Page 1 of 94

LIABILITY OF PARENTS AND GUARDIAN

G.R. No. L-10134 June 29, 1957
SABINA EXCONDE, plaintiff-appellant,
vs.
DELFIN CAPUNO and DANTE CAPUNO, defendants-appellees.
Magno T. Bueser for appellant.
Alver Law Offices and Edon B. Brion and Vencedor A. Alimario for appellees.
BAUTISTA ANGELO, J.:
Dante Capuno, son of Delfin Capuno, was accused of double homicide through reckless
imprudence for the death of Isidoro Caperina and Amado Ticzon on March 31, 1949 in the Court
of First Instance of Laguna (Criminal Case No. 15001). During the trial, Sabina Exconde, as mother
of the deceased Isidoro Caperina, reserved her right to bring a separate civil action for damages
against the accused. After trial, Dante Capuno was found guilty of the crime charged and, on
appeal, the Court Appeals affirmed the decision. Dante Capuno was only (15) years old when he
committed the crime.
In line with her reservation, Sabina Exconde filed the present action against Delfin Capuno and
his son Dante Capuno asking for damages in the aggregate amount of P2,959.00 for the death of
her son Isidoro Caperia. Defendants set up the defense that if any one should be held liable for
the death of Isidoro Caperina, he is Dante Capuno and not his father Delfin because at the time
of the accident, the former was not under the control, supervision and custody, of the latter. This
defense was sustained by the lower court and, as a consequence it only convicted Dante Capuno
to pay the damages claimed in the complaint. From decision, plaintiff appealed to the Court of
Appeals but the case was certified to us on the ground that the appeal only involves questions of
law.
It appears that Dante Capuno was a member of the Boy Scouts Organization and a student of the
Bilintawak Elementary School situated in a barrio in the City of San Pablo and on March 31, 1949
he attended a parade in honor of Dr. Jose Rizal in said city upon instruction of the city school's
supervisor. From the school Dante, with other students, boarded a jeep and when the same
started to run, he 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, Amado Ticzon and
Isidore Caperia, died as a consequence. It further appears that Delfin Capuno, father of Dante,
was not with his son at the time of the accident, nor did he know that his son was going to
attend a parade. He only came to know it when his son told him after the accident that he
attended the parade upon instruction of his teacher.
The only issue involved in this appeal is whether defendant Delfin Capuno can be held civilly
liable, jointly and severally with his son Dante, for damages resulting from the death of Isidoro
Caperia caused by the negligent act of minor Dante Capuno.
The case comes under Article 1903 of the Spanish Civil Code, paragraph 1 and 5, which provides:
ART. 1903. The obligation impossed by the next preceding articles is enforceable not
only for personal acts and omissions, but also for those of persons for whom another is
responsible.
The father, and, in case of his death or incapacity, the mother, are liable for any
damages caused by the minor children who live with them.
x x x x x x x x x
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.
Plaintiff contends that defendant Delfin Capuno is liable for the damages in question jointly and
severally with his son Dante because at the time the latter committed the negligent act which
resulted in the death of the victim, he was a minor and was then living with his father, and
inasmuch as these facts are not disputed, the civil liability of the father is evident. And so,
plaintiff contends, the lower court erred in relieving the father from liability.
We find merit in this claim. It is true that under the law above quoted, "teachers or directors of
arts and trades are liable for any damages 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 (Padilla, Civil Law, 1953, Ed., Vol. IV, p. 841; See 12
Manresa, 4th Ed., p. 557). Here Dante capuno was then a student of the Balintawak Elementary
School and as part of his extra-curricular activity, he attended the parade in honor of Dr. Jose
Rizal upon instruction of the city school's supervisor. And it was in connection with that parade
that Dante boarded a jeep with some companions and while driving it, the accident occurred. In
the circumstances, it is clear that neither the head of that school, nor the city school's supervisor,
could be held liable for the negligent act of Dante because he was not then a student of an
institute of arts and trades as provided by law.
The civil liability which the law impose 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 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 and instructing them in proportion to their means", while, on the other hand,
gives them the "right to correct and punish them in moderation" (Articles 154 and 155, 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(Article 1903,
last paragraph, Spanish Civil Code). This defendants failed to prove.
WHEREFORE, the decision appealed from is modified in the sense that defendants Delfin Capuno
and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of P2,959.00 as damages,
and the costs of action.
Bengzon, Montemayor, Labrador and Endencia, JJ., concur.
Paras, C.J., concurs in the result.
Case Digest
Dante Capuno was a 15 year old boy who was a pupil of Balintawak Elementary School. In March
1949, he attended a boy scout parade for Dr. Jose Rizal. While they were inside a jeep, he took
control of the wheels which he later lost control of causing the jeep to go turtle thereby killing
two other students, Isidoro Caperina and one other. Isidoros mother sued Dante Capuno for the
death of her son. Pending the criminal action, the mother reserved her right to file a separate
civil action which she subsequently filed against Dante and his dad,Delfin Capuno.
ISSUE: Whether or not Delfin Capuno, as the father of Dante is liable for damages.
HELD: Yes. 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 necessary consequence of the parental authority they exercise over
Page 2 of 94

them which imposes upon the parents the duty of supporting them, keeping them in their
company, educating them and instructing them in proportion to their means, while, on the
other hand, gives them the right to correct and punish them in moderation. 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 which Delfin failed to prove.
On the other hand, the school is not liable. It is true that under the law, teachers or directors of
arts and trades are liable for any damages 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.

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.
Page 3 of 94

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.
Case Digest
Maria Teresa Cuadra and Maria Teresa Monfort were both classmates in Mabini Elementary
School Bacolod City. In July 1962, their teacher assigned to weed the school premises. While they
were doing so, MT Monfort found a headband and she jokingly shouted it as an earthworm and
thereafter tossed it MT Cuadra who was hit in her eye. MT Cuadras eye got infected. She was
brought to the hospital; her eyes were attempted to be surgically repaired but she nevertheless
got blind in her right eye. MT Cuadras parents sued Alfonso Monfort (MT Monforts dad) based
on Article 2180 of the Civil Code. The lower court ruled that Monfort should pay for
actual damages(cost of hospitalization), moral damages and attorneys fees.
ISSUE: Whether or not Monfort is liable under Article 2180.
HELD: No. Article 2180 provides that the father, in case of his incapacity or death, the mother, is
responsible for the damages caused by the minor children who live in their company. The basis
of this vicarious, although primary, liability is 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.
In the case at bar there is nothing from which it may be inferred that the Alfonso Monfort 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 childs character which would reflect unfavorably on her upbringing and for which the
blame could be attributed to her parents.
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
Page 4 of 94

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
Page 5 of 94

be effective he date the original petition was filed. The decree shall state the
name by which the child is thenceforth to be known. (Emphasis supplied)
The Bundoc spouses further argue that the above Article 36 should be read in relation
to Article 39 of the same Code:
Art. 39. Effect of Adoption. The adoption shall:
xxx xxx xxx
(2) Dissolve the authority vested in the natural parents, except where the
adopter is the spouse of the surviving natural parent;
xxx xxx xxx
(Emphasis supplied)
and urge that their Parental authority must be deemed to have been dissolved as of the time the
Petition for adoption was filed.
The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability
for the torts of a minor child is the relationship existing between the parents and the minor child
living with them and over whom, the law presumes, the parents exercise supervision and control.
Article 58 of the Child and Youth Welfare Code, re-enacted this rule:
Article 58 Torts Parents and guardians are responsible for the damage
caused by the child under their parental authority in accordance with the civil
Code. (Emphasis supplied)
Article 221 of the Family Code of the Philippines
9
has similarly insisted upon the requisite that
the child, doer of the tortious act, shall have beer in the actual custody of the parents sought to
be held liable for the ensuing damage:
Art. 221. Parents and other persons exercising parental authority shall be
civilly liable for the injuries and damages caused by the acts or omissions of
their unemancipated children living in their companyand under their parental
authority subject to the appropriate defenses provided by law. (Emphasis
supplied)
We do not believe that parental authority is properly regarded as having been retroactively
transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle
shooting happened. We do not consider that retroactive effect may be giver to the decree of
adoption so as to impose a liability upon the adopting parents accruing at a time when adopting
parents had no actual or physically custody over the adopted child. Retroactive affect may
perhaps be given to the granting of the petition for adoption where such is essential to permit
the accrual of some benefit or advantage in favor of the adopted child. In the instant case,
however, to hold that parental authority had been retroactively lodged in the Rapisura spouses
so as to burden them with liability for a tortious act that they could not have foreseen and which
they could not have prevented (since they were at the time in the United States and had no
physical custody over the child Adelberto) would be unfair and unconscionable. Such a result,
moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine
of vicarious liability. Put a little differently, no presumption of parental dereliction on the part of
the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact
subject to their control at the time the tort was committed.
Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35
provides as follows:
Art. 35. Trial Custody. No petition for adoption shall be finally granted
unless and until the adopting parents are given by the courts a supervised trial
custody period of at least six months to assess their adjustment and emotional
readiness for the legal union. During the period of trial custody, parental
authority shall be vested in the adopting parents. (Emphasis supplied)
Under the above Article 35, parental authority is provisionally vested in the adopting parents
during the period of trial custody, i.e., before the issuance of a decree of adoption, precisely
because the adopting parents are given actual custody of the child during such trial period. In the
instant case, the trial custody period either had not yet begun or bad already been completed at
the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his
natural parents, not the adopting parents.
Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were
indispensable parties to the suit for damages brought by petitioners, and that the dismissal by
the trial court of petitioners' complaint, the indispensable parties being already before the court,
constituted grave abuse of discretion amounting to lack or excess of jurisdiction.
WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE and
the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is
hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the trial court is hereby
REINSTATED and this case is REMANDED to that court for further proceedings consistent with
this Decision. Costs against respondent Bundoc spouses. This Decision is immediately executory.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Romero, concur.
Case digest
FACTS:
In October 1982, Adelberto Bundoc, minor, 10 years of age, shot Jennifer Tamargo with an air
rifle causing injuries that resulted in her death. The petitioners, natural parents of Tamargo, filed
a complaint for damages against the natural parents of Adelberto with whom he was living the
time of the tragic incident.
In December 1981, the spouses Rapisura filed a petition to adopt Adelberto Bundoc. Such
petition was granted on November 1982 after the tragic incident.
ISSUE: WON parental authority concerned may be given retroactive effect so as to make
adopting parents the indispensable parties in a damage case filed against the adopted child
where actual custody was lodged with the biological parents.
HELD:
Parental liability is a natural or logical consequence of duties and responsibilities of parents, their
parental authority which includes instructing, controlling and disciplining the child. In the case at
bar, during the shooting incident, parental authority over Adelberto was still lodged with the
natural parents. It follows that they are the indispensable parties to the suit for damages.
Parents and guardians are responsible for the damage caused by the child under their parental
authority in accordance with the civil code.
SC did not consider that retroactive effect may be given to the decree of adoption so as to
impose a liability upon the adopting parents accruing at the time when they had no actual or
physical custody over the adopted child. Retroactivity may be essential if it permits accrual of
some benefit or advantage in favor of the adopted child. Under Article 35 of the Child and Youth
Page 6 of 94

Welfare Code, parental authority is provisionally vested in the adopting parents during the
period of trial custody however in this case, trial custody period either had not yet begin nor had
been completed at the time of the shooting incident. Hence, actual custody was then with the
natural parents of Adelberto.
Petition for review was hereby granted.

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

CRESENCIO LIBI* AND AMELIA YAP LIBI, PETITIONERS, VS. HON. INTERMEDIATE APPELLATE
COURT, FELIPE GOTIONG AND SHIRLEY GOTIONG, RESPONDENTS.

D E C I S I O N

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:
"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:
1. Moral damages, P30,000.00;
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 Osmea 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.
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:
"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:
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 atthe 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
Page 7 of 94

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.
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 wasdried.
[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:
"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:
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 bullets 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:
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.
x x x
"Evidence of contact or close-contact fire, such as burning around the gunshot wound of
entrance, gunpowder tattooing (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:
"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 theHonorable Court how would it have been possible for Wendell Libi
to killhimself? Will you please indicate the 24 inches?
WITNESS:
A Actually, sir, the 24 inches is approximately one arm's length . . .
ATTY. SENINING:
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:
"ATTY. ORTIZ: (TO WITNESS).
Q What is the height of the wall of the Gotiong's in relation to your house?
WITNESS:
A It is about 8 feet.
ATTY. ORTIZ: (TO WITNESS)
Q And where were you looking from?
WITNESS:
A From upstairs in my living room.
ATTY. ORTIZ (TO WITNESS)
Q From your living room window, is that correct?
WITNESS:
A Yes, but not very clear because the wall is high."
[14]

Page 8 of 94

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.
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 minorson, 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 been 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
fatalgun 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 wasonly 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 uptight 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:
"x x x 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:
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
various liability herein defendants-appellees has been reiterated by the Supreme Court in many
cases, prominent of which is the case of Fuellas vs. Cadano, et. al. (L-14409, Oct. 31, 1961, 3
SCRA 361-367), which held that:
'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).
"x x x 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
ha(d) 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. x x x."
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.
Page 9 of 94

In imposing sanctions for the so-called, vicarious liability of petitioners, respondent court
cites Fuellas vs. 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.
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
or 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 damage."
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:
"Art. 101. Rules regarding civil liability in certain cases. -
x x x
First. In cases of subdivisions x x x 2, and 3 of Article 12, the civil liability for acts committed by x x
x a person under nine years of age, or by one over nine but under fifteen years of age, who has
actedwithout 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." (Emphases 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 childrenis 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 afamily.
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 delictoof minors, Article 2182 of the Civil Code states
that "(i)f the minor causing damage has no parents or guardian, the minor x x x 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:
"Should there be no person having such x x x minor under his authority, legal guardianship or
control, or if such person be insolvent, said x x x minor shall respond with (his) own property,
excepting property exempt from execution, in accordance with civil law."
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 FueIlas, been the subject of a number of cases adjudicated
by this Court, viz.: Exconde vs. Capuno, et al.,
[22]
Araneta vs. Arreglado,
[23]
Salen, et al. vs.
Balce,
[24]
Paleyan, etc., et al. vs. Bangkili, et al.,
[25]
and Elcano, et al. vs. 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 withdiscernment, and also of minors 15 years of age 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 Salenand 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 solidarity 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 matterof 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
Page 10 of 94

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.
"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."
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 delictocaused 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.

LIABILITY OF OWNERS AND MANAGERS AND EMPLOYERS

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.
AQUINO, J.:+.wph!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:t.hqw
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
Page 11 of 94

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" (dueos 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 3.0del (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 Espaol 5th
Ed. 662; 1913 Enciclopedia Juridica Espaola 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.1wp
FIRST DIVISION
[G.R. No. 132344. February 17, 2000]
UNIVERSITY OF THE EAST, petitioner, vs. ROMEO A. JADER, respondent.
D E C I S I O N
YNARES-SANTIAGO, J.:
May an educational institution be held liable for damages for misleading a student into believing
that the latter had satisfied all the requirements for graduation when such is not the case? This is
the issue in the instant petition for review premised on the following undisputed facts as
summarized by the trial court and adopted by the Court of Appeals (CA),
[1]
to wit:
"Plaintiff was enrolled in the defendants College of Law from 1984 up to
1988. In the first semester of his last year (School year 1987-1988), he failed to
take the regular final examination in Practice Court I for which he was given an
incomplete grade (Exhibits 2, also Exhibit H). He enrolled for the second
semester as fourth year law student (Exhibit A) and on February 1, 1988 he
filed an application for the removal of the incomplete grade given him by
Professor Carlos Ortega (Exhibits H-2, also Exhibit 2) which was approved by
Dean Celedonio Tiongson after payment of the required fee. He took the
examination on March 28, 1988. On May 30, 1988, Professor Carlos Ortega
submitted his grade. It was a grade of five (5). (Exhibits H-4, also Exhibits 2-
L, 2-N).
"In the meantime, the Dean and the Faculty Members of the College of Law
met to deliberate on who among the fourth year students should be allowed
to graduate. The plaintiffs name appeared in the Tentative List of Candidates
for graduation for the Degree of Bachelor of Laws (LL.B) as of Second
Semester (1987-1988) with the following annotation:
"JADER ROMEO A.
Def. Conflict of Laws - x-1-87-88, Practice Court I - Inc., 1-
87-88. C-1 to submit transcript with S.O. (Exhibits 3, 3-C-
1, 3-C-2)." Jurismis
"The 35th Investitures & Commencement Ceremonies for the candidates of
Bachelor of Laws was scheduled on the 16th of April 1988 at 3:00 oclock in
the afternoon, and in the invitation for that occasion the name of the plaintiff
appeared as one of the candidates. (Exhibits B, B-6, B-6-A). At the foot of
the list of the names of the candidates there appeared however the following
annotation:
This is a tentative list. Degrees will be conferred upon
these candidates who satisfactorily complete requirements
as stated in the University Bulletin and as approved of the
Page 12 of 94

Department of Education, Culture and Sports (Exhibit B-7-
A).
"The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle,
U.E., Recto Campus, during the program of which he went up the stage when
his name was called, escorted by her (sic) mother and his eldest brother who
assisted in placing the Hood, and his Tassel was turned from left to right, and
he was thereafter handed by Dean Celedonio a rolled white sheet of paper
symbolical of the Law Diploma. His relatives took pictures of the occasion
(Exhibits C to C-6, D-3 to D-11).
"He tendered a blow-out that evening which was attended by neighbors,
friends and relatives who wished him good luck in the forthcoming bar
examination. There were pictures taken too during the blow-out (Exhibits D
to D-1).
"He thereafter prepared himself for the bar examination. He took a leave of
absence without pay from his job from April 20, 1988 to September 30, 1988
(Exhibit G) and enrolled at the pre-bar review class in Far Eastern University
(Exhibits F to F-2). Having learned of the deficiency he dropped his review
class and was not able to take the bar examination."
[2]

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock,
mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights
when he was not able to take the 1988 bar examinations arising from the latters negligence. He
prayed for an award of moral and exemplary damages, unrealized income, attorneys fees, and
costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led
respondent to believe that he completed the requirements for a Bachelor of Laws degree when
his name was included in the tentative list of graduating students. After trial, the lower court
rendered judgment as follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of
the plaintiff and against the defendant ordering the latter to pay plaintiff the
sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00)
with legal rate of interest from the filing of the complaint until fully paid, the
amount of FIVE THOUSAND PESOS (P5,000.00) as attorneys fees and the cost
of suit. Jjjuris
Defendants counterclaim is, for lack of merit, hereby dismissed.
SO ORDERED.
[3]

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification.
The dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Courts Decision is hereby
AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the
sum adjudged by the lower court in favor of plaintiff-appellant, is also
ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND
(P50,000.00) PESOS for moral damages. Costs against defendant-appellee.
SO ORDERED.
[4]

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court
on a petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to
respondent Romeo A. Jader, considering that the proximate and immediate cause of the alleged
damages incurred by the latter arose out of his own negligence in not verifying from the
professor concerned the result of his removal exam.
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of education is
entered into between said institution and the student. The professors, teachers or instructors
hired by the school are considered merely as agents and administrators tasked to perform the
schools commitment under the contract. Since the contracting parties are the school and the
student, the latter is not duty-bound to deal with the formers agents, such as the professors
with respect to the status or result of his grades, although nothing prevents either professors or
students from sharing with each other such information. The Court takes judicial notice of the
traditional practice in educational institutions wherein the professor directly furnishes his/her
students their grades. It is the contractual obligation of the school to timely inform and furnish
sufficient notice and information to each and every student as to whether he or she had already
complied with all the requirements for the conferment of a degree or whether they would be
included among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational
institutions way of announcing to the whole world that the students included in the list of those
who will be conferred a degree during the baccalaureate ceremony have satisfied all the
requirements for such degree. Prior or subsequent to the ceremony, the school has the
obligation to promptly inform the student of any problem involving the latters grades and
performance and also most importantly, of the procedures for remedying the same. justice
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams, cannot be
said to have acted in good faith. Absence of good faith must be sufficiently established for a
successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the
Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of
another, even though the forms and technicalities of the law, together with the absence of all
information or belief of facts, would render the transaction unconscientious.
[5]
It is the school
that has access to those information and it is only the school that can compel its professors to act
and comply with its rules, regulations and policies with respect to the computation and the
prompt submission of grades. Students do not exercise control, much less influence, over the
way an educational institution should run its affairs, particularly in disciplining its professors and
teachers and ensuring their compliance with the schools rules and orders. Being the party that
hired them, it is the school that exercises general supervision and exclusive control over the
professors with respect to the submission of reports involving the students standing. Exclusive
control means that no other person or entity had any control over the instrumentality which
caused the damage or injury.
[6]

