:

Defendant Sabiano, in his testimony, categorically admitted that he took the jeep from the
garage of defendant Duavit without the consent and authority of the latter. He testified
further that Duavit even filed charges against him for the theft of the jeep but which Duavit
did not push through as his (Sabianos) parents apologized to Duavit on his behalf. [12]

As correctly pointed out by the CA, the Duavit ruling is not applicable to petitioners case
since the circumstance of unauthorized use was not present. He in fact voluntarily delivered
his car to Albert Jaucian as part of the downpayment for a vehicle he purchased from Jaucian.
Thus, he could not claim that the vehicle was stolen from him since he voluntarily ceded
possession thereof to Jaucian. It was the latter, as the new (actual) owner, who could have
raised the defense of theft to prove that he was not liable for the acts of his employee Ocfemia.
Thus, there is no reason to apply the Duavit ruling to this case.
The ruling in First Malayan has been reiterated in BA Finance Corporation vs. CA[13] and
more recently in Aguilar, Sr. vs. Commercial Savings Bank.[14] In BA Finance, we held the
registered owner liable even if, at the time of the accident, the vehicle was leased by another
party and was driven by the lessees employee. In Aguilar, the registered owner-bank
answered for damages for the accident even if the vehicle was being driven by the Vice-
President of the Bank in his private capacity and not as an officer of the Bank, as claimed by
the Bank. We find no reason to deviate from these decisions.
 The main purpose of vehicle registration is the easy identification of the owner who can
be held responsible for any accident, damage or injury caused by the vehicle. Easy
identification prevents inconvenience and prejudice to a third party injured by one who is
unknown or unidentified. To allow a registered owner to escape liability by claiming that the
driver was not authorized by the new (actual) owner results in the public detriment the law
seeks to avoid.
Finally, the issue of whether or not the driver of the vehicle during the accident was
authorized is not at all relevant to determining the liability of the registered owner. This must
be so if we are to comply with the rationale and principle behind the registration requirement
under the motor vehicle law.
WHEREFORE, the petition is hereby DENIED. The January 26, 2000 decision of the Court
of Appeals is AFFIRMED.
SO ORDERED.
Panganiban (Chairman) and Sandoval-Gutierrez, JJ., concur.
Carpio-Morales, J., on leave.
G.R. No. L-11154 March 21, 1916

E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Crossfield and O'Brien for plaintiff.

Attorney-General Avanceña for defendant..

TRENT, J.:

This is an appeal by both parties from a judgment of the Court of First Instance of the city
of Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the
cause.

Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages
which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and
(2) "in limiting the time when plaintiff was entirely disabled to two months and twenty-one
days and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed
by plaintiff in his complaint."

The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in
finding that the collision between the plaintiff's motorcycle and the ambulance of the
General Hospital was due to the negligence of the chauffeur; (b) in holding that the
Government of the Philippine Islands is liable for the damages sustained by the plaintiff as a
result of the collision, even if it be true that the collision was due to the negligence of the
chauffeur; and (c) in rendering judgment against the defendant for the sum of P14,741.

The trial court's findings of fact, which are fully supported by the record, are as follows:

It is a fact not disputed by counsel for the defendant that when the plaintiff, riding
on a motorcycle, was going toward the western part of Calle Padre Faura, passing
along the west side thereof at a speed of ten to twelve miles an hour, upon crossing
Taft Avenue and when he was ten feet from the southwestern intersection of said
streets, the General Hospital ambulance, upon reaching said avenue, instead of
turning toward the south, after passing the center thereof, so that it would be on the
left side of said avenue, as is prescribed by the ordinance and the Motor Vehicle Act,
turned suddenly and unexpectedly and long before reaching the center of the street,
into the right side of Taft Avenue, without having sounded any whistle or horn, by
which movement it struck the plaintiff, who was already six feet from the
southwestern point or from the post place there.

By reason of the resulting collision, the plaintiff was so severely injured that,
according to Dr. Saleeby, who examined him on the very same day that he was
taken to the General Hospital, he was suffering from a depression in the left parietal
region, a would in the same place and in the back part of his head, while blood
issued from his nose and he was entirely unconscious.

The marks revealed that he had one or more fractures of the skull and that the grey
matter and brain was had suffered material injury. At ten o'clock of the night in
question, which was the time set for performing the operation, his pulse was so weak
 and so irregular that, in his opinion, there was little hope that he would live. His right
leg was broken in such a way that the fracture extended to the outer skin in such
manner that it might be regarded as double and the would be exposed to infection,
for which reason it was of the most serious nature.

At another examination six days before the day of the trial, Dr. Saleeby noticed that
the plaintiff's leg showed a contraction of an inch and a half and a curvature that
made his leg very weak and painful at the point of the fracture. Examination of his
head revealed a notable readjustment of the functions of the brain and nerves. The
patient apparently was slightly deaf, had a light weakness in his eyes and in his
mental condition. This latter weakness was always noticed when the plaintiff had to
do any difficult mental labor, especially when he attempted to use his money for
mathematical calculations.

According to the various merchants who testified as witnesses, the plaintiff's mental
and physical condition prior to the accident was excellent, and that after having
received the injuries that have been discussed, his physical condition had undergone
a noticeable depreciation, for he had lost the agility, energy, and ability that he had
constantly displayed before the accident as one of the best constructors of wooden
buildings and he could not now earn even a half of the income that he had secured
for his work because he had lost 50 per cent of his efficiency. As a contractor, he
could no longer, as he had before done, climb up ladders and scaffoldings to reach
the highest parts of the building.

As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer.
Wilson, because he was incapacitated from making mathematical calculations on
account of the condition of his leg and of his mental faculties, and he had to give up
a contract he had for the construction of the Uy Chaco building."

We may say at the outset that we are in full accord with the trial court to the effect that the
collision between the plaintiff's motorcycle and the ambulance of the General Hospital was
due solely to the negligence of the chauffeur.

The two items which constitute a part of the P14,741 and which are drawn in question by
the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666,
the amount allowed for the loss of wages during the time the plaintiff was incapacitated
from pursuing his occupation. We find nothing in the record which would justify us in
increasing the amount of the first. As to the second, the record shows, and the trial court so
found, that the plaintiff's services as a contractor were worth P1,000 per month. The court,
however, limited the time to two months and twenty-one days, which the plaintiff was
actually confined in the hospital. In this we think there was error, because it was clearly
established that the plaintiff was wholly incapacitated for a period of six months. The mere
fact that he remained in the hospital only two months and twenty-one days while the
remainder of the six months was spent in his home, would not prevent recovery for the
whole time. We, therefore, find that the amount of damages sustained by the plaintiff,
without any fault on his part, is P18,075.

As the negligence which caused the collision is a tort committed by an agent or employee of
the Government, the inquiry at once arises whether the Government is legally-liable for the
damages resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government of the Philippine
Islands and authorizing the Attorney-General of said Islands to appear in said suit.

Whereas a claim has been filed against the Government of the Philippine Islands by
Mr. E. Merritt, of Manila, for damages resulting from a collision between his
motorcycle and the ambulance of the General Hospital on March twenty-fifth,
nineteen hundred and thirteen;

Whereas it is not known who is responsible for the accident nor is it possible to
determine the amount of damages, if any, to which the claimant is entitled; and

Whereas the Director of Public Works and the Attorney-General recommended that
an Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the
courts against the Government, in order that said questions may be decided: Now,
therefore,

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance
of the city of Manila against the Government of the Philippine Islands in order to fix
the responsibility for the collision between his motorcycle and the ambulance of the
General Hospital, and to determine the amount of the damages, if any, to which Mr.
E. Merritt is entitled on account of said collision, and the Attorney-General of the
Philippine Islands is hereby authorized and directed to appear at the trial on the
behalf of the Government of said Islands, to defendant said Government at the
same.

SEC. 2. This Act shall take effect on its passage.

Enacted, February 3, 1915.

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or
did it also concede its liability to the plaintiff? If only the former, then it cannot be held that
the Act created any new cause of action in favor of the plaintiff or extended the defendant's
liability to any case not previously recognized.

All admit that the Insular Government (the defendant) cannot be sued by an individual
without its consent. It is also admitted that the instant case is one against the Government.
As the consent of the Government to be sued by the plaintiff was entirely voluntary on its
part, it is our duty to look carefully into the terms of the consent, and render judgment
accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is
entitled on account of said collision, . . . ." These were the two questions submitted to the
court for determination. The Act was passed "in order that said questions may be decided."
We have "decided" that the accident was due solely to the negligence of the chauffeur, who
was at the time an employee of the defendant, and we have also fixed the amount of
damages sustained by the plaintiff as a result of the collision. Does the Act authorize us to
hold that the Government is legally liable for that amount? If not, we must look elsewhere
for such authority, if it exists.

The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that
country for aid in determining the purpose and scope of Act No. 2457.

In the United States the rule that the state is not liable for the torts committed by its
officers or agents whom it employs, except when expressly made so by legislative
enactment, is well settled. "The Government," says Justice Story, "does not undertake to
guarantee to any person the fidelity of the officers or agents whom it employs, since that
would involve it in all its operations in endless embarrassments, difficulties and losses,
which would be subversive of the public interest." (Claussen vs. City of Luverne, 103 Minn.,
491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20
How., 527; 15 L. Ed., 991.)

In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from
the state for personal injuries received on account of the negligence of the state officers at
the state fair, a state institution created by the legislature for the purpose of improving
agricultural and kindred industries; to disseminate information calculated to educate and
benefit the industrial classes; and to advance by such means the material interests of the
state, being objects similar to those sought by the public school system. In passing upon
the question of the state's liability for the negligent acts of its officers or agents, the court
said:

No claim arises against any government is favor of an individual, by reason of the

misfeasance, laches, or unauthorized exercise of powers by its officers or agents.
(Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am.
Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs.
State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on
Agency, sec. 319.)

As to the scope of legislative enactments permitting individuals to sue the state where the
cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:

By consenting to be sued a state simply waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy
to enforce a preexisting liability and submits itself to the jurisdiction of the court,
subject to its right to interpose any lawful defense.

In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act
of 1913, which authorized the bringing of this suit, read:

SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit,

Waukesha County, Wisconsin, to bring suit in such court or courts and in such form
or forms as he may be advised for the purpose of settling and determining all
controversies which he may now have with the State of Wisconsin, or its duly
authorized officers and agents, relative to the mill property of said George
Apfelbacher, the fish hatchery of the State of Wisconsin on the Bark River, and the
mill property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to
 the use of the waters of said Bark River and Nagawicka Lake, all in the county of
Waukesha, Wisconsin.

In determining the scope of this act, the court said:

Plaintiff claims that by the enactment of this law the legislature admitted liability on
the part of the state for the acts of its officers, and that the suit now stands just as it
would stand between private parties. It is difficult to see how the act does, or was
intended to do, more than remove the state's immunity from suit. It simply gives
authority to commence suit for the purpose of settling plaintiff's controversies with
the estate. Nowhere in the act is there a whisper or suggestion that the court or
courts in the disposition of the suit shall depart from well established principles of
law, or that the amount of damages is the only question to be settled. The act
opened the door of the court to the plaintiff. It did not pass upon the question of
liability, but left the suit just where it would be in the absence of the state's
immunity from suit. If the Legislature had intended to change the rule that obtained
in this state so long and to declare liability on the part of the state, it would not have
left so important a matter to mere inference, but would have done so in express
terms. (Murdock Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R.
A., 399.)

In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows:

All persons who have, or shall hereafter have, claims on contract or for negligence
against the state not allowed by the state board of examiners, are hereby
authorized, on the terms and conditions herein contained, to bring suit thereon
against the state in any of the courts of this state of competent jurisdiction, and
prosecute the same to final judgment. The rules of practice in civil cases shall apply
to such suits, except as herein otherwise provided.

And the court said:

This statute has been considered by this court in at least two cases, arising under
different facts, and in both it was held that said statute did not create any liability or
cause of action against the state where none existed before, but merely gave an
additional remedy to enforce such liability as would have existed if the statute had
not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin
vs. State, 121 Cal., 16.)

A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all
claims against the commonwealth, whether at law or in equity," with an exception not
necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co.
vs. Commonwealth (152 Mass., 28), said:

The statute we are discussing disclose no intention to create against the state a new
and heretofore unrecognized class of liabilities, but only an intention to provide a
judicial tribunal where well recognized existing liabilities can be adjudicated.

In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of
the statute of New York, jurisdiction of claims for damages for injuries in the management
of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be
conceded that the state can be made liable for injuries arising from the negligence of its
agents or servants, only by force of some positive statute assuming such liability."

It being quite clear that Act No. 2457 does not operate to extend the Government's liability
to any cause not previously recognized, we will now examine the substantive law touching
the defendant's liability for the negligent acts of its officers, agents, and employees.
Paragraph 5 of article 1903 of the Civil Code reads:

The state is liable in this sense when it acts through a special agent, but not when
the damage 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.

The supreme court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another
by his fault or negligence is based, as is evidenced by the same Law 3, Title 15,
Partida 7, on that the person obligated, by his own fault or negligence, takes part in
the act or omission of the third party who caused the damage. It follows therefrom
that the state, by virtue of such provisions of law, is not responsible for the damages
suffered by private individuals in consequence of acts performed by its employees in
the discharge of the functions pertaining to their office, because neither fault nor
even negligence can be presumed on the part of the state in the organization of
branches of public service and in the appointment of its agents; on the contrary, we
must presuppose all foresight humanly possible on its part in order that each branch
of service serves the general weal an that of private persons interested in its
operation. Between these latter and the state, therefore, no relations of a private
nature governed by the civil law can arise except in a case where the state acts as a
judicial person capable of acquiring rights and contracting obligations. (Supreme
Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)

That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which
arise out of fault or negligence; and whereas in the first article thereof. No. 1902,
where the general principle is laid down that where a person who by an act or
omission causes damage to another through fault or negligence, shall be obliged to
repair the damage so done, reference is made to acts or omissions of the persons
who directly or indirectly cause the damage, the following articles refers to this
persons and imposes an identical obligation upon those who maintain fixed relations
of authority and superiority over the authors of the damage, because the law
presumes that in consequence of such relations the evil caused by their own fault or
negligence is imputable to them. This legal presumption gives way to proof,
however, because, as held in the last paragraph of article 1903, responsibility for
acts of third persons ceases when the persons mentioned in said article prove that
they employed all the diligence of a good father of a family to avoid the damage, and
among these persons, called upon to answer in a direct and not a subsidiary manner,
are found, in addition to the mother or the father in a proper case, guardians and
owners or directors of an establishment or enterprise, the state, but not always,
except when it acts through the agency of a special agent, doubtless because and
only in this case, the fault or negligence, which is the original basis of this kind of
objections, must be presumed to lie with the state.
 That although in some cases the state might by virtue of the general principle set
forth in article 1902 respond for all the damage that is occasioned to private parties
by orders or resolutions which by fault or negligence are made by branches of the
central administration acting in the name and representation of the state itself and
as an external expression of its sovereignty in the exercise of its executive powers,
yet said article is not applicable in the case of damages said to have been occasioned
to the petitioners by an executive official, acting in the exercise of his powers, in
proceedings to enforce the collections of certain property taxes owing by the owner
of the property which they hold in sublease.

That the responsibility of the state is limited by article 1903 to the case wherein it
acts through a special agent(and a special agent, in the sense in which these words
are employed, is one who receives a definite and fixed order or commission, foreign
to the exercise of the duties of his office if he is a special official) so that in
representation of the state and being bound to act as an agent thereof, he executes
the trust confided to him. This concept does not apply to any executive agent who is
an employee of the acting administration and who on his own responsibility performs
the functions which are inherent in and naturally pertain to his office and which are
regulated by law and the regulations." (Supreme Court of Spain, May 18, 1904; 98
Jur. Civ., 389, 390.)

That according to paragraph 5 of article 1903 of the Civil Code and the principle laid
down in a decision, among others, of the 18th of May, 1904, in a damage case, the
responsibility of the state is limited to that which it contracts through a special
agent, duly empowered by a definite order or commission to perform some act or
charged with some definite purpose which gives rise to the claim, and not where the
claim is based on acts or omissions imputable to a public official charged with some
administrative or technical office who can be held to the proper responsibility in the
manner laid down by the law of civil responsibility. Consequently, the trial court in
not so deciding and in sentencing the said entity to the payment of damages, caused
by an official of the second class referred to, has by erroneous interpretation
infringed the provisions of articles 1902 and 1903 of the Civil Code. (Supreme Court
of Spain, July 30, 1911; 122 Jur. Civ., 146.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) is only
liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts
of its agents, officers and employees when they act as special agents within the meaning of
paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General
Hospital was not such an agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in
this instance. Whether the Government intends to make itself legally liable for the amount
of damages above set forth, which the plaintiff has sustained by reason of the negligent acts
of one of its employees, by legislative enactment and by appropriating sufficient funds
therefor, we are not called upon to determine. This matter rests solely with the Legislature
and not with the courts.

Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.

G.R. No. 70547 January 22, 1993

PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT, INC., respondents.

The Solicitor General for petitioner.

Leopoldo Sta. Maria for private respondents.

MELO, J.:

The imputation of culpa on the part of herein petitioners as a result of the collision between
its strain, bound for Manila from La Union, with a Baliwag transit bus at the railroad crossing
on the road going to Hagonoy, Bulacan on August l0, 1974, is the subject of the petition at
bar directed against the judgment of affirmance rendered by respondent court, through the
Fourth Civil Cases Division (Sison, Bidin (P), Veloso, JJ.), vis-a-vis the decretal portion
handed down by the court of origin in:

1. Ordering the defendants, jointly and severally to pay the plaintiff the
amount of P179,511.52 as actual damages.

2. Ordering the defendants jointly and severally to pay the plaintiff

P436,642.03 as reimbursement for the damages paid by the plaintiff to death,
injury and damage claimants.

3. Ordering the defendants jointly and severally to pay exemplary damages in

the amount of P50, 000.00 to the plaintiff.

4. Ordering the defendants jointly and severally to pay the plaintiff attorney's
fees in the amount of P5, 000.00.

5. Ordering the defendants, jointly and severally to pay the plaintiff interest
at the legal rate on the above amounts due the plaintiff from August 10, 1974
until fully paid.

6. Ordering the defendants to pay the cost of this suit.

7. Ordering the dismissal of the defendants' counterclaim for lack of factual

and legal basis. (p. 101, Record on Appeal; p. 103. Rollo.)

Culled from the text of the assailed disposition are the facts of the case at bar which are
hereunder adopted verbatim:

The case arose from a collision of a passenger express train of defendant

Philippine National Railways, (PNR) coming from San Fernando, La Union and
bound for Manila and a passenger bus of Baliwag Transit, Inc. which was on
its way to Hagonoy, Bulacan, from Manila, but upon reaching the railroad
crossing at Barrio Balungao, Calumpit, Bulacan at about 1:30 in the afternoon
of August 10, 1974, got stalled and was hit by defendant's express train
causing damages to plaintiff's bus and its passengers, eighteen (18) of whom
died and fifty-three (53) others suffered physical injuries. Plaintiff alleging
that the proximate cause of the collision was the negligence and imprudence
of defendant PNR and its locomotive engineer, Honorio Cirbado, in operating
its passenger train in a busy intersection without any bars, semaphores,
signal lights, flagman or switchman to warn the public of approaching train
that would pass through the crossing, filed the instant action for Damages
against defendants. The defendants, in their Answer traversed the material
allegation of the Complaint and as affirmative defense alleged that the
collision was caused by the negligence, imprudence and lack of foresight of
plaintiff's bus driver, Romeo Hughes.

At the pre-trial conference held on June 23, 1976, the parties agreed on a
partial stipulation of facts and issues which as amplified at the continuation of
the pre-trial conference, on July 12, 1976, are as follows:

1 That plaintiff is a duly constituted corporation registered with

the Securities and Exchange Commission engaged in the
business of transportation and operating public utility buses for
the public with lines covering Manila, Caloocan City, Quezon
City, Malabon, Rizal, Bulacan, Pampanga and Nueva Ecija, and
particularly from Manila to Hagonoy, Bulacan and return in the
month of August, l974 passing thru the town of Calumpit
Bulacan, temporarily while the bridge at Hagonoy, Bulacan was
under construction;

2 That defendant Philippine National Railways is a purely

government owned and controlled corporation duly registered
and existing virtue of Presidential Decree No. 741, with capacity
to sue and be sued, and is likewise engaged in transporting
passengers and cargoes by trains and buses and that, it
operates a train line between San Fernando, La Union and
Manila particularly Passenger Express Train with Body No. 73,
passing along the intersection of Barrio Balungao, Calumpit,
Bulacan, in going to San Fernando, La Union from Manila and
return;

3. That on August 10, 1974, at about 1:20 o'clock in the

afternoon, a Baliuag Transit Bus with Body No. 1066 and Plate
No. XS-929 PUB-Bulacan '74 was driven by its authorized driver
Romeo Hughes and PNR Train No. 73 was operated by Train
Engineer Honorio Cabardo alias Honorio Cirbado and at the
railroad intersection at Barrio Balungao, Calumpit, Bulacan, said
passenger train No. 73 hit and bumped the right mid portion of
the plaintiff's passenger bus No. 1066, while the rear portion of
said bus was at the railroad track and its direction was towards
Hagonoy, Bulacan at about 1:30 o'clock in the afternoon;

4. That at the time of the collision there was a slight rainfall in

the vicinity of the scene of the accident and that there was at
said intersection no bars, semaphores, and signal lights that
would warn the public of the approaching train that was about
to pass through the intersection and likewise there was no
warning devices to passing trains showing that they were about
to pass an intersection in going to Manila from San Fernando,
La Union and back;

5. That on account of said collision, the Baliuag Transit Bus with

Body No. 1066 driven by Romeo Hughes was damaged and
eighteen (18) of its passengers died and the rest who were
more than fifty three (53) passengers suffered physical
injuries;

6. That after the investigation the Chief of Police of Calumpit,

Bulacan, filed a criminal case of Reckless Imprudence Causing
Multiple Homicide with Multiple Physical Injuries and Damage to
Property against Romeo Hughes y Parfan, driver of the Baliuag
Transit bus docketed under Crim. Case No. 2392; while the
train Engineer Honorio Cabardo alias Honorio Cirbado was not
included as an accused in said case, although his train No. 73
was the one that hit and bumped the right rear portion of the
said bus;

7. That immediately after the said accident Major Manuel A.

Macam, Chief of the Municipal Police of Calumpit, Bulacan,
together with some of his policemen conducted an investigation
of the accident;

8. That at the railroad crossing in Calumpit, Bulacan where the

accident took place there is no railroad crossing bar, however,
during the pre-war days there was a railroad crossing bar at
said intersection; that, however, there was only one sign of
railroad crossing "Stop, Look and Listen" placed on a concrete
slab and attached to a concrete post existing at the approach of
the railroad track from the Highway going towards Hagonoy,
Bulacan and that after the said railroad track there was a
designated jeep parking area at the right side in the direction
from the Highway to Hagonoy Bulacan;

9. That the train No. 73 driven by Train Engineer Honorio

Cabardo alias Honorio Cirbado stopped after passing the
railroad crossing at a distance of about 50 meters from the said
intersection after the collision on August, 1974;

10. That the expected time of arrival of said Train No. 73 in

Manila was 2:41 P.M. and its departure time from San
Fernando, La Union was 9:00 A.M. and its expected arrival at
Calumpit, Bulacan was 1:41 P.M. with no stop at Calumpit,
Bulacan.

SIMPLIFICATION OF ISSUES
 11. That the principal issue in the instant case is who between
the driver Romeo Hughes of Baliuag Transit, Incorporated and
the train engineer Honorio Cabardo alias Honorio Cirbado of the
Philippine National Railways was negligent or whether or not
both are negligent; that likewise which of said companies was
negligent at said railroad intersection;

12. That another additional issue is whether the Baliuag Transit

Incorporated has exercised the diligence of a good father of the
family in the selection and supervision of its employees. (pp.
85-87, Record on Appeal). ( Annex A, Petition; pp. 79-
82, Rollo)

In addition, respondent court deemed it necessary to reflect the salient findings of the case
for damages as formulated by the trial court:

Posed for resolution are the following issues: Who between the driver Romeo
Hughes of the Baliuag Transit Incorporated and Honorio Cabardo, train
Engineer of the Philippine National Railways was negligent in the operation of
their respective vehicles, or whether or both were negligent? Could either of
the companies Baliuag Transit Incorporated and the Philippine National
Railways be held accountable for the collision because of negligence?

The defendants presented several statements or affidavits of alleged

witnesses to the collision, specifically Exhibits 2, 3, 4, 5, 6, 11, 13, 14, 15,
16, 17, 18 and 19; the Court is at a loss as to why the persons who gave the
said statements were not presented as witnesses during the trial of the
case, as aptly said, the statements are hearsay evidence (Azcueta v.
Cabangbang, — 45 O.G. 144); at most they be taken as proof only of the fact
that statements of said persons were taken and that investigation was
conducted of the incident; the Court cannot consider the averments in said
statements as testimonies or evidence of truth.

Defendants endeavored to show that the proximate and immediate cause of

the collision was the negligence of the bus driver because the driver did not
make a stop before ascending the railtrack; he did not heed the warning or
shoutings of bystanders and passengers and proceeded in traversing the
railtrack at a fast speed; that the bus driver was in fact violating Section
42(d) of R.A. 4136, otherwise known as the Land Transportation and Traffic
Code for failure to "stop, look, and listen" at the intersection, before crossing
the railtrack; that it is incumbent upon him to take the necessary precautions
at the intersection because the railroad track is in itself a warning; and the
bus driver ignored such a warning and must assume the responsibility for the
result of the motion taken by him (U.S. v. Mananquil, 42 Phil. 90)

Except the testimony of the train engineer Cabardo, there is no admissible

evidence to show that indeed, the bus driver did not take the necessary
precaution in traversing the track. Note that he first noticed the bus when it
was only 15 meters away from him; he could not have possibly noticed the
position of the bus before negotiating the track.
On the other hand, it was shown by plaintiff that the bus driver Romeo
Hughes took the necessary precautions in traversing the track.

The bus driver had stopped before traversing the track and in fact asked the
conductor to alight and made a "Look and Listen" before proceeding; the
conductor had done just that and made a signal to proceed when he did not
see any oncoming train. (TSN, October 2l, 1976, p. 4); plaintiff's bus drivers
and conductors are enjoined to observe such a precautionary measure in
seminars conducted by the company. (TSN, September 23, 1976. pp. 26-27).

The evidence disclosed that the train was running fast because by his own
testimony, the train engineer had testified that before reaching the station of
Calumpit the terrain was downgrade and levelled only after passing the
Calumpit bridge (TSN, July 28, 1976, p. 14 ); the tendency of the train,
coming from a high point is to accelerate as the gravity will necessarily make
it so, especially when it is pulling seven coaches loaded with goods and
passengers.

Moreover, upon impact, the bus loaded with passengers was dragged and
thrown into a ditch several meters away; the train had stopped only after the
engine portion was about 190 meters away from the fallen bus; several
passengers were injured and at least 20 died; such facts conclusively indicate
that the train was speeding, because if it were moving at moderate speed, it
would not run some 190 meters after impact and throw the bus at quite a
distance especially so when it is claimed that the train's emergency brakes
were applied.

Further, the train was an express train; its departure was 9:00 A.M. at San
Fernando, La Union and expected in Manila at 2:41 P.M.; the collision
occurred at 1:30 P.M. or 4 1/2 hours after it left La Union; surely, the train
could have not negotiated such a distance in so short a time if it were not
running at fast speed.

It may be argued that a railroad is not subject to the same restrictions to the
speed of its train as a motorists (Mckelvey v. Delaware L. and W.R. Co. 253
App. D.V. 109, 300 NYS 1263 ); but it does not follow that a train will be
permitted to run fast under all conditions at any rate of speed it may choose.
It must regulate its speed with proper regard for the safety of human life and
property (Johnson v. Southern Pacific Company (Cal. App. 288 p. 81),
considering the surrounding circumstances particularly the nature of the
locality (Atchinson, T. and SFR Co. v. Nicks (Arts) 165 p. 2d 167).