The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services.
[7]
He
must see to it that his own professors and teachers, regardless of their status or position outside
of the university, must comply with the rules set by the latter. The negligent act of a professor
Page 13 of 94

who fails to observe the rules of the school, for instance by not promptly submitting a students
grade, is not only imputable to the professor but is an act of the school, being his employer.
Considering further, that the institution of learning involved herein is a university which is
engaged in legal education, it should have practiced what it inculcates in its students, more
specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code which
states:
Art. 19. Every person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe honesty and
good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.
Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to provide specifically in
statutory law.
[8]
In civilized society, men must be able to assume that others will do them no
intended injury that others will commit no internal aggressions upon them; that their
fellowmen, when they act affirmatively will do so with due care which the ordinary
understanding and moral sense of the community exacts and that those with whom they deal in
the general course of society will act in good faith. The ultimate thing in the theory of liability is
justifiable reliance under conditions of civilized society.
[9]
Schools and professors cannot just take
students for granted and be indifferent to them, for without the latter, the former are
useless. Jksm
Educational institutions are duty-bound to inform the students of their academic status and not
wait for the latter to inquire from the former. The conscious indifference of a person to the rights
or welfare of the person/persons who may be affected by his act or omission can support a claim
for damages.
[10]
Want of care to the conscious disregard of civil obligations coupled with a
conscious knowledge of the cause naturally calculated to produce them would make the erring
party liable.
[11]
Petitioner ought to have known that time was of the essence in the performance
of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will
not prepare himself for the bar exams since that is precisely the immediate concern after
graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its
students grades at any time because a student has to comply with certain deadlines set by the
Supreme Court on the submission of requirements for taking the bar. Petitioners liability arose
from its failure to promptly inform respondent of the result of an examination and in misleading
the latter into believing that he had satisfied all requirements for the course. Worth quoting is
the following disquisition of the respondent court:
"It is apparent from the testimony of Dean Tiongson that defendant-appellee
University had been informed during the deliberation that the professor in
Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant-
appellee still did not inform plaintiff-appellant of his failure to complete the
requirements for the degree nor did they remove his name from the tentative
list of candidates for graduation. Worse, defendant-appellee university,
despite the knowledge that plaintiff-appellant failed in Practice Court
I, again included plaintiff-appellants name in the "tentative" list of candidates
for graduation which was prepared after the deliberation and which became
the basis for the commencement rites program. Dean Tiongson reasons out
that plaintiff-appellants name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to
remedy the situation in the remaining few days before graduation day. Dean
Tiongson, however, did not explain how plaintiff-appellant Jader could have
done something to complete his deficiency if defendant-appellee university
did not exert any effort to inform plaintiff-appellant of his failing grade in
Practice Court I."
[12]
Es m
Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the
delayed relay of information to respondent. When one of two innocent parties must suffer, he
through whose agency the loss occurred must bear it.
[13]
The modern tendency is to grant
indemnity for damages in cases where there is abuse of right, even when the act is not illicit.
[14]
If
mere fault or negligence in ones acts can make him liable for damages for injury caused thereby,
with more reason should abuse or bad faith make him liable. A person should be protected only
when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in
good faith, but not when he acts with negligence or abuse.
[15]

However, while petitioner was guilty of negligence and thus liable to respondent for the latters
actual damages, we hold that respondent should not have been awarded moral damages. We do
not agree with the Court of Appeals findings that respondent suffered shock, trauma and pain
when he was informed that he could not graduate and will not be allowed to take the bar
examinations. At the very least, it behooved on respondent to verify for himself whether he has
completed all necessary requirements to be eligible for the bar examinations. As a senior law
student, respondent should have been responsible enough to ensure that all his affairs,
specifically those pertaining to his academic achievement, are in order. Given these
considerations, we fail to see how respondent could have suffered untold embarrassment in
attending the graduation rites, enrolling in the bar review classes and not being able to take the
bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this
upon himself by not verifying if he has satisfied all the requirements including his school records,
before preparing himself for the bar examination. Certainly, taking the bar examinations does
not only entail a mental preparation on the subjects thereof; there are also prerequisites of
documentation and submission of requirements which the prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION.
Petitioner is ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy
Pesos (P35,470.00), with legal interest of 6% per annum computed from the date of filing of the
complaint until fully paid; the amount of Five Thousand Pesos (P5,000.00) as attorneys fees; and
the costs of the suit. The award of moral damages is DELETED.
SO ORDERED.2/29
Case Digest
Facts: Petitioner was enrolled in the defendants College of Law. He failed to take the regular
examination in Practice Court 1 for which he was given an incomplete grade. He enrolled for the
second semester as a fourth year student, and filed an application for the removal of the
incomplete grade which was approved by the Dean. In the meantime, the faculty members and
the Dean met to deliberate who among the fourth year students should be allowed to graduate.
The plaintiffs name appeared on the tentative list, he also attended the investiture ceremonies
Page 14 of 94

to which he tendered blowout afterwards. He thereafter prepared himself for the bar
examination and took review classes. However, he was not able to take the bar examination
because his academic requirements is not complete. Consequently, respondent sued petitioner
for damages alleging that he suffered moral shock besmirched reputation, wounded feelings,
sleepless nights, when he was not able to take the 1988 bar examinations arising from the
latters negligence. He prayed for an award of moral damages, unrealized income, attorneys fees
and cost of suit.
ISSUE: Whether or not an educational institution be held liable for damages for misleading a
student into believing that the latter had satisfied all the requirements for graduation when such
is not the case.
HELD: The Supreme Court held that UE is liable for damages. It is the contractual obligation of
the school to timely inform and furnish sufficient notice and information to each and every
student as to where he or she had already complied with the entire requirement for the
conferment of a degree or whether they should be included among those who will graduate. The
school cannot be said to have acted in good faith. Absence of good faith must be sufficiently
established for a successful prosecution by the aggrieved party in suit for abuse of right under
Article 19 of the Civil Code
G.R. No. L-9010 March 28, 1914
J. H. CHAPMAN, plaintiff-appellant,
vs.
JAMES M. UNDERWOOD, defendant-appellee.
MORELAND, J.:
At the time the accident occurred, which is the basis of this action, there was a single-track
street-car line running along Calle Herran, with occasional switches to allow cars to meet and
pass each other. One of these switches was located at the scene of the accident.
The plaintiff had been visiting his friend, a man by the name of Creveling, in front of whose house
the accident happened. He desired to board a certain "San Marcelino" car coming from Santa
Ana and bound for Manila. Being told by Creveling that the car was approaching, he immediately,
and somewhat hurriedly, passed from the gate into the street for the purpose of signaling and
boarding the car. The car was a closed one, the entrance being from the front or the rear
flatform. Plaintiff attempted to board the front platform but, seeing that he could not reached it
without extra exertion, stopped beside the car, facing toward the rear platform, and waited for it
to come abreast of him in order to board. While in this position he was struck from behind and
run over by the defendant's automobile.
The defendant entered Calle Herran at Calle Peafrancia in his automobile driven by his
chauffeur, a competent driver. A street car bound from Manila to Santa Ana being immediately
in front of him, he followed along behind it. Just before reaching the scene of the accident the
street car which was following took the switch that is, went off the main line to the left upon
the switch lying alongside of the main track. Thereupon the defendant no longer followed that
the street car nor went to the left, but either kept straight ahead on the main street-car track or
a bit to the right. The car which the plaintiff intended to board was on the main line and bound in
an opposite direction to that in which the defendant was going. When the front of the "San
Marcelino" car, the one the plaintiff attempted to board, was almost in front of the defendant's
automobile, defendant's driver suddenly went to the right and struck and ran over the plaintiff,
as above described.
The judgment of the trial court was for defendant.
A careful examination of the record leads us to the conclusion that the defendant's driver was
guilty of negligence in running upon and over the plaintiff. He was passing an oncoming car upon
the wrong side. The plaintiff, in common out to board the car, was not obliged, for his own
protection, to observe whether a car was coming upon him from his left hand. He had only to
guard against those coming from the right. He knew that, according to the law of the road, no
automobile or other vehicle coming from his left should pass upon his side of the car. He needed
only to watch for cars coming from his right, as they were the only ones under the law permitted
to pass upon that side of the street car.
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 persons in article 1903 of the Civil Code for whose acts
the defendant would be responsible.
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 act 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 cease therefrom, becomes himself responsible for
such acts. The owner of an automobile who permits his chauffeur to drive up to 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 acts 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 a time that the owner, by his acquiescence, makes his driver's act his own.
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 give the
defendant an opportunity to 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 small as not to be sufficient to charge defendant with the negligence of the
driver.
Whether or not the owner of an automobile driven by a competent driver, would be responsible,
whether present or not, for the negligent acts of his driver when the automobile was a part of a
business enterprise, and was being driven at the time of the accident in furtherance of the
owner's business, we do not now decide.
The judgment appealed from is affirmed, with costs against the appellant.
Case Digest
Page 15 of 94

The facts of the case took place in the 1910s. Chapman visited a friend in Santa Ana and while he
was about to ride a vehicle to take him home he was struck by a car owned by Underwood and
driven by his chauffeur. Chapman was on the correct lane. Underwood was riding in the car
when the incident happened. Apparently, the chauffeur, coming from the opposite direction and
was driving straight ahead and when the automobile about to be boarded by Chapman was in
front of him, he [the chauffeur] instead of swerving left he suddenly swerved right to the
direction of Chapman thereby hitting and running over him.
ISSUE: Whether or not Underwood is liable for the negligent act of his chauffeur.
HELD: No. The general rule is that 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 thedriver cease
therefrom, becomes himself responsible for such acts. On the other hand, if the driver, by a
sudden act of negligence, and without the owner having a reasonable opportunity to prevent the
acts 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 a time that the owner, by his acquiescence, makes his drivers act his
own. In the case at bar, it was not shown that there was a sufficient period for Underwood to
dissuade the chauffeur from the negligent act as the swerving of the vehicle by
the chauffeur was sudden.
G.R. No. L-55963 December 1, 1989
SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,
vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION
ADMINISTRATION, respondents.
G.R. No. L-61045 December 1, 1989
NATIONAL IRRIGATION ADMINISTRATION, appellant,
vs.
SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees.
Cecilio V. Suarez, Jr. for Spouses Fontanilla.
Felicisimo C. Villaflor for NIA.

PARAS, J.:
In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the decision
dated March 20, 1980 of the then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose
City and its modification with respect to the denial of petitioner's claim for moral and exemplary
damages and attorneys fees.
In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the
aforesaid decision of the lower court. The original appeal of this case before the Court of Appeals
was certified to this Court and in the resolution of July 7, 1982, it was docketed with the
aforecited number. And in the resolution of April 3, this case was consolidated with G.R. No.
55963.
It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by
respondent National Irrigation Administration, a government agency bearing Plate No. IN-651,
then driven officially by Hugo Garcia, an employee of said agency as its regular driver, bumped a
bicycle ridden by Francisco Fontanilla, son of herein petitioners, and Restituto Deligo, at Maasin,
San Jose City along the Maharlika Highway. As a result of the impact, Francisco Fontanilla and
Restituto Deligo were injured and brought to the San Jose City Emergency Hospital for
treatment. Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he died.
Garcia was then a regular driver of respondent National Irrigation Administration who, at the
time of the accident, was a licensed professional driver and who qualified for employment as
such regular driver of respondent after having passed the written and oral examinations on
traffic rules and maintenance of vehicles given by National Irrigation Administration authorities.
The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by
petitioners-spouses on April 17, 1978 against respondent NIA before the then Court of First
Instance of Nueva Ecija, Branch VIII at San Jose City, for damages in connection with the death of
their son resulting from the aforestated accident.
After trial, the trial court rendered judgment on March 20, 1980 which directed respondent
National Irrigation Administration to pay damages (death benefits) and actual expenses to
petitioners. The dispositive portion of the decision reads thus:
. . . . . Judgment is here rendered ordering the defendant National Irrigation
Administration to pay to the heirs of the deceased P12,000.00 for the death of
Francisco Fontanilla; P3,389.00 which the parents of the deceased had spent
for the hospitalization and burial of the deceased Francisco Fontanilla; and to
pay the costs. (Brief for the petitioners spouses Fontanilla, p. 4; Rollo, p. 132)
Respondent National Irrigation Administration filed on April 21, 1980, its motion for
reconsideration of the aforesaid decision which respondent trial court denied in its Order of June
13, 1980. Respondent National Irrigation Administration thus appealed said decision to the Court
of Appeals (C.A.-G.R. No. 67237- R) where it filed its brief for appellant in support of its position.
Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed the
instant petition with this Court.
The sole issue for the resolution of the Court is: Whether or not the award of moral damages,
exemplary damages and attorney's fees is legally proper in a complaint for damages based on
quasi-delict which resulted in the death of the son of herein petitioners.
Petitioners allege:
1. The award of moral damages is specifically allowable. under paragraph 3 of
Article 2206 of the New Civil Code which provides that the spouse, legitimate
and illegitimate descendants and ascendants of the deceased may demand
moral damages for mental anguish by reason of the death of the deceased.
Should moral damages be granted, the award should be made to each of
petitioners-spouses individually and in varying amounts depending upon proof
of mental and depth of intensity of the same, which should not be less than
P50,000.00 for each of them.
2. The decision of the trial court had made an impression that respondent
National Irrigation Administration acted with gross negligence because of the
accident and the subsequent failure of the National Irrigation Administration
personnel including the driver to stop in order to give assistance to the,
victims. Thus, by reason of the gross negligence of respondent, petitioners
Page 16 of 94

become entitled to exemplary damages under Arts. 2231 and 2229 of the New
Civil Code.
3. Petitioners are entitled to an award of attorney's fees, the amount of which
(20%) had been sufficiently established in the hearing of May 23, 1979.
4. This petition has been filed only for the purpose of reviewing the findings of
the lower court upon which the disallowance of moral damages, exemplary
damages and attorney's fees was based and not for the purpose of disturbing
the other findings of fact and conclusions of law.
The Solicitor General, taking up the cudgels for public respondent National Irrigation
Administration, contends thus:
1. The filing of the instant petition is rot proper in view of the appeal taken by
respondent National Irrigation Administration to the Court of Appeals against
the judgment sought to be reviewed. The focal issue raised in respondent's
appeal to the Court of Appeals involves the question as to whether or not the
driver of the vehicle that bumped the victims was negligent in his operation of
said vehicle. It thus becomes necessary that before petitioners' claim for
moral and exemplary damages could be resolved, there should first be a
finding of negligence on the part of respondent's employee-driver. In this
regard, the Solicitor General alleges that the trial court decision does not
categorically contain such finding.
2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-
Appellee's Brief" dated December 28, 1981 by petitioners in the appeal (CA-
G.R. No. 67237-R; and G. R. No.61045) of the respondent National Irrigation
Administration before the Court of Appeals, is an explicit admission of said
petitioners that the herein petition, is not proper. Inconsistent procedures are
manifest because while petitioners question the findings of fact in the Court of
Appeals, they present only the questions of law before this Court which
posture confirms their admission of the facts.
3. The fact that the parties failed to agree on whether or not negligence
caused the vehicular accident involves a question of fact which petitioners
should have brought to the Court of Appeals within the reglementary period.
Hence, the decision of the trial court has become final as to the petitioners
and for this reason alone, the petition should be dismissed.
4. Respondent Judge acted within his jurisdiction, sound discretion and in
conformity with the law.
5. Respondents do not assail petitioners' claim to moral and exemplary
damages by reason of the shock and subsequent illness they suffered because
of the death of their son. Respondent National Irrigation Administration,
however, avers that it cannot be held liable for the damages because it is an
agency of the State performing governmental functions and driver Hugo
Garcia was a regular driver of the vehicle, not a special agent who was
performing a job or act foreign to his usual duties. Hence, the liability for the
tortious act should. not be borne by respondent government agency but by
driver Garcia who should answer for the consequences of his act.
6. Even as the trial court touched on the failure or laxity of respondent
National Irrigation Administration in exercising due diligence in the selection
and supervision of its employee, the matter of due diligence is not an issue in
this case since driver Garcia was not its special agent but a regular driver of
the vehicle.
The sole legal question on whether or not petitioners may be entitled to an award of moral and
exemplary damages and attorney's fees can very well be answered with the application of Arts.
2176 and 2180 of theNew Civil Code.
Art. 2176 thus provides:
Whoever by act omission causes damage to another, there being fault or
negligence, is obliged to pay for damage done. Such fault or negligence, if
there is no pre-existing cotractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter
Paragraphs 5 and 6 of Art. 21 80 read as follows:
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even the
though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent.;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in Art. 2176 shall be
applicable.
The liability of the State has two aspects. namely:
1. Its public or governmental aspects where it is liable for the tortious acts of
special agents only.
2. Its private or business aspects (as when it engages in private enterprises)
where it becomes liable as an ordinary employer. (p. 961, Civil Code of the
Philippines; Annotated, Paras; 1986 Ed. ).
In this jurisdiction, the State assumes a limited liability for the damage caused by the tortious
acts or conduct of its special agent.
Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability for
acts done through special agents. The State's agent, if a public official, must not only be specially
commissioned to do a particular task but that such task must be foreign to said official's usual
governmental functions. If the State's agent is not a public official, and is commissioned to
perform non-governmental functions, then the State assumes the role of an ordinary employer
and will be held liable as such for its agent's tort. Where the government commissions a private
individual for a special governmental task, it is acting through a special agent within the meaning
of the provision. (Torts and Damages, Sangco, p. 347, 1984 Ed.)
Certain functions and activities, which can be performed only by the government, are more or
less generally agreed to be "governmental" in character, and so the State is immune from tort
liability. On the other hand, a service which might as well be provided by a private corporation,
and particularly when it collects revenues from it, the function is considered a "proprietary" one,
as to which there may be liability for the torts of agents within the scope of their employment.
The National Irrigation Administration is an agency of the government exercising proprietary
functions, by express provision of Rep. Act No. 3601. Section 1 of said Act provides:
Page 17 of 94

Section 1. Name and domicile.-A body corporate is hereby created which shall
be known as the National Irrigation Administration, hereinafter called the NIA
for short, which shall be organized immediately after the approval of this Act.
It shall have its principal seat of business in the City of Manila and shall have
representatives in all provinces for the proper conduct of its business.
Section 2 of said law spells out some of the NIA's proprietary functions. Thus-
Sec. 2. Powers and objectives.-The NIA shall have the following powers and
objectives:
(a) x x x x x x x x x x x x x x x x x x
(b) x x x x x x x x x x x x x x x x x x
(c) To collect from the users of each irrigation system constructed by it such
fees as may be necessary to finance the continuous operation of the system
and reimburse within a certain period not less than twenty-five years cost of
construction thereof; and
(d) To do all such other tthings and to transact all such business as are directly
or indirectly necessary, incidental or conducive to the attainment of the above
objectives.
Indubitably, the NIA is a government corporation with juridical personality and not a mere
agency of the government. Since it is a corporate body performing non-governmental functions,
it now becomes liable for the damage caused by the accident resulting from the tortious act of its
driver-employee. In this particular case, the NIA assumes the responsibility of an ordinary
employer and as such, it becomes answerable for damages.
This assumption of liability, however, is predicated upon the existence of negligence on the part
of respondent NIA. The negligence referred to here is the negligence of supervision.
At this juncture, the matter of due diligence on the part of respondent NIA becomes a crucial
issue in determining its liability since it has been established that respondent is a government
agency performing proprietary functions and as such, it assumes the posture of an ordinary
employer which, under Par. 5 of Art. 2180, is responsible for the damages caused by its
employees provided that it has failed to observe or exercise due diligence in the selection and
supervision of the driver.
It will be noted from the assailed decision of the trial court that "as a result of the impact,
Francisco Fontanilla wasthrown to a distance 50 meters away from the point of impact while
Restituto Deligo was thrown a little bit further away. The impact took place almost at the edge of
the cemented portion of the road." (Emphasis supplied,) [page 26, Rollo]
The lower court further declared that "a speeding vehicle coming in contact with a person causes
force and impact upon the vehicle that anyone in the vehicle cannot fail to notice. As a matter of
fact, the impact was so strong as shown by the fact that the vehicle suffered dents on the right
side of the radiator guard, the hood, the fender and a crack on the radiator as shown by the
investigation report (Exhibit "E"). (Emphasis supplied) [page 29, Rollo]
It should be emphasized that the accident happened along the Maharlika National Road within
the city limits of San Jose City, an urban area. Considering the fact that the victim was thrown 50
meters away from the point of impact, there is a strong indication that driver Garcia was driving
at a high speed. This is confirmed by the fact that the pick-up suffered substantial and heavy
damage as above-described and the fact that the NIA group was then "in a hurry to reach the
campsite as early as possible", as shown by their not stopping to find out what they bumped as
would have been their normal and initial reaction.
Evidently, there was negligence in the supervision of the driver for the reason that they were
travelling at a high speed within the city limits and yet the supervisor of the group, Ely Salonga,
failed to caution and make the driver observe the proper and allowed speed limit within the city.
Under the situation, such negligence is further aggravated by their desire to reach their
destination without even checking whether or not the vehicle suffered damage from the object it
bumped, thus showing imprudence and reckelessness on the part of both the driver and the
supervisor in the group.
Significantly, this Court has ruled that even if the employer can prove the diligence in the
selection and supervision (the latter aspect has not been established herein) of the employee,
still if he ratifies the wrongful acts, or take no step to avert further damage, the employer would
still be liable. (Maxion vs. Manila Railroad Co., 44 Phil. 597).
Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970, 34 SCRA
618), this Court held that a driver should be especially watchful in anticipation of others who may
be using the highway, and his failure to keep a proper look out for reasons and objects in the line
to be traversed constitutes negligence.
Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-spouses
the amounts of P12,000.00 for the death of Francisco Fontanilla; P3,389.00 for hospitalization
and burial expenses of the aforenamed deceased; P30,000.00 as moral damages; P8,000.00 as
exemplary damages and attorney's fees of 20% of the total award.
SO ORDERED.
G.R. No. 71137 October 5, 1989
SPOUSES FEDERICO FRANCO and FELICISIMA R. FRANCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS. SUSAN CHUAY and LOLITA
LUGUErespondents.