Cabardo's route included the passage over the said intersection; he could
have noticed that it is a very busy intersection because the crossroad leads to
the Calumpit Poblacion as well as to the neighboring town of Hagonoy; there
was a parking lot by the side of the track whereat passengers board jeepneys
for the neighboring barrios and towns; stalls abound in the vicinity and
bystanders congregate nearby. A prudent train operator must, under the
circumstances, slacken his speed almost for the protection of motorists and
pedestrians, not only when a collision is inevitable but even if no hindrance is
apparent on the way;
Moreover, there was an intermittent rain at the time of the collision (see
stipulation of facts and photographs); the condition of the weather was such
that even if for this reason alone, the train engineer should have foreseen
that danger of collision lurked because of poor visibility of slippery road; he
should have taken extra precaution by considerably slackening its speed. This
he failed to do even if the nature of his job required him to observe care
exercised by a prudent man.

Contributory negligence may not be ascribed to the bus driver; it was evident
that he had taken the necessary precautions before passing over the railway
track; if the bus was hit, it was for reasons beyond the control of the bus
driver because he had no place to go; there were vehicles to his left which
prevented him in swerving towards that direction; his bus stalled in view of
the obstructions in his front where a sand and gravel truck stopped because
of a jeep maneuvering into a garage up front. All the wheels at the bus have
already passed the rail portion of the track and only the rear portion of the
bus' body occupied or covered the railtrack. This was evident because the
part of the bus hit by the train was the rear since the bus fell on a nearby
ditch. Otherwise, if the bus was really hit in mid-body, the bus could have
been halved into two because of the force of the impact.

The stipulation of facts between the parties show that there was no crossing
bar at the railroad intersection at Calumpit, Bulacan at the time of collision
(par. 8, Stipulation of Facts); the plaintiff contended and the defendants did
not deny, that there were no signal lights, semaphores, flagman or switchman
thereat; the absence of such devices, the plaintiff argues constitute
negligence on the part of the Philippine National Railways.

A railroad is not required to have a gate (crossing bar) or a flagman, or to

maintain signals at every intersection; only at such places reasonably
necessary; what is considered reasonably necessary will depend on the
amount of travel upon the road, the frequency with which trains pass over it
and the view which could be obtained of trains as they approach the crossing,
and other conditions (Pari v. Los Angeles, Ry. Corporation (Cal A2d) 128 p2d
563; Swdyk v. Indiana Harbor Belt R. Co. 148 F. 2d 795, and others).

As has been amply discussed, the crossroad at the intersection at Calumpit is

one which is a busy thoroughfare; it leads to the Poblacion at Calumpit and
other barrios as well as the town of Hagonoy; the vicinity is utilized as a
parking and waiting area for passengers of jeepneys that ply between the
barrios, clearly, the flow of vehicular traffic thereat is huge. It can be said
also that, since there is no other railtrack going North except that one passing
at Calumpit, trains pass over it frequently;

A portion of the intersection is being used as a parking area with stalls and
other obstructions present making it difficult, if not impossible, to see
approaching trains (see photographs).

The failure of the Philippine National Railways to put a cross bar, or signal
light, flagman or switchman, or semaphores is evidence of negligence and
disregard of the safety of the public, even if there is no law or ordinance
requiring it, because public safety demands that said devices or equipments
 be installed, in the light of aforesaid jurisprudence. In the opinion of this
Court the X sign or the presence of "STOP, LOOK, LISTEN" warnings would
not be sufficient protection of the motoring public as well as the pedestrians,
in the said intersection;

The parties likewise have stipulated that during the pre-war days, there was a
railroad crossing bar at the said intersection (Par-8, Stipulation of Facts). It
appears that it was a self imposed requirement which has been abandoned.
In a case it was held that where the use of a flagman was self imposed, the
abandonment thereof may constitute negligence. (Fleming v. Missouri and A.
Ry. Co. 198 ARDC 290, 128 S.W. 2d 286 and others; cited in Sec. 1082
SCRWARTZ, Vol. 2). Similarly, the abandonment by the PNR of the use of the
crossing bar at the intersection at Calumpit constitutes negligence, as its
installation has become imperative, because of the prevailing circumstances
in the place.

A railroad company has been adjudged guilty of negligence and civilly liable
for damages when it failed to install semaphores, or where it does not see to
it that its flagman or switchman comply with their duties faithfully, to motorist
injured by a crossing train as long as he had crossed without negligence on
his part (Lilius vs. MRR, 39 Phil. 758). (Decision, pages 94-100, R A.; pp. 83-
89, Rollo).

On the aspect of whether the Philippine National Railways enjoys immunity from suit,
respondent court initially noted that an exculpation of this nature that was raised for the
first time on appeal may no longer be entertained in view of the proscription under Section
2, Rule 9 of the Revised Rules of Court, apart from the fact that the lawyer of petitioner
agreed to stipulate inter alia that the railroad company had capacity to sue and be sued.
This being so, respondent court continued, PNR was perforce estopped from disavowing the
prejudicial repercussion of an admission in judicio. Even as the laws governing the creation
and rehabilitation of the PNR were entirely mute on its power to sue and be sued,
respondent court nonetheless opined that such prerogative was implied from the general
power to transact business pertinent or indispensable to the attainment of the goals of the
railroad company under Section 4 of Republic Act No. 4156 as amended by Republic Act No.
6366:

Sec. 4 General Powers — The Philippine National Railways shall have the
following general powers:

(a) To do all such other things and to transact all such business directly or
indirectly necessary, incidental or conducive to the attainment of the purpose
of the corporation; and

(b) Generally, to exercise all powers of a railroad corporation under the

Corporation law.

in conjunction with Section 2(b) of Presidential Decree No. 741:

(b) To own or operate railroad transways, bus lines, trucklines, subways, and
other kinds of land transportation, vessels, and pipelines, for the purpose of
transporting for consideration, passengers, mail and property between any
points in the Philippines;
Thus, respondent court utilized the doctrine of implied powers announced in National
Airports Corporation vs. Teodoro, Sr. and Philippine Airlines, Inc. (91 Phil. 203 [1952]), to
the effect that the power to sue and be sued is implicit from the faculty to transact private
business. At any rate, respondent court characterized the railroad company as a private
entity created not to discharge a governmental function but, among other things, to operate
a transport service which is essentially a business concern, and thus barred from invoking
immunity from suit.

In brushing aside petitioners' asseveration that the bus driver outraced the train at the
crossing, respondent court observed that the bus was hit by the train at its rear portion
then protruding over the tracks as the bus could not move because another truck at its front
was equally immobile due to a jeep maneuvering into a nearby parking area. Under these
tight conditions, respondent court blamed the train engineer who admitted to have seen the
maneuvering jeep at a distance (TSN, July 28, 1976, page 18) and had the last clear chance
to apply the brakes, knowing fully well that the vehicles following the jeep could not move
away from the path of the train. Apart from these considerations, it was perceived below
that the train was running fast during the entire trip since the train stopped 190 meters
from the point of impact and arrived at Calumpit, Bulacan earlier than its expected time of
arrival thereat.

Moreover, respondent court agreed with the conclusion reached by the trial court that the
absence of a crossing bar, signal light, flagman or switchman to warn the public of an
approaching train constitutes negligence per the pronouncement of this Court in Lilius vs.
Manila Railroad Company (59 Phil 758 [1934]).

Concerning the exercise of diligence normally expected of an employer in the selection and
supervision of its employees, respondent court expressed the view that PNR was remiss on
this score since it allowed Honorio Cabardo, who finished only primary education and
became an engineer only through sheer experience, to operate the locomotive, not to
mention the fact that such plea in avoidance was not asserted in the answer and was thus
belatedly raised on appeal.

Petitioner moved to reconsider, but respondent court was far from persuaded. Hence, the
petition before Us which, in essence, incorporates similar disputations anent PNR's immunity
from suit and the attempt to toss the burden of negligence from the train engineer to the
bus driver of herein private respondent.

The bone of contention for exculpation is premised on the familiar maxim in political law
that the State, by virtue of its sovereign nature and as reaffirmed by constitutional precept,
is insulated from suits without its consent (Article 16, Section 3, 1987 Constitution).
However, equally conceded is the legal proposition that the acquiescence of the State to be
sued can be manifested expressly through a general or special law, or indicated implicitly,
as when the State commences litigation for the purpose of asserting an affirmative relief or
when it enters into a contract (Cruz,Philippine Political Law, 1991 edition, page 33; Sinco,
Philippine Political Law, Eleventh Edition, 1962, page 34). When the State participates in a
covenant, it is deemed to have descended from its superior position to the level of an
ordinary citizen and thus virtually opens itself to judicial process. Of course, We realize that
this Court qualified this form of consent only to those contracts concluded in a proprietary
capacity and therefore immunity will attach for those contracts entered into in a
governmental capacity, following the ruling in the 1985 case of United States of America vs.
Ruiz (136 SCRA 487 [1985]; cited by Cruz, supra at pages 36-37). But the restrictive
interpretation laid down therein is of no practical worth nor can it give rise to herein
petitioner PNR's exoneration since the case of Malong vs. Philippine National Railways (138
SCRA 63, [1985]); 3 Padilla, 1987 Constitution with Comments and Cases, 1991 edition,
page 644), decided three months after Ruiz was promulgated, was categorical enough to
specify that the Philippine National Railways "is not performing any governmental function"
(supra, at page 68).

In Malong, Justice Aquino, speaking for the Court en banc, declared:

The Manila Railroad Company, the PNR's predecessor, as a common carrier,

was not immune from suit under Act No. 1510, its charter.

The PNR Charter, Republic Act No. 4156, as amended by Republic Act No.
6366 and Presidential Decree No. 741, provides that the PNR is a government
instrumentality under government ownership during its 50-year term, 1964 to
2014. It is under the Office of the President of the Philippines. Republic Act
No. 6366 provides:

Sec. 1-a. Statement of policy. — The Philippine National

Railways, being a factor for socio-economic development and
growth, shall be a part of the infrastructure program of the
government and as such shall remain in and under government
ownership during its corporate existence. The Philippine
National Railways must be administered with the view of
serving the interests of the public by providing them the
maximum of service and, while aiming at its greatest utility by
the public, the economy of operation must be ensured so that
service can be rendered at the minimum passenger and freight
prices possible.

The charter also provides:

Sec. 4. General powers. — The Philippine National Railways

shall have the following general powers:

(a) To do all such other things and to transact all such business
directly or indirectly necessary, incidental or conducive to the
attainment of the purpose of the corporation; and

(b) Generally, to exercise all powers of a railroad corporation

under the Corporation Law. (This refers to Sections 81 to 102
of the Corporation Law on railroad corporations, not reproduced
in the Corporation Code.)

Section 36 of the Corporation Code provides that every corporation has the power to sue
and be sued in its corporate name. Section 13(2) of the Corporation Law provides that
every corporation has the power to sue and be sued in any court.

A sovereign is exempt from suit, not because of any formal conception or

obsolete theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the right
 depends (Justice Holmes in Kawananakoa vs. Polyblank, 205 U.S. 353, 51 L.
3d 834).

The public service would be hindered, and public safety endangered, if the
supreme authority could be subjected to suit at the instance of every citizen
and, consequently, controlled in the use and disposition of the means
required for the proper administration of the Government (The Siren vs. U.S.,
7 Wall. 152, 19 L. ed. 129). (at pp.
65-66).

To the pivotal issue of whether the State acted in a sovereign capacity when it organized
the PNR for the purpose of engaging in transportation, Malong continued to hold that:

. . . in the instant case the State divested itself of its sovereign capacity when
it organized the PNR which is no different from its predecessor, the Manila
Railroad Company. The PNR did not become immune from suit. It did not
remove itself from the operation of Articles 1732 to 1766 of the Civil Code on
common carriers.

The correct rule is that "not all government entities, whether corporate or
noncorporate, are immune from suits. Immunity from suit is determined by
the character of the objects for which the entity was organized." (Nat.
Airports Corp. vs. Teodoro and Phil. Airlines, Inc., 91 Phil. 203, 206; Santos
vs. Santos, 92 Phil. 281, 285; Harry Lyons, Inc. vs. USA, 104 Phil. 593).

Suits against State agencies with respect to matters in which they have
assumed to act in a private or nongovernmental capacity are not suits against
the State (81 C.J.S. 1319).

Suits against State agencies with relation to matters in which

they have assumed to act in a private or nongovernmental
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 the 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 implicating consents to suits
against the corporation. (81 C.J.S. 1319).

The foregoing rule was applied to State Dock Commissions carrying on

business relating to pilots, terminals and transportation (Standard Oil Co. of
New Jersey vs. U.S., 27 Fed. 2nd 370) and to State Highways Commissions
created to build public roads and given appropriations in advance to discharge
obligations incurred in their behalf (Arkansas State Highway Commission vs.
Dodge, 26 SW 2nd 879 and State Highway Commission of Missouri vs. Bates,
296 SW 418, cited in National Airports case).
 The point is that when the government enters into a commercial business it
abandons its sovereign capacity and is to be treated like any other private
corporation (Bank of the U.S. vs. Planters' Bank, 9 Wheat. 904, 6 L ed. 244,
cited in Manila Hotel Employees Association vs. Manila Hotel Company, et al.,
73 Phil. 374, 388). The Manila Hotel case also relied on the following rulings:

By engaging in a particular business through the

instrumentality of a corporation, the government divests
itself pro hac vice of its sovereign character, so as to render the
corporation subject to the rules of law governing private
corporations.

When the State acts in its proprietary capacity, it is amenable

to all the rules of law which bind private individuals.

There is not one law for the sovereign and another for the
subject, but when the sovereign engages in business and the
conduct of business enterprises, and contracts with individuals,
whenever the contract in any form comes before the courts, the
rights and obligation of the contracting parties must be
adjusted upon the same principles as if both contracting parties
were private persons. Both stand upon equality before the law,
and the sovereign is merged in the dealer, contractor and suitor
(People vs. Stephens, 71 N.Y. 549).

It should be noted that in Philippine National Railways vs. Union de

Maquinistas, etc., L-31948, July 25, 1978, 84 SCRA 223, it was held that the
PNR funds could be garnished at the instance of a labor union.

It would be unjust if the heirs of the victim of an alleged negligence of the

PNR employees could not sue the PNR for damages. Like any private common
carrier, the PNR is subject to the obligations of persons engaged in that
private enterprise. It is not performing any governmental function.

Thus, the National Development Company is not immune from suit. It does
not exercise sovereign functions. It is an agency for the performance of
purely corporate, proprietary or business functions (National Development
Company vs. Tobias, 117 Phil. 703, 705 and cases cited therein; National
Development Company vs. NDC Employees and Workers' Union, L-32387,
August 19, 1975, 66 SCRA 18l, 184).

Other government agencies not enjoying immunity from suit are the Social
Security System (Social Security System vs. Court of Appeals,
L-41299, February 21, 1983, 120 SCRA 707) and the Philippine National Bank
(Republic vs. Philippine National Bank, 121 Phil. 26). (at pp. 66-68).

We come now to the question of whether respondent court properly agreed with the trial
court in imputing negligence on the part of the train engineer and his employer.

It was demonstrated beyond cavil in the course of the pre-trial hearings held for the
purpose of stipulating on crucial facts that the bus was hit on the rear portion thereof after
it crossed the railroad tracks. Then, too the train engineer was frank enough to say that he
saw the jeep maneuvering into a parking area near the crossing which caused the
obstruction in the flow of traffic such that the gravel and sand truck including the bus of
herein private respondent were not able to move forward or to take the opposite lane due to
other vehicles. The unmindful demeanor of the train engineer in surging forward despite the
obstruction before him is definitely anathema to the conduct of a prudent person placed
under the same set of perceived danger. Indeed:

When it is apparent, or when in the exercise of reasonable diligence

commensurate with the surroundings it should be apparent, to the company
that a person on its track or to get on its track is unaware of his danger or
cannot get out of the way, it becomes the duty of the company to use such
precautions, by warnings, applying brakes, or otherwise, as may be
reasonably necessary to avoid injury to him. (65 Am. Jur., Second Edition. p.
649).

Likewise, it was established that the weather condition was characterized with intermittent
rain which should have prompted the train engineer to exercise extra precaution. Also, the
train reached Calumpit, Bulacan ahead of scheduled arrival thereat, indicating that the train
was travelling more than the normal speed of 30 kilometers per hour. If the train were
really running at 30 kilometers per hour when it was approaching the intersection, it would
probably not have travelled 190 meters more from the place of the accident (page 10, Brief
for Petitioners). All of these factors, taken collectively, engendered the concrete and yes,
correct conclusion that the train engineer was negligent who, moreover, despite the last
opportunity within his hands vis-a-vis the weather condition including the presence of
people near the intersection, could have obviated the impending collision had he slackened
his speed and applied the brakes (Picart vs. Smith, 37 Phil. 809 [1918]).Withal, these
considerations were addressed to the trial judge who, unlike appellate magistrates, was in a
better position to assign weight on factual questions. Having resolved the question of
negligence between the train engineer and the bus driver after collating the mass of
evidence, the conclusion reached thereafter thus commands great respect especially so in
this case where respondent court gave its nod of approval to the findings of the court of
origin (Co vs. Court of Appeals, 193 SCRA 198; 206 [1991]); Amigo vs. Teves, 50 O.G.
5799; Regalado, Remedial Law Compendium, Fifth edition, page 353).

What exacerbates against petitioners' contention is the authority in this jurisdiction to the
effect that the failure of a railroad company to install a semaphore or at the very least, to
post a flagman or watchman to warn the public of the passing train amounts to negligence
(Lilius vs. Manila Railroad Company, 59 Phil. 758 [1934]).

WHEREFORE, the petition is hereby DISMISSED and the decision of respondent court
AFFIRMED.

SO ORDERED.

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

Bidin, J., took no part.

G.R. No. 61516 March 21, 1989

FLORENTINA A. GUILATCO, petitioner,
vs.
CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents.

Nolan R. Evangelista for petitioner.

The City Legal Officer for respondents.

SARMIENTO, J.:

In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, the
following judgment was rendered against the respondent City of Dagupan:

xxx

(1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the
amount of P 15,924 (namely P8,054.00 as hospital, medical and other
expenses [Exhs. H to H-60], P 7,420.00 as lost income for one (1) year [Exh.
F] and P 450.00 as bonus). P 150,000.00 as moral damages, P 50,000.00 as
exemplary damages, and P 3,000.00 as attorney's fees, and litigation
expenses, plus costs and to appropriate through its Sangguniang Panglunsod
(City Council) said amounts for said purpose;

(2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G.

Tangco; and

(3) Dismissing the counterclaims of defendant City of Dagupan and defendant

City Engr. Alfredo G. Tangco, for lack of merit. 2

The facts found by the trial court are as follows: 3

It would appear from the evidences that on July 25, 1978, herein plaintiff, a
Court Interpreter of Branch III, CFI--Dagupan City, while she was about to
board a motorized tricycle at a sidewalk located at Perez Blvd. (a National
Road, under the control and supervision of the City of Dagupan) accidentally
fell into a manhole located on said sidewalk, thereby causing her right leg to
be fractured. As a result thereof, she had to be hospitalized, operated on,
confined, at first at the Pangasinan Provincial Hospital, from July 25 to August
3, 1978 (or for a period of 16 days). She also incurred hospitalization,
medication and other expenses to the tune of P 8,053.65 (Exh. H to H-60) or
a total of P 10,000.00 in all, as other receipts were either lost or misplaced;
during the period of her confinement in said two hospitals, plaintiff suffered
severe or excruciating pain not only on her right leg which was fractured but
also on all parts of her body; the pain has persisted even after her discharge
from the Medical City General Hospital on October 9, 1978, to the present.
Despite her discharge from the Hospital plaintiff is presently still wearing
crutches and the Court has actually observed that she has difficulty in
locomotion. From the time of the mishap on July 25, 1978 up to the present,
plaintiff has not yet reported for duty as court interpreter, as she has
 difficulty of locomotion in going up the stairs of her office, located near the
city hall in Dagupan City. She earns at least P 720.00 a month consisting of
her monthly salary and other means of income, but since July 25, 1978 up to
the present she has been deprived of said income as she has already
consumed her accrued leaves in the government service. She has lost several
pounds as a result of the accident and she is no longer her former jovial self,
she has been unable to perform her religious, social, and other activities
which she used to do prior to the incident.

Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as
well as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong
Rizal (Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond
shadow of any doubt the extent of the fracture and injuries sustained by the
plaintiff as a result of the mishap. On the other hand, Patrolman Claveria, De
Asis and Cerezo corroborated the testimony of the plaintiff regarding the
mishap and they have confirmed the existence of the manhole (Exhs. A, B, C
and sub-exhibits) on the sidewalk along Perez Blvd., at the time of the
incident on July 25, 1978 which was partially covered by a concrete flower pot
by leaving gaping hole about 2 ft. long by 1 1/2 feet wide or 42 cms. wide by
75 cms. long by 150 cms. deep (see Exhs. D and D-1).

Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-
officio Highway Engineer, City Engineer of the Public Works and Building
Official for Dagupan City, admitted the existence of said manhole along the
sidewalk in Perez Blvd., admittedly a National Road in front of the Luzon
Colleges. He also admitted that said manhole (there are at least 11 in all in
Perez Blvd.) is owned by the National Government and the sidewalk on which
they are found along Perez Blvd. are also owned by the National Government.
But as City Engineer of Dagupan City, he supervises the maintenance of said
manholes or drainage system and sees to it that they are properly covered,
and the job is specifically done by his subordinates, Mr. Santiago de Vera
(Maintenance Foreman) and Engr. Ernesto Solermo also a maintenance
Engineer. In his answer defendant Tangco expressly admitted in par. 7-1
thereof, that in his capacity as ex-officio Highway Engineer for Dagupan City
he exercises supervision and control over National roads, including the Perez
Blvd. where the incident happened.

On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower
court findings on the ground that no evidence was presented by the plaintiff- appellee to
prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5

The city contends that Perez Boulevard, where the fatal drainage hole is located, is a
national road that is not under the control or supervision of the City of Dagupan. Hence, no
liability should attach to the city. It submits that it is actually the Ministry of Public
Highways that has control or supervision through the Highway Engineer which, by mere
coincidence, is held concurrently by the same person who is also the City Engineer of
Dagupan.

After examination of the findings and conclusions of the trial court and those of the
appellate court, as well as the arguments presented by the parties, we agree with those of
the trial court and of the petitioner. Hence, we grant the petition.
In this review on certiorari, we have simplified the errors assigned by the petitioner to a
single issue: whether or not control or supervision over a national road by the City of
Dagupan exists, in effect binding the city to answer for damages in accordance with article
2189 of the Civil Code.

The liability of public corporations for damages arising from injuries suffered by pedestrians
from the defective condition of roads is expressed in the Civil Code as follows:

Article 2189. Provinces, cities and municipalities shall be liable for damages
for the death of, or injuries suffered by, any person by reason of the defective
condition of roads, streets, bridges, public buildings, and other public works
under their control or supervision.

It is not even necessary for the defective road or street to belong to the province, city or
municipality for liability to attach. The article only requires that either control or supervision
is exercised over the defective road or street. 6

In the case at bar, this control or supervision is provided for in the charter of Dagupan and
is exercised through the City Engineer who has the following duties:

Sec. 22. The City Engineer--His powers, duties and compensation-There shall
be a city engineer, who shall be in charge of the department of Engineering
and Public Works. He shall receive a salary of not exceeding three thousand
pesos per annum. He shall have the following duties:

xxx

(j) He shall have the care and custody of the public system of waterworks and
sewers, and all sources of water supply, and shall control, maintain and
regulate the use of the same, in accordance with the ordinance relating
thereto; shall inspect and regulate the use of all private systems for supplying
water to the city and its inhabitants, and all private sewers, and their
connection with the public sewer system.

xxx

The same charter of Dagupan also provides that the laying out, construction and
improvement of streets, avenues and alleys and sidewalks, and regulation of the use
thereof, may be legislated by the Municipal Board . 7 Thus the charter clearly indicates that
the city indeed has supervision and control over the sidewalk where the open drainage hole
is located.

The express provision in the charter holding the city not liable for damages or injuries
sustained by persons or property due to the failure of any city officer to enforce the
provisions of the charter, can not be used to exempt the city, as in the case at bar.8

The charter only lays down general rules regulating the liability of the city. On the other
hand article 2189 applies in particular to the liability arising from "defective streets, public
buildings and other public works." 9
The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision
over the said road. But the city can not be excused from liability by the argument that the
duty of the City Engineer to supervise or control the said provincial road belongs more to his
functions as an ex-officio Highway Engineer of the Ministry of Public Highway than as a city
officer. This is because while he is entitled to an honorarium from the Ministry of Public
Highways, his salary from the city government substantially exceeds the honorarium.

We do not agree.

Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex- Officio
Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last but
not the least, as Building Official for Dagupan City, receives the following monthly
compensation: P 1,810.66 from Dagupan City; P 200.00 from the Ministry of Public
Highways; P 100.00 from the Bureau of Public Works and P 500.00 by virtue of P.D. 1096,
respectively." 10 This function of supervision over streets, public buildings, and other public
works pertaining to the City Engineer is coursed through a Maintenance Foreman and a
Maintenance Engineer.11 Although these last two officials are employees of the National
Government, they are detailed with the City of Dagupan and hence receive instruction and
supervision from the city through the City Engineer.

There is, therefore, no doubt that the City Engineer exercises control or supervision over the
public works in question. Hence, the liability of the city to the petitioner under article 2198
of the Civil Code is clear.

Be all that as it may, the actual damages awarded to the petitioner in the amount of P
10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court
should not have rounded off the amount. In determining actual damages, the court can not
rely on "speculation, conjecture or guess work" as to the amount. Without the actual proof
of loss, the award of actual damages becomes erroneous. 12

On the other hand, moral damages may be awarded even without proof of pecuniary loss,
inasmuch as the determination of the amount is discretionary on the court.13 Though
incapable of pecuniary estimation, moral damages are in the nature of an award to
compensate the claimant for actual injury suffered but which for some reason can not be
proven. However, in awarding moral damages, the following should be taken into
consideration:

(1) First, the proximate cause of the injury must be the claimee's acts.14

(2) Second, there must be compensatory or actual damages as satisfactory

proof of the factual basis for damages.15

(3) Third, the award of moral damages must be predicated on any of the
cases enumerated in the Civil Code. 16

In the case at bar, the physical suffering and mental anguish suffered by the petitioner were
proven. Witnesses from the petitioner's place of work testified to the degeneration in her
disposition-from being jovial to depressed. She refrained from attending social and civic
activities.17
Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was
not permanent and disabled her only during her treatment which lasted for one year.
Though evidence of moral loss and anguish existed to warrant the award of damages,18 the
moderating hand of the law is called for. The Court has time and again called attention to
the reprehensible propensity of trial judges to award damages without basis,19 resulting in
exhorbitant amounts.20

Although the assessment of the amount is better left to the discretion of the trial
court 21 under preceding jurisprudence, the amount of moral damages should be reduced
to P 20,000.00.

As for the award of exemplary damages, the trial court correctly pointed out the basis:

To serve as an example for the public good, it is high time that the Court,
through this case, should serve warning to the city or cities concerned to be
more conscious of their duty and responsibility to their constituents,
especially when they are engaged in construction work or when there are
manholes on their sidewalks or streets which are uncovered, to immediately
cover the same, in order to minimize or prevent accidents to the poor
pedestrians.22

Too often in the zeal to put up "public impact" projects such as beautification drives, the
end is more important than the manner in which the work is carried out. Because of this
obsession for showing off, such trivial details as misplaced flower pots betray the careless
execution of the projects, causing public inconvenience and inviting accidents.

Pending appeal by the respondent City of Dagupan from the trial court to the appellate
court, the petitioner was able to secure an order for garnishment of the funds of the City
deposited with the Philippine National Bank, from the then presiding judge, Hon. Willelmo
Fortun. This order for garnishment was revoked subsequently by the succeeding presiding
judge, Hon. Romeo D. Magat, and became the basis for the petitioner's motion for
reconsideration which was also denied. 23

We rule that the execution of the judgment of the trial court pending appeal was premature.
We do not find any good reason to justify the issuance of an order of execution even before
the expiration of the time to appeal .24

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the
respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of the
trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby REINSTATED
with the indicated modifications as regards the amounts awarded:

(1) Ordering the defendant City of Dagupan to pay the plaintiff actual
damages in the amount of P 15,924 (namely P 8,054.00 as hospital, medical
and other expenses; P 7,420.00 as lost income for one (1) year and P 450.00
as bonus); P 20,000.00 as moral damages and P 10,000.00 as exemplary
damages.

The attorney's fees of P 3,000.00 remain the same.