FERNAN, C.J.:
The instant petition for review of a decision of the Court of Appeals deals mainly with the nature
of an employer's liability for his employee's negligent act.
At about 7:30 in the evening of October 18, 1974, Macario Yuro swerved the northbound Franco
Bus with Plate No. XY320-PUB he was driving to the left to avoid hitting a truck with a trailer
parked facing north along the cemented pavement of the MacArthur Highway at Barrio Talaga,
Capas Tarlac, thereby taking the lane of an incoming Isuzu Mini Bus bearing Plate No. YL-735
being driven by one Magdaleno Lugue and making a collision between the two (2) vehicles an
unavoidable and disastrous eventuality.
Dragged fifteen (15) meters from the point of impact (midway the length of the parked truck
with trailer), the mini bus landed right side down facing south in the canal of the highway, a total
wreck. The Franco Bus was also damaged but not as severely. The collision resulted in the deaths
of the two (2) drivers, Macario Yuro and Magdaleno Lugue, and two (2) passengers of the mini
bus, Romeo Bue and Fernando Chuay.
Consequently, Antonio Reyes, the registered owner of the Isuzu Mini Bus, Mrs. Susan Chuay, the
wife of victim Fernando Chuay, and Mrs. Lolita Lugue, the wife of driver-victim Magdaleno Lugue,
Page 18 of 94

filed an action for damages through reckless imprudence before the Court of First Instance of
Pampanga in Angeles City, Branch IV, docketed as Civil Case No. 2154 against Mr. & Mrs.
Federico Franco, the owners and operators of the Franco Transportation Company. The
complaint alleged that: (a) the recklessness and imprudence of the Franco Bus driver caused the
collision which resulted in his own death and that of the mini bus driver and two (2) other
passengers thereof; (b) that as a consequence of the vehicular mishap, the Isuzu Mini Bus
became a total wreck resulting in actual damages amounting to P50,000.00 and the loss of an
average net income of P120.00 daily or P3,600.00 monthly multiplied by a minimum of one more
year of serviceability of said mini bus or P40,200.00; and, (c) that in view of the death of the
three (3) passengers aforementioned, the heirs of each should be awarded a minimum of
P12,000.00 and the expected average income of P6,000.00 each of the driver and one of the
passengers and P12,000.00 of the Chinese businessman passenger.
In answer to the complaint, defendants set up, among others, the affirmative defense that as
owners and operators of the Franco Transportation Company, they exercised due diligence in the
selection and supervision of all their employees, including the deceased driver Macario Yuro.
Said defense was, however, rejected by the trial court in its decision
1
dated May 17, 1978, for
the reason that the act of the Franco Bus driver was a negligent act punishable by law resulting in
a civil obligation arising from Article 103 of the Revised Penal Code and not from Article 2180 of
the Civil Code. It said: "This is a case of criminal negligence out of which civil liability arises, and
not a case of civil negligence and the defense of having acted like a good father of a family or
having trained or selected the drivers of his truck is no defense to avoid civil liability."
2
On this
premise, the trial court ruled as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan Chuay, and against the
defendants Mr. and Mrs. Federico Franco, ordering the latter:
(1) To pay Antonio Reyes, actual and compensatory damages in the amount of
P90,000.00 for the Isuzu Mini Bus;
(2) To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and
compensatory damages in the total sum of P18,000.00;
(3) To pay Susan Chuay, the widow of Fernando Chuay, actual and
compensatory damages in the total sum of P24,000.00; and
(4) To pay attorney's fee in the amount of P5.000.00;
All with legal interests from the filing of this suit on November 11, 1974 until
paid; and the costs of this suit.
SO ORDERED.
3

On appeal by herein petitioners as defendants-appellants, respondent appellate court, agreeing
with the lower court, held that defendants-appellants' driver who died instantly in the vehicular
collision, was guilty of reckless or criminal imprudence punishable by law in driving appellants'
bus; that the civil obligation of the appellants arises from Article 103 of the Revised Penal Code
resulting in the subsidiary liability of the appellants under the said provisions,
4
that the case
subject of appeal is one involving culpable negligence out of which civil liability arises and is not
one of civil negligence;
5
and that there is nothing in Articles 102 and 103 of the Revised Penal
Code which requires a prior judgment of conviction of the erring vehicle driver and his obligation
to pay his civil liability before the said provisions can be applied.
6
Respondent appellate court
increased the award of damages granted by the lower court as follows:
WHEREFORE, the decision appealed from is hereby modified as follows:
1. To pay Susan Chuay, widow of Fernando Chuay, the sum of P30,000.00 for
the latter's death and P112,000.00 for loss of earning capacity;
2. To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of P30,000.00 for
the latter's death and P62,000.00 for loss of earning capacity. The rest of the
judgment appealed from is affirmed. Costs against defendants-appellants.
SO ORDERED.
7

On April 1, 1985, petitioners filed a motion for reconsideration of the aforesaid respondent
appellate court's decision dated January 2, 1985 but the same was denied on May 13, 1985.
Hence, the instant petition raising two (2) legal questions: first, whether the action for recovery
of damages instituted by herein private respondents was predicated upon crime or quasi-delict;
and second, whether respondent appellate court in an appeal filed by the defeated parties,
herein petitioners, may properly increase the award of damages in favor of the private
respondents Chuay and Lugue, prevailing parties in the lower court, who did not appeal said
court's decision.
Petitioners contend that the allegations in paragraph 9 of the Amended Complaint
8
of herein
private respondents as plaintiffs in Civil Case No. 2154 unequivocally claim that the former as the
employers of Macario Yuro, the driver of the Franco Bus who caused the vehicular mishap, are
jointly and severally liable to the latter for the damages suffered by them which thus makes Civil
Case No. 2154 an action predicated upon a quasi-delict under the Civil Code subject to the
defense that the employer exercised all the diligence of a good father of a family in the selection
and supervision of their employees.
We find merit in this contention. Distinction should be made between the subsidiary liability of
the employer under the Revised Penal Code and the employer's primary liability under the Civil
Code which is quasi-delictual or tortious in character. The first type of liability is governed by
Articles 102 and 103 of the Revised Penal Code which provide as follows:
Art. 102. Subsidiary civil liability of innkeepers, tavern-keepers and proprietors
of establishments. In default of the persons criminally liable, innkeepers,
tavern-keepers, and any other persons or corporations shall be civilly liable for
crimes committed in their establishments, in all cases where a violation of
municipal ordinances or some general or special police regulations shall have
been committed by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods taken by
robbery or theft within their houses from guests lodging therein, or for the
payment of the value thereof, provided that such guests shall have notified in
advance the innkeeper himself, or the person representing him, of the
deposits of such goods within the inn; and shall furthermore have followed
the directions which such innkeeper or his representative may have given
them with respect to the care and vigilance over such goods. No liability shall
attach in case of robbery with violence against or intimidation of persons
unless committed by the innkeeper's employees.
Page 19 of 94

Art. 103. Subsidiary civil liability of other persons. The subsidiary liability
established in the next preceding article shall also apply to employers,
teachers, persons, and corporations engaged in any kind of industry for
felonies committed by the servants, pupils, workmen, apprentices, or
employees in the discharge of their duties;
while the second kind is governed by the following provisions of the Civil Code:
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. 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence
under the Penal Code. But the plaintiff cannot recover damages twice for the
same act or omission of the defendant.
Art. 2180. 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.
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 Article 103 of the Revised Penal Code, liability originates from a delict committed by the
employee who is primarily liable therefor and upon whose primary liability his employer's
subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded
against, it is imperative that there should be a criminal action whereby the employee's criminal
negligence or delict and corresponding liability therefor are proved. If no criminal action was
instituted, the employer's liability would not be predicated under Article 103.
9

In the case at bar, no criminal action was instituted because the person who should stand as the
accused and the party supposed to be primarily liable for the damages suffered by private
respondents as a consequence of the vehicular mishap died. Thus, petitioners' subsidiary liability
has no leg to stand on considering that their liability is merely secondary to their employee's
primary liability. Logically therefore, recourse under this remedy is not possible.
On the other hand, under Articles 2176 and 2180 of the Civil Code, liability is based on culpa
aquiliana which holds the employer primarily liable for tortious acts of its employees subject,
however, to the defense that the former exercised all the diligence of a good father of a family in
the selection and supervision of his employees.
Respondent appellate court relies on the case of Arambulo, supra, where it was held that the
defense of observance of due diligence of a good father of a family in the selection and
supervision of employees is not applicable to the subsidiary liability provided in Article 20 of the
Penal Code (now Article 103 of the Revised Penal Code). By such reliance, it would seem that
respondent appellate court seeks to enforce the subsidiary civil liability of the employer without
a criminal conviction of the party primarily liable therefor. This is not only erroneous and absurd
but is also fraught with dangerous consequences. It is erroneous because the conviction of the
employee primarily liable is a condition sine qua non for the employer's subsidiary liability
10
and,
at the same time, absurd because we will be faced with a situation where the employer is held
subsidiarily liable even without a primary liability being previously established. It is likewise
dangerous because, in effect, the employer's subsidiary liability would partake of a solidary
obligation resulting in the law's amendment without legislative sanction.
The Court in the aforecited M.D. Transit case went further to say that there can be no automatic
subsidiary liability of defendant employer under Article 103 of the Revised Penal Code where his
employee has not been previously criminally convicted.
Having thus established that Civil Case No. 2154 is a civil action to impose the primary liability of
the employer as a result of the tortious act of its alleged reckless driver, we confront ourselves
with the plausibility of defendants-petitioners' defense that they observed due diligence of a
good father of a family in the selection and supervision of their employees.
On this point, the appellate court has unequivocally spoken in affirmation of the lower court's
findings, to wit:
Anyway, a perusal of the record shows that the appellants were not able to
establish the defense of a good father of a family in the supervision of their
bus driver. The evidence presented by the appellants in this regard is purely
self-serving. No independent evidence was presented as to the alleged
supervision of appellants' bus drivers, especially with regard to driving habits
and reaction to actual traffic conditions. The appellants in fact admitted that
the only kind of supervision given the drivers referred to the running time
between the terminal points of the line (t.s.n., September 16, 1976, p. 21).
Moreover, the appellants who ran a fleet of 12 buses plying the Manila-Laoag
line, have only two inspectors whose duties were only ticket inspection. There
is no evidence that they are really safety inspectors.
11

Basically, the Court finds that these determinations are factual in nature. As a painstaking review
of the evidence presented in the case at bar fails to disclose any evidence or circumstance of
note sufficient to overrule said factual findings and conclusions, the Court is inclined to likewise
reject petitioners' affirmative defense of due diligence. The wisdom of this stance is made more
apparent by the fact that the appellate court's conclusions are based on the findings of the lower
court which is in a better position to evaluate the testimonies of the witnesses during trial. As a
rule, this Court respects the factual findings of the appellate and trial courts and accord them a
certain measure of finality.
12
Consequently, therefore, we find petitioners liable for the damages
claimed pursuant to their primary liability under the Civil Code.
On the second legal issue raised in the instant petition, we agree with petitioners' contention
that the Intermediate Appellate Court (later Court of Appeals) is without jurisdiction to increase
the amount of damages awarded to private respondents Chuay and Lugue, neither of whom
appealed the decision of the lower court. While an appellee who is not also an appellant may
assign error in his brief if his purpose is to maintain the judgment on other grounds, he cannot
ask for modification or reversal of the judgment or affirmative relief unless he has also
Page 20 of 94

appealed.
13
For failure of plaintiffs-appellees, herein private respondents, to appeal the lower
court's judgment, the amount of actual damages cannot exceed that awarded by it.
14

Furthermore, the records
15
show that plaintiffs-private respondents limited their claim for actual
and compensatory damages to the supposed average income for a period of one (1) year of
P6,000.00 for the driver Magdaleno Lugue and P12,000.00 for the Chinese businessman
Fernando Chuay. We feel that our award should not exceed the said amounts .
16

However, the increase in awards for indemnity arising from death to P30,000.00 each remains,
the same having been made in accordance with prevailing jurisprudence decreeing such increase
in view of the depreciated Philippine currency.
17

WHEREFORE, the decision of the Court of Appeals is hereby modified decreasing the award to
private respondents of actual and compensatory damages for loss of average income for the
period of one year to P6,000.00 for the deceased Magdaleno Lugue and P12,000.00 for the
deceased Fernando Chuay. The rest of the judgment appealed from is hereby affirmed. Costs
against the private respondents. This decision is immediately executory.
SO ORDERED.
CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and LUISA SO
VASQUEZ, and CEBU DOCTORS HOSPITAL, INC.,respondents.
D E C I S I O N
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.
Page 21 of 94

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
Page 22 of 94

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
Page 23 of 94

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. 115024. February 7, 1996]
MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI and ALEXANDER
COMMERCIAL, INC., respondents.
[G.R. No. 117944. February 7, 1996]
RICHARD LI, petitioner, vs. COURT OF APPEALS and MA. LOURDES VALENZUELA, respondents.
D E C I S I O N
KAPUNAN, J.:
These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court
stem from an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial
Court of Quezon City for injuries sustained by her in a vehicular accident in the early morning
of June 24, 1990. The facts found by the trial court are succinctly summarized by the Court of
Appeals below:
This is an action to recover damages based on quasi-delict, for serious physical injuries sustained
in a vehicular accident.
Plaintiffs version of the accident is as follows: At around 2:00 in the morning of June 24, 1990,
plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No. FFU 542 from
her restaurant at Marcos highway to her home at Palanza Street, Araneta Avenue. She was
travelling along Aurora Blvd. with a companion, Cecilia Ramon, heading towards the direction
of Manila. Before reaching A. Lake Street, she noticed something wrong with her tires; she
stopped at a lighted place where there were people, to verify whether she had a flat tire and to
solicit help if needed. Having been told by the people present that her rear right tire was flat and
that she cannot reach her home in that cars condition, she parked along the sidewalk, about
1 feet away, put on her emergency lights, alighted from the car, and went to the rear to open
the trunk. She was standing at the left side of the rear of her car pointing to the tools to a man
who will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven
by defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc.
Because of the impact plaintiff was thrown against the windshield of the car of the defendant,
which was destroyed, and then fell to the ground. She was pulled out from under defendants
car. Plaintiffs left leg was severed up to the middle of her thigh, with only some skin and sucle
connected to the rest of the body. She was brought to
the UERM Medical Memorial Center where she was found to have a traumatic amputation, leg,
left up to distal thigh (above knee). She was confined in the hospital for twenty (20) days and
was eventually fitted with an artificial leg. The expenses for the hospital confinement (P
120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants from the car
insurance.
In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary
damages in the amount of P100,000.00 and other medical and related expenses amounting to a
total of P180,000.00, including loss of expected earnings.
Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph;
considering that it was raining, visibility was affected and the road was wet. Traffic was light. He
testified that he was driving along the inner portion of the right lane of Aurora Blvd. towards the
direction of Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street,
San Juan, with a car coming from the opposite direction, travelling at 80 kph, with full bright
lights. Temporarily blinded, he instinctively swerved to the right to avoid colliding with the
oncoming vehicle, and bumped plaintiffs car, which he did not see because it was midnight blue
in color, with no parking lights or early warning device, and the area was poorly lighted. He
alleged in his defense that the left rear portion of plaintiffs car was protruding as it was then at
a standstill diagonally on the outer portion of the right lane towards Araneta Avenue (par. 18,
Answer). He confirmed the testimony of plaintiffs witness that after being bumped the car of the
plaintiff swerved to the right and hit another car parked on the sidewalk. Defendants
counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she was not a
licensed driver.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the
sketch of the three cars involved in the accident, testified that the plaintiffs car was near the
sidewalk; this witness did not remember whether the hazard lights of plaintiffs car were on, and
did not notice if there was an early warning device; there was a street light at the corner of
Aurora Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e. things can be
seen (p. 16, tsn, Oct. 28, 1991).
A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car
and opened the trunk compartment, defendants car came approaching very fast ten meters
from the scene; the car was zigzagging. The rear left side of plaintiffs car was bumped by the
front right portion of defendants car; as a consequence, the plaintiffs car swerved to the right
and hit the parked car on the sidewalk. Plaintiff was thrown to the windshield of defendants car,
which was destroyed, and landed under the car. He stated that defendant was under the
influence of liquor as he could smell it very well (pp. 43, 79, tsn., June 17, 1991).
After trial, the lower court sustained the plaintiffs submissions and found defendant
Richard Li guilty of gross negligence and liable for damages under Article 2176 of the Civil Code.
The trial court likewise held Alexander Commercial, Inc., Lis employer, jointly and severally liable
for damages pursuant to Article 2180. It ordered the defendants to jointly and severally pay the
following amounts:
1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as
a result of her severed left leg;
Page 24 of 94

2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiffs
Bistro La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a
month, as unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990
until the date of this judgment; and (c) P30,000.00, a month, for unrealized profits in plaintiffs
two (2) beauty salons from July, 1990 until the date of this decision;
3. P1,000,000.00, in moral damages;
4. P50,000.00, as exemplary damages,
5. P60,000.00, as reasonable attorneys fees; and
6. Costs.
As a result of the trial courts decision, defendants filed an Omnibus Motion for New Trial
and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard
Li), tending to show that the point of impact, as depicted by the pieces of glass/debris from the
parties cars, appeared to be at the center of the right lane of Aurora Blvd. The trial court denied
the motion. Defendants forthwith filed an appeal with the respondent Court of Appeals. In a
Decision rendered March 30, 1994, the Court of Appeals found that there was ample basis from
the evidence of record for the trial courts finding that the plaintiffs car was properly parked at
the right, beside the sidewalk when it was bumped by defendants car.[1] Dismissing the
defendants argument that the plaintiffs car was improperly parked, almost at the center of the
road, the respondent court noted that evidence which was supposed to prove that the car was at
or near center of the right lane was never presented during the trial of the case.
[2]
The
respondent court furthermore observed that:
Defendant Lis testimony that he was driving at a safe speed of 55 km./hour is self serving; it was
not corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was
outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of
June 24, 1990 when his attention was caught by a beautiful lady (referring to the plaintiff)
alighting from her car and opening the trunk compartment; he noticed the car of Richard Li
approaching very fast ten (10) meters away from the scene; defendants car was zigzagging,
although there were no holes and hazards on the street, and bumped the leg of the plaintiff
who was thrown against the windshield of defendants car, causing its destruction. He came to
the rescue of the plaintiff, who was pulled out from under defendants car and was able to say
hurting words to Richard Li because he noticed that the latter was under the influence of
liquor, because he could smell it very well (p. 36, et. seq., tsn, June 17, 1991). He knew that
plaintiff owned a beerhouse in Sta. Mesa in the 1970s, but did not know either plaintiff or
defendant Li before the accident.
In agreeing with the trial court that the defendant Li was liable for the injuries sustained by
the plaintiff, the Court of Appeals, in its decision, however, absolved the Lis employer, Alexander
Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the
amount of moral damages to P500,000.00. Finding justification for exemplary damages, the
respondent court allowed an award of P50,000.00 for the same, in addition to costs, attorneys
fees and the other damages. The Court of Appeals, likewise, dismissed the defendants
counterclaims.
[3]

Consequently, both parties assail the respondent courts decision by filing two separate
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held
liable for damages because the proximate cause of the accident was Ma. Lourdes Valenzuelas
own negligence. Alternatively, he argues that in the event that this Court finds him negligent,
such negligence ought to be mitigated by the contributory negligence of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent
courts decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of
the car driven by Richard Li and insofar as it reduces the amount of the actual and moral
damages awarded by the trial court.
[4]

As the issues are intimately related, both petitions are hereby consolidated. It is plainly
evident that the petition for review in G.R. No. 117944 raises no substantial questions of law.
What it, in effect, attempts to have this Court review are factual findings of the trial court, as
sustained by the Court of Appeals finding Richard Li grossly negligent in driving the Mitsubishi
Lancer provided by his company in the early morning hours of June 24, 1990. This we will not do.
As a general rule, findings of fact of the Court of Appeals are binding and conclusive upon us, and
this Court will not normally disturb such factual findings unless the findings of fact of the said
court are palpably unsupported by the evidence on record or unless the judgment itself is based
on a misapprehension of facts.
[5]

In the first place, Valenzuelas version of the incident was fully corroborated by an
uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located just
across the scene of the accident. On trial, he testified that he observed a car being driven at a
very fast speed, racing towards the general direction of Araneta Avenue.
[6]
Rodriguez further
added that he was standing in front of his establishment, just ten to twenty feet away from the
scene of the accident, when he saw the car hit Valenzuela, hurtling her against the windshield of
the defendants Mitsubishi Lancer, from where she eventually fell under the defendants car.
Spontaneously reacting to the incident, he crossed the street, noting that a man reeking with the
smell of liquor had alighted from the offending vehicle in order to survey the incident.
[7]
Equally
important, Rodriguez declared that he observed Valenzuelas car parked parallel and very near
the sidewalk,
[8]
contrary to Lis allegation that Valenzuelas car was close to the center of the right
lane. We agree that as between Lis self-serving asseverations and the observations of a
witness who did not even know the accident victim personally and who immediately gave a
statement of the incident similar to his testimony to the investigator immediately after the
incident, the latters testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of the transcript, We are not
prepared to set aside the trial courts reliance on the testimony of Rodriguez negating
defendants assertion that he was driving at a safe speed. While Rodriguez drives only a
motorcycle, his perception of speed is not necessarily impaired. He was subjected to cross-
examination and no attempt was made to question his competence or the accuracy of his
statement that defendant was driving very fast. This was the same statement he gave to the
police investigator after the incident, as told to a newspaper report (Exh. P). We see no
compelling basis for disregarding his testimony.
The alleged inconsistencies in Rodriguez testimony are not borne out by an examination of the
testimony. Rodriguez testified that the scene of the accident was across the street where his
beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not
state that the accident transpired immediately in front of his establishment. The ownership of
the Lambingan sa Kambingan is not material; the business is registered in the name of his
mother, but he explained that he owns the establishment (p. 5, tsn., June 20, 1991).
Page 25 of 94

Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on the night
the accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that
there was a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn., Oct.
20, 1991).
With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a
heavy rain and the rain has stopped and he was outside his establishment at the time the
accident transpired (pp. 64-65, tsn.,June 17, 1991). This was consistent with plaintiffs testimony
that it was no longer raining when she left Bistro La Conga (pp. 10-11, tsn., April 29, 1991). It was
defendant Li who stated that it was raining all the way in an attempt to explain why he was
travelling at only 50-55 kph. (p. 11, tsn., Oct. 14, 1991). As to the testimony of Pfc. Ramos that it
was raining, he arrived at the scene only in response to a telephone call after the accident had
transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial inconsistencies in Rodriguezs
testimony that would impair the essential integrity of his testimony or reflect on his honesty. We
are compelled to affirm the trial courts acceptance of the testimony of said eyewitness.
Against the unassailable testimony of witness Rodriguez we note that Lis testimony was
peppered with so many inconsistencies leading us to conclude that his version of the accident
was merely adroitly crafted to provide a version, obviously self-serving, which would exculpate
him from any and all liability in the incident. Against Valenzuelas corroborated claims, his
allegations were neither backed up by other witnesses nor by the circumstances proven in the
course of trial. He claimed that he was driving merely at a speed of 55 kph. when out of
nowhere he saw a dark maroon lancer right in front of him, which was (the) plaintiffs car. He
alleged that upon seeing this sudden apparition he put on his brakes to no avail as the road
was slippery.
[9]

One will have to suspend disbelief in order to give credence to Lis disingenuous and
patently self-serving asseverations. The average motorist alert to road conditions will have no
difficulty applying the brakes to a car traveling at the speed claimed by Li. Given a light rainfall,
the visibility of the street, and the road conditions on a principal metropolitan thoroughfare
like Aurora Boulevard, Li would have had ample time to react to the changing conditions of the
road if he were alert - as every driver should be - to those conditions. Driving exacts a more than
usual toll on the senses. Physiological fight or flight
[10]
mechanisms are at work, provided such
mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc.
[11]
Lis failure to react
in a manner which would have avoided the accident could therefore have been only due to
either or both of the two factors: 1) that he was driving at a very fast speed as testified by
Rodriquez; and 2) that he was under the influence of alcohol.
[12]
Either factor working
independently would have diminished his responsiveness to road conditions, since normally he
would have slowed down prior to reaching Valenzuelas car, rather than be in a situation forcing
him to suddenly apply his brakes. As the trial court noted (quoted with approval by respondent
court):
Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the
incident, he said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon
lancer right in front of him, which was plaintiffs car, indicating, again, thereby that, indeed, he
was driving very fast, oblivious of his surroundings and the road ahead of him, because if he was
not, then he could not have missed noticing at a still far distance the parked car of the plaintiff at
the right side near the sidewalk which had its emergency lights on, thereby avoiding forcefully
bumping at the plaintiff who was then standing at the left rear edge of her car.
Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw
the plaintiffs car in front of him, but that it failed as the road was wet and slippery, this goes to
show again, that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise,
he could have easily completely stopped his car, thereby avoiding the bumping of the plaintiff,
notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he was running
slow, as he claimed, at only about 55 kilometers per hour, then, inspite of the wet and slippery
road, he could have avoided hitting the plaintiff by the mere expedient or applying his brakes at
the proper time and distance.
It could not be true, therefore, as he now claims during his testimony, which is contrary to what
he told the police immediately after the accident and is, therefore, more believable, that he did
not actually step on his brakes, but simply swerved a little to the right when he saw the on-
coming car with glaring headlights, from the opposite direction, in order to avoid it.
For, had this been what he did, he would not have bumped the car of the plaintiff which was
properly parked at the right beside the sidewalk. And, it was not even necessary for him to
swerve a little to the right in order to safely avoid a collision with the on-coming car, considering
that Aurora Blvd. is a double lane avenue separated at the center by a dotted white paint, and
there is plenty of space for both cars, since her car was running at the right lane going towards
Manila and the on-coming car was also on its right lane going to Cubao.
[13]

Having come to the conclusion that Li was negligent in driving his company-issued
Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was
likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard, which
entire area Li points out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory
negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required to
conform for his own protection.
[14]
Based on the foregoing definition, the standard or act to
which, according to petitioner Li, Valenzuela ought to have conformed for her own protection
was not to park at all at any point of Aurora Boulevard, a no parking zone. We cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted with
an emergency is not to be held up to the standard of conduct normally applied to an individual
who is in no such situation. The law takes stock of impulses of humanity when placed in
threatening or dangerous situations and does not require the same standard of thoughtful and
reflective care from persons confronted by unusual and oftentimes threatening
conditions.
[15]
Under the emergency rule adopted by this Court in Gan vs Court of
Appeals,
[16]
an individual who suddenly finds himself in a situation of danger and is required to
act without much time to consider the best means that may be adopted to avoid the impending
danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection
may appear to be a better solution, unless the emergency was brought by his own negligence.
[17]

Applying this principle to a case in which the victims in a vehicular accident swerved to the
wrong lane to avoid hitting two children suddenly darting into the street, we held, in Mc Kee vs.
Intermediate Appellate Court,
[18]
that the driver therein, Jose Koh, adopted the best means
Page 26 of 94

possible in the given situation to avoid hitting the children. Using the emergency rule the
court concluded that Koh, in spite of the fact that he was in the wrong lane when the collision
with an oncoming truck occurred, was not guilty of negligence.
[19]

While the emergency rule applies to those cases in which reflective thought, or the
opportunity to adequately weigh a threatening situation is absent, the conduct which is required
of an individual in such cases is dictated not exclusively by the suddenness of the event which
absolutely negates thoughtful care, but by the over-all nature of the circumstances. A woman
driving a vehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at
a point which is both convenient for her to do so and which is not a hazard to other motorists.
She is not expected to run the entire boulevard in search for a parking zone or turn on a dark
Street or alley where she would likely find no one to help her. It would be hazardous for her not
to stop and assess the emergency (simply because the entire length of Aurora Boulevard is a no-
parking zone) because the hobbling vehicle would be both a threat to her safety and to other
motorists. In the instant case, Valenzuela, upon reaching that portion of Aurora Boulevard close
to A. Lake St., noticed that she had a flat tire. To avoid putting herself and other motorists in
danger, she did what was best under the situation. As narrated by respondent court:
She stopped at a lighted place where there were people, to verify whether she had a flat tire
and to solicit help if needed. Having been told by the people present that her rear right tire was
flat and that she cannot reach her home she parked along the sidewalk, about 1 feet away,
behind a Toyota Corona Car.
[20]
In fact, respondent court noted, Pfc. Felix Ramos, the
investigator on the scene of the accident confirmed that Valenzuelas car was parked very close
to the sidewalk.
[21]
The sketch which he prepared after the incident showed Valenzuelas car
partly straddling the sidewalk, clear and at a convenient distance from motorists passing the
right lane of Aurora Boulevard. This fact was itself corroborated by the testimony of witness
Rodriguez.
[22]

Under the circumstances described, Valenzuela did exercise the standard reasonably
dictated by the emergency and could not be considered to have contributed to the unfortunate
circumstances which eventually led to the amputation of one of her lower extremities. The
emergency which led her to park her car on a sidewalk in Aurora Boulevard was not of her own
making, and it was evident that she had taken all reasonable precautions.
Obviously in the case at bench, the only negligence ascribable was the negligence of Li on
the night of the accident. Negligence, as it is commonly understood is conduct which creates an
undue risk of harm to others.
[23]
It is the failure to observe that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers
injury.
[24]
We stressed, in Corliss vs. Manila Railroad Company,
[25]
that negligence is the want of
care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly
demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that
he was driving at a fast speed at about 2:00 A.M. after a heavy downpour had settled into a
drizzle rendering the street slippery. There is ample testimonial evidence on record to show that
he was under the influence of liquor. Under these conditions, his chances of effectively dealing
with changing conditions on the road were significantly lessened. As Prosser and Keaton
emphasize:
[U]nder present day traffic conditions, any driver of an automobile must be prepared for the
sudden appearance of obstacles and persons on the highway, and of other vehicles at
intersections, such as one who sees a child on the curb may be required to anticipate its sudden
dash into the street, and his failure to act properly when they appear may be found to amount to
negligence.
[26]

Lis obvious unpreparedness to cope with the situation confronting him on the night of the
accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Lis employer.
In denying liability on the part of Alexander Commercial, the respondent court held that:
There is no evidence, not even defendant Lis testimony, that the visit was in connection with
official matters. His functions as assistant manager sometimes required him to perform work
outside the office as he has to visit buyers and company clients, but he admitted that on the
night of the accident he came from BF Homes Paraaque he did not have business from the
company (pp. 25-26, tsn, Sept. 23, 1991). The use ofthe company car was partly required by the
nature of his work, but the privilege of using it for non-official business is a benefit, apparently
referring to the fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in the discharge of
their respective duties, the basis of which liability is not respondeat superior, but the relationship
of pater familias, which theory bases the liability of the master ultimately on his own negligence
and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an
employer may be held liable for the negligence of his employee, the act or omission which
caused damage must have occurred while an employee was in the actual performance of his
assigned tasks or duties (Francis High School vs. Court of Appeals, 194 SCRA 341). In defining an
employers liability for the acts done within the scope of the employees assigned tasks, the
Supreme Court has held that this 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 (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637). 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 (at p.
645).
In light of the foregoing, We are unable to sustain the trial courts finding that since defendant Li
was authorized by the company to use the company car either officially or socially or even bring
it home, he can be considered as using the company car in the service of his employer or on the
occasion of his functions. Driving the company car was not among his functions as assistant
manager; using it for non-official purposes would appear to be a fringe benefit, one of the perks
attached to his position. But to impose liability upon the employer under Article 2180 of the Civil
Code, earlier quoted, there must be a showing that the damage was caused by their employees
in the service of the employer or on the occasion of their functions. There is no evidence that
Richard Li was at the time of the accident performing any act in furtherance of the companys
business or its interests, or at least for its benefit. The imposition of solidary liability against
defendant Alexander Commercial Corporation must therefore fail.
[27]

We agree with the respondent court that the relationship in question is not based on the
principle of respondeat superior, which holds the master liable for acts of the servant, but that
of pater familias, in which the liability ultimately falls upon the employer, for his failure to
Page 27 of 94

exercise the diligence of a good father of the family in the selection and supervision of his
employees. It is up to this point, however, that our agreement with the respondent court ends.
Utilizing the bonus pater familias standard expressed in Article 2180 of the Civil Code,
[28]
we are
of the opinion that Lis employer, Alexander Commercial, Inc. is jointly and solidarily liable for the
damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals
[29]
upon which respondent
court has placed undue reliance, dealt with the subject of a school and its teachers supervision
of students during an extracurricular activity. These cases now fall under the provision on special
parental authority found in Art. 218 of the Family Code which generally encompasses all
authorized school activities, whether inside or outside school premises.
Second, the employers primary liability under the concept of pater familias embodied by
Art. 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His
liability is relieved on a showing that he exercised the diligence of a good father of the family in
the selection and supervision of its employees. Once evidence is introduced showing that the
employer exercised the required amount of care in selecting its employees, half of the
employers burden is overcome. The question of diligent supervision, however, depends on the
circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of
its employee during the performance of the latters assigned tasks would be enough to relieve
him of the liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The
employer is not expected to exercise supervision over either the employees private activities or
during the performance of tasks either unsanctioned by the former or unrelated to the
employees tasks. The case at bench presents a situation of a different character, involving a
practice utilized by large companies with either their employees of managerial rank or their
representatives.
It is customary for large companies to provide certain classes of their employees with
courtesy vehicles. These company cars are either wholly owned and maintained by the company
itself or are subject to various plans through which employees eventually acquire their vehicles
after a given period of service, or after paying a token amount. Many companies provide liberal
car plans to enable their managerial or other employees of rank to purchase cars, which, given
the cost of vehicles these days, they would not otherwise be able to purchase on their own.
Under the first example, the company actually owns and maintains the car up to the point
of turnover of ownership to the employee; in the second example, the car is really owned and
maintained by the employee himself. In furnishing vehicles to such employees, are companies
totally absolved of responsibility when an accident involving a company-issued car occurs during
private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan,
require rigorous tests of road worthiness from their agents prior to turning over the car (subject
of company maintenance) to their representatives. In other words, like a good father of a family,
they entrust the company vehicle only after they are satisfied that the employee to whom the
car has been given full use of the said company car for company or private purposes will not be a
threat or menace to himself, the company or to others. When a company gives full use and
enjoyment of a company car to its employee, it in effect guarantees that it is, like every good
father, satisfied that its employee will use the privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of
using a company-issued car. For large companies other than those cited in the example of the
preceding paragraph, the privilege serves important business purposes either related to the
image of success an entity intends to present to its clients and to the public in general, or for
practical and utilitarian reasons - to enable its managerial and other employees of rank or its
sales agents to reach clients conveniently. In most cases, providing a company car serves both
purposes. Since important business transactions and decisions may occur at all hours in all sorts
of situations and under all kinds of guises, the provision for the unlimited use of a company car
thereforeprincipally serves the business and goodwill of a company and only incidentally the
private purposes of the individual who actually uses the car, the managerial employee or
company sales agent. As such, in providing for a company car for business use and/or for the
purpose of furthering the companys image, a company owes a responsibility to the public to see
to it that the managerial or other employees to whom it entrusts virtually unlimited use of a
company issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did not
require him to scrupulously keep normal office hours as he was required quite often to perform
work outside the office, visiting prospective buyers and contacting and meeting with company
clients.
[30]
These meetings, clearly, were not strictly confined to routine hours because, as a
managerial employee tasked with the job of representing his company with its clients, meetings
with clients were both social as well as work-related functions. The service car assigned to Li by
Alexander Commercial, Inc. therefore enabled both Li - as well as the corporation - to put up the
front of a highly successful entity, increasing the latters goodwill before its clientele. It also
facilitated meeting between Li and its clients by providing the former with a convenient mode of
travel.
Moreover, Lis claim that he happened to be on the road on the night of the accident
because he was coming from a social visit with an officemate in Paraaque was a bare allegation
which was never corroborated in the court below. It was obviously self-serving. Assuming he
really came from his officemates place, the same could give rise to speculation that he and his
officemate had just been from a work-related function, or they were together to discuss sales
and other work related strategies.
In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it
exercised the care and diligence of a good father of the family in entrusting its company car to Li.
No allegations were made as to whether or not the company took the steps necessary to
determine or ascertain the driving proficiency and history of Li, to whom it gave full and
unlimited use of a company car.
[31]
Not having been able to overcome the burden of
demonstrating that it should be absolved of liability for entrusting its company car to Li, said
company, based on the principle ofbonus pater familias, ought to be jointly and severally liable
with the former for the injuries sustained by Ma. Lourdes Valenzuela during the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent
court, except as to the amount of moral damages. In the case of moral damages, while the said
damages are not intended to enrich the plaintiff at the expense of a defendant, the award should
nonetheless be commensurate to the suffering inflicted. In the instant case we are of the opinion
that the reduction in moral damages from an amount of P 1,000,000.00 to P500,000.00 by the
Page 28 of 94

Court of Appeals was not justified considering the nature of the resulting damage and the
predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of
her left lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela
will forever be deprived of the full ambulatory functions of her left extremity, even with the use
of state of the art prosthetic technology. Well beyond the period of hospitalization (which was
paid for by Li), she will be required to undergo adjustments in her prosthetic devise due to the
shrinkage of the stump from the process of healing.
These adjustments entail costs, prosthetic replacements and months of physical and
occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be
replaced and re-adjusted to changes in the size of her lower limb effected by the biological
changes of middle-age, menopause and aging. Assuming she reaches menopause, for example,
the prosthetic will have to be adjusted to respond to the changes in bone resulting from a
precipitate decrease in calcium levels observed in the bones of all post-menopausal women. In
other words, the damage done to her would not only be permanent and lasting, it would also be
permanently changing and adjusting to the physiologic changes which her body
would normally undergo through the years. The replacements, changes, and adjustments will
require corresponding adjustive physical and occupational therapy. All of these adjustments, it
has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting
damage because it would be highly speculative to estimate the amount of psychological pain,
damage and injury which goes with the sudden severing of a vital portion of the human body. A
prosthetic device, however technologically advanced, will only allow a reasonable amount of
functional restoration of the motor functions of the lower limb. The sensory functions are
forever lost. The resultant anxiety, sleeplessness, psychological injury, mental and physical pain
are inestimable.
As the amount of moral damages are subject to this Courts discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord with the
extent and nature of the injury -. physical and psychological - suffered by Valenzuela as a result
of Lis grossly negligent driving of his Mitsubishi Lancer in the early morning hours of the
accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the court of Appeals is modified with
the effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.
Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Vitug., J., see concurring opinion.
[G.R. No. 119121. August 14, 1998]
NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS, Fifteenth Division and
PHESCO INCORPORATED, respondents.
DECISION
ROMERO, J.:
On July 22, 1979, a convoy of four (4) dump trucks owned by the National Power
Corporation (NPC) left Marawi city bound for Iligan city. Unfortunately, enroute to its
destination, one of the trucks with plate no. RFT-9-6-673 driven by a certain Gavino Ilumba
figured in a head-on-collision with a Toyota Tamaraw. The incident resulted in the death of three
(3) persons riding in the Toyota Tamaraw, as well as physical injuries to seventeen other
passengers.
On June 10, 1980, the heirs of the victims filed a complaint for damages against National
Power Corporation (NPC) and PHESCO Incorporated (PHESCO) before the then Court of First
Instance of Lanao del Norte, Marawi City. When defendant PHESCO filed its answer to the
complaint it contended that it was not the owner of the dump truck which collided with the
Toyota Tamaraw but NPC. Moreover, it asserted that it was merely a contractor of NPC with the
main duty of supplying workers and technicians for the latters projects. On the other hand, NPC
denied any liability and countered that the driver of the dump truck was the employee of
PHESCO.
After trial on the merits, the trial court rendered a decision dated July 25, 1988 absolving
NPC of any liability. The dispositive portion reads:
Consequently, in view of the foregoing consideration, judgment is hereby rendered ordering
PHESCO, Inc. and Gavino Ilumba upon receipt hereof:
1. To pay jointly and severally the plaintiffs thru the Dansalan College the sum of P954,154.55
representing the actual or compensatory damages incurred by the plaintiffs; and
2. To pay the sum of P50,000.00 representing Attorneys fees.
SO ORDERED.
Dissatisfied, PHESCO appealed to the Court of Appeals, which on November 10, 1994
reversed the trial courts judgment. We quote the pertinent portion of the decision:
A labor only contractor is considered merely as an agent of the employer (Deferia vs. National
Labor Relations Commission, 194 SCRA 525). A finding that a contractor is a labor only
contractor is equivalent to a finding that there is an employer-employee relationship between
the owner of the project and the employees of the labor only contractor (Industrial Timer
Corporation vs. National Labor Relations Commission, 202 SCRA 465). So, even if Phesco hired
driver Gavino Ilumba, as Phesco is admittedly a labor only contractor of Napocor, the statute
itself establishes an employer-employee relationship between the employer (Napocor) and the
employee (driver Ilumba) of the labor only contractor (Phesco). (Ecal vs. National Labor
Relations Commission, 195 SCRA 224).
Consequently, we hold Phesco not liable for the tort of driver Gavino Ilumba, as there was no
employment relationship between Phesco and driver Gavino Ilumba. Under Article 2180 of the
Civil Code, to hold the employer liable for torts committed by his employees within the scope of
their assigned task, there must exist an employer-employee relationship. (Martin vs. Court of
Appeals, 205 SCRA 591).
WHEREFORE, we REVERSE the appealed decision. In lieu thereof, the Court renders judgment
sentencing defendant National Power Corporation to pay plaintiffs the sum of P174,889.20 plus
P20,000.00 as attorneys fees and costs.
SO ORDERED.
Chagrined by the sudden turnaround, NPC filed a motion for reconsideration of said
decision which was, however, denied on February 9, 1995.
[1]
Hence, this petition.
The principal query to be resolved is, as between NPC and PHESCO, who is the employer of
Ilumba, driver of the dumptruck which figured in the accident and which should, therefore,
would be liable for damages to the victims. Specifically, NPC assigns the sole error that:
Page 29 of 94

THE COURT OF APPEALS DECISION FINDING THAT PETITIONER NPC AS THE EMPLOYER OF THE
DRIVER GAVINO ILUMBA, AND CONSEQUENTLY, SENTENCING IT TO PAY THE ACTUAL AND
COMPENSATORY DAMAGES SUSTAINED BY COMPLAINANTS, IS NOT IN ACCORD WITH THE LAW
OR WITH THE APPLICABLE RULINGS OF THIS HONORABLE COURT.
[2]

As earlier stated, NPC denies that the driver of the dump truck was its employee. It alleges
that it did not have the power of selection and dismissal nor the power of control over
Ilumba.
[3]
PHESCO, meanwhile, argues that it merely acted as a recruiter of the necessary
workers for and in behalf of NPC.
[4]

Before we decide who is the employer of Ilumba, it is evidently necessary to ascertain the
contractual relationship between NPC and PHESCO. Was the relationship one of employer and
job (independent) contractor or one of employer and labor only contractor?
Job (independent) contracting is present if the following conditions are met: (a) the
contractor carries on an independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance
of the work except to the result thereof; and (b) the contractor has substantial capital or
investments in the form of tools, equipment, machineries, work premises and other materials
which are necessary in the conduct of his business.
[5]
Absent these requisites, what exists is a
labor only contract under which the person acting as contractor is considered merely as an
agent or intermediary of the principal who is responsible to the workers in the same manner and
to the same extent as if they had been directly employed by him.
[6]
Taking into consideration the
above distinction and the provisions of the Memorandum of Understanding entered into by
PHESCO and NPC, we are convinced that PHESCO was engaged in labor only contracting.
It must be noted that under the Memorandum, NPC had mandate to approve the critical
path network and rate of expenditure to be undertaken by PHESCO.
[7]
Likewise, the manning
schedule and pay scale of the workers hired by PHESCO were subject to confirmation by
NPC.
[8]
Then too, it cannot be ignored that if PHESCO enters into any sub-contract or lease, again
NPCs concurrence is needed.
[9]
Another consideration is that even in the procurement of tools
and equipment that will be used by PHESCO, NPCs favorable recommendation is still necessary
before these tools and equipment can be purchased.
[10]
Notably, it is NPC that will provide the
money or funding that will be used by PHESCO to undertake the project.
[11]
Furthermore, it must
be emphasized that the project being undertaken by PHESCO, i.e., construction of power energy
facilities, is related to NPCs principal business of power generation. In sum, NPCs control over
PHESCO in matters concerning the performance of the latters work is evident. It is enough that
NPC has the right to wield such power to be considered as the employer.
[12]