SO ORDERED.
Melencio-Herrera, (Chaiperson), Paras, Padilla and Regalado, JJ., concur.
 THIRD DIVISION

THE MUNICIPALITY OF SAN JUAN, METRO G.R. No. 121920

MANILA,
Petitioner, Present:

PANGANIBAN, J., Chairman

SANDOVAL-GUTIERREZ,
- versus - CORONA,
CARPIO MORALES, and
GARCIA, JJ.

THE HON. COURT OF APPEALS, LAURA Promulgated:

BIGLANG-AWA, METROPOLITAN
WATERWORKS AND SEWERAGE SYSTEM August 9, 2005
(MWSS), and KWOK CHEUNG,
Respondents.

x-------------------------------------------------------------------------------------x

DECISION

GARCIA, J.:

In this appeal by way of a petition for review on certiorari under Rule 45 of the Rules
of Court, petitioner Municipality of San Juan urges us to annul and set aside the decision
dated 08 September 1995[1] of the Court of Appeals in CA-G.R. CV No. 38906, affirming
with modification an earlier decision of the Regional Trial Court at Pasig City in an action for
damages thereat commenced by private respondent Laura Biglang-awa against, among
others, the herein petitioner.

The material facts are not at all disputed:

Under a Contract For Water Service Connections[2] entered into by and between the
Metropolitan Waterworks and Sewerage System (MWSS) and Kwok Cheung as sole proprietor
of K.C. Waterworks System Construction (KC, for short), the former engaged the services of
the latter to install water service connections. Article 11 (Scope of Work), paragraph 2.01 of
the agreement provides:

2.01 The CONTRACTOR agrees to install water service connections, transfer

location of tapping to the nearest main, undertake separation of service
 connection, change rusted connections, within the service area of the MWSS
specified in each job order covered by this Contract, from the water main up to
the installation of the verticals. Tapping of the service pipe connection and
mounting of water meter shall be undertaken exclusively or solely by the
MWSS;

On 20 May 1988, KC was given a Job Order by the South Sector Office of MWSS to
conduct and effect excavations at the corner of M. Paterno and Santolan Road, San Juan,
Metro Manila, a national road, for the laying of water pipes and tapping of water to the
respective houses of water concessionaires.

That same day, KC dispatched five (5) of its workers under Project Engineer Ernesto
Battad, Jr. to conduct the digging operations in the specified place. The workers installed four
(4) barricades made up of two-inch thick GI pipes welded together, 1.3 meters wide and 1.2
meters high, at the area where the digging is to take place. The digging operations started at
9 oclock in the morning and ended at about 3 oclock in the afternoon. The workers dug a hole
one (1) meter wide and 1.5 meters deep, after which they refilled the excavated portion of
the road with the same gravel and stone excavated from the area. At that time, only of the
job was finished in view of the fact that the workers were still required to re-excavate that
particular portion for the tapping of pipes for the water connections to the concessionaires.

Meanwhile, between 10 oclock and 11 oclock in the evening of 31 May 1988, Priscilla
Chan was driving her Toyota Crown car with Plate No. PDK 991 at a speed of thirty (30)
kilometers per hour on the right side of Santolan Road towards the direction of Pinaglabanan,
San Juan, Metro Manila. With her on board the car and seated on the right front seat was
Assistant City Prosecutor Laura Biglang-awa. The road was flooded as it was then raining
hard. Suddenly, the left front wheel of the car fell on a manhole where the workers of KC had
earlier made excavations. As a result, the humerus on the right arm of Prosecutor Biglang-
awa was fractured. Thereupon, Priscilla Chan contacted Biglang-awas husband who
immediately arrived at the scene and brought his wife to the Cardinal Santos Hospital.

Dispatched to the scene of the accident to conduct an investigation thereof, Pfc. Felix
Ramos of the Traffic Division of the San Juan Police Station, upon arriving thereat, saw Priscilla
Chans car already extracted from the manhole and placed beside the excavated portion of
the road. According to this police officer, he did not see any barricades at the scene when he
arrived less than an hour later. A Traffic Accident Investigation Report[3] was thereafter
prepared and signed by Pfc. Ramos.
 At the hospital, the attending physician, after having performed a close reduction and
application of abduction splint on Biglang-awa, placed a plastic cast on her right arm. Barring
complications, the injury she suffered was expected to heal in four (4) to six (6) weeks,
although she must revisit her doctor from time to time for check-up and rehabilitation. After
some time, the plastic cast was removed. Biglang-awa sustained no deformity and no
tenderness of the area of the injury but she could not sleep on her right side because she still
felt pain in that portion of her body. A Medical Certificate[4] on her injuries was issued by Dr.
Antonio Rivera.

Consequent to the foregoing incident, Biglang-awa filed before the Regional Trial Court
at Pasig, Metro Manila a complaint for damages against MWSS, the Municipality of San Juan
and a number of San Juan municipal officials.

Later, Biglang-awa amended her complaint twice. In her second amended complaint,
she included KC as one of the defendants.
After due proceedings, the trial court rendered judgment in favor of Biglang-awa adjudging
MWSS and the Municipality of San Juan jointly and severally liable to her. Dated 29 February
1992, the decision[5] dispositively reads in full, thus:

WHEREFORE, foregoing considered, judgment is hereby rendered

declaring the Municipality of San Juan, Metro Manila and the Metropolitan
Waterworks and Sewerage System jointly and severally liable to the plaintiff
[Biglang-awa]. Both defendants are ordered to pay plaintiff the amounts of:

(a) P18,389.55, for actual damages suffered by the plaintiff;

(b) P15,000.00, for moral damages;

(c) P10,000.00, for exemplary damages;

(d) P5,000.00, for attorneys fees; and

(e) to pay the costs.

SO ORDERED.

Unable to accept the judgment, both Biglang-awa and the Municipality of San Juan

went to the Court of Appeals via ordinary appeal under Rule 41 of the Rules of Court, which

appeal was thereat docketed as CA-G.R. CV No. 38906.

 As stated at the outset hereof, the appellate court, in a decision dated 08 September

1995, affirmed with modification that of the trial court, to wit:

IN THE LIGHT OF ALL THE FOREGOING, the Decision appealed from

is AFFIRMED but modified as follows:
1. The Appellees KC and MWSS and the Appellant
San Juan are hereby ordered to pay, jointly and severally, to [Biglang-awa] the
amounts of P50,000.00 by way of moral damages, P50,000.00 by way of
exemplary damages and P5,000.00 by way of attorneys fees, without prejudice
to the right of the Appellee MWSS for reimbursement from the Appellee KC under
the Contract, Exhibit 3-MWSS:

2. The counterclaims of the Appellees and Appellant

San Juan and the cross-claim of the latter are DISMISSED. Without
pronouncement as to costs.

SO ORDERED. (Words in bracket supplied).

Therefrom, petitioner Municipality of San Juan came to this Court thru the present

recourse, on its submissions that:

I.

THE RESPONDENT APPELLATE COURT HAS DECIDED A QUESTION OF

SUBSTANCE NOT HEREFORE DECIDED BY THE SUPREME COURT.
II.

THE RESPONDENT APPELLATE COURT HAS DECIDED A QUESTION PROBABLY

NOT IN ACCORD WITH THE LAW AND JURISPRUDENCE.

With no similar recourse having been taken by the other parties, the Court shall limit

itself to the liability or non-liability of petitioner municipality for the injury sustained by

Biglang-awa.

In denying liability for the subject accident, petitioner essentially anchored its defense

on two provisions of laws, namely: (1) Section 149, [1][z] of Batas Pambansa Blg. 337,

otherwise known as the Local Government Code of 1983; and (2) Section 8, Ordinance 82-

01, of the Metropolitan Manila Commission.

 Petitioner maintains that under Section 149, [1][z] of the Local Government Code,[6] it

is obliged to provide for the construction, improvement, repair and maintenance of

only municipal streets, avenues, alleys, sidewalks, bridges, parks and other public

places. Ergo, since Santolan Road is concededly a national and not a municipal road, it cannot

be held liable for the injuries suffered by Biglang-awa on account of the accident that occurred

on said road.

Additionally, petitioner contends that under Section 8, Ordinance No. 82-01, of the

Metropolitan Manila Commission, which reads:

In the event of death, injury and/or damages caused by the non-completion of

such works and/or failure of one undertaking the work to adopt the required
precautionary measures for the protection of the general public or violation of
any of the terms or conditions of the permit, the permittee/excavator shall
assume fully all liabilities for such death, injury or damage arising therefrom.
For this purpose, the excavator/permittee shall purchase insurance coverage
to answer for third party liability,

only the Project Engineer of KC and MWSS can be held liable for the same accident.

The petition must have to be denied.

Jurisprudence[7] teaches that for liability to arise under Article 2189[8] of the Civil Code,

ownership of the roads, streets, bridges, public buildings and other public works, is not a

controlling factor, it being sufficient that a province, city or municipality has control or

supervision thereof. This, we made clear in City of Manila vs. Teotico, et al[9]:

At any rate, under Article 2189 of the Civil Code, it is not necessary for
the liability therein established to attach that the defective roads or
streets belong to the province, city or municipality from which responsibility is
exacted. What said article requires is that the province, city or municipality
have either "control or supervision" over said street or road. x x x

It is argued, however, that under Section 149, [1][z] of the Local Government Code,

petitioner has control or supervision only over municipal and not national roads, like Santolan

Road.
Sadly, petitioner failed to take note of the other provisions of Section 149 of the same Code,

more particularly the following:

Section 149. Powers and Duties. (1) The sangguniang bayan shall:
(bb) Regulate the drilling and excavation of the ground for the laying of gas, water,
sewer, and other pipes; the building and repair of tunnels, sewers, drains and other
similar structures; erecting of poles and the use of crosswalks, curbs and gutters
therein, and adopt measures to ensure public safety against open canals, manholes,
live wires and other similar hazards to life and property, and provide just compensation
or relief for persons suffering from them; (Underscoring supplied)

Clear it is from the above that the Municipality of San Juan can regulate the drilling

and excavation of the ground for the laying of gas, water, sewer, and other pipes within its

territorial jurisdiction.

Doubtless, the term regulate found in the aforequoted provision of Section 149 can

only mean that petitioner municipality exercises the power of control, or, at the very least,

supervision over all excavations for the laying of gas, water, sewer and other pipes within its

territory.

We must emphasize that under paragraph [1][bb] of Section 149, supra, of the Local

Government Code, the phrases regulate the drilling and excavation of the ground for the

laying of gas, water, sewer, and other pipes, and adopt measures to ensure public safety

against open canals, manholes, live wires and other similar hazards to life and property, are

not modified by the term municipal road. And neither can it be fairly inferred from the same

provision of Section 149 that petitioners power of regulation vis--vis the activities therein

mentioned applies only in cases where such activities are to be performed in municipal roads.

To our mind, the municipalitys liability for injuries caused by its failure to regulate the drilling

and excavation of the ground for the laying of gas, water, sewer, and other pipes, attaches

regardless of whether the drilling or excavation is made on a national or municipal road, for

as long as the same is within its territorial jurisdiction.

 We are thus in full accord with the following pronouncements of the appellate court in

the decision under review:

While it may be true that the Department of Public Works and Highways
may have issued the requisite permit to the Appellee KC and/or concessionaires
for the excavation on said road, the Appellant San Juan is not thereby relieved
of its liability to [Biglang-awa] for its own gross negligence. Indeed, Evangeline
Alfonso, the witness for the Appellant San Juan unabashedly [sic] admitted,
when she testified in the Court a quo, that even if the Department of Public
Works and Highways failed to effect the requisite refilling, the Appellant San
Juan was mandated to undertake the necessary precautionary measures to
avert accidents and insure the safety of pedestrians and commuters:

xxx

The [petitioner] cannot validly shirk from its obligation to maintain and insure
the safe condition of the road merely because the permit for the excavation
may have been issued by a government entity or unit other than the Appellant
San Juan or that the excavation may have been done by a contractor under
contract with a public entity like the Appellee MWSS.

Neither is the [petitioner] relieved of liability based on its purported lack of

knowledge of the excavation and the condition of the road during the period
from May 20, 1988 up to May 30, 1988 when the accident occurred. It must be
borne in mind that the obligation of the [petitioner] to maintain the safe
condition of the road within its territory is a continuing one which is not
suspended while a street is being repaired
(CorpusJuris Secundum, Municipal Corporations, page 120). Knowledge of the
condition of the road and the defects and/or obstructions on the road may be
actual or constructive. It is enough that the authorities should have known of
the aforesaid circumstances in the exercise of ordinary care
(City of Louiseville versus Harris, 180 Southwestern Reporter. page 65). In
the present recourse, Santolan Road and the Greenhills area coming from
Ortigas Avenue going to Pinaglabanan, San Juan, Metro Manila is a busy
thoroughfare. The gaping hole in the middle of the road of Santolan Road could
not have been missed by the authorities concerned. After all, the [petitioner]
San Juan is mandated to effect a constant and unabated monitoring of the
conditions of the roads to insure the safety of motorists. Persuasive authority
has it that:

It is the duty of the municipal authorities to exercise an

active vigilance over the streets; to see that they are kept in a
reasonably safe condition for public travel. They cannot fold their
arms and shut their eyes and say they have no notice.
(Todd versus City of Troy, 61 New York 506). (Words in bracket
supplied).

Nor can petitioner seek shelter on Section 8 of Ordinance 82-01 of the Metropolitan Manila

Commission.
Concededly, Section 8 of the Ordinance makes the permittee/excavator liable for death, injury

and/or damages caused by the non-completion of works and/or failure of the one undertaking

the works to adopt the required precautionary measures for the protection of the general

public. Significantly, however, nowhere can it be found in said Ordinance any provision

exempting municipalities in Metro Manila from liabilities caused by their own negligent

acts. Afortiori, nothing prevents this Court from applying other relevant laws concerning

petitioners liability for the injuries sustained by Biglang-awa on that fateful rainy evening of

31 May 1988.

WHEREFORE, the instant petition is DENIED and the assailed decision of the

appellate court AFFIRMED.

Costs against petitioner.

SO ORDERED.
QUEZON CITY GOVERNMENT G.R. No. 150304
and Engineer RAMIR J. TIAMZON,
Petitioners, Present:
Panganiban, J.,
Chairman,
Sandoval-Gutierrez,
- versus - Corona,
Carpio Morales, and
Garcia, JJ
Promulgated:
FULGENCIO DACARA,*
Respondent. June 15, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x

DECISION

PANGANIBAN, J.:

he review of cases under Rule 45 of the Rules of Court is limited to errors of law. Unless

there is a showing that the findings of the lower court are totally devoid of support or are

T glaringly erroneous, this Court will not analyze or weigh evidence all over again. Under

the circumstance, the factual findings and

conclusions of the Court of Appeals affirming those of the trial courts will be conclusive upon

the Supreme Court. Furthermore, well-entrenched is the rule that points of law, theories,

issues and arguments not brought to the attention of the trial court cannot be raised for the

first time on appeal or certiorari. Finally, this Court reiterates the principle that moral damages

are designed to compensate the claimant for actual injury suffered, not to impose a penalty

on the wrongdoer. Hence, absent any definite finding as to what they consist of, the alleged

moral damages suffered would become a penalty rather than a compensation for actual injury

suffered.

The Case
 Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the

February 21, 2001 Decision[2] and the October 9, 2001 Resolution[3] of the Court of Appeals

(CA) in CA-GR CV No. 29392. The challenged Decision disposed as follows:

WHEREFORE, premises considered, the Decision dated June 29, 1990

in Civil Case No. Q-88-233 should be AFFIRMED, with costs against the
appellants.[4]

The assailed Resolution denied petitioners Motion for Reconsideration.

The Facts

The CA summarized the facts in this manner:

Sometime on February 28, 1988 at about 1:00 A.M., Fulgencio Dacara, Jr., son
of Fulgencio P. Dacara, Sr. and owner of 87 Toyota Corolla 4-door Sedan with
Plate No. 877 (sic), while driving the said vehicle, rammed into a pile of
earth/street diggings found at Matahimik St., Quezon City, which was then
being repaired by the Quezon City government. As a result, Dacarra (sic), Jr.
allegedly sustained bodily injuries and the vehicle suffered extensive damage
for it turned turtle when it hit the pile of earth.

Indemnification was sought from the city government (Record, p. 22), which
however, yielded negative results. Consequently, Fulgencio P. Dacara
(hereinafter referred to as FULGENCIO), for and in behalf of his minor son, Jr.,
filed a Complaint (Record, p. 1) for damages against the Quezon City and Engr.
Ramir Tiamzon, as defendants, before the Regional Trial Court, National Capital
Judicial Region, Branch 101, Quezon City, docketed as Civil Case No. Q-88-233.
FULGENCIO prayed that the amount of not less than P20,000.00 actual or
compensatory damages, P150,000.00 moral damages, P30,000.00 exemplary
damages, and P20,000.00 attorneys fees and costs of the suit be awarded to
him.

In an Answer with Affirmative and/or Special Defenses (Record, p. 11),

defendants admitted the occurrence of the incident but alleged that the subject
diggings was provided with a moun[d] of soil and barricaded with reflectorized
traffic paint with sticks placed before or after it which was visible during the
incident on February 28, 1988 at 1:00 A.M. In short, defendants claimed that
they exercised due care by providing the area of the diggings all necessary
measures to avoid accident. Hence, the reason why Fulgencio Dacara, Jr. fell
into the diggings was precisely because of the latters negligence and failure to
exercise due care.[5]
After trial on the merits, the Regional Trial Court (RTC), Branch 101, Quezon City, rendered

its Decision[6] dated June 29, 1990. The evidence proffered by the complainant (herein

respondent) was found to be sufficient proof of the negligence of herein petitioners. Under

Article 2189 of the Civil Code,[7] the latter were held liable as follows:

WHEREFORE, premises above considered, based on the quantum of

evidence presented by the plaintiff which tilts in their favor elucidating the
negligent acts of the city government together with its employees when
considered in the light of Article 2189, judgment is hereby rendered ordering
the defendants to indemnify the plaintiff the sum of twenty thousand pesos as
actual/compensatory damages, P10,000.00 as moral damages, P5,000.00 as
exemplary damages, P10,000.00 as attorneys fees and other costs of suit.[8]

In their appeal to the CA, petitioners maintained that they had observed due diligence and

care in installing preventive warning devices, and that it was in fact the plaintiff who had

failed to exercise prudence by driving too fast to avoid the diggings. Moreover, the lower court

allegedly erred in using Article 2189 of the Civil Code, which supposedly applied only to liability

for the death or injuries suffered by a person, not for damage to property.

Ruling of the Court of Appeals

The CA agreed with the RTCs finding that petitioners negligence was the proximate

cause of the damage suffered by respondent.[9] Noting the failure of petitioners to present
evidence to support their contention that precautionary measures had indeed been observed,

it ruled thus:

x x x. Sadly, the evidence indicates that [petitioners] failed to show that they
placed sufficient and adequate precautionary signs at Matahimik Street to
minimize or prevent the dangers to life and limb under the circumstances.
Contrary to the testimony of the witnesses for the [petitioners], namely Engr.
Ramir Tiamzon, Ernesto Landrito and Eduardo Castillo, that there were signs,
gasera which was buried so that its light could not be blown off by the wind and
barricade, none was ever presented to stress and prove the sufficiency and
adequacy of said contention.[10]

Further upholding the trial courts finding of negligence on the part of herein petitioners, the

CA gave this opinion:

x x x. As observed by the trial court, the negligence of [petitioners] was

clear based on the investigation report of Pfc. William P. Villafranca stating to
the effect that the subject vehicle rammed into a pile of earth from a deep
excavation thereat without any warning devi[c]e whatsoever and as a
consequence thereof, Dacara, Jr. lost control of his driven car and finally
turned-turtle causing substantial damage to the same. As a defense against
liability on the basis of quasi-delict, one must have exercised the diligence of a
good father of a family which [petitioners] failed to establish in the instant
case.[11]

Whether Article 2189 is applicable to cases in which there has been no death or

physical injury, the CA ruled in the affirmative:

x x x. More importantly, we find it illogical to limit the liability to death

or personal injury only as argued by appellants in the case at bar applying the
foregoing provisions. For, injury is an act that damages, harms or hurts and
mean in common as the act or result of inflicting on a person or thing something
that causes loss, pain, distress, or impairment. Injury is the most
comprehensive, applying to an act or result involving an impairment or
destruction of right, health, freedom, soundness, or loss of something of
value.[12]

Hence, this Petition.[13]

Issues
Petitioners raise the following issues for our consideration:

1. The Honorable Court of Appeals decided a question of law/substance contrary

to applicable law and jurisprudence when it affirmed the award of moral
damage suit (sic) the amount of P10,000.00.

2. The Honorable Court of Appeals decided a question of law/substance contrary

to applicable law and jurisprudence when it affirmed the award of exemplary
damage sin (sic) the amount of P5,000.00 and attorneys fee in the [a]mount
of P10,000.00.

3. The Honorable Court of Appeals gravely erred and/;or (sic) had acted with
grave abuse of discretion amounting to lack and/or excess of jurisdiction when
it refused to hold that respondents son in the person of Fulgencio Dacara, Jr.
was negligent at the time of incident.[14]

Because the issues regarding the liability of petitioners for moral and exemplary damages

presuppose that their negligence caused the vehicular accident, we first resolve the question

of negligence or the proximate cause of the incident.

The Courts Ruling

The Petition is partly meritorious.

First Issue:
Negligence

Maintaining that they were not negligent, petitioners insist that they placed all the

necessary precautionary signs to alert the public of a roadside construction. They argue that
the driver (Fulgencio Dacara Jr.) of respondents car was overspeeding, and that his own

negligence was therefore the sole cause of the incident.

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.[15] Proximate cause is determined from the facts of each case,

upon a combined consideration of logic, common sense, policy and precedent. [16]

What really caused the subject vehicle to turn turtle is a factual issue that this Court cannot

pass upon, absent any whimsical or capricious exercise of judgment by the lower courts or an

ample showing that they lacked any basis for their conclusions. [17] The unanimity of the CA

and the trial court in their factual ascertainment that petitioners negligence was the proximate

cause of the accident bars us from supplanting their findings and substituting these with our

own. The function of this Court is limited to the review of the appellate courts alleged errors

of law. It is not required to weigh all over again the factual evidence already considered in

the proceedings below.[18] Petitioners have not shown that they are entitled to an exception

to this rule.[19] They have not sufficiently demonstrated any special circumstances to justify a

factual review.
That the negligence of petitioners was the proximate cause of the accident was aptly discussed

in the lower courts finding, which we quote:

Facts obtaining in this case are crystal clear that the accident of February 28,
1988 which caused almost the life and limb of Fulgencio Dacara, Jr. when his
car turned turtle was the existence of a pile of earth from a digging done relative
to the base failure at Matahimik Street nary a lighting device or a reflectorized
barricade or sign perhaps which could have served as an adequate warning to
motorist especially during the thick of the night where darkness is pervasive.

Contrary to the testimony of the witnesses for the defense that there were
signs, gasera which was buried so that its light could not be blown off by the
wind and barricade, none was ever presented to stress the point that sufficient
and adequate precautionary signs were placed at Matahimik Street. If indeed
signs were placed thereat, how then could it be explained that according to the
report even of the policeman which for clarity is quoted again, none was found
at the scene of the accident.

xxxxxxxxx

Negligence of a person whether natural or juridical over a particular set of

events is transfixed by the attending circumstances so that the greater the
danger known or reasonably anticipated, the greater is the degree of care
required to be observed.

xxxxxxxxx

The provisions of Article 2189 of the New Civil Code capsulizes the
responsibility of the city government relative to the maintenance of roads and
bridges since it exercises the control and supervision over the same. Failure of
the defendant to comply with the statutory provision found in the subject-article
is tantamount to negligence per se which renders the City government liable.
Harsh application of the law ensues as a result thereof but the state assumed
the responsibility for the maintenance and repair of the roads and bridges and
neither exception nor exculpation from liability would deem just and
equitable.[20] (Emphasis supplied)

Petitioners belatedly point out that Fulgencio Jr. was driving at the speed of 60

kilometers per hour (kph) when he met the accident. This speed was allegedly well above the

maximum limit of 30 kph allowed on city streets with light traffic, when not designated

through streets, as provided under the Land Transportation and Traffic Code (Republic Act
4136). Thus, petitioners assert that Fulgencio Jr., having violated a traffic regulation, should

be presumed negligent pursuant to Article 2185[21] of the Civil Code.[22]

These matters were, however, not raised by petitioners at any time during the trial. It

is evident from the records that they brought up for the first time the matter of violation of

RA 4136 in their Motion for Reconsideration[23] of the CA Decision dated February 21, 2001.

It is too late in the day for them to raise this new issue. It is well-settled that points of law,

theories or arguments not brought out in the original proceedings cannot be considered on

review or appeal.[24] To consider their belatedly raised arguments at this stage of the

proceedings would trample on the basic principles of fair play, justice, and due process. [25]

Indeed, both the trial and the appellate courts findings, which are amply substantiated

by the evidence on record, clearly point to petitioners negligence as the proximate cause of

the damages suffered by respondents car. No adequate reason has been given to overturn

this factual conclusion.

Second Issue:
Moral Damages

Petitioners argue that moral damages are recoverable only in the instances specified in Article

2219[26] of the Civil Code. Although the instant case is an action for quasi-delict, petitioners

contend that moral damages are not recoverable, because no evidence of physical injury were

presented before the trial court.[27]

To award moral damages, a court must be satisfied with proof of the following

requisites: (1) an injury -- whether physical, mental, or psychological -- clearly sustained by

the claimant; (2) a culpable act or omission factually established; (3) a wrongful act or
omission of the defendant as the proximate cause of the injury sustained by the claimant;

and (4) the award of damages predicated on any of the cases stated in Article 2219. [28]

Article 2219(2) specifically allows moral damages to be recovered for quasi-

delicts, provided that the act or omission caused physical injuries. There can be no recovery

of moral damages unless the quasi-delict resulted in physical injury.[29] This rule was

enunciated in Malonzo v. Galang[30] as follows:

x x x. Besides, Article 2219 specifically mentions quasi-delicts causing

physical injuries, as an instance when moral damages may be allowed, thereby
implying that all other quasi-delicts not resulting in physical injuries are
excluded, excepting of course, the special torts referred to in Art. 309 (par. 9,
Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, 34 and 35 on the chapter on
human relations (par. 10, Art. 2219).

In the present case, the Complaint alleged that respondents son Fulgencio Jr. sustained

physical injuries. The son testified that he suffered a deep cut on his left arm when the car

overturned after hitting a pile of earth that had been left in the open without any warning

device whatsoever.

It is apparent from the Decisions of the trial and the appellate courts, however, that no other

evidence (such as a medical certificate or proof of medical expenses) was presented to prove

Fulgencio Jr.s bare assertion of physical injury. Thus, there was no credible proof that would

justify an award of moral damages based on Article 2219(2) of the Civil Code.

Moreover, the Decisions are conspicuously silent with respect to the claim of

respondent that his moral sufferings were due to the negligence of petitioners. The Decision
of the trial court, which summarizes the testimony of respondents four witnesses, makes no

mention of any statement regarding moral suffering, such as mental anguish, besmirched

reputation, wounded feelings, social humiliation and the like.

Moral damages are not punitive in nature, but are designed to compensate and alleviate in

some way the physical suffering, mental anguish, fright, serious anxiety, besmirched

reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly

inflicted on a person.[31] Intended for the restoration of the psychological or emotional status

quo ante, the award of moral damages is designed to compensate emotional injury suffered,

not to impose a penalty on the wrongdoer.

For the court to arrive upon a judicious approximation of emotional or moral injury,

competent and substantial proof of the

suffering experienced must be laid before it. Essential to this approximation

are definite findings as to what the supposed moral damages suffered consisted of; otherwise,

such damages would become a penalty rather than a compensation for actual injury

suffered.[32]

Furthermore, well-settled is the rule that moral damages cannot be awarded -- whether in a

civil[33] or a criminal case[34] -- in the absence of proof of physical suffering, mental anguish,

fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social

humiliation, or similar injury.[35] The award of moral damages must be solidly anchored on a

definite showing that respondent actually experienced emotional and mental sufferings. Mere

allegations do not suffice; they must be substantiated by clear and convincing proof. [36]

Third Issue:
 Exemplary Damages

Petitioners argue that exemplary damages and attorneys fees are not recoverable.