Under this factual milieu, there is no doubt that PHESCO was engaged in labor-only
contracting vis--vis NPC and as such, it is considered merely an agent of the latter. In labor-only
contracting, an employer-employee relationship between the principal employer and the
employees of the labor-only contractor is created. Accordingly, the principal employer is
responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer.
[13]
Since PHESCO is only a labor-only contractor,
the workers it supplied to NPC, including the driver of the ill-fated truck, should be considered as
employees of NPC.
[14]
After all, it is axiomatic that any person (the principal employer) who
enters into an agreement with a job contractor, either for the performance of a specified work or
for the supply of manpower, assumes responsibility over the employees of the latter.
[15]

However, NPC maintains that even assuming that a labor only contract exists between it
and PHESCO, its liability will not extend to third persons who are injured due to the tortious acts
of the employee of the labor-only contractor.
[16]
Stated otherwise, its liability shall only be
limited to violations of the Labor Code and not quasi-delicts.
To bolster its position, NPC cites Section 9(b), Rule VII, Book III of the Omnibus Rules
Implementing the Labor Code which reads:
(b) Labor only contracting as defined herein is hereby prohibited and the person acting as
contractor shall be considered merely as an agent or intermediary of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly employed
by him.
In other words, NPC posits the theory that its liability is limited only to compliance with the
substantive labor provisions on working conditions, rest periods, and wages and shall not extend
to liabilities suffered by third parties, viz.:
Consequently, the responsibilities of the employer contemplated in a labor only contract,
should, consistent with the terms expressed in the rule, be restricted to the workers. The same
can not be expanded to cover liabilities for damages to third persons resulting from the
employees tortious acts under Article 2180 of the Civil Code.
[17]

The reliance is misplaced. It bears stressing that the action was premised on the recovery
of damages as a result of quasi-delict against both NPC and PHESCO, hence, it is the Civil Code
and not the Labor Code which is the applicable law in resolving this case.
To be sure, the pronouncement of this Court in Filamer Christian Institute v. IAC,
[18]
is most
instructive:
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.
Corollarily from the above doctrine, the ruling in Cuison v. Norton & Harrison Co.,
[19]
finds
applicability in the instant case, viz.:
It is well to repeat that under the civil law an employer is only liable for the negligence of his
employees in the discharge of their respective duties. The defense of independent contractor
would be a valid one in the Philippines just as it would be in the United States. Here Ora was a
contractor, but it does not necessarily follow that he was an independent contractor. The reason
for this distinction is that the employer retained the power of directing and controlling the
work. The chauffeur and the two persons on the truck were the employees of Ora, the
contractor, but Ora, the contractor, was an employee of Norton & Harrison Co., charged with the
duty of directing the loading and transportation of the lumber. And it was the negligence in
loading the lumber and the use of minors on the truck which caused the death of the
unfortunate boy. On the facts and the law, Ora was not an independent contractor, but was the
servant of the defendant, and for his negligence defendant was responsible.
Page 30 of 94

Given the above considerations, it is apparent that Article 2180 of the Civil Code and not
the Labor Code will determine the liability of NPC in a civil suit for damages instituted by an
injured person for any negligent act of the employees of the labor only contractor. This is
consistent with the ruling that a finding that a contractor was a labor-only contractor is
equivalent to a finding that an employer-employee relationship existed between the owner
(principal contractor) and the labor-only contractor, including the latters workers.
[20]

With respect to the liability of NPC as the direct employer, Article 2180 of the Civil Code
explicitly provides:
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
In this regard, NPCs liability is direct, primary and solidary with PHESCO and the
driver.
[21]
Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse
against PHESCO and the driver who committed the negligence which gave rise to the action.
[22]

Finally, NPC, even if it truly believed that it was not the employer of the driver, could still
have disclaimed any liability had it raised the defense of due diligence in the selection or
supervision of PHESCO and Ilumba.
[23]
However, for some reason or another, NPC did not invoke
said defense. Hence, by opting not to present any evidence that it exercised due diligence in the
supervision of the activities of PHESCO and Ilumba, NPC has foreclosed its right to interpose the
same on appeal in conformity with the rule that points of law, theories, issues of facts and
arguments not raised in the proceedings below cannot be ventilated for the first time on
appeal.
[24]
Consequently, its liability stands.
WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals dated
November 10, 1994 and its accompanying resolution dated February 9, 1995 are AFFIRMED
without prejudice to the right of NPC to demand from PHESCO and Ilumba reimbursement of the
damages it would be adjudged to pay to complainants. No costs.
SO ORDERED.

G.R. No. 104658. April 7, 1993.
PILIPINAS SHELL PETROLEUM CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and CLARITA T. CAMACHO, respondents.
3. CIVIL LAW; QUASI-DELICTS; INDEPENDENT CONTRACTOR RESPONSIBLE FOR HIS OWN ACTS
AND OMISSIONS. Being an independent contractor, Feliciano is responsible for his own acts
and omissions. As he alone was in control over the manner of how he was to undertake the
hydro-pressure test, he alone must bear the consequences of his negligence, if any, in the
conduct of the same.
D E C I S I O N
CAMPOS, JR., J p:
Was the hydro-pressure test of the underground storage tank in private respondent Clarita T.
Camacho's gasoline station conducted by an independent contractor or not? A negative answer
will make petitioner Pilipinas Shell Petroleum Corporation (Shell, for brevity) liable for the said
independent contractor's acts or omissions; otherwise, no. This is the issue that this Court is
called upon to resolve in this case.
The facts are as follows:
Private respondent Clarita T. Camacho (private respondent for short) was the operator of a
gasoline station in Naguilian Road, Baguio City, wherein she sells petitioner Shell's petroleum
products. Sometime in April 1983, private respondent requested petitioner to conduct a hydro-
pressure test on the underground storage tanks of the said station in order to determine
whether or not the sales losses she was incurring for the past several months were due to
leakages therein. Petitioner acceded to the said request and on April 27, 1983, one Jesus "Jessie"
Feliciano together with other workers, came to private respondent's station with a Job Order
from petitioner to perform the hydro-pressure test.
On the same day, Feliciano and his men drained the underground storage tank which was to be
tested of its remaining gasoline. After which, they filled the tank with water through a water
hose from the deposit tank of private respondent. Then, after requesting one of private
respondent's gasoline boys to shut off the water when the tank was filled, Feliciano and his men
left. At around 2:00 a.m. the following day, private respondent saw that the water had reached
the lip of the pipe of the underground storage tank and so, she shut off the water faucet.
At around 5:30 a.m., private respondent's husband opened the station and started selling
gasoline. But at about 6:00 a.m., the customers who had bought gasoline returned to the station
complaining that their vehicles stalled because there was water in the gasoline that they bought.
On account of this, private respondent was constrained to replace the gasoline sold to the said
customers. However, a certain Eduardo Villanueva, one of the customers, filed a complaint with
the police against private respondent for selling the adulterated gasoline. In addition, he caused
the incident to be published in two local newspapers.
Feliciano, who arrived later that morning, did not know what caused the water pollution of the
gasoline in the adjacent storage tank. So he called up Nick Manalo, Superintendent of Shell's
Poro Point Installation at San Fernando, La Union, and referred the matter to the latter. Manalo
went up to Baguio in the afternoon to investigate. Thereafter, he and Feliciano again filled with
water the underground storage tank undergoing hydro-pressure test whereat they noticed that
the water was transferring to the other tanks from whence came the gasoline being sold. Manalo
asked permission from Shell's Manila Office to excavate the underground pipes of the station.
Upon being granted permission to do so, Feliciano and his men began excavating the driveway of
private respondent's station in order to expose the underground pipeline. The task was
continued by one Daniel "Danny" Pascua who replaced Feliciano, Pascua removed the corroded
pipeline and installed new independent vent pipe for each storage tank.
Meanwhile, petitioner undertook to settle the criminal complaint filed by Villanueva.
Subsequently, Villanueva filed an Affidavit of Desistance, 1 declaring, inter alia
"THAT, after careful evaluation of the surrounding circumstances, especially the explanation of
the representatives of SHELL Phils., that the gasoline tanks of Mrs. Camacho were subject to
Hydro test, in such a way that water was used for the said test, I believe that she may not have
had anything to do with the filling of water in the tank of my car;
xxx xxx xxx
THAT, said representatives of SHELL Phils. have interceded for and in behalf of Mrs. Camacho and
have fully satisfied my claim against her.
THAT, in view of all the foregoing I do not intend to prosecute the case and I am therefore asking
for the dismissal of the case against Mrs. Camacho."
Page 31 of 94

Thereafter, private respondent demanded from petitioner the payment of damages in the
amount of P10,000.00. Petitioner, instead, offered private respondent additional credit line and
other beneficial terms, which offer was, however, rejected. cdrep
Subsequently, or on October 12, 1983, private respondent filed before the trial court a complaint
for damages against petitioner due to the latter's alleged negligence in the conduct of the hydro-
pressure test in her gasoline station. For its part, petitioner denied liability because, according to
it, the hydro-pressure test on the underground storage tanks was conducted by an independent
contractor.
The trial court dismissed private respondent's complaint for damages for the reason that:
"The hydro-pressure test which brought about the incident was conducted by Jesus Feliciano,
who was neither an employee nor agent nor representative of the defendant. Jesus Feliciano is
responsible for his own acts and omissions. He alone was in control of the manner of how he is
to undertake the hydro-pressure test.
Considering that the conduct of said hydro-pressure test was under the sole and exclusive
control and supervision of Jesus Feliciano, the overflow with water causing the same to sip into
the adjoining tank cannot be attributed to the fault or negligence of defendant. 2
From the adverse decision of the trial court, private respondent appealed to the Court of Appeals
which court reversed the decision of the trial court. Thus,
"PREMISES CONSIDERED, the decision being appealed from is hereby SET ASIDE and, in lieu
thereof, another rendered ordering defendant to pay plaintiff:
1. P100,000.00 as moral damages;
2. P2,639.25 and P15,000.00 representing the actual losses suffered by plaintiff as a result of the
water pollution of the gasoline.
No costs.
SO ORDERED." 3
Petitioner moved to have the above decision reconsidered but the same was denied in a
Resolution dated March 9, 1992. Hence, this recourse.
As stated at the very outset, the pivotal issue in this case is whether or not petitioner should be
held accountable for the damage to private respondent due to the hydro-pressure test
conducted by Jesus Feliciano.
It is a well-entrenched rule that an employer-employee relationship must exist before an
employer may be held liable for the negligence of his employee. It is likewise firmly settled that
the existence or non-existence of the employer-employee relationship is commonly to be
determined by examination of certain factors or aspects of that relationship. These include: (a)
the manner of selection and engagement of the putative employee; (b) the mode of payment of
wages; (c) the presence or absence of a power to control the putative employee's conduct, 4
although the latter is the most important element. 5
In this case, respondent Court of Appeals held petitioner liable for the damage caused to private
respondent as a result of the hydro-pressure test conducted by Jesus Feliciano due to the
following circumstances: 6
1. Feliciano was hired by petitioner;
2. He received his instructions from the Field Engineer of petitioner, Mr. Roberto Mitra;
3. While he was at private respondent's service station, he also received instructions from Nick
Manalo, petitioner's Poro Point Depot Superintendent;
4. Instructions from petitioner's Manila Office were also relayed to him while he was at .the job
site at Baguio City;
5. His work was under the constant supervision of petitioner's engineer;
6. Before he could complete the work, he was instructed by Mr. Manalo, petitioner's
Superintendent, to discontinue the same and it was turned over to Daniel Pascua, who was
likewise hired by petitioner.
Based on the foregoing, respondent Court of Appeals concluded that Feliciano was not an
independent contractor but was under the control and supervision of petitioner in the
performance of the hydro-pressure test, hence, it held petitioner liable for the former's acts and
omissions.
We are not in accord with the above finding of respondent Court of Appeals. As aptly held by the
trial court, petitioner did not exercise control and supervision over Feliciano with regard to the
manner in which he conducted the hydro-pressure test. All that petitioner did, through its Field
Engineer, Roberto Mitra, was relay to Feliciano the request of private respondent for a hydro-
pressure test, to determine any possible leakages in the storage tanks in her gasoline station. The
mere hiring of Feliciano by petitioner for that particular task is not the form of control and
supervision contemplated by may be the basis for establishing an employer-employee
relationship between petitioner and Feliciano. The fact that there was no such control is further
amplified by the absence of any Shell representative in the job site time when the test was
conducted. Roberto Mitra was never there. Only Feliciano and his men were.
True, it was petitioner who sent Feliciano to private respondent's gasoline station in conduct the
hydro-pressure test as per the request of private respondent herself. But this single act did not
automatically make Feliciano an employee of petitioner. As discussed earlier, more than mere
hiring is required. It must further be established that petitioner is the one who is paying Felicia's
salary on a regular basis; that it has the power to dismiss said employee, and more importantly,
that petitioner has control and supervision over the work of Feliciano. The last requisite was
sorely missing in the instant case.
A careful perusal of the records will lead to the conclusion that Feliciano is an independent
contractor. Section 8 of Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code
provides:
"Sec. 8. Job contracting. There is job contracting permissible under the Code if the following
conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his
own account under his own responsibility according to his own manner and method, free from
the control and direction of his employer or principal in all matters connected with the
performance of the work except as to the results thereof; and
(2) The contractor has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of his
business."
Feliciano is independently maintaining a business under a duly registered business name, "JFS
Repair and Maintenance Service," and is duly registered with the Bureau of Domestic Trade. 7 He
does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of
work he accomplishes. 8 If he is not able to finish his work, he does not get paid, as what
happened in this case. 9 Further, Feliciano utilizes his own tools and equipment and has a
Page 32 of 94

complement of workers. Neither is he required to work on a regular basis. Instead, he merely
awaits calls from clients such as petitioner whenever repairs and maintenance services are
requested. Moreover, Feliciano does not exclusively service petitioner because he can accept
other business but not from other oil companies. 10 All these are the hallmarks of an
independent contractor.
Being an independent contractor, Feliciano is responsible for his own acts and omissions. As he
alone was in control over the manner of how he was to undertake the hydro-pressure test, he
alone must bear the consequences of his negligence, if any, in the conduct of the same.
Anent the issue of damages, the same has been rendered moot by the failure of private
respondent to establish an employer-employee relationship between petitioner and Feliciano.
Absent said relationship, petitioner cannot be held liable for the acts and omissions of the
independent contractor, Feliciano.
WHEREFORE, premises considered, the appealed decision of respondent Court of Appeals is
hereby SET ASIDE and the decision of the trial court REINSTATED. Without pronouncement as to
costs.
SO ORDERED.
Narvasa, C .J ., Padilla, Regalado and Nocon, JJ ., concur.


[G.R. No. 138054. September 28, 2000]
ROSENDO C. CARTICIANO and ZACARIAS A. CARTICIANO, Petitioners, v. MARIO
NUVAL, Respondent.
D E C I S I O N
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

Page 33 of 94

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
Page 34 of 94

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:
x x x
(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 DecisionREINSTATED, 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.
SECOND DIVISION
[G.R. Nos. 118441-42. January 18, 2000]
Page 35 of 94

ARMANDO JOSE y PAZ and MANILA CENTRAL BUS LINES (MCL), represented by its General
Manager MR. DANILO T. DE DIOS, petitioners vs. COURT OF APPEALS, ROMMEL ABRAHAM,
represented by his father FELIXBERTO ABRAHAM, JOSE MACARUBO and MERCEDES
MACARUBO, respondents.
D E C I S I O N
MENDOZA, J.:
This is a petition for review on certiorari of the decision
[1]
of the Court of Appeals, reversing the
decision of the Regional Trial Court, Branch 172, Valenzuela, Metro Manila and ordering
petitioners to pay damages for injuries to persons and damage to property as a result of a
vehicular accident.
The facts are as follows:
Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a public utility
bus (hereafter referred to as Bus 203) with plate number NVR-III-TB-PIL and body number 203.
Bus 203 is owned by the Metro Manila Transit Corporation and is insured with the Government
Service Insurance System.
On February 22, 1985, at around six oclock in the morning, Bus 203, then driven by petitioner
Armando Jose, collided with a red Ford Escort driven by John Macarubo on MacArthur Highway,
in Marulas, Valenzuela, Metro Manila. Bus 203 was bound for Muntinlupa, Rizal, while the Ford
Escort was headed towards Malanday, Valenzuela on the opposite lane. As a result of the
collision, the left side of the Ford Escorts hood was severely damaged while its driver, John
Macarubo, and its lone passenger, private respondent Rommel Abraham, were seriously injured.
The driver and conductress of Bus 203 rushed Macarubo and Abraham to the nearby Fatima
Hospital where Macarubo lapsed into a coma. Despite surgery, Macarubo failed to recover and
died five days later. Abraham survived, but he became blind on the left eye which had to be
removed. In addition, he sustained a fracture on the forehead and multiple lacerations on the
face, which caused him to be hospitalized for a week.
On March 26, 1985, Rommel Abraham, represented by his father, Felixberto, instituted Civil Case
No. 2206-V-85 for damages against petitioners MCL and Armando Jose in the Regional Trial
Court, Branch 172, Valenzuela.
On July 17, 1986, the spouses Jose and Mercedes Macarubo, parents of the deceased John
Macarubo, filed their own suit for damages in the same trial court, where it was docketed as Civil
Case No. 2428-V-86, against MCL alone. On the other hand, MCL filed a third-party complaint
against Juanita Macarubo, registered owner of the Ford Escort on the theory that John Macarubo
was negligent and that he was the "authorized driver" of Juanita Macarubo. The latter, in turn,
filed a counterclaim for damages against MCL for the damage to her car. Civil Case No. 2206-V-85
and Civil Case No. 2428-V-86 were consolidated and later tried jointly. The facts, as found by the
trial court, are as follows: Esmsc
In Civil Case No. 2206-V-85, the Court heard the testimonies that during the
night previous to the accident of February 22, 1985 at 6:15 a.m., Rommel
Abraham and John Macarubo were at a party. There was therefore, no sleep
for them, notwithstanding testimony to the contrary and the service of drinks
cannot be totally discounted. After the party at 11 p.m., while both Rommel
and John were enroute home to Valenzuela from La Loma, the car
encountered mechanical trouble and had to be repaired as its cross-joint was
detached. The defect of a cross-joint is not minor and repair thereof would as
testified to by Rommel lasted up to early dawn and the car started to run only
after five oclock in the morning. With lack of sleep, the strains of a party still
on their bodies, and the attention to the repair coupled with the wait until the
car was ready to run, are potentials in a driver for possible accident. The
accident happened at 6:15 a.m. when the physical and mental condition of the
driver John Macarubo was as expected not too fit for the driving as he could
not anymore control the car. The desire to be home quick for the much
needed sleep could have prompted him to overtake the preceding vehicle.
Indeed the pictures taken of the two vehicles (Exh. 1,2 and 3) will clearly show
that the MCL bus was at its proper lane and not in an overtaking position
while the car driven by John Macarubo was positioned in a diagonal manner
and crossed the line of the MCL, which is an indication of an overtaking act. If
it were the bus that was overtaking at the time, the car would have been
thrown farther away from the point of the impact.
The court is convinced of the close supervision and control of MCL over their
drivers, and its exercise of due diligence in seeing to it that no recklessness is
committed by its employees, drivers especially, from the unrebutted
testimonies of Cesar Cainglet.
The Court noted the respective damages of the two vehicles especially the
point of the impact. From these damages as shown by the picture, it can be
clearly deduced which vehicle did the bumping. It was the car driven by John
Macarubo that hit the MCL which was on its right and correct lane.
[2]

Based on the foregoing facts, the trial court rendered judgment on September 28, 1989,
dismissing both civil cases against MCL and ruling favorably on its third-party complaint against
Juanita Macarubo, ordering the latter to pay MCL P54,232.12 as actual damages, P24,000.00 for
lost income, and P10,000.00 as attorneys fees.
Rommel Abraham, the Macarubo spouses, and third-party defendant Juanita Macarubo then
appealed to the Court of Appeals which, on December 21, 1994, rendered a decision reversing
the decision of the trial court. It held (1) that the trial court erred in disregarding Rommel
Abrahams uncontroverted testimony that the collision was due to the fault of the driver of Bus
203; (2) that the trial court erred in relying on photographs (Exhs. 1-3) which had been taken an
hour after the collision as within that span of time, the positions of the vehicles could have been
changed; (3) that the photographs do not show that the Ford Escort was overtaking another
vehicle when the accident happened and that John Macarubo, its driver, was negligent; and (4)
that MCL failed to make a satisfactory showing that it exercised due diligence in the selection
and supervision of its driver Armando Jose. The dispositive portion of the decision reads: Jksm
WHEREFORE, the appealed decision is hereby REVERSED and the defendants-
appellees MCL and Armando Jose are adjudged to pay jointly and severally:
1. Rommel Abraham, represented by his father Felixberto
Abraham:
(a) P37,576.47 as actual damages;
(b) P50,000.00 as compensatory
damages;
Page 36 of 94

(c) P15,000.00 as moral damages;
(d) P5,000.00 as exemplary damages;
and
(e) P10,000.00 as attorneys fees.
2. The heirs of John Macarubo:
(a) P50,000.00 as indemnity for his
death;
(b) P50,000.00 as moral damages;
(c) P10,000.00 as exemplary damages;
and
(d) P10,000.00 as attorneys fees.
Costs against the appellees.
SO ORDERED.
Hence, this petition for review on certiorari. Petitioners MCL and Armando Jose raise four issues
which boil down to the question whether it was the driver of Bus 203 or that of the Ford Escort
who was at fault for the collision of the two vehicles.
It is well-settled that a question of fact is to be determined by the evidence
offered to support the particular contention.
[3]
In the proceedings below,
petitioners relied mainly on photographs, identified in evidence as Exhibits 1
to 3, showing the position of the two vehicles after the collision. On the other
hand, private respondents offered the testimony of Rommel Abraham to the
effect that the collision took place because Bus 203 invaded their lane.
[4]

The trial court was justified in relying on the photographs rather than on Rommel Abrahams
testimony which was obviously biased and unsupported by any other evidence. Physical evidence
is a mute but an eloquent manifestation of truth, and it ranks high in our hierarchy of
trustworthy evidence.
[5]
In criminal cases such as murder or rape where the accused stands to
lose his liberty if found guilty, this Court has, in many occasions, relied principally upon physical
evidence in ascertaining the truth. In People v. Vasquez,
[6]
where the physical evidence on record
ran counter to the testimonial evidence of the prosecution witnesses, we ruled that the physical
evidence should prevail.
[7]
Esm
In this case, the positions of the two vehicles, as shown in the photographs (Exhs. 1 to 3) taken
by MCL line inspector Jesus Custodio about an hour and fifteen minutes after the collision,
disputes Abrahams self-serving testimony that the two vehicles collided because Bus 203
invaded the lane of the Ford Escort and clearly shows that the case is exactly the opposite of
what he claimed happened. Contrary to Abrahams testimony, the photographs show quite
clearly that Bus 203 was in its proper lane and that it was the Ford Escort which usurped a
portion of the opposite lane. The three photographs show the Ford Escort positioned diagonally
on the highway, with its two front wheels occupying Bus 203s lane. As shown by the photograph
marked Exhibit 3, the portion of MacArthur Highway where the collision took place is marked by
a groove which serves as the center line separating the right from the left lanes. The photograph
shows that the left side of Bus 203 is about a few feet from the center line and that the bus is
positioned parallel thereto. This negates the claim that Bus 203 was overtaking another vehicle
and, in so doing, encroached on the opposite lane occupied by the Ford Escort.
Indeed, Bus 203 could not have been overtaking another vehicle when the collision happened. It
was filled with passengers,
[8]
and it was considerably heavier and larger than the Ford Escort. If it
was overtaking another vehicle, it necessarily had to accelerate. The acceleration of its speed and
its heavy load would have greatly increased its momentum so that the impact of the collision
would have thrown the smaller and lighter Ford Escort to a considerable distance from the point
of impact. Exhibit 1, however, shows that the Ford Escorts smashed hood was only about one or
two meters from Bus 203s damaged left front. If there had been a great impact, such as would
be the case if Bus 203 had been running at a high speed, the two vehicles should have ended up
far from each other.
In discrediting the physical evidence, the appellate court made the following observations:
We cannot believe that it was the car which overtook another vehicle and
proceeded to the lane occupied by the bus. There was a traffic jam on the
"bus lane" while traffic was light on the "car lane."Indeed, we find it
inconceivable that the car, occupying the lane without any traffic, would
overtake and traverse a heavy traffic lane.
[9]
(Underscoring supplied.)
This is correct. However, the fact remains that when the Ford Escort finally came to a stop, it
encroached on the opposite lane occupied by Bus 203.
Significantly, Rommel Abraham testified that on February 21, 1985, the night before the
accident, he and John Macarubo went to a friends house in La Loma where they stayed until 11
p.m.
[10]
Abrahams explanation as to why they did not reach Valenzuela until six oclock in the
morning of the next day when the accident happened indicates that the Ford Escort careened
and slammed against Bus 203 because of a mechanical defect. Abraham told the
court:
[11]
Esmmis
ATTY. RESPICIO:
Q: I am sorry, Your honor. After leaving Arnels place where did you go?
ROMMEL ABRAHAM
A: We proceeded in going home, sir.
Q: You were on your way home?
A: Yes, sir.
Q: What time did you . . . I will reform the question. You met the accident at
about 6:00 oclock the next day, 6:00 oclock in the morning the next day, did
it take you long to reach BBB?
A: Our car had a mechanical trouble somewhere at 2nd Avenue, sir.
Q: What kind of trouble?
A: The cross-joint were detached, sir.
Q: Are you familiar with cars?
A: A little, sir.
COURT:
Q: What time was that when you have this cross-joint problem?
A: About 12:00 oclock perhaps, sir.
Q: What happened to the cross joint?
A: It was cut, maam.
Q: You were able to repair that cross-joint 12:00 oclock and you were able to
run and reached this place of accident at 6:00 oclock?
Page 37 of 94

A: No, we were not able to get spare parts, maam.
Q: Why were you able to reach this place at 6:00 oclock?
A: We went home and look for the spare parts in their house, maam.
Q: House of Macarubo?
A: Yes, maam.
Q: So you were able to repair the car?
A: Yes, maam.
Q: What time were you able to repair the car?
A: Around 5:00 oclock in the morning, sir.
Q: You were able to replace the cross-joint or what?
A: Ginawaan ng paraan, maam.
Q: How?
A: The cross-joint were welded in order to enable us to go home, maam.
Q: No spare parts was replaced? Msesm
A: No, maam.
Thus, as Rommel Abraham himself admitted, the Ford Escorts rear cross-joint was cut/detached.
This mechanism controls the movement of the rear tires. Since trouble in the cross-joint affects a
cars maneuverability, the matter should have been treated as a serious mechanical problem. In
this case, when asked if they were able to repair the cross-joint, Abraham said "Ginawaan ng
paraan, maam," by simply welding them just so they could reach home. His testimony indicates
that the rear cross-joint was hastily repaired and that, at most, the kind of repairs made thereon
were merely temporary; just enough to enable Abraham and Macarubo to reach home. Given
such fact, the likelihood is that while the Ford Escort might not have been overtaking another
vehicle, it actually strayed into the bus lane because of the defective cross-joint, causing its
driver to lose control of the vehicle.
The appellate court refused to give credence to the physical evidence on the ground that the
photographs were taken an hour after the collision and that within such span of time the bus
could have been moved because there was no showing that the driver left the scene of the
accident. This is not correct. Constancia Gerolada, Bus 203s conductress, testified that,
immediately after the collision, she and bus driver, petitioner Armando Jose, took the injured
driver and passenger of the Ford Escort to the Fatima Hospital.
[12]
This fact is not disputed by
private respondents.
Rommel Abraham mentioned in his appellants brief in the appellate court a sketch of the scene
of the accident allegedly prepared by one Patrolman Kalale, which shows Bus 203 to be
occupying the Ford Escorts lane. However, the records of this case do not show that such a
sketch was ever presented in evidence in the trial court or that Patrolman Kalale was ever
presented as a witness to testify on the sketch allegedly prepared by him. Under Rule 132, 3 of
the Rules on Evidence, courts cannot consider any evidence unless formally offered by a party.
Finally, the appellate court also ruled that MCL failed to make a satisfactory showing that it
exercised the diligence of a good father of a family in the selection and supervision of its bus
driver, Armando Jose.
[13]
Under the circumstances of this case, we hold that proof of due
diligence in the selection and supervision of employees is not required.
The Civil Code provides in pertinent parts:
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 in Art. 2176 is demandable not only for
ones own acts or omissions, but also for those of persons for whom one is
responsible. Esmso
. . . .
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 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.
Thus, the responsibility of employers is premised upon the presumption of negligence of their
employees. As held in Poblete v. Fabros:
[14]

[I]t is such a firmly established principle, as to have virtually formed part of the
law itself, that the negligence of the employee gives rise to the presumption
of negligence on the part of the employer. This is the presumed negligence in
the selection and supervision of the employee. The theory of presumed
negligence, in contrast with the American doctrine of respondent superior,
where the negligence of the employee is conclusively presumed to be the
negligence of the employer, is clearly deducible from the last paragraph of
Article 2180 of the Civil Code which provides that the responsibility therein
mentioned shall cease if the employers prove that they observed all the
diligence of a good father of a family to prevent damages (12 Manresa, 657;
Balica vs. Litonjua and Leynes, 30 Phil. 624; Cangco vs. Manila Railroad Co., 30
Phil. 768), as observed in the same cases just cited.
Therefore, before the presumption of the employers negligence in the selection and supervision
of its employees can arise, the negligence of the employee must first be established. While the
allegations of negligence against the employee and that of an employer-employee relation in the
complaint are enough to make out a case of quasi-delict under Art. 2180 of the Civil Code, the
failure to prove the employees negligence during the trial is fatal to proving the employers
vicarious liability. In this case, private respondents failed to prove their allegation of negligence
against driver Armando Jose who, in fact, was acquitted in the case for criminal negligence
arising from the same incident.
[15]

For the foregoing reasons, we hold that the appellate court erred in holding petitioners liable to
private respondents. The next question then is whether, as the trial court held, private
respondent Juanita Macarubo is liable to petitioners.
Article 2180 of the Civil Code makes the persons specified therein responsible for the quasi-
delicts of others. The burden is upon MCL to prove that Juanita Macarubo is one of those
specified persons who are vicariously liable for the negligence of the deceased John
Macarubo. Exsm
Page 38 of 94

In its third-party complaint, MCL alleged that Juanita Macarubo was the registered owner of the
Ford Escort car and that John Macarubo was the "authorized driver" of the car.
[16]
Nowhere was
it alleged that John Macarubo was the son, ward, employee or pupil of private respondent
Juanita Macarubo so as to make the latter vicariously liable for the negligence of John Macarubo.
The allegation that John Macarubo was "the authorized driver" of the Ford Escort is not
equivalent to an allegation that he was an employee of Juanita Macarubo. That John Macarubo
was the "authorized driver" of the car simply means that he drove the Ford Escort with the
permission of Juanita Macarubo.
Nor did MCL present any evidence to prove that Juanita Macarubo was the employer of John
Macarubo or that she is in any way liable for John Macarubos negligence under Art. 2180 of the
Civil Code. For failure to discharge its burden, MCLs third-party complaint should be dismissed.
WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaints filed in Civil
Cases Nos. 2206-V-85 and 24428-V-86 against Manila Central Bus Lines and Armando Jose, as
well as the third-party complaint filed in Civil Case No. 2206-V-85 against Juanita Macarubo, are
hereby DISMISSED.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.2/3/00
[G.R. No. 138296. November 22, 2000]
VIRON TRANSPORTATION CO., INC., petitioner, vs. ALBERTO DELOS SANTOS y NATIVIDAD and
RUDY SAMIDAN, respondents.
D E C I S I O N
GONZAGA-REYES, J.:
This is a petition for review on certiorari which seeks to reverse and set aside: (1) the
decision of the Court of Appeals
[1]
promulgated on October 27, 1998 in CA-G.R. CV No. 54080
entitled Viron Transportation Co., Inc. vs. Alberto delos Santos and Rudy Samidan affirming the
decision of the Regional Trial Court of Manila
[2]
in Civil Case No. 93-67283 and (2) the resolution
of the Court of Appeals promulgated on April 14, 1999 denying the motion for reconsideration.
The said civil case is an action to recover damages based on quasi-delict filed as a result of a
vehicular accident in the afternoon of August 16, 1993 between a passenger bus owned by
petitioner Viron Transportation Co., Inc. and a Forward Cargo Truck owned by private
respondent Rudy Samidan.
The conflicting versions of the accident were summarized by the trial court and adopted by
the Court of Appeals in the assailed decision. The version of petitioner is as follows:
Plaintiff, a public utility transportation company, is the registered owner of Viron Transit Bus
No. 1080, with Plate No. TB-AVC-332; while the defendant Rudy Samidan is the registered owner
of the Forward Cargo Truck with Plate No. TDY-524 which, at the time of the vehicular accident in
question, was driven and operated by the defendant Alberto delos Santos y Natividad. On
August 16, 1993, at around 2:30 in the afternoon, the aforesaid bus was driven by plaintiffs
regular driver Wilfredo Villanueva along MacArthur Highway within the vicinity of Barangay
Parsolingan, Gerona, Tarlac coming from the North en route to its destination in Manila. It was
following the Forward Cargo Truck proceeding from the same direction then being driven, as
aforesaid, by the defendant Alberto delos Santos. The cargo truck swerved to the right shoulder
of the road and, while about to be overtaken by the bus, again swerved to the left to occupy its
lane. It was at that instance that the collision occurred, the left front side of the truck collided
with the right front side of the bus causing the two vehicles substantial damages.
[3]

On the other hand, the version of private respondents is as follows:
Defendant Alberto delos Santos was the driver of defendant Rudy Samidan of the latters
vehicle, a Forward Cargo Truck with Plate No. TDY-524, on that fateful day in question. At about
12:30 in the afternoon of August 16, 1993, he was driving said truck along the National Highway
within the vicinity of Barangay Parsolingan, Gerona, Tarlac. The Viron bus with Body No. 1080
and Plate No., TB-AVC-332, driven by Wilfredo Villanueva y Gaudia, tried to overtake his truck,
and he swerved to the right shoulder of the highway, but as soon as he occupied the right lane of
the road, the cargo truck which he was driving was hit by the Viron bus on its left front side, as
the bus swerved to his lane to avoid an incoming bus on its opposite direction. With the driver of
another truck dealing likewise in vegetables, Dulnuan, the two of them and the driver of the
Viron bus proceeded to report the incident to the Gerona Police Station. A Vehicular Traffic
Report was prepared by the police (See Exhibit D), with a Sketch of the relative positions of the
circumstances leading to the vehicular collision. x x x.
[4]

After trial, the lower court dismissed petitioners complaint and sustained the private
respondents counterclaim for damages. It ordered the petitioner to pay the following amounts:
1. P19,500.00, with interest thereon at 6% per annum from the date of complaint, as
actual damages, until the same shall have been fully paid and satisfied;
2. P10,000.00 as additional compensatory damages for transportation and
accommodations during the trial of this case;
3. P10,000.00 for and as attorneys fees; and
4. Costs of suit.
[5]

Not satisfied therewith, petitioner appealed to the Court of Appeals which as mentioned at
the outset affirmed in toto the decision of the lower court. Its motion for reconsideration having
been denied, petitioner came to us claiming that the Court of Appeals gravely erred
a) IN FINDING THAT THE ACCIDENT WAS DUE TO THE FAULT OF THE PETITIONERS
DRIVER;
b) IN FINDING THE PETITIONER LIABLE FOR DAMAGES WHEN THE COUNTERCLAIM
FAILED TO STATE A CAUSE OF ACTION FOR THERE IS NO AVERMENT WHATSOEVER
THEREIN THAT SAID PETITIONER FAILED TO EXERCISE DUE DILIGENCE OF A GOOD
FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF ITS DRIVERS OR
EMPLOYEES;
c) IN AWARDING COMPENSATORY OR ACTUAL DAMAGES AS WELL AS, TRAVELLING
EXPENSES AND ATTORNEYS FEES WHEN THE SAME WERE NOT SUBSTANTIATED
OR BUTTRESSED BY THE EVIDENCE ON RECORD;
d) IN AFFIRMING THE DECISION OF THE COURT A QUO DENYING PETITIONERS
MOTION TO PRESENT REBUTTAL EVIDENCE.
[6]

We resolved to give due course to the petition and required the parties to submit their
respective memoranda after due consideration of the allegations, issues and arguments adduced
in the petition, the comment thereon by the private respondents, and the reply to the comment
filed by the petitioner. The petitioner and private respondents filed their respective memoranda
in due time.
Page 39 of 94

The first imputed error is without merit. Petitioner endeavors to have this Court review the
factual findings of the trial court as sustained by the Court of Appeals finding the driver of the
Viron passenger bus at fault as the collision resulted from the latters failed attempt to overtake
the cargo truck.
We are unable to sustain petitioners contention. The rule is settled that the findings of the
trial court especially when affirmed by the Court of Appeals, are conclusive on this Court when
supported by the evidence on record.
[7]
The Supreme Court will not assess and evaluate all over
again the evidence, testimonial and documentary adduced by the parties to an appeal
particularly where, such as here, the findings of both the trial court and the appellate court on
the matter coincide.
[8]
Indeed, petitioner has failed to show compelling grounds for a reversal of
the following findings and conclusions of the trial court and the Court of Appeals:
There is no doubt whatsoever, in the mind of the Court, on the basis of the documentary
evidence (Exhibits D, 4 and 5) and the testimonies of the witnesses, that the vehicular
collision was due to the negligence of plaintiffs regular driver, Wilfredo Villanueva y Gaudia, at
that time. The cargo truck was on its proper lane at the time of the collision. In fact, the cargo
truck even swerved to the right shoulder of the road to give much room for the Viron bus to
pass. Notwithstanding the condition of the road and the in-coming Dagupan Bus from the
opposite direction, the Viron bus nonetheless proceeded to overtake the cargo truck, bringing
about the collision. The evidence is uniform as to that fact. Indeed, no witnesses for the plaintiff
ever contradicted the obtrusive fact that it was while in the process of overtaking the cargo truck
that the Viron bus collided with the former vehicle.
It is here well to recall that the driver of an overtaking vehicle must see to it that the conditions
are such that an attempt to pass is reasonably safe and prudent, and in passing must exercise
reasonable care. In the absence of clear evidence of negligence on the part of the operator of
the overtaken vehicle, the courts are inclined to put the blame for an accident occurring while a
passage is being attempted on the driver of the overtaking vehicle (People vs. Bolason, (C.A.) 53
Off. Gaz. 4158). As already intimated elsewhere in this judgment, no evidence was presented by
the plaintiff to even intimate at the negligence of the driver of the cargo truck.
[9]

It is plain to see that the fault or negligence was attributable to the driver of the Viron
passenger bus. Petitioner proceeds to attack, albeit feebly, the credibility of the two witnesses
presented by private respondents, namely, Alberto delos Santos himself, who was then the
driver of the Forward Cargo Truck and a certain Manuel Dulnuan, who was then travelling along
the same highway coming from the opposite direction when the accident occurred. According to
petitioner, the two witnesses contradicted each other when witness Dulnuan testified that the
petitioners passenger bus while attempting to overtake the respondents truck, noticed the
Dagupan passenger bus coming from the opposite direction and to avoid hitting said passenger
bus, the Viron Transit passenger bus swerved to the right, hitting in the process the front left side
portion of the respondents truck; while, witness Alberto delos Santos testified that prior to
the accident, he swerved his truck to the right shoulder of the road (western lane) and when he
attempted to return to his lane, the accident happened. Contrary to petitioners assertion, the
testimonies of the two witnesses complement, if not corroborate each other. The Viron
passenger bus collided with the cargo truck in a vain attempt to overtake the latter. At the sight
of an oncoming bus in the opposite direction, the Viron passenger bus swerved to the right lane
which was then occupied by the cargo truck resulting in the collision of the two vehicles. In
reference to Alberto delos Santos testimony, the lower court pointed out that the said driver of
the cargo truck was on its proper lane at the time of impact, and even swerved earlier toward
the right shoulder of the road just to give room to the bus. In any event, it is doctrinally
entrenched that the assessment of the trial judge as to the issue of credibility binds the appellate
court because he is in a better position to decide the issue, having heard the witnesses and
observed their deportment and manner of testifying during the trial, except when the trial court
has plainly overlooked certain facts of substance and value, that, if considered, might affect the
result of the case, or where the assessment is clearly shown to be arbitrary.
[10]
Petitioner has not
shown this case to fall under the exception.
The second imputed error is without merit either. Petitioner contends that private
respondents counterclaim failed to state a cause of action for there is no averment therein that
petitioner failed to exercise the diligence of a good father of a family in the selection and
supervision of its drivers or employees. It is to be noted that petitioner Viron Transportation Co.,
Inc., as the registered owner of the bus involved in the subject vehicular accident originally
brought the action for damages against private respondents. Private respondents as defendants
in the court a quodenied any liability and filed instead a counterclaim for damages claiming that
it was the driver of the bus who was at fault in the operation of the bus. We find that the
counterclaim of private respondents alleges the ultimate facts constituting their cause of
action. It is not necessary to state that petitioner was negligent in the supervision or selection of
its employees, as its negligence is presumed by operation of law. The liability of the
employer was explained in a case thus:
As employers of the bus driver, the petitioner is, under Article 2180 of the Civil Code, directly
and primary liable for the resulting damages. The presumption that they are negligent flows
from the negligence of their employee. That presumption, however, is only juris tantum,
not juris et de jure. Their only possible defense is that they exercised all the diligence of a good
father of a family to prevent the damage. Article 2180 reads as follows:
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.
The diligence of a good father referred to means the diligence in the selection and supervision of
employees.
[11]