Allegedly, the RTC and the CA did not find that petitioners were guilty of gross negligence in

the performance of their duty and responsibilities.[37]

Exemplary damages cannot be recovered as a matter of right.[38] While granting them

is subject to the discretion of the court, they can be awarded only after claimants have shown

their entitlement to moral, temperate or compensatory damages.[39] In the case before us,

respondent sufficiently proved before the courts a quo that petitioners negligence was the

proximate cause of the incident, thereby establishing his right to actual or compensatory

damages. He has adduced adequate proof to justify his claim for the damages caused his car.

The question that remains, therefore, is whether exemplary damages may be awarded in

addition to compensatory damages.

Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary

damages may be recovered if the defendant acted with gross negligence. [40] Gross negligence

means such utter want of care as to raise a presumption that the persons at fault must have

been conscious of the probable consequences of their carelessness, and that they must have

nevertheless been indifferent (or worse) to the danger of injury to the person or property of

others.[41] The negligence must amount to a reckless disregard for the safety of persons or

property. Such a circumstance obtains in the instant case.

A finding of gross negligence can be discerned from the Decisions of both the CA and

the trial court. We quote from the RTC Decision:

Sad to state that the City Government through its instrumentalities have
(sic) failed to show the modicum of responsibility, much less, care expected of
 them (sic) by the constituents of this City. It is even more deplorable that it
was a case of a street digging in a side street which caused the accident in the
so-called premier city.[42]

The CA reiterated the finding of the trial court that petitioners negligence was clear,

considering that there was no warning device whatsoever[43] at the excavation site.

The facts of the case show a complete disregard by petitioners of any adverse consequence

of their failure to install even a single warning device at the area under renovation.

Considering further that the street was dimly lit,[44] the need for adequate precautionary

measures was even greater. By carrying on the road diggings without any warning or

barricade, petitioners demonstrated a wanton disregard for public safety. Indeed, the

February 28, 1988 incident was bound to happen due to their gross negligence. It is clear

that under the circumstances, there is sufficient factual basis for a finding of gross negligence

on their part.

Article 2229 of the Civil Code provides that exemplary damages may be imposed by

way of example or correction for the public good. The award of these damages is meant to

be a deterrent to socially deleterious actions.[45] Public policy requires such imposition to

suppress wanton acts of an offender.[46] It must be emphasized that local governments and

their employees should be responsible not only for the maintenance of roads and streets, but
also for the safety of the public. Thus, they must secure construction areas with adequate

precautionary measures.

Not only is the work of petitioners impressed with public interest; their very existence

is justified only by public service. Hence, local governments have the paramount responsibility

of keeping the interests of the public foremost in their agenda. For these reasons, it is most

disturbing to note that the present petitioners are the very parties responsible for endangering

the public through such a rash and reckless act.

WHEREFORE, the Petition is hereby PARTLY GRANTED. The Decision of the Court of Appeals

is AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED. No

costs.

SO ORDERED.
G.R. No. 73928 August 31, 1987

JOSE E. GENSON, petitioner,

vs.
SPS. EDUARDO ADARLE and SHERLITA MARI-ON, and INTERMEDIATE APPELLATE
COURT, respondents.

GUTIERREZ, JR., J.:

This is a Petition for review which seeks to set aside the decision in CA-G.R. No. 00783 on
the ground that the findings of the respondent Court of Appeals are based on
misapprehension of facts and conflict with those of the trial court and that the conclusions
drawn therefrom are based on speculations and conjectures.

Arturo Arbatin was the successful bidder in the sale at public auction of junk and other
unserviceable government property located at the compound of the Highway District
Engineer's Office of Roxas City. Private respondent Eduardo Adarle was hired as a laborer by
Arbatin to gather and take away scrap iron from the said compound with a daily wage of
P12.00 or about 312.00 a month.

On September 8, 1979, at 4:00 o'clock in the morning, on a Saturday and a non-working

day, while the private respondent was tying a cable to a pile of scrap iron to be loaded on a
truck inside the premises of the compound, and while the bucket of the payloader driven by
Ramon Buensalido was being raised, the bucket suddenly fell and hit Adarle on the right
back portion of his head just below the nape of his neck. Adarle was rushed to the St.
Anthony Hospital, Roxas City. According to the medical certificate issued by the attending
physician, the private respondent suffered the following injuries:

1) Comminuted fracture of the vertebral body of 13 with extreme Kyphosis of

the segment by x-ray.

2) Cord compression 2nd to the injury with paralysis of the lower extremity,
inability to defecate and urinate. (E Exh. A, Exhibits for the plaintiff-appellant,
Original Records.)

The medical certificate also reported that:

The patient recovered the use of his urinary bladder and was able to defecate
2 months after surgery. He is paralyzed from the knee down to his toes. He
can only sit on a wheel chair. The above residual damage is permanent 2nd to
the injury incurred by Mr. Adarle, he is still confined in the Hospital. (idem)

While still in the hospital, the private respondent instituted the action below for damages
against Arbatin, his employer; Buensalido, the payloader operator; Candelario Marcelino,
the civil engineer; and petitioner, the Highway District Engineer.

During the trial on the merits, the petitioner put up the defense that he had no knowledge
of or participation in the accident and that, when it happened, he was not present in the
government compound. Apart from the fact that it was a Saturday and a non-working day,
he was in Iloilo. As part of his evidence, the petitioner presented a memorandum directed to
a certain Mr. Orlando Panaguiton ordering the latter to take charge of the district until his
return (Exh. 1).

The trial court found that, with the exception of the petitioner, all of the defendants were
present at the Highway's compound when the accident occurred. However, it still adjudged
the petitioner liable for damages because the petitioner was supposed to know what his
men do with their government equipment within an area under his supervision.

Thus, on January 19, 1982, the trial court rendered a decision finding all the defendants
liable for damages under Articles 1172 and 2176 of the New Civil Code. The dispositive
portion of the decision reads:

WHEREFORE, this court orders the defendants to pay to plaintiff the amounts
stated in the complainant's prayer as follows:

Ordering the defendants jointly and severally to pay the plaintiff the sum of
312.00 monthly from September 8, 1979 until his release from the hospital.

Ordering the defendants jointly and severally to pay the plaintiff the sum of
P7,410.63 for hospital expenses up to January 14, 1980 and an additional
amount for further hospitalization until the release of plaintiff from the
hospital;

Ordering the defendants jointly and severally to pay the plaintiff the sum of at
least P100,000.00 as actual and compensatory damages, considering that
plaintiff Eduardo Adarle is totally incapacitated for any employment for life;

Ordering the defendants jointly and severally to pay the plaintiff the sum of
P20,000.00 as moral damages and another sum for exemplary damages
which we leave to the sound discretion of the Honorable Court;

Ordering the defendants jointly and severally to pay the plaintiff the sum of
P5,000.00 as attorney's fees. (pp. 129- 130, Original Records).

The petitioner appealed to the Intermediate Appellate Court which affirmed the decision of
the trial court and further ordered the defendants to pay P5,000.00 exemplary damages.
Defendant Candelario Marcelino was, however, absolved from liability.

In its decision, the appellate court ruled:

That payloader owned by the Government, as found by the lower court,

should not have been operated that Saturday, September 8, 1979, a
Saturday, a non-working holiday. There is no official order from the proper
authorities authorizing Arbatin and plaintiff to work and Buensalido to operate
the payloader on that day inside the Highway compound. Thereabouts, we
can logically deduce that Arbatin and plaintiff went to the compound to work
with the previous knowledge and consent of Highway District Engineer Jose E.
Genson. And allowed him, probably upon the request of Arbatin. We have
noted that Genson testified that his office does not authorize work on
Saturdays.
 Genson testified that he was in Iloilo from September 9 and 10, 1979. The
accident occurred on September 8, in the morning. In his answer, Genson did
not allege his presence in Iloilo on September 9 and 10 ... .

We fully concur with the lower court's conclusions regarding the physical
presence of appellants inside the compound on that fateful day, pursuant to a
previous understanding with Arbatin for plaintiff to work on the scrap iron and
for Buensalido to operate the payloader inside the compound. Arbatin and
plaintiff would not go to the compound on that Saturday, if there was no
previous understanding with Genson and Buensalido.

The liability of Genson is based on fault, intentional and voluntary or negligent

(Eleano v. Hill, 77 SCRA 106; Jimena v. Lincallo, 63 O.G. 11,15, 8 C. A.R.
2567). He gave permission to Arbatin, plaintiff and Buensalido to work on
Saturday, a non-working day, in contravention of his office' rules and
regulations outlawing work on Saturdays.. (pp. 29-30, Rollo)

In this present petition, the petitioner contends that the appellate court committed a
palpable error when it ruled that the petitioner was present when the accident happened
and that he had given permission to the other defendants to work on a Saturday, a non-
working day. The petitioner argues that considering these were the facts relied upon by the
said court in holding that he was negligent and thus liable for damages, such a conclusion,
is without basis.

The petitioner further contends that the appellate court erred in not holding that the suit
against the petitioner was, in effect, a suit against the government and, therefore, should
be dismissed under the principle of non-suability of the state.

As regards the petitioner's second contention, we hold that the petitioner's Identification as
the Highway District Engineer in the complaint filed by the private respondent did not result
in the said complaint's becoming a suit against the government or state.

In Belizar v. Brazas, (2 SCRA 526), we ruled that "the fact that the duties and positions of
the defendants are indicated does not mean that they are being sued in their official
capacities, especially as the present action is not one against the Government."
Furthermore, the accident in the case at bar happened on a non-working day and there was
no showing that the work performed on that day was authorized by the government. While
the equipment used belongs to the Government, the work was private in nature, for the
benefit of a purchaser of junk. As we have held in the case of Republic v. Palacio (23 SCRA
899,906).

xxx xxx xxx

the ISU liability thus arose from tort and not from contract, and it is a well-
entrenched rule in this jurisdiction, embodied in Article 2180 of the Civil Code
of the Philippines, that the State is liable only for torts caused by its special
agents, specially commissioned to carry out the acts complained of outside of
such agent's regular duties (Merritt v. Insular Government, supra; Rosete v.
Auditor General, 81 Phil. 453) There being no proof that the making of the
tortious inducement was authorized, neither the State nor its funds can be
made liable therefor.
Therefore, the defense of the petitioner that he cannot be made liable under the principle of
non-suability of the state cannot be sustained.

With regard to the main contention of the petitioner that the appellate court based its
conclusions on an erroneous finding of fact, we agree with him that the appellate court's
finding that he was present within the premises when the accident happened is not
supported by evidence indisputably showing that he was indeed there.

Since the evidence fails to establish petitioner Genson's presence when the payloader's
bucket fell on the head of Mr. Adarle, any liability on his part would be based only on his
alleged failure to exercise proper supervision over his subordinates (See Umali v. Bacani, 69
SCRA 263, 267-268).

According to the trial court, Mr. Genson authorized work on a Saturday when no work was
supposed to be done. It stated that the petitioner should know what his men do with their
government equipment and he should neither be lax nor lenient in his supervision over
them.

The petitioner contends that:

1. No evidence on record exists that Genson gave authority to Adarle and

Arbatin, either verbally or in writing, to enter the work inside the Highways
Compound on September 8, 1979;

2. Genson never knew or met Arbatin until the trial of the case. This fact was
never denied by Arbatin nor rebutted by Adarle. How then could Genson have
ordered or allowed Arbatin to enter the Highways Compound with Adarle?

3. Adarle himself repeatedly admitted that Arbatin, his employer, gave him
the instructions to enter the compound, thus:

Q. Now particularly on September 8, 1979, did Arbatin ask you

to go to the compound in the Highway?

A. Yes sr.

Q. Are you sure of that?

A. Yes, sir.

Q. Where did he say that to you?

A. We went to the Highway compound for many times already

and that was the time when I met the incident.

Q. The particular day in question September 8. 1979, did you

see Arturo Arbatin and he asked you to go the compound on
that day?
 A. That date was included on the first day when "he instructed
us to gather scrap iron until that work could be finished." (pp.
25-26, tsn., October 10, 1980) (Emphasis supplied)

Q. Who told you to work there?

A. "Through the instruction of Arturo Arbatin" (pp. 32, tsn., Oct.

10, 1980) (Emphasis supplied) (pp. 12-13, Rollo).

Insofar as work on a Saturday is concerned, and assuming Mr. Genson verbally allowed it,
we see nothing wrong in the petitioner's authorizing work on that day. As a matter of fact, it
could even be required that the hauling of junk and unserviceable equipment sold at public
auction must be done on non-working days. The regular work of the District Engineer's
office would not be disturbed or prejudiced by a private bidder bringing in his trucks and
obstructing the smooth flow of traffic and the daily routine within the compound. Obviously,
it would also be safer for all concerned to effect the clearing of the junk pile when
everything is peaceful and quiet.

There is no showing from the records that it is against regulations to use government
cranes and payloaders to load items sold at public auction on the trucks of the winning
bidder. The items were formerly government property. Unless the contract specifies
otherwise, it may be presumed that all the parties were in agreement regarding the use of
equipment already there for that purpose. Of course, it would be different if the junk pile is
in a compound where there is no equipment for loading or unloading and the cranes or
payloaders have to be brought there.

There is likewise no sufficient basis for the "master-servant" doctrine in tort law to apply.
Buensalido was not working overtime as a government employee. It is doubtful if the
district engineer can be considered an "employer" for purposes of tort liability who may be
liable even if he was not there. No evidence was presented to show that an application for
overtime work or a claim for overtime pay from the district engineer's office was ever filed.
It is more logical to presume that Buensalido, the operator of the payloader, was trying to
earn a little money on the side from the junk buyer and that his presence in the compound
on that Saturday was a purely private arrangement. From the records of this case, we are
not disposed to rule that a supervisor who tolerates his subordinates to moonlight on a non-
working day in their office premises can be held liable for everything that happens on that
day. It would have been preferable if Mr. Arbatin brought his own payloader operator and
perhaps, his own equipment but we are not dealing with sound office practice in this case.
The issue before us is subsidiary liability for tort comitted by a government employee who is
moonlighting on a non-working day.

This Court ruled in Dumlao v. Court of Appeals (114 SCRA 247, 251):

Nevertheless, it is a well-settled principle of law that a public official may be

liable in his personal private capacity for whatever damage he may have
caused by his act done with malice and in bad faith, (Mindanao realty Corp. v.
Kintanar, 6 SCRA 814) or beyond the scope of his authority or jurisdiction.
(the Philippine Racing Club v. Bonifacio, G.R. No. L-11844, August 31, 1960)
The question, therefore, is whether petitioner did act in any of the manner
aforesaid.
 Petitioner contends that, contrary to the holding of the respondent Court of
Appeals, he was not sued in his personal capacity, but in his official capacity.
Neither was malice or bad faith alleged against him in the complaint, much
less proven by the evidence, as the respondent court made no such finding of
malice or bad faith.

Examining the allegations of the complaint and reviewing the evidence it

would indeed be correct to say that petitioner was sued in his official capacity,
and that the most that was imputed to him is act of culpable neglect,
inefficiency and gross indifference in the performance of his official duties.
Verily, this is not imputation of bad faith or malice, and what is more was not
convincingly proven.

According to the respondent court, "Genson and Buensalido divested themselves of their
public positions and privileges to accomodate an acquaintance or probably for inordinate
gain." (p. 31, Rollo).

There is no showing from the records that Genson received anything which could be called
"inordinate gain." It is possible that he permitted work on a Saturday to accomodate an
acquaintance but it is more plausible that he simply wanted to clear his compound of junk
and the best time for the winning bidder to do it was on a non-working day.

At any rate, we see no malice, bad faith, or gross negligence on the part of Genson to hold
him liable for the acts of Buensalido and Arbatin.

WHEREFORE, the decision of the Intermediate Appellate Court is hereby REVERSED and SET
ASIDE. The complaint against Jesus Genson is DISMISSED.

SO ORDERED.

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

G.R. No. L-15992 May 31, 1961

PEDRO TY BELIZAR, plaintiff-appellant,

vs.
FLORENCIO BRAZAS, FELIX HILARIO, LUCIO BALDONILO, FELIX BALATO,
TEODORO BALATO and TODESCO CEBUANO, defendants-appellees.

Lope C. Quimbo for plaintiff-appellant.

Artemio A. Docena and Jacinto R. Bohol for defendants-appellees.

LABRADOR, J.:

This is an appeal from an order of the Court of First Instance of Samar dated June 6, 1959,
dismissing the complaint filed before it.

On April 21, 1959, Pedro Ty Belizar filed a complaint against Florencio Brazas, Felix Hilario,
Lucio Baldonilo alleging that he is operating the Samar Express Transit; that defendants are
being used in their capacity as employees (of the Bureau of Public Highways); that due to
their gross negligence in not providing the ferry boat with safety devices, one of his auto-
trucks, while being transported from one bank of the Taft River, Taft, Samar, to the other,
fell into the river and was submerged in water for over 30 hours; that as a consequence
thereof, he suffered actual and moral damages and had to hire counsel to prosecute this
action. He therefore prays for payment to him by the defendants of said damages and
attorney's fees.

On May 14, 1959, defendant Felix Hilario, on his own behalf, filed his answer, denying the
material allegations of the complaint and alleging as special defense that he is working only
under the instructions of his superiors. On May 19, 1959, defendants Lucio Baldonilo, Felix
Balato, Teodoro Balato and Todesco Cebuano filed a motion to dismiss on the grounds that
the complaint states no cause of action and that they are not the real parties in interest.
After an opposition thereto was filed by the plaintiff, the remaining defendant Florencio
Brazas filed another motion to dismiss on May 20, 1959, claiming that the plaintiff has no
cause of action against the defendants because they are being sued in their official
capacities and therefore the claim for damages should be directed against the State.

Acting upon the motions to dismiss, the lower court on June 6, 1959, dismissed the
complaint, and against this order, the plaintiff has prosecuted this appeal directly to this
Court.

The only issue before this Court is the correctness of the order appealed from.

It is apparent from the records that although the Government is the one operating the ferry
boat, from which plaintiffs truck fell, because of the absence of safety devices, the plaintiff
has elected to sue the defendant employees personally for their negligent acts under the
doctrine of quasi-delict. Article 2180 of the Civil Code provides for the liability of an
employer for the tortuous acts of his employees. This, however, does not exempt the
employees from personal liability, especially if there are no persons having direct
supervision over them, or if there is proof of the existence of negligence on their part. So
the injured party can bring an action directly against the author of the negligent act or
omission, although he may sue as joint defendants such author and the person responsible
for him (7 Salvat 80, quoted in V Tolentino, Commentaries and Jurisprudence on the Civil
Code of the Philippines, 1959 edition, p. 520). The provisions of Article 1733 of the Civil
Code and the decision in the case of the Manila Railroad Co. vs. La Compania Trasatlantica
and Atlantic Gulf & Pacific Co., 38 Phil. 875, cited in the order appealed from refer to an
order based upon a contract of transportation. The present action being based on torts, said
authorities are not applicable thereto.

The fact that the duties and positions of the defendants are indicated does not mean that
they are being sued in their official capacities, especially as the present action is not one
against the Government.

In view of the foregoing we find that the dismissal of complaint is not justified, and for this
reason, we hereby set aside the order of dismissal appealed from and remanded the case to
the court of origin for further proceedings. With costs against the defendants-appellees.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon,
De Leon and Natividad, JJ., concur.
G.R. No. L-7317 January 31, 1912

EMILIA ALZUA and IGNACIO ARNALOT, plaintiffs-appellants,

vs.
E. FINLEY JOHNSON, defendant-appellee.

William Tutherly & Wm. J. Rohde for appellants.

W. A. Kincaid & Thomas L. Hartigan for appellee.

CARSON, J.:

This is an appeal from a judgment of the Court of First Instance of Manila sustaining a
demurrer to the complaint filed in this action on the ground that the facts stated therein do
not constitute a cause of action.

A copy of the complaint, omitting the voluminous exhibits thereto Attached, is set out in full
in the margin, and for convenience will be identified as marginal note A.1

The complaint charges the defendant, an associate justice of the Supreme Court of the
Philippine Islands, with corruption and misconduct in office of the gravest character. The
damages which plaintiff Alzua seeks to recover in this section are alleged to have resulted
from the entry by the court of an alleged erroneous judgment in a former action to which
Alzua was a party defendant. The error which is alleged was committed by the court in
entering that judgment, is attributed to the alleged false and misleading statement of the
facts of the case which is set out in the written opinion upon which the judgment of the
court was based. The complaint specifically charges the defendant, the writer of that
opinion, with having willfully, maliciously, and in bad faith, perverted and misstated the
facts set out therein for the purpose of deceiving the other members of the court to whom
the opinion was submitted for signature; and is further changed, that this was but one of
series of malicious and wrongful acts whereby the defendant succeeded in deceiving his
associates, and induced them to sign the order directing the entry of the alleged erroneous
judgment. As necessary corollary to the surmises, conjectures, and specific charges of
wrongdoing set out in the complaint, if these surmises, conjectures, and specific charges
are well founded, the four members of this court whose signatures are attached to that
opinion together with that of the defendant, must have signed the opinion with no personal
knowledge of the contents of the record submitted to them for adjudication, and without
having read the briefs of counsel, relying wholly upon the alleged false and misleading
statement of the facts prepared by the defendant as the basis for the judgment which it is
alleged was erroneously entered by the court.

We need hardly say that in sitting in judgment upon a complaint which thus boldly attacks
the good name and fame of one of our associates, and which indirectly reflects upon the
credit and reputation of the whole court, we keenly recognize the delicacy of our position;
and that had we any discretion so to do, we would decline to take part in the discussion and
decision of the questions submitted on the appeal. But our duty, as members of the court of
last resort in these Islands, demands that in this case, as in all other cases duly submitted
to us for adjudication, we proceed, in the language of our solemn oath of office, to
"administer to justice without respect to persons, and with equal right to the rich and to the
poor" and that we "faithfully and impartially discharge and perform all the duties incumbent
upon us, as members of the court, according to the best of our ability and understanding,
agreeably to the laws of the Philippine Islands."
We are, however, in some sort relieved of the extreme embarrassment to which we might
otherwise be subjected by the exceptional character of the allegations and charges set out
in the complaint:

(1) By the knowledge that our action herein is subject to review by a higher court;

(2) By the fact that counsel, upon submitting the case on appeal, formally advised
the court that it was submitted for judgment without any object to the participation
therein of any of the members of the court whose signatures are here to attached;
and

(3) Because the case is before us in such form that we can fully and completely
disposed off all the issues involved, without being called upon to decide any difficult,
doubtful or certain questions of fact; and because, without any doubts or misgivings
as to the correctness of our conclusions, we are unanimously of opinion not only that
the plaintiff has no legal right to maintain this action, even if the truth of all her
charges of official misconduct and wrongdoing on the part of the defendant be
admitted; but that an examination of the complaint, together with the exhibits
incorporated therein, clearly discloses that even if plaintiff could be permitted to
maintain this action, she has no just claim against the defendant; that she did not as
alleged, suffer the damages complained of, or any damages whatever; that the
material and relevant facts well pleaded in the complaint do not sustain or justify the
surmises, conjectures, inferential allegation and specific charges of misconduct on
the part of the defendant contained therein: that on the contrary the complaint, read
with the exhibits and court files which are incorporated therein, clearly discloses
facts which justify us in holding that the defendant was not guilty of any misconduct
or wrongdoing in connection with the entry of the judgment in question or the
litigation in the course of which it was rendered; that his intervention in the
adjudication of the causes mentioned in the complaint was had in the due and proper
performance of his duty; that a failure or neglect on his part to do each and all of the
acts complained of substantially in manner and form as he did in fact do them, would
have rendered him liable to a well-founded charge dereliction in the performance of
the duties of his office as an associate justice of the Supreme Court of the Philippine
Islands; and, finally, that the two separate final judgments entered by this court in
the causes referred to in the complaint, which are alleged to have been erroneously
entered at the instigation of the defendant, were justly and lawfully entered, and
adjudicated the issues involved in each of them "according to the very right of the
cause" and agreeably to the laws of the Philippine Islands."

It is hardly possible that any one can be better informed than are we as to the truth in
regard to the extended litigation in this court which culminated in the alleged erroneous
judgment. Certainly no one can be in better position than are the members of this court to
interpret correctly the various incidents of that litigation as they are disclosed by our own
records. Nevertheless, this case having been submitted to us for a review of the action of
the court below in sustaining a demurrer to the complaint, and that demurrer admitting, as
it does, the truth of all the material and relevant facts which are well pleaded; we have
taken scrupulous care to decide the appeal thus submitted, not upon any matter of our own
knowledge which could not have been known to the court below, but strictly upon the facts
discloses by the complaint, aided only by those additional facts of which the court below
might and should be taken judicial notice.
Counsel for Alzua, the real plaintiff and appellant in this action, and who will be referred to
hereinafter as the 'plaintiff," contend that the judgment of the lower court sustaining the
demurrer should be reversed because, as counsel contend, if the truth of the allegations
contained in the complaint be admitted, it appears that she suffered damages, actual and
special, amounting to some P65,000 as the result of the entry of an erroneous judgment
against her for the sum of P12,000 by the Supreme Court of the Philippine Islands in a
certain action to which she was a party defendant, to satisfy which she was compelled, as
she alleges, to sell certain valuable real estate at a great sacrifice; and because, as counsel
contend, this erroneous judgment was rendered by the Supreme Court of the Philippine
Islands as a result of the unlawful and malicious intervention of the defendant in the various
proceedings had in this court leading up to its entry. The alleged unlawful acts of the
defendant to which the complaint directs the attention of the court consists of an alleged
misstatement and perversion of the facts developed by the record which is set out in his
written opinion in the case wherein the alleged erroneous judgment was entered, and a like
misstatement of the facts developed in the record which is set out in his written opinion in a
prior case intimately connected therewith; also the striking out with pen and ink by the
defendant of the word "affirmed" and the substitution therefor of the word "revoked" in the
original order directing entry of judgment in the earlier case, and the issuance by him, at
the same time, of directions to the clerk of the court to suspend the execution of the order
thus amended, until the further order of the court. The complaint charges that the
intervention by the defendant in these proceedings was actuated throughout by an intent to
injure the plaintiff in this action; that the statement of facts set out in the opinions written
by him, upon which the judgments in those cases were entered, were false, and made by
the defendant knowing them to be false; that the amendment made to the order directing
to the entry of judgment in the first cause by striking out the word "affirmed" and
substituting therefor the word "revoked," was made by the defendant surreptitiously,
unlawfully, without consulting with associates, and with intent to injure the plaintiff in this
action; that it constituted a willful and deliberate falsification of the records of this court by
the defendant in this action; and that the defendant, thus unlawfully and maliciously
intervening in the proceedings of the court upon the appeals in the two above-mentioned
causes, procured the entry of the erroneous judgment from which sprung the damages
complained of by the plaintiff in this action. Counsel contend that the truth of these
allegation being admitted by the demurrer, judgment should be rendered against the
defendant for damages: P40,000 as actual damages, that being the alleged value of the real
estate which plaintiff Alzua was compelled to sell in order to satisfy the alleged erroneous
judgment against her for P12,000; P25,000 by way of special damages because of the loss
of profits from this property of which she was thus deprived from the date of its sale to the
date of the institution of this action; and P50,000 by way of punitive damages, which
plaintiff claims, apparently on the ground of the malicious character of the alleged wrong
done her by the defendant.

We do not think that these contentions of counsel for appellant are supported by the facts
well pleaded in the complaint; and, on the contrary, we are unanimously of opinion, and so
hold, that the demurrer to the complaint was properly sustained by the court below. Our
conclusions are based on several grounds, each of which is sufficient in itself to sustain the
action of the trial judge. We shall, therefore, set out the various grounds on which our
judgment rests very summarily in the fist place; and, thereafter, we shall examine each of
them in greater detail and under separate heads.

First. We hold that, admitting the truth of all the allegation set out in the complaint, and of
all the surmises, conjectures, inferenial allegations, and specific charges of official
misconduct and wrong doing, and of malice, bad faith, and intent to injure the plaintiff
contained therein, the defendant, nevertheless, is not liable to respond in a civil action for
the damages which it is alleged were occasioned thereby.

Second. We hold the complaint itself, read together with the exhibits and court records
which are incorporated therein, clearly discloses that the judgment, out of which plaintiff
claims that the alleged damages sprung, was not erroneously entered as alleged in the
complaint, and therefore that the plaintiff has no claim for damages against the defendant;
in other words, that the facts set out in the complaint do not constitute a cause of action.

Third. We hold that the complaint itself, read together with the exhibits and court records
which are incorporated therein, sets forth facts which clearly demonstrate that the
surmises, conjectures, inferential allegations, and specific charges of official misconduct and
wrongdoing directed against the defendant in the complaint are not well founded. We hold
also, in this connection, that the allegations in the complaint of malice, bad faith, and intent
on the part of the defendant to injure the plaintiff are not sustained, and on the contrary are
directly controverted, by the specific averments of facts set out in the complaint when read
together with the court records specially referred to therein. We conclude, therefore, that
proof of the material and relevant facts well pleaded in the complaint would not sustain the
charges of bad faith, malice, and wicked intent set out therein, which on plaintiff's own
theory of the case must be shown to exist she can establish a cause of action; or in other
words, that the facts set out in the complaint do not constitute a cause of action.

In support of the proposition that defendant is not liable to respond in a civil action for the
damages alleged in the complaint, we might, perhaps, rely upon the reasoning of the
concurring opinion in the case of Forbes vs. Chuoco Tiaco (16 Phil. Rep., 534), wherein the
writer undertakes to establish that "whenever and wherever a judge of a court of superior
jurisdiction exercises judicial functions, he will not personally liable in civil damages for the
result of the actions," and that "the test of judicial liability is not jurisdiction, but such
liability depends wholly upon the nature of the question which is being determined when the
error complained of is committed by the court. If such question is one of determination of
which requires the exercise of judicial functions, the judge is not liable, even though there is
in reality an absolute failure of jurisdiction over the subject matter." Applying this test to
the allegations contained in the complaint, there could be no question as to the nonliability
of the defendant to respond in this action for the alleged damages. We shall not, however,
rest our decision in this case upon the doctrine thus enunciated, nor shall we in any wise
rely upon the reasoning or the conclusions contained in the concurring opinion in the Forbes
case. The doctrine as to nonliability of judges therein set forth has not been uniformly and
unquestioningly accepted by all the courts which have been called upon to consider the
principles involved; and indeed, the writer of that opinion carefully directs attention to the
fact that the doctrine a to nonliability of judge therein announced is, if not a step in advance
of the doctrine generally recognized in English and American courts, at least a statement of
the doctrine in a form which has not yet received universal judicial recognition and
acceptance. We prefer, therefore, since the facts in this case permit us to do so, to rest our
conclusion upon a much narrower and more restricted proposition touching the liability of
judicial officers, which have never been seriously questioned by any court of last resort in
England or the United States; merely observing in passing, that the rule of judicial liability
on which we propose to rely is not in conflict with the doctrine laid down in the occuring
opinion in the Forbes case, but is included therein, so that the grounds of public policy on
which the broader doctrine rests necessarily sustain the more restricted statement of the
rule upon which we purpose to rely.
We hold that under the law as it now exists in these Islands judges of superior and general
jurisdiction are not liable to respond in civil action for damages for what they may do in the
exercise of their judicial functions when acting within their legal powers and jurisdiction.

The grounds of public policy upon which these proposition rests have been held by the very
highest authority to protect judges, even when acting in excess of jurisdiction; and with
much reason many authorities have held that upon the same grounds of public policy the
protecting mantle of this rule should be thrown around judges with inferior jurisdiction as
well as those of superior jurisdiction. So the writer of the concurring opinion in the Forbes
case, supra, in carrying the reasoning on which this rule rests to what the conceives to be
its legal conclusion, lays down the still broader rule above cited. But for the purposes of this
decision we desire to limit ourselves to the restricted statement of the rule as just laid
down, because as we believe and will undertake hereinafter to establish, there can be no
question that whatever may have been the motives of the defendant, the allegation of the
complaint disclose that in doing each and all of the acts complained of, he was acting "as a
judge," in the exercise of the judicial functions, and that in doing these acts he was clearly
and undoubtedly acting within his legal powers and jurisdiction.

This restricted statement of the rule of judicial liability in civil actions is universally asserted
by the text-writers, and is a settled principle of law as applied by the courts of England and
the United States. It need not no citation of authorities to sustain it, and we shall not
burden the body of this opinion with the arguments which are advanced in its support. But
in the margin (Notes C and D, pp. 334, 336) will be found a full statement of the grounds of
public policy on which it rests, quoted from Mr. Cooley's work on Torts; and an extensive
citation from the opinion of the Supreme Court of the Unite States written by Chief Justice
Field in the case of Bradley vs. Fisher,2 in which the rule is discussed at length.

There can be no argument to demonstrate that the defendant, an associate justice of the
Supreme Court of the Philippine Islands, was acting within the limits of his legal powers and
jurisdiction in taking part in the adjudication of the appeals in the two cases referred to in
the complaint; in discussing the issues involved therein with his associates; in preparing the
written opinions therein and submitting them to other members of the court for signature;
and in joining with them in the issuance of the necessary orders for the entry of the final
judgments rendered by the court. The only question, therefore, as to the legal powers and
jurisdiction of the defendant to do the various acts mentioned in the complaint which need
be considered, arises in connection with his action in amending the order directing the entry
of judgment in the earlier cae referred to in the complaint, and in giving directions to the
clerk of the court not to execute the original order nor the order as amended until the
further order of the court. We hold that if it be admitted that the court itself had legal
powers and jurisdiction thus to amend its own order and to suspend the execution thereof
until the further order of the court, then the facts alleged in the complaint conclusively
establish the legal powers and jurisdiction of the defendant so to do. The complaint
expressly alleges that all of these acts were done during the judicial vacation of the court in
the year 1907: and furthermore, it sets forth facts which fully sustain the averment
contained therein that these acts were done on or about the 8th day of April, 1907. But at
the time the defendant was acting as vacation justice, designated to remain on duty during
the vacation period of the year 1907, with full legal powers and jurisdiction to each an all of
these acts if the court itself would have had such powers and jurisdiction to do them when
in regular session. True the complaint studiously refrains from mentioning the fact that at
the time when these acts were done by the defendant was on duty as vacation judge of the
court, but we hold that this court as well as the court below may and should take judicial
notice of the fact, under the provisions of section 421 of the Code of Civil Procedure; and an
extract from the official copy of the administrative order designate him for that duty, which
was furnished to all the courts of the Islands, will be found in marginal B.3

That the court itself had plenary control over the order in question, and complete legal
powers and jurisdiction to amend it, and to issue orders to the clerk directing suspension of
its execution until further orders, will be shown further on in this opinion; and indeed this
proposition is so apparent that it is hardly necessary to set forth the reasoning on which it
rests. That the defendant, as vacation justice of the court, had full legal powers and
jurisdiction to do likewise, becomes very clear from a reading of the provisions of
subsections (c) and (d) of section 5 of Act No. 136 as amended by section 1 of Act No. 867,
set out in marginal note,4 which confer and define the legal powers and jurisdiction of
justices of the Supreme Court of the Philippine Islands designated for duty during judicial
vacations. Under the rulings and practice of this court in construing these provisions of the
law, it cannot be doubted that the interlocutory jurisdiction thus conferred by law upon
vacation justices of this court clothed the defendant with full legal powers and jurisdiction to
make the provisional amendment of the order directing the entry of the judgment, and to
direct the suspension of its execution until the further orders of the court, these acts being
essentially interlocutory in their nature, and, in the very language of the statute, "not final
in their character" and not involving "a decision of the case pending on the merits."

The allegations of the complaint setting forth that all the acts complained of therein, were
done by the defendant, in the exercise of his judicial functions, as a judicial functions, as a
justice of the Supreme Court of the Philippine Islands, a court of superior and general
jurisdiction; and it clearly in the exercise of judicial functions, as a justice of the Supreme
Court of the Philippine Islands, a court of superior and general jurisdiction; and it clearly
appearing from the complaint, that in doing each and all of the acts complained of, he was
acting in the limits of his legal powers and jurisdiction; it follows, as of course, that he
cannot be held to respond in this action for the damages which it is alleged were occasioned
thereby, since judges of superior and general jurisdiction are not liable to respond in civil
actions for damages for what they may do in the exercise of judicial functions when acting
within legal powers and jurisdiction."

But counsel for appellants, while they do not deny that the rule on law which we rely is
universally recognized and applied in the courts of England and the United States, insists
that it is not a correct statement of the law in force in these Islands. As we understand their
contention, it is that this rule of the common law of England, and as such not in force in the
Philippines; and that the doctrine as to the liability of judicial officers in civil actions is to be
derived from the Spanish substantive law in force in these Islands at the time of their
transfer to American sovereignty, modified only by the provisions of section 9 of the Code of
Civil Procedure.

To this we answer that while it is true that the body of the common la was known to Anglo-
American jurisprudence is not in force in these Islands, "nor are the doctrines derived
therefrom binding upon our courts, save only in so far as they are founded on sound
principles applicable to local conditions, and are not in conflict with existing law" (U.
S. vs. Cuna, 12 Phil. Rep., 241); nevertheless many of the rules, principles, and doctrines of
the common law have, to all intents and purposes, been imported into jurisdiction, as a
result of the enactment of new laws and the organization and establishment of new
institutions by the Congress of the United States or under its authority; for it will be found
that many of these laws can only be construed and applied with the aid of the common law
from which they are derived, and that to breathe the breath of life into many of the
institutions introduced in these Islands under American sovereignty recourse must be had to
the rules, principles, and doctrines of the common law under whose protecting aegis the
prototypes of these institutions had their birth.

In the case of Kepner vs. United Sates (195 U. S., 100; 11 Phil. Rep., 669), the Supreme
Court of the United States declared that:

The expressed declarations of the President in Military Order, No. 58 of April 23,
1900, and in the Act of July 1, 1902, establishing a civil government in the Philippine
Islands, both adopting with little alteration the provisions of the Bill of Rights, show
that it was intended to carry to the Philippine Islands those principles or our
Government which the President declared to the established as rules of law for the
maintenance of individual freedom; and those expressions were used in the sense
which has been placed upon them in construing the instrument from which they were
taken.

It is a well-settled rule of construction that language used in a statute which has a

settled and well-known meaning, sanctioned by judicial decision, is presumed to be
in that sense by the legislative body.

It is a well-settled principle of construction that specific terms covering the given

subject matter will prevail over general language of the same or another statute
which might otherwise prove controlling.

In ascertaining the meaning of a phrase in the Constitution taken from the Bill of
Rights, it must be construed with reference to the common law from which it was
taken.

So in Serra vs. Mortiga (204 U. S., 470; 11 Phil. Rep., 762) the same court held that:

The guaranties extended by Congress to the Philippine Islands are to be interpreted

as meaning what the like provisions meant when Congress made them applicable to
whose Islands.

And it is safe to say in every volume of the Philippine Reports, numbers of cases might be
sighted wherein recourse has been had to the rules, principles, and doctrines of the
common law in ascertaining the true meaning and scope of the legislation enacted in and for
the Philippine Islands since they passed under American sovereignty.

Among the earliest measures of the Philippine Commission, after the establishment of the
Civil Government under American sovereignty, was the enactment on June 11, 1901, of Act
No. 136, "An Act providing the organization of courts in the Philippine Islands." This Act in
express terms abolished the then existing Audiencia or Supreme Court and Court of First
Instance, and substituted in their place the courts provided therein. It sets out in general
terms the jurisdiction, duties, privileges, and powers of the new courts and their judges.
The majority of the members of the body which enacted it were able American lawyers. The
spirits with which it is informed, and indeed it very language and terminology would be
unintelligible without some knowledge of the judicial systems of England and the United
States. Its manifest purpose and object was to replace the old judicial system, with its
incidents and traditions drawn from Spanish sources, with a new system modeled in all its
essential characteristics upon the judicial systems of the United States. It cannot be
doubted, therefore, that any incident of the former system which conflicts with the essential
principles and settled doctrines on which the new system rests, must be held to be
abrogated by the law organizing the new system.

The exemption of judges of courts of superior or general authority from liability in a civil
action for acts done by them in the exercise of their judicial functions is a principle
essentially inherent in the various judicial systems upon which system under organized Act
No. 136 is modeled. The grounds of Public policy and the reasoning upon which the doctrine
is based are not less forceful and imperative in these Islands than in the countries from
which the new judicial system was borrowed; and an examination of the reasons assigned
by the Supreme Court of the United States and by Mr. Cooley in his work on Torts for the
universal recognition of the rule in the United States, as set out in the margin (Notes C and
D5) leaves no room for doubt that a failure to recognize it as an incident to the new judicial
system would materially impair its usefulness, and tend very strongly to defeat the ends for
which it was established. Indeed, upon the authority of the reasoning in the case of
Bradley vs. Fisher, it may safely be asserted that an attempt to inforce any rule of law in
conflict with the doctrine would be utterly subversive of the system jurisprudence
established in these Islands under and by virtue of the authority of Congress of the Unite
States:

For it is a general principle of the highest importance to the proper administration of

justice that a judicial officer, in exercising the authority vested in him, shall be free
to act upon his own convictions, without apprehension of personal consequence to
himself. Liability to answer to everyone who might fell himself aggrieved by the
action of the judge would be inconsistent with the possession of this freedom, and
would destroy that independence without which no judiciary can be either
respectable or useful. As observed by a distinguished English judge, it would
establish the weakness of judicial authority in a degrading responsibility.

The principal, therefore, which exempts judges of courts of superior or general

authority from liability in a civil action for acts done by them in the exercise of their
judicial functions, obtains in all countries where there is any well-ordered system of
jurisprudence. It has been the settled doctrine of the English courts for many
centuries, and has never been denied, that we are of, in the courts of this country.
(Bradley vs. Fisher, supra.)

We conclude, that if it be true, as asserted by counsel for appellant, that the provisions of
Spanish law in force in these Islands prior to American occupation are in conflict with the
doctrine of nonliability of judges above set out, such provisions of the old law must be held
to have been abrogated by the enactment of Act No. 136 of the Philippine Commission, to at
least the extent with which they are in conflict with in the doctrine.

But while we hold that since the enactment of Act No. 126 the doctrine as to the liability of
judges must be laid down in accordance with principles derived from Anglo- American rather
than Spanish jurisprudence, and that it is not dependent for its existence upon Spanish
legislation, we do not admit that there is, in truth, any substantial conflict between the two
systems in this regard. We would, indeed, be surprised to find that the learned Spanish
authors of the scientific and carefully wrought codes of Spain had disregarded a principle
which the Supreme Court of the United States declares "obtains in all countries where there
is any well-ordered system of jurisprudence." (Bradley vs. Fisher, supra.) It may be
interesting, therefore, and perhaps profitable to glance for a moment at the provisions of
Spanish law upon this subject.
It will be seen from the citations set in marginal note F6 that the liability (responsibilidad) of
Spanish judicial officers was limited to the indemnification (resarcimiento) of damages to
private persons when in the exercise of their functions they violated the laws through
negligence or inexcusable ignorance; and it was further expressly provided that such
negligence or ignorance is to be deemed inexcusable when it appears that this officers have
pronounced a ruling or judgment manifestly contrary to the law, or when they have failed to
take some step or to comply with some formality which the law expressly prescribes, upon
such conditions that the failure so to do invalidates the proceeding.

Here we have two separate grounds of liability, neither of them in any wise dependent on
the motive or intent of the judge, so that in Spanish as in American jurisprudence the
existence and character of the motive or intent behind the commission of the act
complained of can have no place in the inquiry as to the civil liability of a judge of superior
and generally authority when acting within his jurisdiction.

One of he grounds of liability set out in the Spanish law, that is to say, manifest and
inexcusable negligence in failing to take some step or to comply with some formality which
the law expressly prescribes, is evidently limited to cases involving a failure on the part of
the judge to perform some ministerial function prescribed by law, as to which he has no
judicial discretion. And certainly this provision as to the liability of judicial officers is not in
conflict with Anglo-American jurisprudence in this regard; for in England and the United
States the liability of judicial officers for acts done in the performance of such ministerial
functions as may be imposed upon them is generally recognized and sustained; the rule in
this regard as laid down in 23 Cyc., 571, and many cases there cited being that:

For the wrongful execution of or refusal to perform a ministerial duty or authority

annexed to a judicial office, the officer is answerable to the injured party in an action
at law, whether or not he acts in good faith; or personally, or by a clerk whom he
has authorized to perform the acts; and his judicial character affords him no
protection.

The only other ground of civil liability of judicial officers under the Spanish law springs from
inexcusable negligence or ignorance in the pronouncing a ruling or
judgment manifestly contrary to the law. But critically examined this provision appears to
be substantially identical with the rule as to the liability of judicial officers, derived by the
writer of the concurring opinion in the Forbes case (supra) from a careful review of the
principles laid down by Anglo-American authorities — a rule which , as we have said, is
much broader than the rule relied upon by us, and in which the narrower and more
restricted rule is necessarily included. To say that judge is only liable when he is guilty of
inexcusable ignorance or negligence, and that ignorance or negligence will be deemed
inexcusable only when a ruling or judgment manifestly contrary to the law is pronounced by
the judge, is substantially equivalent to a declaration that the judge can only be held liable
when it appears that the acts complained of were not done by him in the exercise of judicial
discretion, were not done by him as a judge, were not the result of the exercise of judicial
functions; because, in any case wherein the acts complained of appear to have been
manifestly contrary to the law, no real question can have been submitted for decision; that
is to say, no question whose determination required the exercise of judicial functions. In
truth this branch of the rule of liability of judges as laid down in the Spanish law hardly
admits of differentiation from the rule of liability as laid down in the concurring opinion in
the Forbes case. But we shall not pursue this inquiry further, and content ourselves with
setting out the rule as laid down in the syllabus of that opinion merely for purposes of
convenient comparison.
 The rule of liability. — The rule of liability is: If the question is one which a judge,
qualified in the average way for position occupied by the offending judge or for a
similar judicial position, would regard as a real question, then it is one whose
determination requires the exercise of judicial functions. But if it is one so clear that
a judge, qualified as aforesaid, would not regard as a real question, then it is one
whose determination does not require the exercise of judicial functions. In the
former case,. the judge is not liable; in the latter, he is. (Forbes vs. Chuoco Tiaco, 16
Phil. Rep., 534.)

We venture to assert, therefore, that the rule of liability of judicial officers, as laid down in
the old Spanish law, is not in substantial conflict with that recognized by the American
authorities upon which we rely. Both judicial systems recognize the liability of these officers
for wrongs committed in the performance of purely ministerial functions; and the Spanish
rule that liability is not incurred unless the act done is so manifestly contrary to the law as
to negative the possibility that it was done in the exercise of judicial functions, though a
broader rule than the rule on which we rely, that is to say that "judges of courts of superior
and general jurisdiction are not liable for acts done in the exercise of their judicial
functions and within their legal power and jurisdiction," is manifestly not in conflict
therewith.

But counsel insist that the true rule as to the civil liability of judicial officers in these Islands
is to be found in section 9 of Act No. 190, the only legislative enactment under American
sovereignty which, expressly, and in terms, treats of the "civil liability of judge." This
section is one of the "general and preliminary provisions" of the Code of Civil Procedure, and
is as follows:

Civil liability of judges. — No judge, justice of the peace, or assessor shall be liable to
a civil action for the recovery of damages by reason of nay judicial action or
judgment rendered by him in good faith, and within the limits of his legal powers and
jurisdiction.

Counsel contend that under the provisions of this section all judicial officers may be held
liable in civil actions for damages resulting from their erroneous or wrongful acts as judges,
unless it appears that the acts complained of were done by them; first, in good faith; and
second, within the limits of their legal powers and jurisdiction. The connection seems to be
that by expressly exempting judges from liability in certain cases, this section prescribes, by
necessary implication, that they shall be liable in all other cases. We do not think that this
contention can be maintained.

In the first place it fails to take into account the state of the law in force at the time when
the Code of Civil Procedure was enacted. We think we have shown that after the enactment
of Act No. 136 the rule of the law. at least as to judges of superior and general jurisdiction,
was that they were not liable to civil actions for damages when acting within our legal
powers and jurisdiction. Doubtless the immunity will be held to extend to judges acting "in
excess of their jurisdiction;" and it may be found that it should be extended so as to protect
judicial officers of every kind to the full limits of the rule laid down in the concurring opinion
in the Forbes case and the Spanish laws above cited. But beyond any question, the rule in
its more restricted and limited form was in force in these Islands at the time when section 9
of Act No. 190 was promulgated. There is no necessary conflict between the provisions of
this section and the rule as above enunciated, and they should not therefore be held to
repeal or to abrogate the rule by necessary implication.7
It will be observed that the provisions of section 9 merely negative the existence of civil
liability in certain cases. The section does not undertake to define the nature of the civil
liability of judicial officers generally. It contains no affirmative provisions whatever imposing
liability upon these officials. Yet it is contended that it not only abrogate the existing law
touching the liability of judicial officers but inferentially prescribed the rule of liability in all
cases; and this rule thus inferentially prescribed, one which is in conflict with the rule that,
in the language of the Supreme Court of the United States, "obtains in all countries there is
any well ordered system of jurisprudence."

If such had been the intention of the legislator we are convinced that he could have used
language which would not admit of doubt as to its meaning. If the intent of the statute was
to provide that the judicial officers would be liable in all the cases than those mentioned
therein, such an extraordinary provision would have been set forth in express terms and not
left to mere inference. Certainly, in the absence of clear and express language we should
not and will not read into the section of a general law of procedure a provision which the
Supreme Court of the United States has declared would be subversive of the whole
procedural system of which it forms a part. Indeed we venture to go further, and assert that
even if the language were not doubtful, and if the provisions of this minor section of the
general Code of Procedure expressly prescribed the rule of liability contended for the
counsel for the appellants, it might well become our duty to declare it in conflict with the
spirit and the intent of the remaining provisions of the code, and to decline to inforce it.
This, in order to conserve to the people of these Islands a free and independent judiciary,
capable of securing to them those sacred rights guaranteed under the Philippine Bill of
Rights, and strong enough to administer justice "without respect to persons" and to
"faithfully and impartially discharge and performs all the duties incumbent upon it." For,
quoting once again from the decision in Bradley vs. Fisher:

Liability to answer to everyone who might feel himself aggrieved by the action of the
judge would be inconsistent with the possession of this freedom, and would destroy
that independence without which no jurisdiction can either respectable or useful.

We hold that this "general and preliminary" provision of the Code of Civil Procedure is
merely declaratory of the law as it existed prior to its enactment, and that it does not
undertake to dispose of the whole subject of the liability of judicial officers. Its purpose and
object is merely to set forth a general rule, applicable to all judicial officers alike, and under
all circumstances. Unlike most of the provisions of that code, it is not, so far as we have
been able to learn, borrowed from or modeled upon any similar provisions in the statutes of
any of the States. Counsel for both appellant and appellee account for its presence in the
code by reference to certain administrative proceedings had about the time of its
enactment, involving the removal from office of a judge of the Court of First Instance of
Manila for misconduct in office; and to the uncertainty, which it is said existed at that time,
as to the precise meaning of the provisions of Spanish law touching the liability of judicial
officers to respond in civil actions and administrative proceedings for acts done in the
exercise of their judicial functions. But however this may be, it is quite clear that the
legislator sought, in section 9 of the code, to lay down a general rule as to the civil liability
of all judicial officers, whether or general or limited, or of superior or inferior authority,
which would secure to all such officers the protection furnished by a rule of liability,
universally recognized in Anglo-American jurisprudence; and that he made no attempt to
enter upon an exhaustive definition and exposition of the precise extent and limitation of
the civil responsibility of the various classes of judicial officers for acts done by them in the
exercise of their judicial functions.
An examination of American and English authorities discloses that there is much conflict of
opinion as to whether the rule of civil liability upon which we rely in this opinion is applicable
to judicial officers of inferior and limited jurisdiction as well as those of superior and general
authority; and it will be found that the various courts of last resort in the United States are
by no means in agreement as to the degree of responsibility of these various classes of
judicial officers for acts done in excess of their legal powers and jurisdiction. Indeed the
dissenting opinion in the case of Bradley vs. Fisher, frequently cited in this opinion, discloses
that while the authorities are all agreed upon the rule of liability relied upon by us as to
judges of superior and general authority acting within their jurisdiction, differences have
arisen as to the liability of such officers when, acting in excess of their jurisdiction, they are
alleged to have been actuated by malicious and corrupt motives. In the resultant
uncertainly as to the true rule of liability of judicial officers generally in the United States, it
is to understand why the Philippine Commission in laying down "general and preliminary
provisions" in the new Code of Civil Procedure did not attempt to harmonize all these
conflicting views, nor to define the precise limitations of the civil liability of the various
classes of judicial officers under all the varying circumstances which might present
themselves.

While the doubts which arose as to the provisions of Spanish law on this subject might well
have induced the American legislator to enact express provisions setting forth the rule
universally recognized in the United States as to the limitations on the civil liability of
judicial officers generally, it is clear that it was deemed prudent or expedient in the "general
and preliminary provisions" of the Code of Civil Procedure to go further and repeal existing
law more specifically defining and limiting this liability in particular cases, or to take
affirmatively to declare the nature and extent of the civil liability of judicial officers in all
cases. This is precisely what we hold that a reading of the section itself discloses to have
been the intention of the Commission in enacting it; and we are satisfied that the
deductions from it by the counsel for appellant are not satisfied by its terms, nor by a
consideration of the conditions under which it was enacted and the mischief it sought to
remedy, and that the construction which counsel foe appellant seeks to place upon it is
contrary to those principles of public policy which ought to have controlled and doubtless did
control the legislator in its enactment.

Perhaps we should not conclude this discussion of the doctrine of immunity of judicial
officers from civil liability in certain cases without expressly directing attention to the fact
that nothing therein is to be understood as giving to them the power to act with partially, or
maliciously, or corruptly, or arbitrarily, or oppressively without fear that they may be called
to account for such conduct. No judge, however high his rank may be, is above or beyond
the law which it is his high office to administer. Indeed, we would deem it our duty to be the
first to take the necessary preliminary steps looking to the suspension and removal from
office of the defendant, by impeachment of otherwise, if we were of opinion that the
charges of misconduct in office preferred against him had any foundation in fact; and we
would not allow the sun to set upon this day's session of the court without having issued the
necessary for the institution of criminal proceedings against him if we had reason to believe
that there are any grounds for the criminal charges set forth in the complaint.

II

Our holding that the defendant is not liable to respond in a civil action for the alleged
damages completely and sufficiently disposes of this appeal, and we might rest our
judgment sustaining the judgment of the court below on that ground alone. Indeed, having
arrived at our conclusion in this regard we would ordinarily proceed to enter judgment
without further discussion of the various contentions of counsel. In view, however, of the
exceptional nature of the allegations of the complaint, and especially in view of the gravity
of the charges against the defendant therein specifically set forth, we deem it proper to
examine in some detail the other grounds above stated, upon each of which, as we have
said, the judgment of the court below may be and should be sustained; each of them, in our
opinion, being sufficient in itself for that purpose.

The second ground on which we base our judgment is that the complaint does not set our
facts which constitute a cause of action, because, as we hold, a critical examination of the
complaint and of the exhibits annexed thereto, together with the records of the cases
specifically referred to therein, clearly demonstrate that the two judgments of this court out
of which the alleged damages are said to have sprung were not erroneous as alleged in the
complaint; and, on the contrary, that each of these causes was adjudicated "in accordance
with the very right of the cause" and "agreeably to the law in the Philippine Islands."

Before entering on an examination of the complaint for this purpose, it will be well to refer
briefly to certain elementary rules of pleading, as to which we believe there can be no cavil
under the system of procedure in civil cases borrowed from Anglo-American jurisprudence
and introduced in these Islands under the new Code of Civil Procedure.

While it is sometimes loosely stated that a demurrer admits the truth of all the allegations
of fact set out in the complaint, the rule thus broadly stated has many important and well-
recognized limitations and restrictions. A more accurate statement of the rule is that a
demurrer admits the truth of all material and relevant facts which are well pleaded. It will
readily be seen that the itilicized portion of the rule as thus modified the looser and broader
statement of the rule to a marked degree. Without stopping to discuss the reasons for the
various rules of pleading set out in the paragraph, we lay them down here, relying the
reasoning and authority of the cases cited in support of each and all of them.