In fine, when the employee causes damage due to his own negligence while performing his
own duties, there arises the juris tantum presumption that the employer is negligent, rebuttable
only by proof of observance of the diligence of a good father of a family.
[12]
Petitioner, through its
witnesses, namely, Danilo Azardon, a shop supervisor and Fernando Mallare, an administrative
officer, failed to rebut such legal presumption of negligence in the selection and supervision of
employees, thus, petitioner as the employer is responsible for damages, the basis of the liability
being the relationship of pater familias or on the employers own negligence.
[13]
Hence, with the
Page 40 of 94

allegations and subsequent proof of negligence against the bus driver of petitioner, the lower
courts correctly adjudged petitioner liable for damages.
Be that as it may, it is too late in the day for petitioner to raise failure to state a cause of
action as an issue. Rule 9, Section 2 of the Rules of Court provides as a general rule that
defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed
waived. An exception is made where there is a failure to state a cause of action which may be
alleged in a later pleading, if one is permitted, or by motion for judgment on the pleadings, or at
the trial on the merits; x x x. Applying said rule, petitioner is now barred from raising said issue,
which it did only for the first time in the Court of Appeals and subsequently before this
Court. Petitioner did not raise the said issue in a later pleading, i.e. answer to the counterclaim,
or at any time during the trial.
The fourth imputed error is likewise without merit. The Court of Appeals committed no
error in declaring the case submitted for decision even without the testimony of petitioners
rebuttal witness. Petitioner has only itself to blame for its failure to present its rebuttal witness
as the Court of Appeals explained thus:
Appellants claim that the court a quo erred in not allowing it to present rebuttal evidence, thus
depriving it of its day in court is without merit. A review of the records would show that
appellant was given ample opportunity to present its rebuttal evidence but failed to so do. It
was appellant itself which sought the postponements and cancellations of the hearings, after its
motion for the presentation of rebuttal evidence had been granted.
[14]

There is, however, merit in the third imputed error. We find that with respect to the award
of damages, an oversight was committed by the Court of Appeals. The Court of Appeals justified
the award of actual damages as follows:
In the case at bench, the award of actual damages cannot be said to be devoid of factual and
legal basis. Appellees were able to prove that damage had been suffered by the cargo truck, the
amount of which is shown in Exhibit 3, the estimate of repair expenses. Moreover, the picture of
the damaged cargo truck (Exh. 1), more or less, supports the amount of damage reflected in the
repair estimate (Exh. 3).
As to the award of attorneys fees, the Court finds the same just and reasonable. The award of
attorneys fees is proper where the acts and omissions of a party have compelled the other party
to litigate or incur expenses to protect his rights and such may be recovered when deemed by
the court as just and equitable, as in the case at bar. x x x.
[15]

Actual damages, to be recoverable, must not only be capable of proof, but must actually be
proved with a reasonable degree of certainty. Courts cannot simply rely on speculation,
conjecture or guesswork in determining the fact and amount of damages.
[16]
To justify an award
of actual damages, there must be competent proof of the actual amount of loss, credence can be
given only to claims which are duly supported by receipts.
[17]
Considering that the actual
damages suffered by private respondents were based only on a job estimate and a photo
showing the damage to the truck, there is absence of competent proof on the specific amounts
of actual damages suffered. Neither were the transportation and accommodation expenses
during the trial supported by competent proof, the lower court having relied merely on the
unsubstantiated allegations of private respondents.
Nonetheless, in the absence of competent proof on the actual damages suffered, a party is
entitled to temperate damages. Article 2224 of the Civil Code provides that:
Art. 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has
been suffered but its amount can not, from the nature of the case, be proved with certainty.
There is no doubt that the damage sustained by private respondents' cargo truck was due
to the fault or negligence of petitioner's bus driver. The Court deems the amount of P10,000.00
to be reasonable given the circumstances.
[18]

With respect to the award of attorneys fees, there is likewise neither factual nor legal basis
therefor. This case does not fall under any of the instances found in Article 2208 of the Civil
Code
[19]
for the proper award of attorneys fees. The futility of petitioners resort to judicial
action without more could not be taken against it. It cannot be said that petitioner filed a clearly
unfounded civil action against the private respondents. A resort to judicial processes and a
subsequent defeat therein are not per se evidence of a clearly unfounded suit, this is in line with
the policy that no penalty should be placed on the right to litigate.
[20]

WHEREFORE, the challenged decision of the Court of Appeals promulgated on October 27,
1998 in CA-G.R. CV No. 54080 affirming that of the Regional Trial Court of Manila, Branch 55, is
hereby modified insofar as it awarded actual damages to private respondents Alberto delos
Santos y Natividad and Rudy Samidan in the amount of P19,500.00 and an additional P10,000.00
as expenses for transportation and accommodation during the trial for lack of evidentiary bases
therefor. Considering the fact, however, that the cargo truck sustained damages due to the
negligence or fault of petitioner, the award of P10,000.00 in favor of private respondents as and
for temperate damages is in order. The award of P10,000.00 as attorneys fees is DELETED for
reasons above-stated.
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
[G.R. No. 139875. December 4, 2000]
GREGORIO PESTAO and METRO CEBU AUTOBUS CORPORATION, petitioners, vs. Spouses
TEOTIMO SUMAYANG and PAZ C. SUMAYANG,respondents.
D E C I S I O N
PANGANIBAN, J.:
Factual findings of the Court of Appeals, affirming those of the trial judge, are binding on
this Court. In quasi-delicts, such findings are crucial because negligence is largely a matter of
evidence. In computing an award for lost earning capacity, the life expectancy of the deceased,
not that of the heir, is used as basis.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the April 21, 1999 Decision and the August 6, 1999 Resolution of the Court of Appeals
[1]
(CA) in
CA-GR CV No. 30289. The questioned Decision disposed as follows:
WHEREFORE, premises considered, the instant appeal is hereby DENIED. The assailed Decision
of the lower court is hereby AFFIRMED with the aforesaid modification regarding the award of
death penalty.
The Resolution of August 6, 1999 denied reconsideration.
[2]

The Facts
The events leading to this Petition were summarized by the Court of Appeals as follows:
Page 41 of 94

It appears from the records that at around 2:00 oclock *o+n the afternoon of August 9, 1986,
Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon,
Cebu. Riding with him was his friend Manuel Romagos. As they came upon a junction where the
highway connected with the road leading to Tabagon, they were hit by a passenger bus driven by
[Petitioner] Gregorio Pestao and owned by [Petitioner] Metro Cebu Autobus Corporation
(Metro Cebu, for brevity), which had tried to overtake them, sending the motorcycle and its
passengers hurtling upon the pavement. Both Ananias Sumayang and Manuel Romagos were
rushed to the hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos
was transferred to the Cebu Doctors Hospital, but he succumbed to his injuries the day after.
Apart from the institution of criminal charges against Gregorio Pestao, *Respondents+ Teotimo
and Paz Sumayang, as heirs of Ananias Sumayang, filed this civil action for damages against
Gregorio Pestao, as driver of the passenger bus that rammed the deceaseds motorcycle, Metro
Cebu, as owner and operator of the said bus, and Perla Compania de Seguros, as insurer of
Metro Cebu. The case was docketed as Civil Case No. CEB-6108.
On November 9, 1987, upon motion of [Petitioner] Pestao, Judge Pedro C. Son ordered the
consolidation of the said case with Criminal Case No. 10624, pending in Branch 16 of the same
Court, involving the criminal prosecution of Gregorio Pestao for [d]ouble [h]omicide thru
[r]eckless [i]mprudence. Joint trial of the two cases thereafter ensued, where the following
assertions were made:
*Respondents+ rely mainly on the testimonies of Ignacio Neis, Pat. Aquilino Dinoy and Teotimo
Sumayang, father of the deceased. Neis declared that he saw the incident while he was sitting
on a bench beside the highway; that both vehicles c[a]me from the North; that as the motorcycle
approached the junction to Tab[a]gon, the driver Ananias Sumayang signalled with his left arm to
indicate that he was taking the Tab[a]gon Road; that the motorcycle did turn left but as it did so,
it was bumped by an overspeeding bus; that the force of the impact threw Ananias Sumayang
and his companion Manuel Romagos about 14 meters away. The motorcycle, Neis continued,
was badly damaged as it was dragged by the bus.
On the other hand, Pat. Dinoy testified that he was in the nearby house of Ruben Tiu *when+ he
heard the sound or noise caused by the collision; that he immediately went to the scene where
he found Ananias Sumayang and Manuel Romagos lying on the road bleeding and badly injured;
that he requested the driver of a PU vehicle to take them to a hospital; that he took note of the
various distances which he included in his sketch (Exh. J) that the probable point of impact was at
the left lane of the highway and right at the junction to Tab[a]gon (Exh J-11); that he based his
conclusion on the scratches caused by the motorcycles footrest on the asphalt pavement; that
he described the damage caused to the motorcycle in his sketch (Exh J); that on the part of the
bus, the right end of its front bumper was bent and the right portion of the radiator grill was
dented. Pat. Dinoy acknowledged that he met at the scene Ignacio Neis who informed him that
he saw the incident.
On the contrary, Pestao blamed Sumayang for the accident. He testified that when he first
blew the horn the motorcycle which was about 15 or 20 meters ahead went to the right side of
the highway that he again blew the horn and accelerated in order to overtake the motorcycle;
that when he was just one meter behind, the motorcycle suddenly turned left towards the
Tab[a]gon [R]oad and was bumped by his bus; that he was able to apply his break only after the
impact. Pestaos testimony was corroborated by Ireneo Casilia who declared that he was one
of the passengers of the bus; that the motorcycle suddenly turned left towards Tab[a]gon [R]oad
without giving any signal to indicate its maneuver; that the bus was going at 40 kph when the
accident occurred.
To substantiate its defense of bonos pater familias [petitioner] [c]orporation recalled to the
witness box Gregorio Pestao who explained how his driving experience and ability were tested
by the company before he was hired. He further declared that the management gave regular
lectures to drivers and conductors touching on various topics like speeding, parking, loading and
treatment of passengers, and that before he took to the road at 2:30 AM of that day he checked
together with the mechanic the tires, brake, signal lights as well as the tools to be brought
along. He did the same thing before commencing his return trip from Hagnaya, San Remegio
later in the day.
The corporation also presented its maintenance supervisor, Agustin Pugeda, Jr., and its
manager, Alfonso Corominas, Jr. who corroborated Pestaos testimony that his driving ability
was thoroughly tested, and that all drivers underwent periodic lecture on various aspects of
safety driving including pertinent traffic regulations. They also confirmed the thorough checkup
of every vehicle before it would depart and that the performance of the drivers was being
monitored by several inspectors posted at random places along the route.
In judgment, the lower court found *petitioners+ liable to the *respondents], in the amounts of
P30,000.00 for death indemnity, P829,079 for loss of earning capacity of the deceased Ananias
Sumayang, and P36,000.00 for necessary interment expenses. The liability of defendant Perla
Compania de Seguros, Inc., however, was limited only to the amount stipulated in the insurance
policy, which [was] P12,000 for death indemnity and P4,500.00 for burial expenses.
In so ruling, the lower court found *Petitioner+ Pestao to have been negligent in driving the
passenger bus that hit the deceased. It was shown that Pestao negligently attempted to
overtake the motorcycle at a dangerous speed as they were coming upon a junction in the road,
and as the motorcycle was about to turn left towards Tabagon. The court likewise found Metro
Cebu directly and primarily liable, along with Pestao, the latters employer under Article 2180 of
the Civil Code, as [Petitioner] Metro Cebu failed to present evidence to prove that it had
observed x x x [the] diligence of a good father of a family to prevent damage. Nor has Metro
Cebu proven that it had exercised due diligence in the supervision of its employees and in the
maintenance of vehicles.
[3]

Ruling of the Court of Appeals
The CA affirmed respondents liability for the accident and for Sumayangs death. Pestao
was negligent when he tried to overtake the victims motorcycle at the Tabagon junction. As a
professional driver operating a public transport vehicle, he should have taken extra precaution to
avoid accidents, knowing that it was perilous to overtake at a junction, where adjoining roads
had brought about merging and diverging traffic.
The appellate court opined that Metro Cebu had shown laxity in the conduct of its
operations and in the supervision of its employees. By allowing the bus to ply its route despite
the defective speedometer, said petitioner showed its indifference towards the proper
maintenance of its vehicles. Having failed to observe the extraordinary diligence required of
public transportation companies, it was held vicariously liable to the victims of the vehicular
accident.
Page 42 of 94

In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted
indemnity for the death of the victim. It also affirmed the award of loss of earning capacity
based on his life expectancy. Such liability was assessed, not as a pension for the claiming heirs,
but as a penalty and an indemnity for the drivers negligent act.
Hence, this Petition.
[4]

Issues
Petitioners submit the following issues
[5]
for our consideration:
1. The Court of Appeals misapplied facts of weight and substance affecting the result of the
case.
2. The Court of Appeals misapplied R.A. 4136 as regards the behavior of the deceased at the
time of the accident.
3. The Court of Appeals erred in ruling that the award of damages representing income that
deceased could have earned be considered a penalty.
4. The Court of Appeals, contrary to Article 2204, Civil Code, raised the award of P30,000.00
damages representing indemnity for death to P50,000.00.
5. The Court of Appeals used as basis for the loss of earning capacity, the life expectancy of the
*d+eceased instead of that of the respondents which was shorter.
[6]

In short, they raise these questions: whether the CA erred (1) in applying Section 45 of RA
4136 when it ruled that negligence in driving was the proximate cause of the accident; (2) in
increasing the civil indemnity from P30,000 to P50,000; and (3) in using the life expectancy of the
deceased instead of the life expectancies of respondents.
The Courts Ruling
The Petition has no merit.
First Issue: Negligence
Petitioners contend that Pestao was not under any obligation to slow down when he
overtook the motorcycle, because the deceased had given way to him upon hearing the bus
horn. Seeing that the left side of the road was clearly visible and free of oncoming traffic,
Pestao accelerated his speed to pass the motorcycle. Having given way to the bus, the
motorcycle driver should have slowed down until he had been overtaken.
They further contend that the motorcycle was not in the middle of the road nearest to the
junction as found by the trial and the appellate courts, but was on the inner lane. This explains
why the damage on the bus were all on the right side the right end of the bumper and the right
portion of the radiator grill were bent and dented. Hence, they insist that it was the victim who
was negligent.
We disagree. Petitioners are raising a question of fact based on Pestaos testimony
contradicting that of Eyewitness Ignacio Neis and on the location of the dents on the bumper and
the grill. Neis testified that as the two vehicles approached the junction, the victim raised his left
arm to signal that he was turning left to Tabagon, but that the latter and his companion were
thrown off the motorcycle after it was bumped by the overspeeding bus.
These contentions have already been passed upon by the trial and the appellate
courts. We find no cogent reason to reverse or modify their factual findings. The CA agreed with
the trial court that the vehicular collision was caused by Pestaos negligence when he
attempted to overtake the motorcycle. As a professional driver operating a public transport bus,
he should have anticipated that overtaking at a junction was a perilous maneuver and should
thus have exercised extreme caution.
Factual findings of the CA affirming those of the trial court are conclusive and binding on
this Court. Petitioners failed to demonstrate that this case falls under any of the recognized
exceptions to this rule.
[7]
Indeed, the issue of negligence is basically factual and, in quasi-delicts,
crucial in the award of damages.
Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer
and in implying that the accident could have been avoided had this instrument been properly
functioning.
This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code,
owners and managers are responsible for damages caused by their employees. When an injury is
caused by the negligence of a servant or an employee, the master or employer is presumed to be
negligent either in the selection or in the supervision of that employee. This presumption may
be overcome only by satisfactorily showing that the employer exercised the care and the
diligence of a good father of a family in the selection and the supervision of its employee.
[8]

The CA said that allowing Pestao to ply his route with a defective speedometer showed
laxity on the part of Metro Cebu in the operation of its business and in the supervision of its
employees. The negligence alluded to here is in its supervision over its driver, not in that which
directly caused the accident. The fact that Pestao was able to use a bus with a faulty
speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the
proper care of its vehicles. It had thus failed to conduct its business with the diligence required
by law.
Second Issue: Life Indemnity
Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000
to P50,000, without specifying any aggravating circumstance to justify the increment as provided
in the Civil Code.
[9]

This contention is untenable. The indemnity for death caused by a quasi-delict used to be
pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount has been
gradually increased through the years because of the declining value of our currency. At present,
prevailing jurisprudence fixes the amount at P50,000.
[10]

Third Issue: Loss of Earning Capacity
Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals,
[11]
which held:
The determination of the indemnity to be awarded to the heirs of a deceased person has
therefore no fixed basis. x x x The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor. x x x.
They contend that the CA used the wrong basis for its computation of earning capacity.
We disagree. The Court has consistently computed the loss of earning capacity based on
the life expectancy of the deceased,
[12]
and not on that of the heir.
[13]
Even Villa Rey Transit did
likewise.
The award for loss of earning capacity is based on two factors: (1) the number of years on
which the computation of damages is based and (2) the rate at which the loss sustained by the
heirs is fixed.
[14]
The first factor refers to the life expectancy, which takes into consideration the
nature of the victims work, lifestyle, age and state of health prior to the accident. The second
refers to the victims earning capacity minus the necessary living expenses. Stated otherwise,
Page 43 of 94

the amount recoverable is that portion of the earnings of the deceased which the beneficiary
would have received -- the net earnings of the deceased.
[15]

WHEREFORE, the Petition is DENIED and the assailed Decision and
Resolution AFFIRMED. Cost against petitioners.
SO ORDERED.
Melo, (Chairman), Vitug, and Gonzaga-Reyes, JJ., concur.
EN BANC
[G.R. No. 129029. April 3, 2000]
RAFAEL REYES TRUCKING CORPORATION, petitioner, vs. PEOPLE OF THE PHILIPPINES and
ROSARIO P. DY (for herself and on behalf of the minors Maria Luisa, Francis Edward, Francis
Mark and Francis Rafael, all surnamed Dy), respondents.
D E C I S I O N
PARDO, J.:
The case is an appeal via certiorari from the amended decision
[1]
of the Court of
Appeals
[2]
affirming the decision and supplemental decision of the trial court,
[3]
as follows:
"IN VIEW OF THE FOREGOING, judgment is hereby rendered dismissing the
appeals interposed by both accused and Reyes Trucking Corporation and
affirming the Decision and Supplemental Decision dated June 6, 1992 and
October 26, 1992 respectively.
"SO ORDERED."
[4]

The facts are as follows:
On October 10, 1989, Provincial Prosecutor Patricio T. Durian of Isabela filed with the Regional
Trial Court, Isabela, Branch 19, Cauayan an amended information charging Romeo Dunca y de
Tumol with reckless imprudence resulting in double homicide and damage to property, reading
as follows:
"That on or about the 20th day of June, 1989, in the Municipality of Cauayan,
Province of Isabela, Philippines, and within the jurisdiction of this Honorable
Court, the said accused being the driver and person-in-charge of a Trailer
Truck Tractor bearing Plate No. N2A-867 registered in the name of Rafael
Reyes Trucking Corporation, with a load of 2,000 cases of empty bottles of
beer grande, willfully, unlawfully and feloniously drove and operated the same
while along the National Highway of Barangay Tagaran, in said Municipality, in
a negligent, careless and imprudent manner, without due regard to traffic
laws, rules and ordinances and without taking the necessary precautions to
prevent injuries to persons and damage to property, causing by such
negligence, carelessness and imprudence the said trailer truck to hit and bump
a Nissan Pick-up bearing Plate No. BBG-957 driven by Feliciano Balcita and
Francisco Dy, Jr., @ Pacquing, due to irreversible shock, internal and external
hemorrhage and multiple injuries, open wounds, abrasions, and further
causing damages to the heirs of Feliciano Balcita in the amount of P100,000.00
and to the death of Francisco Dy, Jr.; @ Pacquing and damages to his Nissan
Pick-Up bearing Plate No. BBG-957 in the total amount of P2,000,000.00.
"CONTRARY TO LAW.
"Cauayan, Isabela, October 10, 1989.
"(Sgd.) FAUSTO C. CABANTAC
"Third Assistant Provincial Prosecutor"
Upon arraignment on October 23, 1989, the accused entered a plea of not guilty. On the same
occasion, the offended parties (Rosario P. Dy and minor children and Angelina M. Balcita and
minor son Paolo) made a reservation to file a separate civil action against the accused arising
from the offense charged.
[5]
On November 29, 1989, the offended parties actually filed with the
Regional Trial Court, Isabela, Branch 19, Cauayan a complaint against petitioner Rafael Reyes
Trucking Corporation, as employer of driver Romeo Dunca y de Tumol, based on quasi delict. The
petitioner settled the claim of the heirs of Feliciano Balcita (the driver of the other vehicle
involved in the accident). The private respondents opted to pursue the criminal action but did
not withdraw the civil case quasi ex delicto they filed against petitioner. On December 15, 1989,
private respondents withdrew the reservation to file a separate civil action against the accused
and manifested that they would prosecute the civil aspect ex delicto in the criminal
action.
[6]
However, they did not withdraw the separate civil action based on quasi delict against
petitioner as employer arising from the same act or omission of the accused driver.
[7]