A demurrer admits only such matters of fact as are sufficiently pleaded (Com. Dig. Pleader
(A 5); Ia., 63; 14 Ga., 8; 9 Barb., 297; 7 Ark., 282; 6 Wash., 315; 7 Misc. Rep., 1); a
demurrer does not admit the truth of mere epithets charging fraud; nor allegations of legal
conclusions (144 U. S., 75); nor an erroneous statement of law (97 Ala., 491). The
admission of the truth of material and relevant facts well pleaded does not extend to render
a demurrer an admission of interference or conclusions drawn therefrom, even if alleged in
the pleading; nor mere inferences or conclusions from facts not stated; nor conclusions of
law; nor matters of evidence; nor surplusage and irrelevant matter. Furthermore, it is
settled that the general rule touching admissions by demurrer does not apply where the
court may take judicial notice that the facts alleged are not true; nor does it apply to legally
impossible facts; nor to facts which appear unfounded by a record incorporated in the
pleading, or by a document referred to; nor to general averments contradicted by more
specific averments. So, also, the truth of scandalous matter, inserted merely to insult the
opposing party, is not admitted. (In support of these proposition see many scores of cases
cited in 31 Cyc., 333, 334, 335, 336, and 337, and 6 Enc. Pl. & Pr., 334, 335, 336, 337, and
338,)

It has been deemed proper to set out these general propositions laid down by the courts of
last resort in the United States touching the limitations on the general rule as to admission
by demurrer, because, in this jurisdiction, wherein a new system of procedure has been but
lately introduced, the cases thus far decided have not very exhaustively considered the
limitations on the rule; and for a clear understanding of this portion of our opinion, it is
necessary that these limitations should be kept clearly in mind. But it is proper here to
observe that most of these propositions are themselves subject to certain restrictions and
limitation in accordance with the varying nature of the infinite variety of conditions to which
they are applicable.

It will be well, also, before entering upon a discussion of the allegations of the complaint, to
refer very briefly to the rules of pleading touching the incorporation into complaints of
exhibits and bills of particulars which the pleader desires to be shown for some purpose to
the court of his adversary. The general rules on this subject are not wholly uniform; in
various jurisdictions these rules have been greatly modified by statute; and many difficult
and doubtful questions may, and doubtedless will, present themselves in the course of
practice in this jurisdiction, in deciding the precise conditions under which the pleader
himself be permitted to rely upon such exhibits and bills of particulars in aid of the
complaint filed by him; and deciding whether the references in his complaint to such
instruments and writings should be deemed sufficient to incorporate them into his complaint
so as to make them an integral part thereof.

But we think that there can be no doubt that where the pleader voluntarily and for his own
convenience refers to certain instruments or writings in terms which leave no room for
doubt as to their identity, and where the instruments or writings thus referred to are a part
of the court files or records, he will rarely have just ground for complaint if, such a case,
these instruments or writings are held to be incorporated into his complaint, and to
constitute a part thereof, so as to permit his adversary to refer to them in argument on
demurrer. Indeed. "where no confusion can result, the practice of incorporating portions of
the court files as a part of a pleading, by a proper reference, has in some cases been
approved as tending to abbreviate the record," and this in favor of the pleader.
(Sutherland vs.Sutherland, 102 Iowa, 535; Wishard vs. McNeil, 78 Iowa, 40.) In Cancino vs.
Valdez (3 Phil. Rep., 429) this court held as follows:

The original complaint having been held bad on demurrer, the plaintiff filed an
amended complaint, in which they referred to Exhibit A for a description of the land
in litigation. Exhibit A was not attached to the amended complaint, but to the original
complaint: Held, That under a liberal construction of the pleadings (authorized by
section 106 of the Code of Civil Procedure) the amended complaint should be
considered as though Exhibit A had been physically attached to it.

It is hardly necessary to add that, of course, where any doubt arises as to the meaning and
scope of the language used in referring to such instruments and writings, the general rule
applies, that "the pleading will be construed against the pleader." (39 Cent. Dig. tit.
Pleading, par. 66.)

It has been suggested that for the purpose of determining whether the facts alleged in the
complaint in the case at bar constitute a cause of action, the court below might have taken
judicial notice of the contents of the records of the various causes on file therein, and this
whether the complaint itself made express reference to them or not. We do not deem it
necessary to examine or decide this contention. This complaints sets forth a series of
averments of judicial error, of willful misrepresentation of facts, and a number of specific
acts done in bad faith, which, it is alleged, are disclosed by a mere inspection of the records
of two separate appealed cases on file in this court and the court below. The complaint
expressly refers to these cases by title and register number, and incorporates extend
extracts from the records of these cases as exhibits annexed to the complaint. We hold that
the court below was fairly entitled to examine the records of these cases in ruling on the
demurrer to the complaint, and that they had been sufficiently incorporated into the
complaint for that purpose by the pleader himself.

As will be seen from the copy of the complaint set out in marginal note A, the pleader
expressly and in detail refers to and definitely describes two separate cases, Nos. 4017 and
5719, filed in the Court of First Instance of the city of Manila; gives what purports to be a
relation of the proceedings had in those cases and the various steps taken therein in that
court and in this court on appeal; and bases his cause of action in large part on his
allegations that the relation of facts contained in the separate opinions filed in those cases,
which were written by defendant, is not in accord with and perverts and misstates the facts
disclosed by the records of those cases. He further alleges in the twentieth paragraph of the
complaint as the very basis and foundation of his claim for relief, "That defendant performed
each and every act hereinbefore alleged in relation to causes Nos. 4017 and 5719
wrongfully and with intent to injure the plaintiff Alzua, and with full knowledge of the facts
herein set forth. Plaintiffs further allege that such knowledge appears from an inspection of
the decisions in causes Nos. 4017 and 5719." It is very clear that he can not complaint if
the court inspects those decisions, together with the record of the cases of which they are
made a part, to ascertain whether these charges are or are not well founded.

The records of these cases not having been brought up on appeal, this court, under the
authority of section 501 of the Code of Civil Procedure, which provides for the perfection of
incomplete records, issued the necessary orders directing that they be brought here and
united with the record of this case on appeal as an integral part thereof.

We have made a very careful examination and inspection of the records in the two cases
referred to, in order to ascertain whether the judgments entered therein were or were not
erroneous, and we have concluded that the judgments entered by this court in both cases
were justly and properly rendered in accordance with the pleadings and the evidence set out
therein; and further that in each case the judgment entered is in accord with the very right
of the cause. Plaintiff specifically alleges that these judgments were erroneous, but it is very
clear that allegation is a mere conclusion of law, and of course, under the above set out
rules of pleadings as well as in accord with the dictates of good sense, it is entitled to no
consideration, and is not to be taken as admitted by the demurrer, when found to conflict
with the basic facts well pleaded in the complaint.

Disregarding for the present all questions of practice and procedure, and looking only to the
undisputed facts in the record of the former cases, and the actual results flowing from the
judgments of the court in those cases, it appears that Alzua, a judgment creditor of a
certain business association or partnership, by filing an indemnity bond in favor of the
sheriff, induced the sheriff to sell the property of the partners and turn over all the
proceeds, some P12,000, to her that she induced the sheriff so to do over the formal and
vigorous protest and opposition of two minor children, the heirs of a deceased Spaniards
(who will hereafter be referred to as "the minors"); that this court held that these minor
children had a preferred credit for some P12,000 against the property thus sold; and that
the alleged erroneous judgment was, i effect, a declaration by this court that Alzua and her
bondsmen should pay over to the minors this sum of P12,000, which they induced the
sheriff to turn over to her, but which the court was of opinion should have bee turned over
to the minors.

If the facts, upon which the court rested its conclusion that the minors had a preferred claim
to the proceeds of the property sold by the sheriff, support the conclusion of the court in
that regard, it will readily be seen that Alzua's extraordinary claim for P115,000 damages is
base solely upon defendant's intervention in certain legal proceedings as a result of which
Alzua was compelled to pay over to these minor children P12,000 to which they were justly
entitled, and which Alzua had received from the common debtor without being justly
entitled thereto. Let us see what are these facts. Fortunately there can be no question in
regard to them. Case No. 4017 was submitted on an agreed statement of facts, and there is
no dispute as to the facts in Case No. 5719.

Alzua's claim to the partnership funds in the lands of the sheriff rested on a judgment
entered September 7, 1905, which expressly based upon a document dated April 15, 1903,
whereby the partners acknowledge the receipt from Alzua of the amount for which
judgment was rendered.

The claim of the minors rested upon the express provisions of article 7 of the articles of
partnership of the mercantile association known as "Viuda de Soler y J. Riu," a public
document, executed by the partners, and duly inscribed in the mercantile registry of the city
of Manila on the 30th of June, 1902, which this court construed to be acknowledgment of
indebtedness by the partnership to the minors in the sum of 9,868.29 pesos Mexican
currency.

If the court properly construed this clause of the articles of partnership, there can be no
possible question as to the right of the minors to a preferred claim in the proceeds of the
sheriff's sale of the partnership property, and to have the right respected by the sheriff in
the distribution of any partnership funds in his hands for that purpose. It is unnecessary to
repeat here the reasoning upon which this conclusion rests. The reasoning will be found set
out in full in numerous reported opinions wherein we have heretofore construed the
provision of statutory law as applied in like cases. It is sufficient here to say that under the
provisions of the Spanish Code as modified by the Acts of the Commission abrogating the
bankruptcy provision of that code, we have heretofore decided in a number of maturely
considered cases, that:

Article 1924 of the Civil Code places judgment creditors in the order of their
respective judgments in the third class of preferred creditors.

While article 1924 of the Civil Code was repealed by the enactment of the Code of
Civil Procedure in so far as in s applicable to cases of bankruptcy and estates of
deceased persons, its provisions are not limited to such cases and it remains in full
force and effect when by intervention or otherwise a judgment creditor is a proper
party to distribution proceedings of the funds or estate of his judgement debtor and
duly asserts his rights as a preferred creditor.

A creditor does not acquire a lien upon the property of his debtors by virtue of the
filing of his complaint, the judgment, the issue of execution, or the levy thereunder,
other than the mere right to a preference in the distribution of the funds or estate of
his judgment debtor in those cases wherein, by intervention or otherwise, the
judgment creditor is a proper party to the distribution proceedings and duly asserts
his right as a preferred credition. (Syllabus, Peterson vs. Newberry, 6 Phil. Rep.,
260.)

A personal obligation evidenced by a public instrument is entitled to preference over

an obligation upon a promissory note merged into a final judgment which bore date
subsequent to that of the public instrument. (Syllabus, Olivares vs. Hoskyn & Co., 2
Phil. Rep., 689.)
 Credits or debts evidenced by a public document of final judgment shall be preferred
in accordance with their respective dates. A debt evidenced by a public document
dated the 9th of May, 1905, takes preference over a final judgment dated August 1
of the same year. (Syllabus, Gochuico vs. Ocampo, 7 Phil Rep., 15.)

Despite the vigorous contention of American counsel, relying on the principles and practice
quite generally recognized in the United States, we have steadfastly adhered to the doctrine
laid down in the cases just cited, and many others of like tenor; and we hold that not only is
it well founded in the substantive and procedural law of these Islands, but that the
development of this doctrine in a long and unbroken line of decisions, beginning with the
case of Martinez vs. Holliday, Wise & Co. in the first volume of our reports, makes it
substantially a rule of property in these Islands not subject to change except by legislative
enactment. (Martinez vs. Holliday, Wise & Co., 1 Phil. Rep., 194; Olivares vs. Hoskyn & Co.,
2 Phil. Rep., 689; Peterson vs. Newberry, 6 Phil. Rep., 260; Gochuico vs.Ocampo, 7 Phil.
Rep., 15 Soler vs. Alzua, 8 Phil. Rep., 539 Strong vs. Van Buskirk, 10 Phil. Rep., 190;
Compania General de Tabacos vs. Jeanjaquet, 12 Phil. Rep., 195; McMicking vs. Martinez,
15 Phil. Rep., 204.)

It is very clear, therefore, that upon the undisputed facts in the records of cases No. 4017
and No. 5719, the minors were entitled to a preference over Alzua in the distribution of the
proceeds of the sale of the partnership goods, if this court properly construed the provisions
of article 7 of the duly registered articles of partnership as an admission of indebtedness to
the minors. The adjudication of this question present some difficulty, but we adhere to our
former holding that the articles of partnership expressly admit and recognize the existence
of this obligation.

This seventh clause of the articles of partnership is as follows:

Seventh. Mrs. Martinez states that her sons Don Manuel and Don Enrique Soler y
Martinez, both minors, have an interest in the capital supplied by her amounting to
nine thousand eight hundred and sixty-eight pesos and twenty-nine cents, which is
the sum which went to them according to the instrument of adjudication of the
property left by their father, Don Manuel Soler y Cendra, executed before the notary
of the city, Don Antonio Costa y Fabrega, on the twenty-second of March last; but
that this participation by no means ever can affect the partner Mr. Riu, because all
the questions which by virtue of such participation may arise will be on account and
risk of the said Mrs. Martinez with full and complete indemnity of the company
formed by the present instrument.

It will be seen that this clause of the articles expressly admits that, of the capital brought
into the partnership, some nine thousand and odd pesos belonged to the minors, who (as is
agreed on all sides and especially insisted upon by Alzua) were not partners. Taken by itself,
and without any further restrictive provisions in the articles, we think that this admission
must be taken to be an admission and an express recognition of indebtedness is modified by
those causes of the article which undertake to limit and restrict the liability of the
partnership and of one of the partners in regard thereto.

In the case of Sunico vs. Chuidian (9 Phil. Rep., 625) we had occasion to examine some
very analogous provisions in articles of partnership of a duly registered mercantile
association, whereby the organizers of the association, after admitting the indebtedness of
the partnership to certain minors (relatives of some of the partners in that case as in this),
undertook to prescribe the conditions under which this indebtedness would be paid. In that
case, after an exhaustive examination of the respective rights and liabilities of the
partnership and the partners in mercantile associations duly registered under the provisions
of the Code of Commerce, we said:

It does not appear, however, that the plaintiff was a member of said partnership, or
that he ever agreed to this clause of the articles of partnership. On the contrary, it
expressly appears from an examination of the said articles that he took no part
therein, that he was not a partner. and that the debt due him stands on the same
footing as any other indebtedness of the company, except that it is expressly
recognized in the said articles. Under the circumstances the plaintiff is not and can
not be bound by the provisions of the articles of partnership relied upon by the
appellants nor can have the effect of postponing has right of recovery, as contended
by the appellant. (Sunico vs. Chuidian, 9 Phil. Rep., 633.)

Without repeating here the discussion in the Chuidian case we hold that the minors not
being members of the partnership, and never having agreed to the articles of partnership,
the debt to them recognized in clause 7 thereof, the company, except that it is expressly
recognized in the said articles. The mutual agreements of the partners Riu and Martinez
were and are of course mutually binding upon them, but such agreements should not be
permitted to deprive the minors of their right to recover their money from a mercantile
association, which solemnly acknowledged in a public instrument that it had received money
or property of the minors amounting to some nine thousand and odd pesos, and made use
of it for partnership purpose.

The only substantial objections which can be, and have been urged to this construction of
the partnership articles, are that the partner Visitacion Martinez was the widowed mother of
the minors, that as such she had a usufructory interest in the property of the minors as
"legal administratrix" thereof, that in using their property as part of the capital of the
partnership she was acting within her legal rights that as "legal administratrix" of this
property she had a right to enter into such contracts with relation thereto as she might
deem proper, and that she did in fact agree in clause 7 of the articles of partnership that
neither the partnership nor her partner would become liable therefor.

This contention would merit very serious consideration, and certainly could not be passed
over lightly, were it not for the fact that counsel expressly agreed in the "agreed statement
of facts" upon which Case No. 4017 was submitted "that during none of the times above
mentioned has Visitacion Martinez been the legal guardian of the said minors," referring to
the time of the organization of the partnership and the incidents relating thereto which are
set out in that agreement. This express admission of fact by counsel completely cuts the
ground from under their feet, and leaves them helpless in their attempt in this court to
inject into clause 7 of the articles the meaning and effect for which they contend. Indeed, so
clearly did they themselves recognize this, that in their brief in that case in this court (p. 3
brief for Emilia Alzua et al.) they say that this clause "slipped into the agreement" (se ha
colado en el convenio) without their attention being called to it. A fruitless attempt is made,
of course, to explain it away, but an admission such as this, made by experienced counsel in
an agreed statement of facts and submitted in open court at the very outset of the
litigation, is a "stubborn child," and can not be easily brushed aside. Indeed its legal effect
is too apparent to admit of any other explanation than that the fact thus admitted is true, or
that counsel made an egregious and inexcusable blunder.

It is nowhere contended or suggested that ay unfair advantage was taken of counsel in the
preparation of the "agreed statement of facts." No claim is made that astute counsel for her
adversary hoodwinked or surprised counsel for Alzua. There is no limitation of sharp
practice. And indeed the only explanation of the presence of this unrestricted stipulation of
fact in the "agreed statement of facts" signed by counsel, and upon which the case went to
trial, is the bare assertion of counsel that it slipped into the agreement without their
attention being called to it. This explanation does not of course explain the fact away. It
merely amounts to an admission that had counsel for Alzua appreciated the legal effect of
this admission as fully before the case was tried as after they had heard the arguments of
opposing counsel, they would not have submitted that case on "the agreed statement of
facts."

The "agreed statement of facts" was a carefully prepared instrument in writing, signed by
two separate firms of competent attorneys representing the various parties to the cause,
and it was formally submitted to the court with the prayer that the rights of the minors to
the partnership property should be adjudicated in accordance therewith. It is futile now, as
it was futile on appeal from the judgment rendered upon that agreed statement of fact, to
ask this court to disregard a fact thus stipulated as true, or to decline to give it its manifest
legal effect in adjudicating the rights of the parties to the action. In the absence of proof of
sharp practice or surprise, neither third court nor the court below has or had any lawful
authority so to do; and there can be no doubt or question as to the legal effect and meaning
which must be given the admission that Alzua was not the "legal guardian" of the minor
children, in an agreed statement of fact, written in English, and signed by two separate
firms of American attorneys, long after the promulgation of the new Code of Civil Procedure
had established American rules of practice and procedure in civil cases in these Islands.

In this connection it may not be improper to say, in passing, that if there ever was any
merit in the claim of the plaintiff Alzua to a preference over the minor in the distribution of
the partnership funds (which, however, we do not recognize), this claim must necessarily
have been based on the fact, if it be a fact, that in executing the articles of partnership and
in using the funds or property of the minors as a part of the capital of the partnership, the
widow Martinez was acting not merely for herself but also in her representative capacity as
legal guardian or administratrix of the property of the minors. So that if plaintiff Alzua has
been deprived of any right or property to which she was entitled, her loss is clearly and
directly traceable to the fatal and inexcusable blunder of counsel in admitting at the very
outset of the litigation that she was not their legal guardian, if in fact she was.

What has been said sufficiently demonstrates, we think, that disregarding all technical
questions of pleading and practice, and looking only to the undisputed and indisputable
facts out of which the litigation arose, as disclosed by the complaint and the court records
incorporated therein, the substantial rights of the parties to that litigation were correctly
adjudicated by this court on appeal; and we conclude that the claim of plaintiff Alzua for
damages alleged to have resulted from the entry of the judgment of this court in case No.
5719 is not sustained by the facts well pleaded in the complaint — the effect of that
judgment being merely to require her to pay over to the minors the amount which, by the
filing of an indemnity bond, she had induced the sheriff improperly to turn over to her
instead of to the minors who were justly entitled thereto.

But plaintiff Alzua, through her counsel, insists that at various stages of the proceedings,
this court, instigated by the defendant in this action, improperly disregarded certain
technical rules of practice and procedure; and that the judgments actually entered in cases
No. 4017 and No. 5719 could not and would not have been entered had the court
proceeded, with due regard to these technical rules of practice and procedure, to apply the
law in all its rigor to the cases submitted to it. It might, perhaps, be a sufficient answer to
this contention to say that mistakes of procedure or of reasoning made by the court in
arriving at its conclusions could not have occasioned any damage to the plaintiff, if the
conclusions actually arrived at were sound, and if the judgments which she avers were
erroneously entered merely required her to do something which it was her duty to do
whether those judgments were entered or not. But the facts well pleaded in the complaint,
and the records of cases No. 4017 and No. 5719 incorporated therein, justify us in going
further, and after a thorough review of all the proceedings, we hold and think we should
formally so declare, that the judgments complained of were not erroneously entered and
that they dispose of the issues submitted to the court, not only in accord with substantial
justice, but with due regard for sound rules of practice and procedure and "agreeably to the
law in the Philippine Islands."

Without extending this decision intolerably, we can not enter into an exhaustive discussion
and argument in support of each and all of our rulings throughout this extended litigation;
but we shall endeavor to notice the various contentions on which plaintiff Alzua by her
counsel bases her asseverations as to error in the proceedings had on appeal, indicating as
briefly as may be the grounds on which we hold that these contentions are not well
founded.

It is contended that this court erred in deciding these cases on the theory of preferred
credits. Counsel direct attention to the fact that when the minors, by their guardian, first
intervened in the proceedings, they set up a claim of ownership in the partnership property
which he had been levied upon by the sheriff, and, claiming an interest in the property as
partners, demanded that he release his levy; and attention is particularly directed to the
fact that the formal complaint, upon which the minors instituted the injunction proceedings
against the sheriff, reiterated this claim of an interest in the partnership property. Counsel
insist that the minors themselves having thus rested their right to intervene in the sheriff's
proceedings on a claim of ownership, this court should have strictly limited itself to the
consideration of that question when the litigation was submitted to it on appeal.

While it is true that at the outset of the litigation the guardian ad litem of the minors did, in
fact, rest their claim of a right of intervention on an erroneous construction or
misconception of the articles of partnership and that he asserted on their behalf a claim of
an interest in the partnership property as partners, nevertheless, the record clearly
discloses that this claim was promptly abandoned, and that thereafter, the contention of the
minors was steadfastly and squarely planted on their claim of a right to intervene in the
proceedings as preferred creditors of the common debtor.

The very first printed brief connected with this litigation submitted to this court on appeal
(filed on June 5, 1906, by counsel for the minors in case No. 4017, wherein the minors were
plaintiffs and Alzua and the sheriff were defendants), contains on page 4 the following: "In
the court below the question as to whether the minors could be in equity considered
partners in the business levied upon was abandoned and stress laid upon the point that the
evidence showed that the minors had a claim preferred over that of defendant, Emilia
Alzua's, under article of the Civil Code, No. 1924, 3 A." The reply brief filed by counsel for
Alzua, opens on page 1 with the following admission: "The statement of facts contained in
appellant's brief is substantially correct." It is true that counsel for Alzua, in the argument in
their brief, contended that the minors should not be permitted thus to change their ground,
without modifying or amending the original complaint as filed in the action, because counsel
for the defenses had directed their defense against the allegations of the complaint and not
against the claim as preferred creditors then being submitted to the Supreme Court. But
counsel, in their brief, nowhere modified or limited their admission of the substantial
correctness of the statement of counsel for the minors, that in the court below the minors'
claim to a right to intervene as partners "was abandoned, and stress laid" upon their claim
as preferred creditors.

Without considering for the present the right of the minors thus to abandon their claim of
ownership and lay stress on their interest in the property as preferred creditors until they
had first formally amended their complaint, it is quite clear from counsel's own admission,
that as far back as the date of the trial in the Court of First Instance of the injunction
proceedings in case No. 4017, and before the sale of the partnership property, and before
the proceeds thereof were turned over to Alzua, the sheriff and Alzua, who were defendants
in those proceedings, and their counsel, were formally notified of the minors' claim to an
interest in the property as preferred creditors; and from that time until the conclusion of the
litigation in this court and the entry of final judgment in case No. 5719, the records disclose
that their contentions were persistently and unwaveringly based on that theory.

Let us now consider whether they had a right to be heard upon this contention, and whether
this court erred in supporting their contention and directing as it did that the court below
enter the necessary decree to secure their rights thereunder. We have already shown that
under the law in force in these Islands, and in accordance with the uniform doctrine laid
down in a long line of decisions of this court, the minors had a right as preferred creditors to
have their right of preference respected in the distribution of the funds of the sheriff, if they
duly asserted that right; and the only further question that remains to be considered is
whether they did so assert it, and whether this right was duly submitted to the court for
adjudication. In case No. 4017 (the injunction proceedings), the stipulation of facts, among
other things, sets out in full the articles of partnership, and this court's judgment as to the
minors' right to a preference was expressly based on its construction of the provisions of
those articles. In submitting the stipulation of facts, the various parties (the minors, Alzua,
and the sheriff) by their respective counsel concluded as follows:

It is respectfully prayed by the parties hereto that the honorable court upon the
above statement of facts decide the rights of the said minors to the property in
question.

In accord with this request this court did decide the rights of the minors to the property in
question, and held that while they had no rights thereto as partners or owners, they had the
interest therein which the law, under certain circumstances, gives to preferred creditors
with all the rights springing from such an interest. It is very clear, therefore, that the claim
now urged that this judgment of the court was erroneous, and caused damage to the
plaintiff Alzua, in so far as it is based on the mere fact that the court examined the
statement of facts thus submitted, and adjudicated the right of the minors to the property in
accordance with the prayer of all the parties to the action, is so specious that it needs only
this statement of the facts to refute it.

But even if the stipulation entered into by the parties had not expressly and formally prayed
the court to decide the rights of the minors thereon, the claim that this court erred in
adjudicating the cause upon the theory of preferred credits could not be sustained, and is in
direct conflict with the uniform practice and procedure of the courts in this jurisdiction.
Under our system of pleading it is the duty of the courts to grant the relief to which the
parties are shown to be entitled by their allegations and the facts proven at the trial, and
the mere fact that they themselves misconstrue the legal effect of the facts thus alleged and
proven will not prevent the court from placing the just construction thereon, and
adjudicating the issues accordingly. Indeed, under the liberal system of amendments
authorized in our Code of Civil Procedure, amendments may be and have always been freely
allowed to a complaint at any time before final judgment, so as to prevent a miscarriage of
justice; and in such cases, the court in rendering its judgment not infrequently treats such
amendments as actually made without the necessity for formal correction. (Code of Civil
Procedure, section 110; Bliss on Code Pleading, 161, 162, and note; Brocal vs. Molina, 5
Phil. Rep., 507; Gsell vs. Yap Jue, 6 Phil. Rep., 143; De la Rosa vs. Arenas, 7 Phil. Rep.,
556; Fianza vs. Reavis, 7 Phil. Rep., 610; Quison vs. Salud, 12 Phil. Rep., 109
Espiritu vs. Crossfield, 14 Phil. Rep., 588; Alonso vs. Villamor, 16 Phil. Rep., 315) When it
appears, as it does from the records of the cases incorporated into the complaint in this
action, that the facts stipulated support a certain theory of the case, and that after
abandoning the theory of recovery upon which the original complaint was framed the
plaintiff relied upon and "laid stress upon" the theory supported by the facts disclosed by
"an agreed statement of facts" submitted to the court below, it is absurd to contend that on
appeal, the appellate court erred in deciding the case according to the facts stipulated and
the theory of the case actually relied upon by the plaintiff, rather than upon the abandoned
theory of the complaint.

The next contention as to alleged error of procedure and practice which we shall notice, is
based on the fact that this court gave judgment against the plaintiff Alzua, and the
bondsmen upon the indemnity bond to the sheriff, without holding the sheriff himself liable.
It appears from the record that the complaint in case No. 5719 was dismissed as to the
sheriff on demurrer in the court below; that no exception was taken to the court's action
dismissing the complaint as to him; and that as a result this court never was called upon to
adjudicate the liability of the sheriff nor t review the action of the court below in this regard.
It is necessary for us now to discuss or decide whether, upon appeal, we would have
followed the general doctrine holding the sheriff liable as well as the indemnitor and his
bondsmen, or whether we would have followed the doctrine laid down in some states whose
statutory regulations prescribing the duties of sheriffs are very similar to our own, whereby
the sheriff on taking a sufficient indemnity bond is relieved from liability, the indemnitor and
his bondsmen being alone held liable. It is sufficient, for the purposes of this decision, to
say that the question of the liability of the sheriff never was submitted to us.

But it is contended that it is a legal absurdity to hold the indemnitor and his bondsmen
liable, unless the sheriff in whose favor the bond was given is also held liable. In the
discussion of the case much was made of this contention, and a great outcry was made as
to what counsel for Alzua is pleased to describe as the palpable and inexcusable absurdity of
the position of the court in this regard. But however absurd the action of the court in this
regard may seem to counsel, we deem it a sufficient answer to quote as a complete
justification of our action the opinion of the Supreme Court of the United States in the case
of Lovejoy vs. Murray (3 Wallace, 1-19, 70 U. S.).

The demand for indemnity, and the giving of it by the defendants, proceeded upon
the supposition that the sheriff would without it go no further in that direction, but
would give up the property to the claimant, the present plaintiff, and make his peace
on the best terms he could. By the present statute of Iowa he had a right to do this,
if the plaintiff in attachment refused to assume the hazard of indemnifying him. And
if there were no such statute, he had a right to deliver the property to the claimant,
and risk a suit by the plaintiff in attachment, rather than a contest with a rightful
claimant of the goods.

The giving of the bond by the present defendants must, therefore, be held equivalent
to a personal interference in the course of the proceeding, by directing or requesting
 the sheriff to hold the goods as if they were the property of the defendants in
attachment. In doing this they assumed the direction and control of the sheriff's
future action, so far as it might constitute a trespass; and they became to the extent
that the principals, and he their agent in the transaction. This made them
responsible for the continuance of the wrongful possession, and for the sale and
conversion of the goods; in other words, for all the real damages which plaintiff
sustained.

xxx xxx xxx

The faithful and exhaustive research of counsel, in this case, shows that there are
conflicting authorities, not only on the main proposition, but on several incidental
and colateral points closely connected with it. The two propositions, however, seem
to be conceded by all the authorities, which bear with more or less force on the main
question, and which may as well be stated here.

1. That persons engaged in committing the same trespass are joint and several
trespassers, and not joint trespassers exclusively. Like persons liable on a joint and
several contract, they may be all sued in one action; or one may be sued alone, and
cannot plead the nonjoinder of others in abatement; and so far is the doctrine of
several liability carried, that the defendants, where more than one are sued in the
same action, may sever in their pleas, and the jury may find several verdicts, and on
several verdicts of guilty may assess different sums as damages.

In his contention in the case at bar, senior counsel for Alzua falls into the same error as that
which led him astray in his argument on the appeal of case No. 5719. Then as now, he
insisted that there could be no liability on the part of Alzua and her bondsmen if the sheriff
himself was not held liable. Accordingly he rested his contention on appeal, in that case,
substantially on this single proposition, and apparently did not deem it necessary to support
it in his brief with argument or the citation of authority. As we understand his contention it
is that case No. 5719 was an action on the indemnity bond; that the bond having been
given to the sheriff to indemnify him and his official bondsmen, the minors should not have
been permitted to institute or maintain such an action; and that even if they could institute
and maintain an action on the bond, they could not recover, unless and until appeared that
the sheriff had actually incurred the losses which the bond was given t indemnify. But the
action in question was not, in this technical sense, an action on the bond. It is true that the
complaint sets out in detail the facts touching the execution of the bond rendered Alzua and
her bondsmen liable for damages for which joint and several judgment was prayed against
the defendants. To this extent, and to this extent only, was the action founded on the
indemnity bond. But the action was instituted against the sheriff and his deputy, jointly with
Alzua and her bondsmen, and manifestly could not have been directed against the sheriff
"on the bond" of indemnity; and it sets forth facts, which when proven, clearly established
the minors' right to recovery against Alzua and her bondsmen under the doctrine of the
case of Lovejoy vs. Murray just cited.

So much has been said as to the alleged palpable error of this court in holding Alzua and her
bondsmen directly liable to the minors, notwithstanding the dismissal of the complaint as to
the sheriff, that at the risk of unduly prolonging this opinion, we here insert citations from
the opinions of two of the courts of last resort in the United States, wherein contentions
quite analogous to those of counsel for Alzua were ruled upon adversary.
The supreme court appeals of New York in the case of Dyett vs. Hymann et al. (129 N. Y.
(Sickels), 351) held that:

The execution of a bond to a sheriff indemnifying him against damages resulting

from an unlawful levy and sale of property made by him, presumptively establishes
the liability of the obligors as principals for the original trespass committed by the
sheriff.

Those thus connected with the original wrong are jointly and severally liable with the
sheriff, and it is no defense, in an action by the owner of the property against one or
more of the wrongdoers, to show that others were not joined as defendants who are
also liable.

Where an action is brought against several alleged joint wrongdoers, the plaintiff
may at any time, by leave of the court, discontinue the action as to one or more of
the defendants.

So the supreme court of Arkansas, in the case of Rice vs. Wood (31 L. R. A., 644),
commented as follows on contentions of counsel almost identical with those now urged in
this court:

The appellees contend that the judgment should be affirmed, without regard to
whether there were errors committed against the appellants at the trial, because, as
they claim, the suit instituted by the plaintiffs cannot be maintained under the law.
They claim that the bond was personal to the sheriff, and that he alone can sue on it,
and that he can not sue until he has been damaged. It is also said that the statute
makes no provisions for indemnity bond in attachment cases; and it is further urged
as a defense against the action of the plaintiffs that it is doubtful whether the
defendants, by signing the bond, became participants in the trespass; and if they did
become so, it is claimed that they could only be sued in trespass, and not on the
bond.

If this suit was by the sheriff against the defendants on the bond, it would be
necessary for him to show how and in what respect he had been damaged; and in
such a case it might be necessary to determine whether the statute contemplates
the indemnity bond mentioned, although it is questionable even in that case whether
the defendants, having executed the bond under the circumstances, would be heard
at all to contest its legality. But there is no such case here, for this is not a suit on
the bond, but a suit against the defendants to recover the value of the plaintiffs'
goods, which it is claimed were taken to pay the debt of another, and for which
taking it is alleged the defendants were responsible.

The contention of appellees that it is doubtful whether they became participants in

the trespass by making the bond in our opinion is not well taken. It seems to us that
act made them the real principals in the transaction. In order to maintain the action,
it is only necessary for plaintiffs to show: First, that they owned the goods taken;
second, their value; and, third, that the defendant participated in the taking or
caused the same. And the right to maintain the suit cannot be made to depend upon
the existence or nonexistence of any statute. It is simply the common right that
everyone has to recover the value of his property when wrongfully taken. The
plaintiffs, if they owned the goods, could have sued McGuire and the sheriff and the
 defendants jointly, if they desired, or either of them separately. (Lovejoy vs. Murray,
70 U. S., 3 Wall., 19, 18 L. ed., 134.

We rely, without further discussion, upon the reasoning and authority of the cases just
cited, in support of our holding that it was not error in the judgment of this court entered in
case No. 5719, to hold the sheriff's indemnitor and her bondsmen liable, notwithstanding
the fact that the complaint had been dismissed, as against the sheriff, upon demurrer in the
court below. As will be seen from the reasoning in the citations from those decisions, the
action might have been instituted and maintained against the indemnitor and her bondsmen
without including the sheriff as a party — their liability arising out of the execution of the
bond whereby the sheriff was induced to improperly distribute funds to the indemnitor Alzua
to which the minors had a preferred claim.

The next contention as to procedural error in the decision of the former cases which we
shall briefly notice, is that the court improperly treated the facts found in case No. 4017 as
conclusive in case No. 5719. Counsel's entire argument on this point on the appeal of the
latter case was thus briefly stated on page 3 of their printed brief: "The appellants invoke
the case reported in volume 8, page 539, Philippine Reports, as res adjudicata. That is in
fact virtually the same case. There is, however, one great and fundamental difference,
Visitacion Martinez was not a party in that case. This defendant should be the only and real
defendant. The case referred to can therefore not invoked as res adjudicata of the questions
invoked in the present suit. The former suit was a petition for an injunction. There was no
judgment asked other than injunction."

It will be seen that counsel recognized and admitted the fact that the two cases were
virtually the same except for what he describes as the "one great and fundamental
difference," that Visitacion Martinez was not a party in that case. But an examination of the
pleadings makes it very clear that this objection was not well founded. It is true that
Visitacion Martinez, and we may add her partner Riu, the members of the mercantile
association, were made parties defendant to the second action and were not parties to the
former action. But it also appears that there was no connection whatever between the cause
of action set out in the complaint as it affected Mrs. Martinez and her partner Riu, and that
set out against the sheriff, the indemnitor, and his bondsmen. The complaint alleged as one
cause of action that the partners were indebted to plaintiff for goods or money had and
received had never been paid, and this cause of action was directed solely and exclusively
against the partners. The cause of action against the sheriff, jointly with Alzua and her
bondsmen, was in substance that they had distributed and appropriated the proceeds of the
sale of certain partnership property, in utter disregard of the minors' preferential interest
therein. Manifestly the real parties to this cause of action were the same as those in the
former case, No. 4017; and as between them, the cause of action, the subject matter and
the parties being "virtually" and substantially the same, the court properly held that facts
found in the former case conclusive in the second. It may be admitted that the facts found
in the judgment in the former case could not properly be held conclusive as to the separate
cause of action in which the partners were the real and in fact the only defendants, but this
in no wise affects the correctness of the ruling as to the cause of action in which the sheriff,
his indemnitor (Alzua) and her bondsmen were the real and only parties.

The truth of the matter appears to be, that when that action came up on appeal the contest
was directed exclusively to the issue between the minors on the one hand, and the sheriff
and his indemnitors on the other. Mrs. Martinez in the court below had confessed judgment,
and the other partner, whatever may have been his right, was not represented by counsel
on appeal, or at least no brief was filed on his behalf. It may be that the reasoning of the
opinion, being exclusively directed to the contention of counsel as to the cause of action as
to which the minors and the indemnitor and her bondsmen were the only real parties, did
not set forth in sufficient detail the grounds upon which the action of the court as to the
partner, Riu, was based. But the action of the court relative to the cause of action as to
which the partners were parties, could not and did not have any bearing or effect on its
adjudication of the cause of action as to which Alzua and her bondsmen were parties; and it
certainly furnishes no ground for complaint so far as she is concerned. The two separate
causes of action having no substantial relation one to the other, and the defendants who
were sought to be held upon the different causes of action not being the same, separate
actions might have been, and in good practice ought to have been instituted on each
separate cause of action. But since no objection had been made on this ground in the court
below, that question was neither raised nor considered when the case came up on appeal.

To our mind these observations satisfactorily dispose of counsel's objections in this regard;
but to make it very clear that we are announcing new doctrine as to the terms upon which
the plea of res judicata may be considered, we here insert some citations from textbook and
judicial authority.

Estoppel by judgment; Effect of additional parties. — It is not always a conclusive

objection to the admissibility of a record as an estoppel or as a bar that the parties
to the former action included some who are not joined in the second action, or vice
versa. (Black on Judgments, vol. 2, par. 543.)

The fact that parties in the first suit are not identically the same as those in the
second, when the first case was decided on the merits, and not upon an exception to
joinder or nonjoinder of parties, is certainly no answer to the plea (of former
recovery); otherwise, no matter how often a case be decided, the parties might
renew the litigation by simply joining with them a new party. (Gerardin vs. Dean, 49
Tex., 243.)

The objection that the first action was between other parties is not well grounded,
and has no basis in fact to rest it upon the principle of res inter alios acta. That
principle applies where the party against whom the record is offered was not himself
a party to it. In such case, the general rule is that the record is not admissible. But
here this defendant was a party to that record, and the objection in fact is that other
persons were also parties thereto. As we understand the rule, that single fact alone
constitutes no valid objection to the admission of the record. (Larum vs. Wilmer, 35
Iowa, 244.)

In this connection, counsel also contend that the court fell into manifest error, in that it
applied the doctrine of res judicata in case No. 5719, although the parties themselves had
not, as he now alleges, formally "pleaded or introduced the decision in cause No. 4017 in
evidence." As will be seen from the citation from counsel's own brief on the appeal in case
No. 5719 (supra) he himself directly invited the attention of the court to the fact that his
adversary "invoked the case reported in volume 8, Philippine Reports, page 539, as res
judicata," but in his argument in that brief there was no intimation that this claim had not
been well pleaded. On the contrary, counsel unqualifiedly admitted that the doctrine had
been invoked, and limited to his objections to its consideration to the alleged failure of
identity of parties. Clearly, it was his own fault if the court, in good faith, accepted his
statement of the fact, in this regard, and took it for granted that this claim had been
invoked in due form. Furthermore, in his written motion for a rehearing, after the opinion
was filed, and before final judgment was entered, counsel again objected to the application
of the doctrine of res judicata in reliance upon the former decision, and again based his
argument on the ground that the parties to the different actions were not identical, without
intimating or suggesting that the claim had not been well pleaded. Indeed, the first
intimation by counsel that the doctrine had not been technically invoked occurs in an
assignment of error, submitted after the judgment had become final, in the preparation of
the record for an appeal to the Supreme Court of the United States, which, for some reason
which does not appear, was thereafter abandoned. There can be no question that the court
was justified in assuming that had there been any defect in the form in which the doctrine
had been invoked, counsel would have been the first to direct the attention of the court to
that fact, unless he intended to waive the objection. It comes with ill grace from his mouth
to charge the defendant in this action with negligence and bad faith, because he failed to
study the record in order to discover formal defects therein which counsel himself neglected
to point out in his brief or in his motion for a rehearing after the opinion had been filed.

It is not a part of the duty of an appellate court to search out formal or even substantial
procedural defects in the proceedings had in court below, to which its attention is not
directed by counsel in the bill of executions, in the printed and written briefs, or in oral
argument on appeal. See many cases cited in 2 Cyc., 1014 and 1015. That is the duty of
counsel, and their brief should furnish the court and opposing counsel with full notice of the
points of law which they desire to establish, together with the arguments and authorities
upon which they raise or rest their contentions. (Black L. Dict., 155; Anonymous, 40 III.,
57. See also Anderson L. Dict; Bouvier L. Dict.; Haberlau vs.Lake Shore, etc., R. Co., 73 III.
App., 261; Elliott App. Proc., par. 438.) If counsel is not sufficiently industrious and alive to
the interest of his client to bring such matters to the attention of the court, in the event that
he thinks they have any bearing on his case pending on appeal, neither he nor his client has
any just cause for complaint, after final judgment rendered, because the appellate court
appears to have disregarded such alleged defects, or to have treated them as waived by
counsel by his silence when he had his daily in court.

It is worthy of observation in this connection that under the "better doctrine" as laid down in
the courts of last resort in the United States, as appears from the citation below, final and
conclusive effect could and should have been given, under all the circumstances of this
case, to the prior adjudication, whether it was or was not set up by formal plea, if it was in
fact set up in the course of the evidence; or what is substantially equivalent, if it was
"invoked" and thus brought to the attention of the court, and by admission of counsel, tacit
or express, objection was waived as to defects in the technical form in which the claim was
submitted.

Former recovery as a bar; Necessity of pleading prior adjudication. — Upon the

question, whether a party who intends to rely upon a former adjudication as
conclusive of the matters presently in issue must plead it as conclusive of the
matters presently in issue must plead it as an estoppel, on pain of being deprived of
its benefit as a claim or defense if he omits to do so, or whether he may simply
introduce, with the same final effect as if it been placed, the authorities are by no
means in harmony.

xxx xxx xxx

In the United States there has been great contrariety of opinion. Numerous cases, in
accordance with the English rule, hold that the benefit of an estoppel by record is
waived unless it is seasonably interposed by plea. In one state it is said that if the
circumstances and course of proceeding admit, a defendant who relies upon a former
 judgment must plead it, so as to give the plaintiff an opportunity to set up any
objection he may have to its validity. In other, "it is the settled rule of pleading that
where a party makes a judgment of a court the foundation of his action or defense,
he must be the record of such judgment, or a transcript of it, a part of the pleading
setting it up, as in case of written instruments. Former recovery cannot be given in
evidence under the general denial."

xxx xxx xxx

But these views, as we shall presently show, are not supported by the majority of
the decisions of the American courts. On the contrary, the general tendency is to
attach the same final and conclusive effect to a prior adjudication wherever and
whenever it is set up, whether that be done by plea or in the course of the evidence.
(Black on Judgments, vol. 2, par. 783.)

One other alleged error of practice and procedure remains to be noticed. Counsel lay much
stress upon the action of this court in correcting and amending the original memorandum
order filed with the clerk which directed the entry of a judgment affirming the judgment of
the court below in case No. 4017, and thereupon directing the entry of a judgment revoking
the judgment of the trial court. We not now considering the objections to the intervention of
the defendant in this regard. We here refer only to the objections to the action of the court
in itself issuing the order dated July 29, 1907, ratifying, affirming and adopting as it its own
the corrections made by the defendant in the original order filed March 27, 1907, and at the
same time directing the entry of judgment reversing the judgment of the lower court. It is
said that the court had no authority so to do.

That any such contention is seriously urged at this time is only explicable on the theory that
counsel wholly fails to keep in mind the vital difference between an order of the court
directing the entry of judgment by the clerk, and the judgment itself when duly entered in
compliance with the order. For while we have no doubt that, under all the circumstances of
this case, the court might and should have ordered the amendment of the judgment it self
had it been actually entered; we admit that in that event there might have been some room
for discussion as to the precise limitations and extent of the authority of the court thus to
amend in matters form and of substance a final judgment duly entered by the clerk. But we
can not conceive that there can be any question as to the right of this court to correct and
amend, in matters of form or of substance, its orders directing the entry of judgment at a
later day, when such corrections or amendments are made prior to the actual entry of the
judgment in compliance with the order of the court, before the record on appeal has been
returned to the court below, and before any action has been or could have been taken on a
motion for rehearing then pending. That such was the status of the case at the time the
amending order was entered by the court is clearly disclosed by the most superficial
examination of the record.

Such corrections have frequently been made from the earliest days of the organization of
this court. Indeed the uniform practice whereby these orders are framed so as to postpone
the entry of judgment by the clerk for a more or less extended period, usually twenty days
from the filing of the order, has its explanation in the advantages which it is believed are
secured, by thus giving any one interested an opportunity to call the attention of the court
to errors in orders directing the entry of judgment, which should be corrected. As a matter
of practice, the court, ex mero motu, or on motion of an interested party, always makes
such corrections when it appears that it has fallen into error in issuing such orders.
In the case at Arnedo vs. Llorente and Liongson (18 Phil. Rep., 257) after a somewhat
extended examination of our own statutes and of the common-law rules as modified by
practice and statutory regulation in the United States, we said:

We conclude, therefore, that in the absence of statutory provisions expressly

extending or limiting the time within which the courts in these Islands may vacate
judgments and grant new trials or enter new judgments on the ground of error in
fact or in law into which the court may be of opinion that it has fallen, these courts
have no power thus to vacate judgments after they have become final in the sense
that the party in whose favor they are rendered is entitled as of right, to have
execution thereon, but that prior thereto the courts have plenary control over the
proceedings including the judgment, and in the exercise of a sound judicial discretion
may take such proper action in this regard as "truth and justice require."

It cannot be doubted that under the rule thus laid down, this court had "plenary control"
over the order in question, to correct errors of law or of fact by amending it in form or in
substance.

What has been said disposes of all the substantial contentions of counsel as to alleged
errors of procedure and practice in the course of the litigation under review. In the course of
three days' oral argument counsel for appellant touched upon some other alleged errors of
this nature, but we do not deem it necessary to examine these contentions in detail. Time
and space forbid. It must suffice to say that we have carefully considered all the objections
raised by counsel, and that we are convinced that no error prejudicial to the rights of
plaintiff Alzua was committed in the entry of the judgments in the cases mentioned in the
complaint.

III.

The third ground on which we rest our judgment affirming the judgment of the court below
is that the complaint itself, read together with the exhibits and court record incorporated
therein, sets forth facts which justify us in holding: First, that the surmises, conjectures,
inferential allegations and specific charges of official misconduct and wrong-doing attributed
to the defendant in the complaint are not well founded; and second, that the allegations of
malice, of intent to injure the plaintiff and of bad faith on the part of the defendant are not
sustained, and on the contrary are directly controverted, by the specific averments of fact
well pleaded in the complaint, when read together with the court records referred to
therein.

Counsel for plaintiff squarely rest her claim of a right of recovery upon their construction of
the above cited provisions of section 9 of the Code of Civil Procedure. They contend that
although the defendant is a judge of a court of superior and general authority, he is liable,
nevertheless, for damages resulting from acts done in the exercise of his judicial functions,
if it appears that these acts were not done in "good faith," or that they were not "within the
limits of his legal powers and jurisdiction." We have shown already that there can be no
question that the defendant was acting strictly "within the limits of his legal owners and
jurisdiction" when he did each and all of the acts well pleaded in the complaint. It
necessarily results that upon plaintiff's own theory of the case, the defendant is not liable to
respond in this action for alleged damages resulting from these acts unless it is made to
appear that he was not acting in good faith. Bad faith is never presumed, and to support a
judgment for such damages, facts which justify the inference of a lack or absence of good
faith must be alleged and proven. (Civil Code, art. 434.) "Good faith is the opposite of
fraud, and of bad faith; and its nonexistence must be established by proof."
(McConnel vs.Street, 17 III., 253.) "The presumption against fraud, and its equivalent
expression that good faith is presumed, or that fraud is never presumed," declare the rule
that the burden of evidence as to the existence of fraud is upon the party alleging it.
(Friedman vs. Shamblin, 117 Ala., 454, 23 So., 821; Levy vs. Scott, 115 Cal., 39, 46 Pac.,
892; Webb vs. Marks, 10 Colo. App., 429 51 Pac., 518; Baxter vs. Ellis, 57 Me., 178;
Weybrich & Co., vs. Harris, 31 Kan., 92, 1 Pac., 271; State vs. Washington Steam Fire Co.,
76 Miss., 449, 24 So., 877; Henry vs. Buddecke, 81 Mo., App., 360; Manchaca vs. Field, 62
Tex., 135; Smith vs. Collins, 94 Ala., 394, 10 So., 334; Seals vs. Robinson, 75 Ala., 363;
Warren vs. Gabriel, 51 Ala., 235; Little Rock Bank vs. Frank, 63 Ark., 16, 37 S. W., 400 58
Am. St. Rep., 65.)

Under the well-settled rules of pleading hereinbefore set out, neither legal conclusions nor
conclusions or inferences of fact from facts not stated, nor incorrect inferences or
conclusions from facts stated, are admitted by a demurrer to a complaint. Conclusions of
this nature in no wise aid the pleading. The ultimate facts upon which such conclusions rest
must be alleged, though merely probative or evidentiary facts may be and should be
omitted.

It is not always easy to determine whether a pleading states a legal conclusion or merely
states facts according to their legal effect, and the decisions are not entirely uniform in
applying the rule. But it has been held that the following examples of allegations found in
pleadings filed in the courts in the United States are mere legal conclusions, and that such
allegations are not well pleaded unless the ultimate facts upon which they rest are set forth
in the pleadings. Averments that defendant's action arbitrary (Ricketts vs. Crewdson, 13
Wyo., 284, 79 Pac., 1042, 81 Pac., 1.), or illegal (Ricketts vs. Crewdson, 13 Wyo., 284, 79
Pac., 1042, 81 Pac., 1), or wrongful or wrongfully done (Montgomery vs. Gilmer, 33 Ala.,
116, 70 Am. Dec., 562; Miles vs. McDermott, 31 Cal., 271; Whaley vs. Columbus, 89 Ga.,
781, 15 S. E., 694; Lothrop etc., Co. 191 Mass., 353, 77 N. E., 841, 5 L. R. A., N. S., 1077;
Schiffman vs. Schmidt, 154 Mo., 204, 55 S. W., 451; Tomas vs. New York, etc., R. Co., 139
N. Y., 163, 34 N. E., 877; Petty vs. Emery, 96 N. Y. App. Div., 35, 88 N. Y. Supp., 823;
Burdick vs. Chesebrough, 94 N. Y. App. Div., 532, 88 N. Y. Suppl., 13; Boyton vs. Faulk
County, 7 S. D., 423, 64 N. W., 518.) Averments of lack of jurisdiction(Epping vs. Robinson,
21 Fla., 36; Gum-Elastic Roofing Co. vs. Mexico Pub. Co., 140 Ind., 158, 39 N. E., 443, 30
L. R. A., 700; Wegner vs. Wiltsie, 23 Ohio Cir. Ct., 302; Ritchie vs. Carpenter, 2 Wash.,
512, 28 Pac., 380, 26 Am. St. Rep., 877); or of a legal casual relation between facts, for
example that certain facts caused certain other facts, or that by reason of a certain state of
facts certain results followed (Perry County Com'rs Ct. vs. Perry County Medical Soc., 128
Ala., 257, 29 So., 586; Anderson vs. White, 2 App. Cas., 408; Logansport vs. Kihm, 159
Ind., 68, 64 N. E., 595; Bently vs. Bustard, 16 B. Mon., 643, 63 Am. Dec., 561;
Griggs vs. St. Paul, 9 Minn., 246; Dezell vs. Fidelity, etc., Co., 176 Mo., 253, 75 S. W.,
1102; Sprague vs. Fletcher, 67 Vt., 46, 30 Arl., 693); or that a certain proceeding was
unauthorized (39 Cent., Digest, tit. Pleading, par. 17); or that certain acts are lawful or in
violation of law(McLane vs. Leicht. 69 Iowa, 401, 29 N. W., 327; Templeton vs. Sharp, 9 S.
W., 507, 696, 10 Ky. L. Rep., 499; State vs. Western Maryland R. Co., 98 Md., 125, 56 Atl.,
394, 103 Am., St. Rep., 388; McCamant vs. Batsell, 59 Tex., 363; Chicago, etc., R.
Co. vs. Indiana Natural Gas, etc., Co., 161 Ind., 445, 68 N. E., 1008; Payne vs. Moore, 31
Ind. App., 360, 66 N. E., 483, 67 N. E., 1005; Herman vs. Schulte, 166 Mo., 409, 66 S. W.,
163; Knapp, etc., Co. vs. St Louis, 156 Mo., 343, 56 S. W., 1102; Nalle vs. Austin (Tex.
Civ., App., 1893), 21 S. W., 375); or that an injury occurred as a result of a criminal
act (National Ben. Assoc. vs. Bowman, 110 Ind., 355, 11 N. E., 316); or averments of
fraud; or the characterization of an act as fraudulent, without averring the facts which
constitute such fraud. (See numerous cases cited in 39 Cent. Digest, tit. Pleading, par. 28
1/2.)

It will readily be seen that under these precedents, the charges of the complaint in the case
at bar that the acts of defendant therein set forth were done in bad faith, or arbitrary, or
illegally or wrongfully, or maliciously, or without jurisdiction, or in violation of law, are mere
legal conclusion, and if not sustained by well-pleaded averments of facts, are not admitted
by the demurrer and in no wise aid the complaint in setting forth a cause of action. And the
specific facts well-pleaded in the complaint examined together with the court records
incorporated therein, controverting, as we hold they, do each and all of these charges, there
can be no question as to the correctness of the action of the court below in dismissing the
complaint, even if counsel's own theory as to the liability of judicial officers in these Islands
were admitted to be correct.

Let us examine the grounds alleged in the complaint upon which plaintiff's counsel rest their
charges of bad faith, keeping in mind the general rule that "the pleader is bound by, and
estopped to controvert allegations or admission in his own pleadings." (39 Cent. Digest, tit.
Pleading, par. 81, 82.)

As we understand the argument of counsel he contends that the bad faith of defendant is
disclosed by his alleged wrongful acts in connection with the disposition by this court of the
appeals in the two cases described in the complaint, whereby, as it is alleged, he induced
this court to render the alleged erroneous judgment which occasioned the alleged damages
as set forth in the complaint.

Manifestly the very backbone of this contention is broken by our finding that the judgment
in question was not erroneous. That finding, not only dispose of plaintiff's allegations that
she suffered damages, as we undertook to show in the earlier portion of this opinion; it goes
also to the very foundation of her contention that the defendant was acting in bad faith in
urging upon the court, as it is alleged he did, that the judgment in question should be
entered.

Of course an unjust judge may render a just judgment in a particular case, and the mere
fact that he has done so does not establish a claim on his behalf that he has on all occasions
borne himself as a just and righteous judge. But it is difficult, if not impossible to conceive a
case wherein a court would be justified in holding that a judge who had entered a just and
righteous judgment, in the performance of his duties as a judge in a particular case, did so
in bad faith, or that he was actuated by any other than lawful movies in adjudicating the
particular case in which this just and righteous judgment was rendered.

But even if it were admitted that the judgment as rendered by this court was in fact an
erroneous judgment, or that this court erred when it directed its entry, and errs now in its
interpretations and application of the facts developed in the cases incorporated into the
complaint, we hold, nevertheless, that the charge of bad faith or of lack of good faith could
not be sustained by proof of that fact, taken together with proof of the other facts well
pleaded in the complaint. By the unanimous vote of those taking part in the adjudication of
the two separate appeals mentioned in the complaint this court has heretofore construed
the facts disclosed by the records in those cases, and interpreted the law applicable thereto,
against the contentions of the plaintiff. Upon a full review of the facts and the law as
developed in the records of these cases, after listening to several days' oral argument by
counsel and upon a careful study of the printed briefs, we unanimously adhere to our former
findings. If we are correct in our conclusions, the defendant correctly voted for, and
recommended the entry of the judgments in question. If we are in error, the defendant
erred also, in the part he took in the adjudication of those cases. But it is very clear that
such an error on his part, granting that it was committed, would furnish no support
whatever to a charge of bad faith; so that the charge of bad faith set out in the complaint, if
sustained at all, must rest on the other allegations of fact well pleaded therein.

The complaint in express terms alleges that an "inspection" of the written opinions of this
court, prepared by the defendant in the two appealed cases referred to therein, discloses
that defendant willfully perverted the facts developed by the records in those cases in those
cases, and, with intent to deceive his associates, set forth in those opinions false statements
of those facts, knowing them to be false. But a careful inspection and examination of the
records of those cases clearly discloses that each and every material fact set forth in those
opinions is in substantial accord with the facts developed by the records submitted to this
court.

The alleged false statements of fact in the opinion (cause No. 4017), as set forth in the
complaint, are:

(a) That said Solers were creditors, and preferred creditors of Martinez and Riu.

(b) That the judgment of the lower court dismissing the complaint, and dissolving
the temporary injunction is hereby reversed, and the cause is remanded to the lower
court with direction to take action not inconsistent herewith . . . without any finding
of cost: defendant well knowing that such finding was a direct violation of said
decision of March 27.

But we have shown already that the record, and the agreed statement of facts submitted by
counsel clearly disclose that "the said Solers were creditors and preferred creditors of
Martinez and Riu;" and not only does it affirmatively appear in the record of cause No. 4017
that the original decision and memorandum order of March 27 had been amended and in
effect rescinded, at the time when the opinion in the latter case was written, but that fact is
expressly alleged in the complaint itself.

The alleged false statements of facts in the opinion in cause No. 5719, as set forth in the
complaint, are:

(a) That in the demand on the sheriff that he dismiss the levy in cause No. 3274, the
guardian ad litem of said Solers alleges that their claim was a preferred claim;
defendant well knowing from the record that in said demand they alleged under oath
and claimed as owners and partners.

(b) That the Supreme Court had decided in cause No. 4017 that the Solers had a
credit preferred to that of the plaintiff Alzua against Martinez and Riu for P9,868.29;
defendant well knowing from the record that the decision in cause No. 4017 had not
been pleaded or introduced in evidence in said cause 5719.

(c) That cause 5719 was brought against said Alzua and her bondsmen upon the
bond executed and delivered by them to the sheriff, by the purpose of recovering the
sum of P9,868.29, together with damages, interest, and costs amounting to
P11,068.00; defendant well knowing from the record that the sheriff, the acting
sheriff, Visitacion Martinez, and Joaquin Riu were also defendants in said cause, and
 that the only sum at issue was 9, 868.29 pesos Mexican currency and that damages
had been proved.

(d) That said cause No. 5719 was instituted on the first day of October, 1907, and
said decision of the Supreme Court dated September 14, 1907; defendant well
knowing from the record that said suit was instituted and filed before said decision,
to wit, on August 22, 1907.

(e) That the record in cause No. 5719 shows that said indemnity bond to the sheriff
was given after the issuance of the injunction by the lower court in cause No. 4017;
defendant well knowing that the record in cause 5719 does not show.

( f) That the defendants Garcia, Ruiz and Baylon as sureties, and Alzua as principal,
had obligated themselves by said bond to respond to the plaintiffs (the said Solers)
for the amount of the claim which said Solers had against the partnership of Martinez
and Riu; defendant well knowing the said bond was given to the sheriff for his
indemnity and that said Solers were not parties to said bond.

Referring to statement (a) it is sufficient to say that as we have shown already, the record
clearly discloses that while it is true that in his original demand on behalf of the minors, a
claim on their behalf as owners and partners was set up by their guardian, nevertheless this
claim was promptly abandoned, and before the property was sold and before the proceeds
were distributed, their claim as "a preferred claim" was duly asserted, and the sheriff and
his counsel duly advised thereof.

The matters discussed in statements (b) and (c) have already been disposed of, and we
have shown that in regard thereto the contentions of counsel for Alzua as to the legal effect
of the facts developed by the record are not well founded. So also as statement ( f )
touching the legal effect of the execution of the indemnity bond, we have shown that the
contention of counsel for Alzua is not well founded, and that the execution of that bond did,
in fact, impose upon the indemnitor and her bondsmen an obligation to respond for the
damages suffered by the minors as a result of the trespass of the sheriff.

As to the statements of facts referred to in paragraphs (d) and (e), it may be admitted that
there is an apparent discrepancy between the date of the institution of cause No. 5719 as
disclosed by the record and set out in the opinion; and that the record does not conclusively
support the statement, in the history of the case set out in the opinion, that the indemnity
bond was executed after the issuance of the injunction in cause No. 4017. But on closer
examination it will be found that these discrepancies are more apparent than real. The date
mentioned in the history of the case set out in the opinion as the date of the institution of
the action is October 1, 1907, but it appears that this is the date on which the amended
complaint was filed, and that the original complaint in that action was filed on August 22,
1907; in the amended complain new parties were brought into the action, and a new cause
of action alleged, so that in one sense the action actually tried was commenced on the first
day of October, 1907, the date mentioned in the opinion; but it is true that strictly and
technically speaking the action was instituted on the 22d day of August, 1907, when the
original complaint was filed. It also appears from the record that the indemnity bond was
executed, and the injunction issued on the same day, October 14, 1907, but it does not
expressly appear which was first in point of time; there is, however, some ground for the
inference that the bond was given after the issuance of the injunction, as set out in the
opinion. But it is very apparent that these minor discrepancies, if they can properly be said
to be discrepancies, are of no possible import. The institution of cause No. 5719 a few
weeks earlier or later than the date set out in the opinion, and the filing of the indemnity
bond a few hours before rather than after the issuance of the injunction in case No. 4017,
could have no possible effect upon the judgment to be rendered in cause No. 5719. These
slight inaccuracies in the statement of the history of the case, if they can properly be called
inaccuraries, could not have effected the reasoning of the court in arriving at its
conclusions, whether it proceeded on the theory of the case as relied upon by the plaintiffs
therein or upon that urged by the defendants. Manifestly, no charge of bad faith, or of willful
wrongdoing can be predicated upon these alleged inaccuracies in the relation of wholly
immaterial matter in the history of the case as given in the course of the opinion, since they
could, or the reasoning of the members of the court upon which that judgment was based.

The result then of our inspection of the opinions together with the records in the cases in
question is to find that the allegations of the complaint that the defendant willfully perverted
and misrepresented the facts developed in those records, and made false statements of the
facts, knowing them to be false, are not well founded; and that the statements of all the
material facts contained in the opinions in those cases are substantially correct and in
substantial accord with the records of the cases wherein those opinions were entered. It
clearly results that the charges of bad faith, of the intent to injure the plaintiff Alzua, of
wrongful intervention in the adjudication of those cases, and of official misconduct in the
performance of the duties of the defendant as a member of this court are not sustained by
the allegations touching the preparation of the opinions in those cases by the defendant,
and on the contrary, are directly controverted by the facts well pleaded in the complaint and
disclosed by an inspection and review of the records themselves.

Before passing to the last and only remaining allegation in the complaint, upon which
counsel appear to rely in support of the charge of bad faith, we will glance for a moment at
the allegations touching the connection of Justice Elliott with the case. This allegation
evidently has its foundation in the fact that Justice Elliott's name is not attached to the
opinion. We are utterly unable to discover how, upon the facts of this case, the mere fact
that the opinion does not bear his signature (or that it was not presented to him for
signature for some reason not alleged in the complaint) could even remotely tend to support
a charge of bad faith on the part of the defendant. But since the pleader saw fit to allege
this fact, and presumably had some purpose in doing so, we call attention to some facts of
general knowledge in the courts of these Islands, which to our minds demonstrate that no
inference of bad faith on the part of the defendant would be supported by proof of the
allegations that the opinion was not presented to Justice Elliott for his signature and that he
took no part in the disposition of the case. Justice Elliott was at the time when the decision
was filed the most recent addition to the court. He was not present at the date alleged in
the complaint when the first case mentioned therein was before the court, and could not,
therefore, have taken part in any of the earlier discussions of the questions raised in the
extended course of this litigation. Within less than thirty days from the filing of the opinion
he resigned from the court to accept an appointment in the executive branch of the
Philippine Government. And finally, of the nine opinions of this court published in volume 14
of the Philippine Reports bearing date from the 7th day of January, 1910, to the 14th day of
January, 1910 (the week immediately preceding the 15th day of January, 1910, on which
the opinion in question was published), only one (the first) bears the signature of Justice
Elliott. Manifestly, whatever were the reasons for Justice Elliott's abstention from
participation in the adjudication of those cases (and we doubt not that there were sufficient
reasons), no inference of bad faith on the part of the defendant could be sustained by proof
of the bare allegations of the complaint touching his abstention from participation in the
adjudication of this case.
The charge of bad faith, in so far as it based on the allegations of the complaint touching
the defendant's action in provisionally suspending the execution of the original
memorandum order directing the entry of judgment in case No. 4017 has already been
show to be baseless. We have shown that it would have been the duty and the province of
the court itself, if in session, to amend that order if it appeared to have been erroneously
entered. We have shown that this original order, affirming instead of revoking the judgment
of the court below, was undoubtedly erroneous. We have shown that the defendant, at the
time when he did the acts complained of in this connection, was on duty as the vacation
justice of the court, ad as such was charged with the duty of securing an opportunity to the
court to make the necessary amendment in the erroneous order. We have shown that for
this purpose he was clothed with the necessary interlocutory jurisdiction. It is very clear,
therefore, that no charge of bad faith can be successfully predicated on proof that the
defendant did his duty in the premises, and exercised his interlocatory jurisdiction over the
case then pending before the court, to prevent a grave miscarriage of justice, and to secure
to the court an opportunity, of which it later availed itself, to enter a final judgment in
accordance with the very right of the cause.

But absolute baselessness of the whole fabric of innuendo, insinuation, denunciation, and
specific charges of wrongdoing in this connection, o which the plaintiff seeks to make a
showing in the complaint of bad faith on the part of the defendant, will become still more
apparent by contrasting the allegations of the complaint with the simple facts as developed
by an inspection of the record.

With evident intent to led a sinister aspect to defendant's conduct in this connection, ad
thus make a showing of bad faith on the face of the complaint, it is alleged that defendant
acted surreptitiously, and "without consulting the other justices of the court;" and in their
argument upon the demurrer, counsel boldly asserted that his action in this regard
amounted to a falsification of a public record, one of the gravest crimes defined and
penalized in the Spanish criminal code.

Let us see what the allegations of the complaint read together with the record actually
disclose. On the 27th of March, 1907, the last day of the sessions of this court prior to the
court vacations of that year a "short decisions" or more accurately speaking a
"memorandum order," in Spanish, was erroneously entered in the case hereinbefore
described as case No. 4017, as follows:

Reserving the right to set forth hereafter the grounds of this decision, the judgment
of the court below is hereby affirmed in all respects, with the costs of this instance
against the appellants. And after the expiration of twenty days let judgment be
entered in accordance herewith, and ten days thereafter let the record be returned to
the court whence it came for execution. It is also ordered.

Notice of this erroneous order was sent to counsel on the 30th of March. On or about the
8th of April, and before judgment had been entered, the defendant, at that time acting as
vacation justice of this court, and clothed with the jurisdiction and authority conferred by
law on such officers, provisionally emended this "memorandum order" by striking out the
word "confirmanos" ("we affirm") and substituting therefor the word "revocamos" ("we
reverse"), at the same time entering in the margin of the order, in parenthesis, his initials
"E. F. J." (E. Finley Johnson), indicating thereby that the amendment had been made by
him. Two days thereafter formal and official notice of the change was served on counsel;
and, on the morning of the very day when the amendment was made, counsel for Alzua and
the sheriff were personally advised of the fact that the provisional amendment had been or
was about to be made, as clearly and conclusively appears from the fact disclosed by the
record, that at 11.55 a.m., of April 8, 1907, the firm of Hartigan, Rhode & Gutierrez,
counsel for Alzua and the sheriff, filed in the clerk's office a motion for rehearing. At the
same time that the provisional amendment of the memorandum order was made by the
defendant, he issued orders to the clerk that neither the original order nor the amended
order should be executed until the further order of the court. Nothing further was done until
the court reassembled, after vacation, in July, when the defendant reported what had been
done, and the court, after due consideration, affirmed and ratified his action, as appears
from the following order, duly entered on the minutes on the 25th day of July.

Reporting having been submitted of the petition submitted by Messrs. Hartigan,

Rohde & Gutierrez, in case No. 3132, Manuel Soler y Martinez et al., vs. Emilia Alzua
et al., injunction proceedings, moving the court for a rehearing, on the ground that
the facts disclosed by the record do not sustain the judgment thereon, the court
being duly informed thereof, resolved that the petition be denied. And Justice
Johnson having informed the court that in entering the decision in this matter an
involuntary error had been committed, by inserting therein the word "confirmamos"
(we affirm), in place of the word "revocamos" (we reverse), it was ordered that the
amendment inserted therein be held to be ratified and affirmed.

It would not be easy to indicate a more open, public, and direct procedure whereby
defendant could have secured the temporary suspension of the execution of the erroneous
order pending the action of the full court, than that actually adopted by him. Of course the
record does not disclose that he formally and officially consulted with his associates in this
matter until they had returned from vacation and assembled in regular session. At the time
when the amendment was made they were all absent on vacation, and as we have shown, it
was his sworn duty to act for and on behalf of the court, on his own responsibility, if he was
convinced that the memorandum order was erroneously entered, and that it should be
suspended until the full court had an opportunity to take the proper final action in regard
thereto. It affirmatively appearing not only that every act done by the defendant in this
connection was done with due notice, both official and personal, to counsel for all the
parties in interest, with due notice to the court itself, with a full record thereof spread upon
the court files, and with the knowledge and intervention of the clerk of the court, and it also
appearing that the counsel, the parties, the court itself and the clerk were all advised and
informed of his action by the defendant at the very earliest available opportunity ; it is very
earliest available opportunity; it is very clear that the surmis, conjectures and specific
charges of bad faith which are set out in the complaint must fall to the ground so far as they
are based on the alleged surreptitious manner in which the temporary suspension of the
execution of the memorandum order was secured by the defendant. We are not now
considering whether it might not have been more expedient, or more technically correct in
form, had the defendant issued a formal order amending the original order and directing the
suspension of the execution of both the original and the amended order pending the action
of the court in session, rather than to have adopted the course which he actually pursued.
This question can have no possible bearing on the issue involved herein. We are examining
the course he actually pursued, to ascertain whether his action, viewed from the standpoint
of the actuating motive therefor, the legal effects flowing therefrom, and the manner in
which he did the acts which the record discloses he did in this connection, justify the
charges of bad faith set forth in the complaint; and we conclude, that not only are these
charges not sustained, but that they are directly controverted by the material and relevant
facts disclosed by an inspection of the complaint itself, together with the exhibits and court
records incorporated therein.
The argument might be extended further, but it would seem to be unnecessary. Enough has
been said, we think, to show that even upon the plaintiff's own theory of the law in force in
these Islands as to the civil liability of judicial officers for acts done in the exercise of their
judicial functions, the complaint fails to set forth sufficient well-pleaded material, and
relevant facts to sustain a cause of action against the defendant.

CONCLUSION.

In the course of his argument, senior counsel for the plaintiffs formally requested this court,
whatever action it might take on his appeal, to set out in its opinion a plain statement of the
facts connected with the litigation under review in this action, as those facts are known to
the court. As we understood him, however, later on in the discussion and in colloquy with
counsel for appellee, he withdrew, or rather undertook to qualify this request by limiting the
scope of the statement to the facts which he himself had set out in the complaint. Having in
mind the form in which this appeal was finally submitted to us, we have conceived it to be
our duty to exercise the most scrupulous care to exclude from this opinion, and from the
reasoning upon which we base our judgment herein, any fact not disclosed by the complaint
and the records referred to therein, or of which the court below might not and should not
have taken judicial notice. But under all the circumstances, we think it not improper for us
to say that it is for this reason and this reason alone that we have not complied with the
request of counsel, further than to include his complaint as a marginal note attached to this
opinion; and to add, each member whose signature is hereto attached speaking for himself,
that had we felt at liberty to set forth the facts as originally requested by counsel, no fact
known to this court or to any of its members would in any wise tend to weaken the force of
the conclusions herein set out, or detract from the force of the reasoning upon which these
conclusions rest.

In this connection, however, some general observations as to the practice and procedure of
this court in preparing its opinions and filing its decisions may not be out of place, and will
shed some light upon our interpretation and treatment of some of the incidents set forth in
the complaint, and of the contentions of counsel in relation thereto. These observations,
while not restricted to the facts alleged in the complaint, will be strictly limited to matters of
general knowledge in the courts of these Islands, and disclosed by public court records and
the official reports of the Attorney-General.

The Supreme Court of the Philippine Islands annually disposes of some eight hundred cases,
about equally divided between the civil and the criminal dockets, in some five hundred of
which written opinions are filed. In addition, an exceptionally large number of motions and
incidental matters are disposed of in minute orders; the exceptionally large number of
matters of this nature being due, in part at least, to the adoption in this jurisdiction of an
American procedural system, without any substantial modification of the substantive law of
the Islands as found in the codes of Spain. It is believed that a comparison of these figures
with those of the half-hundred courts of last resort in the United States will disclose that the
volume of the output of this court, as a whole and per capita of its membership, places it
well within the rank of the first half dozen of those courts in this regard. (See the reporters
generally and data assembled by the West Publishing Company and published in the
Docket.)

Furthermore it is to be remembered that in disposing of this large volume of business, this

court, unlike the appellate courts of the United States generally, is required, in all criminal
cases and in ninety per cent of the civil cases, to review the evidence (which is not required
by law to be printed and comes up in the original transcript of the stenographer's notes) so
as to ascertain whether the judgment of the lower court are "sustained by the weight of the
evidence." This is a consequence of the absence of the jury system in the Philippines. Then,
too, an unusual number of difficult and doubtful questions present themselves in this
jurisdiction, arising out of the conflict of laws resulting from the introduction of new laws
and new institutions under American sovereignty, which must be interpreted and construed
with due regard to the jurisprudence of both the old and the new sovereign. And finally, the
mere mechanical difficulties, and in some cases the delays, involved in the preparation,
submission, discussion and publication of the decisions of the court are notably increased by
the fact that the official language of the courts in the Philippines is Spanish, while four of
the members of this court are Americans, whose knowledge of that language has for the
most part been acquired since coming to the Islands.

As might be expected, under conditions, it has not infrequently become necessary for the
court, especially as to cases decided just before adjournment for its annual vacation, to
content itself with announcing its judgments in short "memorandum" decisions, definitely
adjudicating the rights of the parties to the litigation without setting out the reasoning and
authority upon which such judgments are based. In such cases the court usually reserves
the right to prepare and publish extended opinions at a later day, if the publication of such
extended opinions appears to be expedient or necessary. The purpose and object of this
practice, is of course, to avoid unnecessary and useless delay in the administration of
justice. So far as the litigants in a particular case are concerned, it is the judgment of the
court, not the reasons on which the judgment is based, with which they are chiefly
concerned. And it is believed that the interests both the litigants and the public are best
subserved in these cases by the prompt adjudication of the of the issues involved in a
memorandum opinion, and the publication, at a later day, of a carefully prepared opinion,
and the publication, at later day, of a carefully prepared opinion, setting out the reasoning
and authority therefore. (Cf. Ocampo vs. Cabañgis, 15 Phil Rep., 626.)

Another consequence of the mechanical difficulties involved in the preparation of the

opinions, orders, and judgments of the court in two languages, and of the necessity for the
translation of those prepared in English into the official language, before being submitted for
signature, is that "eternal vigilance" on the part of each member of the court, is the price
which must be paid to avoid the clerical errors, mistakes, and misunderstandings which
otherwise would so readily creep into the proceedings; and under the circumstances, no one
doubts the right of this court, under the liberal doctrine of the American courts, to amend
and correct clerical errors in the records of it proceedings, when these records speak the
truth. In practice such amendments and corrections are and always have been very freely
made.

The memorandum order which was provisionally amended by the defendant was filed on the
day immediately preceding the adjournment for the court vacation in the year 1907.
Counsel for defendant insists that provisional amendment was merely an attempt to correct
a purely involuntary clerical error, which had crept into the judgment in the haste of the
adjournment proceedings. In support of his contention he refers to the above set out minute
order dated July 28, 1907, wherein the court expressly declared that the word
"confirmamos" (affirm) was "involuntarily" inserted instead of the word "revocamos"
(reverse) in the original memorandum order. Of course the right and the duty of the
defendant and of the court itself to correct an "involuntary" clerical error should not and
would not be questioned under the circumstances. But we have not in any wise rested our
decision on this contention, because while it is true that this court solemnly declared in the
minute order that the amendment ratified by it was made to correct an "involuntary" error
of this nature, we do not understand that the plaintiff, by incorporating the record of those
proceedings into his complaint, Formally admits that it was in fact so made. As we
understand the admissions of the complaint, they only go to the verity of the facts disclosed
by the records incorporated therein, and not to the truth or accuracy of the reasons
assigned for the entry of the orders, judgments and decrees contained in these records.
Accordingly we have wholly disregarded this contention of counsel for the defendant, and
we have based our conclusions on the broader ground of the right of the court to correct
and amend errors of law or fact in its orders and judgments, before such erroneous
judgments and orders become final.

We here refer to this contention of counsel for defendant, merely in explanation of our
action in this regard, and to avoid the possibility that our silence on this point might be
construed as in some sort a recognition of the truth of plaintiffs' allegations that the original
memorandum order confirming the judgment of the court below was in fact entered in
accord with the original vote and action of the court, and not as contended by counsel for
defendant, through an involuntary clerical mistake.

Senior counsel for plaintiffs having agreed in open court with counsel for defendant on the
submission of the case on appeal that if the complaint as submitted is subject to demurrer,
it can not be amended so as to set forth a cause of action, and that fact appearing on its
face: the judgment of the court below, sustaining the demurrer and dismissing the
complaint without day, should be affirmed with the costs of this instance against the
appellant.

So ordered.

Arellano, C.J., Torres, Mapa, Moreland and Trent, JJ., concur.

JOSE ANSELMO I. CADIZ, G.R. No. 178941
LEONARD S. DE VERA, ROMULO
A. RIVERA, DANTE G. ILAYA,
PURA ANGELICA Y. SANTIAGO,
ROSARIO T. SETIAS-REYES, JOSE
VICENTE B. SALAZAR, MANUEL M.
MONZON, IMMANUEL L. SODUSTA,
CARLOS L. VALDEZ, JR., and
LYDIA A. NAVARRO,
Petitioners, Present:
CARPIO,* J.,
VELASCO, JR., Chairperson,
- versus - PERALTA,
ABAD, and
MENDOZA, JJ.

THE HONORABLE PRESIDING

JUDGE, BR. 48, RTC-PUERTO Promulgated:
PRINCESA and GLENN C. GACOTT,
Respondents. April 27, 2011

x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

Can the members of the Board of Governors of the Integrated Bar of the Philippines be held

liable in damages for prematurely recommending disbarment of a lawyer based on the

position papers and affidavits of witnesses of the parties?

The Facts and the Case

On February 23, 2003 the Integrated Bar of the Philippines Board of Governors, then

composed of petitioners Jose Anselmo I. Cadiz, Leonard S. De Vera, Romulo A. Rivera, Dante

G. Ilaya, Pura Angelica Y. Santiago, Rosario T. Setias-Reyes, Jose Vicente B. Salazar, Manuel

M. Monzon, Immanuel L. Sodusta, and Carlos L. Valdez, Jr. (the IBP Board), received an

administrative complaint[1]filed by Lilia T. Ventura and Concepcion Tabang against respondent

Atty. Glenn C. Gacott for gross misconduct, deceit, and gross dishonesty. The IBP Board

designated petitioner Lydia A. Navarro (Navarro) as Commissioner to investigate the case.

Commissioner Navarro summoned the parties to a mandatory conference and required them

afterwards to submit their position papers. Based on these, Navarro submitted her Report

and Recommendation to the IBP Board for its approval. Commissioner Navarro was herself a

member of the IBP Board. After deliberation, the IBP Board adopted Commissioner Navarros

findings but increased the recommended penalty of six months suspension from the practice

of law to disbarment. The IBP Board then transmitted their report to this Court.

On September 29, 2004, however, the Court remanded the case to the IBP Board for further

proceedings in order to give the parties the chance to fully present their case. [2] The Court

said the investigating commissioner should have subpoenaed and examined the witnesses of

the parties considering the gravity of the charge against Atty. Gacott. Navarro rendered her

report based solely on the position papers and affidavits of the witnesses.

While the IBP Board was complying with the Courts directive, Atty. Gacott filed a complaint

for damages against the boards sitting members before the Regional Trial Court (RTC)

of PuertoPrincesa City, Palawan.[3] Answering the complaint, the IBP Board raised the

affirmative defense of failure of the complaint to state a cause of action and filed a motion to

dismiss the case on that ground. On March 9, 2006 the trial court denied the

motion,[4] prompting the IBP Board to elevate the case to the Court of Appeals (CA) on special

civil action for certiorari.[5]

On December 29, 2006 the CA denied the petition, pointing out that the RTC did not commit

grave abuse of discretion. The IBP Board had other plain and speedy remedy, like proceeding

to trial in the case and appealing in the event of failure of the RTC to dismiss the action. The

CA denied in its Resolution dated July 12, 2007 the IBP Boards motion for reconsideration,

thus causing them to file the present petition.

The Issue Presented

The key issue in this case is whether or not the CA erred in failing to rule that the Supreme

Courts remand of the disbarment case to the IBP Board for examination of the witnesses,

considering the gravity of the charge against Atty. Gacott, cannot serve as basis for the latters

complaint for damages against the members of that board.

Ruling of the Court

Atty. Gacott states in his complaint for damages before the RTC that Supreme Courts remand

of his case to the IBP Board is an affirmation of the latters arbitrary abuse of its investigatory

power.The IBP Board recommended his disbarment based on the Commissioners report

rendered to it without the benefit of exhaustive hearing. This made its members personally

liable for actual, moral, and corrective damages. Essentially, therefore, Atty. Gacott anchored

his complaint for damages on the result of the Courts assessment of the IBP Boards report

and recommendation and its remand of the case against him for further proceedings.

The petitioner IBP Board members are correct in claiming that Atty. Gacotts complaint

states no cause of action. The IBP Commissioner and Board of Governors in this case merely

exercised delegated powers to investigate the complaint against Atty. Gacott and submit their

report and recommendation to the Court. They cannot be charged for honest errors

committed in the performance of their quasi-judicial function. And that was what it was in the

absence of any allegation of specific factual circumstances indicating that they acted

maliciously or upon illicit consideration. If the rule were otherwise, a great number of lower

court justices and judges whose acts the appellate courts have annulled on ground of grave

abuse of discretion would be open targets for damage suits.

Parenthetically, Atty. Gacott submitted the disbarment case against him for resolution based

on the position papers that he and the complainants presented, without reservation, to the

IBP along with the affidavits of their witnesses. The IBP Board prepared its report and

recommendation to the Court based on these papers and documents.

WHEREFORE, the Court GRANTS the petition, SETS ASIDE the decision dated December

29, 2006 and resolution dated July 12, 2007 of the Court of Appeals in CA-G.R. SP 94692,

and ORDERS the complaint for damages filed by respondent Glenn C. Gacott against

petitioners Jose Anselmo I. Cadiz, Leonard S. De Vera, Romulo A. Rivera, Dante G. Ilaya, Pura

Angelica Y. Santiago, Rosario T. Setias-Reyes, Jose Vicente B. Salazar, Manuel M. Monzon,

Immanuel L. Sodusta, Carlos L. Valdez, Jr., and Lydia A. Navarro in Civil Case 4095 of the

Regional Trial Court of Puerto Princesa City, Palawan, DISMISSED for failure to state a cause

of action.

SO ORDERED.