Upon agreement of the parties, the trial court consolidated both criminal and civil cases and
conducted a joint trial of the same.
The facts, as found by the trial court, which appear to be undisputed, are as follows:
"The defendant Rafael Reyes Trucking Corporation is a domestic corporation
engaged in the business of transporting beer products for the San Miguel
Corporation (SMC for short) from the latters San Fernando, Pampanga plant
to its various sales outlets in Luzon. Among its fleets of vehicles for hire is the
white truck trailer described above driven by Romeo Dunca y Tumol, a duly
licensed driver. Aside from the Corporations memorandum to all its drivers
and helpers to physically inspect their vehicles before each trip (Exh. 15, pars.
4 & 5), the SMCs Traffic Investigator-Inspector certified the roadworthiness of
this White Truck trailer prior to June 20, 1989 (Exh. 17). In addition to a
professional drivers license, it also conducts a rigid examination of all driver
applicants before they are hired.
"In the early morning of June 20, 1989, the White Truck driven by Dunca left
Tuguegarao, Cagayan bound to San Fernando, Pampanga loaded with 2,000
cases of empty beer "Grande" bottles. Seated at the front right seat beside
him was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At
around 4:00 oclock that same morning while the truck was descending at a
slight downgrade along the national road at Tagaran, Cauayan, Isabela, it
approached a damaged portion of the road covering the full width of the
trucks right lane going south and about six meters in length. These made the
surface of the road uneven because the potholes were about five to six inches
deep. The left lane parallel to this damaged portion is smooth. As narrated by
Ferdinand Domingo, before approaching the potholes, he and Dunca saw the
Nissan with its headlights on coming from the opposite direction. They used to
evade this damaged road by taking the left lance but at that particular
moment, because of the incoming vehicle, they had to run over it. This caused
the truck to bounce wildly. Dunca lost control of the wheels and the truck
Page 44 of 94

swerved to the left invading the lane of the Nissan. As a result, Duncas vehicle
rammed the incoming Nissan dragging it to the left shoulder of the road and
climbed a ridge above said shoulder where it finally stopped. (see Exh. A-5, p.
8, record). The Nissan was severely damaged (Exhs. A-7, A-8, A-9 and A-14, pp.
9-11, record), and its two passengers, namely: Feliciano Balcita and Francisco
Dy, Jr. died instantly (Exh. A-19) from external and internal hemorrhage and
multiple fractures (pp. 15 and 16, record).
"For the funeral expenses of Francisco Dy, Jr. her widow spent P651,360.00
(Exh. I-3). At the time of his death he was 45 years old. He was the President
and Chairman of the Board of the Dynamic Wood Products and Development
Corporation (DWPC), a wood processing establishment, from which he was
receiving an income of P10,000.00 a month (Exh. D). In the Articles of
Incorporation of the DWPC, the spouses Francisco Dy, Jr. and Rosario Perez Dy
appear to be stockholders of 10,000 shares each with par value of P100.00 per
share out of its outstanding and subscribed capital stock of 60,000 shares
valued at P6,000,000.00 (Exhs. K-1 & 10-B). Under its 1988 Income Tax
Returns (Exh. J) the DWPC had a taxable net income of P78,499.30 (Exh. J).
Francisco Dy, Jr. was a La Salle University graduate in Business Administration,
past president of the Pasay Jaycees, National Treasurer and President of the
Philippine Jaycees in 1971 and 1976, respectively, and World Vice-President of
Jaycees International in 1979. He was also the recipient of numerous awards
as a civic leader (Exh. C). His children were all studying in prestigious schools
and spent about P180,000.00 for their education in 1988 alone (Exh. H-4).
"As stated earlier, the plaintiffs procurement of a writ of attachment of the
properties of the Corporation was declared illegal by the Court of Appeals. It
was shown that on December 26, 1989, Deputy Sheriff Edgardo Zabat of the
RTC at San Fernando, Pampanga, attached six units of Truck Tractors and
trailers of the Corporation at its garage at San Fernando, Pampanga. These
vehicles were kept under PC guard by the plaintiffs in said garage thus
preventing the Corporation to operate them. However, on December 28,
1989, the Court of Appeals dissolved the writ (p. 30, record) and on December
29, 1989, said Sheriff reported to this Court that the attached vehicles were
taken by the defendants representative, Melita Manapil (Exh. O, p. 31,
record). The defendants general Manager declared that it lost P21,000.00 per
day for the non-operation of the six units during their attachment (p. 31, t.s.n.,
Natividad C. Babaran, proceedings on December 10, 1990)."
[8]

On June 6, 1992, the trial court rendered a joint decision, the dispositive portion of which reads
as follows:
"WHEREFORE, in view of the foregoing considerations judgment is hereby
rendered:
"1. Finding the accused Romeo Dunca y de Tumol guilty beyond reasonable
doubt of the crime of Double Homicide through Reckless Imprudence with
violation of the Motor Vehicle Law (Rep. Act No. 4136), and appreciating in his
favor the mitigating circumstance of voluntary surrender without any
aggravating circumstance to offset the same, the Court hereby sentences him
to suffer two (2) indeterminate penalties of four months and one day of
arresto mayor as minimum to three years, six months and twenty days as
maximum; to indemnify the Heirs of Francisco Dy. Jr. in the amount of
P3,000,000.00 as compensatory damages, P1,000,000.00 as moral damages,
and P1,030,000.00 as funeral expenses;
"2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay the defendant
therein actual damages in the amount of P84,000.00; and
"3. Ordering the dismissal of the complaint in Civil Case No. Br. 19-424.
"No pronouncement as to costs.
"SO ORDERED.
"Cauayan, Isabela, June 6, 1992.
"(Sgd.) ARTEMIO R. ALIVIA
"Regional Trial Judge"
[9]

On September 3, 1992, petitioner and the accused filed a notice of appeal from the joint
decision.
[10]

On the other hand, private respondents moved for amendment of the dispositive portion of the
joint decision so as to hold petitioner subsidiarily liable for the damages awarded to the private
respondents in the event of insolvency of the accused.
[11]

On October 26, 1992, the trial court rendered a supplemental decision amending the dispositive
portion by inserting an additional paragraph reading as follows:
"2:A Ordering the defendant Reyes Trucking Corporation subsidiarily liable
for all the damages awarded to the heirs of Francisco Dy, Jr., in the event of
insolvency of the accused but deducting therefrom the damages of P84,000.00
awarded to said defendant in the next preceding paragraph; and x x x"
[12]

On November 12, 1992, petitioner filed with the trial court a supplemental notice of appeal from
the supplemental decision.
[13]

During the pendency of the appeal, the accused jumped bail and fled to a foreign country. By
resolution dated December 29, 1994, the Court of Appeals dismissed the appeal of the accused
in the criminal case.
[14]

On January 6, 1997, the Court of Appeals rendered an amended decision affirming that of the
trial court, as set out in the opening paragraph of this decision.
[15]

On January 31, 1997, petitioner filed a motion for reconsideration of the amended decision.
[16]

On April 21, 1997, the Court of Appeals denied petitioners motion for reconsideration for lack of
merit.
[17]

Hence, this petition for review.
[18]

On July 21, 1997, the Court required respondents to comment on the petition within ten (10)
days from notice.
[19]

On January 27, 1998, the Solicitor General filed his comment.
[20]
On April 13, 1998, the Court
granted leave to petitioner to file a reply and noted the reply it filed on March 11, 1998.
[21]

We now resolve to give due course to the petition and decide the case.
Petitioner raises three (3) grounds for allowance of the petition, which, however, boil down to
two (2) basic issues, namely:
Page 45 of 94

1.....May petitioner as owner of the truck involved in the accident be held
subsidiarily liable for the damages awarded to the offended parties in the
criminal action against the truck driver despite the filing of a separate civil
action by the offended parties against the employer of the truck driver?
2.....May the Court award damages to the offended parties in the criminal case
despite the filing of a civil action against the employer of the truck driver; and
in amounts exceeding that alleged in the information for reckless imprudence
resulting in homicide and damage to property?
[22]

We grant the petition, resolving under the circumstances pro hac vice to remand the cases to the
trial court for determination of the civil liability of petitioner as employer of the accused driver in
the civil action quasi ex delicto re-opened for the purpose.
In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil
liability arising from crime under Article 100 of the Revised Penal Code; and (2) a separate action
for quasi delict under Article 2176 of the Civil Code of the Philippines. Once the choice is made,
the injured party can not avail himself of any other remedy because he may not recover damages
twice for the same negligent act or omission of the accused.
[23]
This is the rule against double
recovery.
In other words, "the same act or omission can create two kinds of liability on the part of the
offender, that is, civil liability ex delicto, and civil liability quasi delicto" either of which "may be
enforced against the culprit, subject to the caveat under Article 2177 of the Civil Code that the
offended party can not recover damages under both types of liability."
[24]

In the instant case, the offended parties elected to file a separate civil action for damages against
petitioner as employer of the accused, based on quasi delict, under Article 2176 of the Civil Code
of the Philippines. Private respondents sued petitioner Rafael Reyes Trucking Corporation, as the
employer of the accused, to be vicariously liable for the fault or negligence of the latter. Under
the law, this vicarious liability of the employer is founded on at least two specific provisions of
law.
The first is expressed in Article 2176 in relation to Article 2180 of the Civil Code, which would
allow an action predicated on quasi-delict to be instituted by the injured party against the
employer for an act or omission of the employee and would necessitate only a preponderance of
evidence to prevail. Here, the liability of the employer for the negligent conduct of the
subordinate is direct and primary, subject to the defense of due diligence in the selection and
supervision of the employee. The enforcement of the judgment against the employer in an
action based on Article 2176 does not require the employee to be insolvent since the nature of
the liability of the employer with that of the employee, the two being statutorily considered joint
tortfeasors, is solidary.
[25]
The second, predicated on Article 103 of the Revised Penal Code,
provides that an employer may be held subsidiarily civilly liable for a felony committed by his
employee in the discharge of his duty. This liability attaches when the employee is convicted of a
crime done in the performance of his work and is found to be insolvent that renders him unable
to properly respond to the civil liability adjudged.
[26]

As regards the first issue, the answer is in the negative. Rafael Reyes Trucking Corporation, as
employer of the accused who has been adjudged guilty in the criminal case for reckless
imprudence, can not be held subsidiarily liable because of the filing of the separate civil action
based on quasi delict against it. In view of the reservation to file, and the subsequent filing of the
civil action for recovery of civil liability, the same was not instituted with the criminal action. Such
separate civil action was for recovery of damages under Article 2176 of the Civil Code, arising
from the same act or omission of the accused.
[27]

Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules of Criminal
Procedure, when private respondents, as complainants in the criminal action, reserved the right
to file the separate civil action, they waived other available civil actions predicated on the same
act or omission of the accused-driver. Such civil action includes the recovery of indemnity under
the Revised Penal Code, and damages under Articles 32, 33, and 34 of the Civil Code of the
Philippines arising from the same act or omission of the accused.
[28]

The intention of private respondents to proceed primarily and directly against petitioner as
employer of accused truck driver became clearer when they did not ask for the dismissal of the
civil action against the latter based on quasi delict.
Consequently, the Court of Appeals and the trial court erred in holding the accused civilly liable,
and petitioner-employer of the accused subsidiarily liable for damages arising from crime (ex
delicto) in the criminal action as the offended parties in fact filed a separate civil action against
the employer based on quasi delict resulting in the waiver of the civil action ex delicto.
It might be argued that private respondents as complainants in the criminal case withdrew the
reservation to file a civil action against the driver (accused) and manifested that they would
pursue the civil liability of the driver in the criminal action. However, the withdrawal is ineffective
to reverse the effect of the reservation earlier made because private respondents did not
withdraw the civil action against petitioner based on quasi delict. In such a case, the provision of
Rule 111, Section 1, paragraph 3 of the 1985 Rules on Criminal Procedure is clear that the
reservation to file or the filing of a separate civil action results in a waiver of other available civil
actions arising from the same act or omission of the accused. Rule 111, Section 1, paragraph 2
enumerated what are the civil actions deemed waived upon such reservation or filing, and one of
which is the civil indemnity under the Revised Penal Code. Rule 111, Section 1, paragraph 3 of
the 1985 Rules on Criminal Procedure specifically provides:
"A waiver of any of the civil actions extinguishes the others. The institution of,
or the reservation of the right to file, any of said civil actions separately waives
the others."
The rationale behind this rule is the avoidance of multiple suits between the same litigants
arising out of the same act or omission of the offender. The restrictive phraseology of the section
under consideration is meant to cover all kinds of civil actions, regardless of their source in law,
provided that the action has for its basis the same act or omission of the offender.
[29]

However, petitioner as defendant in the separate civil action for damages filed against it, based
on quasi delict, may be held liable thereon. Thus, the trial court grievously erred in dismissing
plaintiffs civil complaint. And the Court of Appeals erred in affirming the trial courts decision.
Unfortunately private respondents did not appeal from such dismissal and could not be granted
affirmative relief.
[30]

The Court, however, in exceptional cases has relaxed the rules "in order to promote their
objectives and assist the parties in obtaining just, speedy, and inexpensive determination of
every action or proceeding"
[31]
or exempted "a particular case from the operation of the
rules."
[32]

Page 46 of 94

Invoking this principle, we rule that the trial court erred in awarding civil damages in the criminal
case and in dismissing the civil action. Apparently satisfied with such award, private respondent
did not appeal from the dismissal of the civil case. However, petitioner did appeal. Hence, this
case should be remanded to the trial court so that it may render decision in the civil case
awarding damages as may be warranted by the evidence.
[33]

With regard to the second issue, the award of damages in the criminal case was improper
because the civil action for the recovery of civil liability was waived in the criminal action by the
filing of a separate civil action against the employer. As enunciated in Ramos vs. Gonong,
[34]
"civil
indemnity is not part of the penalty for the crime committed." The only issue brought before the
trial court in the criminal action is whether accused Romeo Dunca y de Tumol is guilty of reckless
imprudence resulting in homicide and damage to property. The action for recovery of civil
liability is not included therein, but is covered by the separate civil action filed against the
petitioner as employer of the accused truck-driver.
In this case, accused-driver jumped bail pending his appeal from his conviction. Thus, the
judgment convicting the accused became final and executory, but only insofar as the penalty in
the criminal action is concerned. The damages awarded in the criminal action was invalid
because of its effective waiver. The pronouncement was void because the action for recovery of
the civil liability arising from the crime has been waived in said criminal action.
With respect to the issue that the award of damages in the criminal action exceeded the amount
of damages alleged in the amended information, the issue is de minimis. At any rate, the trial
court erred in awarding damages in the criminal case because by virtue of the reservation of the
right to bring a separate civil action or the filing thereof, "there would be no possibility that the
employer would be held liable because in such a case there would be no pronouncement as to
the civil liability of the accused.
[35]

As a final note, we reiterate that "the policy against double recovery requires that only one
action be maintained for the same act or omission whether the action is brought against the
employee or against his employer.
[36]
The injured party must choose which of the available
causes of action for damages he will bring.
[37]

Parenthetically, the trial court found the accused "guilty beyond reasonable doubt of the crime
of Double Homicide Through Reckless Imprudence with violation of the Motor Vehicle Law (Rep.
Act No. 4136)." There is no such nomenclature of an offense under the Revised Penal Code. Thus,
the trial court was misled to sentence the accused "to suffer two (2) indeterminate penalties of
four (4) months and one (1) day of arresto mayor, as minimum, to three (3) years, six (6) months
and twenty (20) days of prision correccional, as maximum." This is erroneous because in reckless
imprudence cases, the actual penalty for criminal negligence bears no relation to the individual
willful crime or crimes committed, but is set in relation to a whole class, or series of crimes.
[38]

Unfortunately, we can no longer correct this judgment even if erroneous, as it is, because it has
become final and executory.
Under Article 365 of the Revised Penal Code, criminal negligence "is treated as a
mere quasi offense, and dealt with separately from willful offenses. It is not a question of
classification or terminology. In intentional crimes, the act itself is punished; in negligence or
imprudence, what is principally penalized is the mental attitude or condition behind the act, the
dangerous recklessness, lack of care or foresight, the imprudencia punible. Much of the
confusion has arisen from the common use of such descriptive phrase as homicide through
reckless imprudence, and the like; when the strict technical sense is, more accurately, reckless
imprudence resulting in homicide; or simple imprudence causing damages to property."
[39]

There is need, therefore, to rectify the designation of the offense without disturbing the imposed
penalty for the guidance of bench and bar in strict adherence to precedent.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the amended decision and
resolution of the Court of Appeals in CA-G. R. CR No. 14448, promulgated on January 6, 1997,
and the joint decision of the Regional Trial Court, Isabela, Branch 19, Cauayan, in Criminal Case
No. Br. 19-311 and Civil Case No. Br. 19-424, dated June 6, 1992.
IN LIEU THEREOF, the Court renders judgment as follows:
(1) In Criminal Case No. Br. 19-311, the Court declares the accused Romeo Dunca y de Tumol
guilty beyond reasonable doubt of reckless imprudence resulting in homicide and damage to
property, defined and penalized under Article 365, paragraph 2 of the Revised Penal Code, with
violation of the automobile law (R. A. No. 4136, as amended), and sentences him to suffer two
(2) indeterminate penalties of four (4) months and one (1) day of arresto mayor, as minimum, to
three (3) years, six (6) months and twenty (20) days of prision correccional, as
maximum,
[40]
without indemnity, and to pay the costs, and
(2) In Civil Case No. Br. 19-424, the Court orders the case re-opened to determine the liability of
the defendant Rafael Reyes Trucking Corporation to plaintiffs and that of plaintiffs on
defendants counterclaim.
No costs in this instance.
SO ORDERED.
FIRST DIVISION
[G.R. No. 147703. April 14, 2004]
PHILIPPINE RABBIT BUS LINES, INC., petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.
D E C I S I O N
PANGANIBAN, J.:
When the accused-employee absconds or jumps bail, the judgment meted out becomes
final and executory. The employer cannot defeat the finality of the judgment by filing a notice of
appeal on its own behalf in the guise of asking for a review of its subsidiary civil liability. Both the
primary civil liability of the accused-employee and the subsidiary civil liability of the employer are
carried in one single decision that has become final and executory.
The Case
Before this Court is a Petition for Review
[1]
under Rule 45 of the Rules of Court, assailing the
March 29, 2000
[2]
and the March 27, 2001
[3]
Resolutions of the Court of Appeals (CA) in CA-GR CV
No. 59390. Petitioners appeal from the judgment of the Regional Trial Court (RTC) of San
Fernando, La Union in Criminal Case No. 2535 was dismissed in the first Resolution as follows:
WHEREFORE, for all the foregoing, the motion to dismiss is GRANTED and the appeal is ordered
DISMISSED.
[4]

The second Resolution denied petitioners Motion for Reconsideration.
[5]

The Facts
The facts of the case are summarized by the CA in this wise:
On July 27, 1994, accused *Napoleon Roman y Macadangdang] was found guilty and convicted
of the crime of reckless imprudence resulting to triple homicide, multiple physical injuries and
Page 47 of 94

damage to property and was sentenced to suffer the penalty of four (4) years, nine (9) months
and eleven (11) days to six (6) years, and to pay damages as follows:
a. to pay the heirs of JUSTINO TORRES the sum of P50,000.00 as indemnity for his
death, plus the sum of P25,383.00, for funeral expenses, his unearned income
for one year at P2,500.00 a month,P50,000.00 as indemnity for the support of
Renato Torres, and the further sum of P300,000.00 as moral damages;
b. to the heirs of ESTRELLA VELERO, the sum of P50,000.00 as indemnity for her
death, the sum of P237,323.75 for funeral expenses, her unearned income for
three years at P45,000.00 per annum, and the further sum of P1,000,000.00 as
moral damages and P200,000.00 as attorneys fees*;+
c. to the heirs of LORNA ANCHETA, the sum of P50,000.00 as indemnity for her
death, the sum of P22,838.00 as funeral expenses, the sum of P20,544.94 as
medical expenses and her loss of income for 30 years at P1,000.00 per month,
and the further sum of P100,000.00 for moral damages;
d. to MAUREEN BRENNAN, the sum of P229,654.00 as hospital expenses, doctors
fees of P170,000.00 for the orthopedic surgeon, P22,500.00 for the
[n]eurologist, an additional indemnity [of] at leastP150,000.00 to cover future
correction of deformity of her limbs, and moral damages in the amount
of P1,000,000.00;
e. to ROSIE BALAJO, the sum of P3,561.46 as medical expenses, P2,000.00 as loss
of income, and P25,000.00 as moral damages;
f. to TERESITA TAMONDONG, the sum of P19,800.47 as medical
expenses, P800.00 for loss of income, and P25,000.00 as moral damages;
g. to JULIANA TABTAB, the amount of P580.81 as medical expenses, P4,600.00 as
actual damages and her loss earnings of P1,400.00 as well as moral damages
in the amount of P10,000.00;
h. to MIGUEL ARQUITOLA, the sum of P12,473.82 as hospital expenses, P14,530.00
as doctors fees, P1,000.00 for medicines and P50,000.00 as moral damages;
i. to CLARITA CABANBAN, the sum of P155.00 for medical expenses, P87.00 for
medicines, P1,710.00 as actual damages and P5,000.00 as moral damages;
j. to MARIANO CABANBAN, the sum of P1,395.00 for hospital bills, P500.00 for
medicine, P2,100.00 as actual damages, P1,200.00 for loss of income
and P5,000.00 as moral damages;
k. to La Union Electric Company as the registered owner of the Toyota Hi-Ace Van,
the amount of P250,000.00 as actual damages for the cost of the totally
wrecked vehicle; to the owner of the jeepney, the amount of P22,698.38 as
actual damages;
The court further ruled that *petitioner+, in the event of the insolvency of accused, shall be
liable for the civil liabilities of the accused. Evidently, the judgment against accused had become
final and executory.
Admittedly, accused had jumped bail and remained at-large. It is worth mention[ing] that
Section 8, Rule 124 of the Rules of Court authorizes the dismissal of appeal when appellant
jumps bail. Counsel for accused, also admittedly hired and provided by [petitioner], filed a notice
of appeal which was denied by the trial court. We affirmed the denial of the notice of appeal
filed in behalf of accused.
Simultaneously, on August 6, 1994, [petitioner] filed its notice of appeal from the judgment of
the trial court. On April 29, 1997, the trial court gave due course to *petitioners+ notice of
appeal. On December 8, 1998, [petitioner] filed its brief. On December 9, 1998, the Office of the
Solicitor General received *a+ copy of *petitioners+ brief. On January 8, 1999, the OSG moved to
be excused from filing *respondents+ brief on the ground that the OSGs authority to represent
People is confined to criminal cases on appeal. The motion was however denied per Our
resolution of May 31, 1999. On March 2, 1999, [respondent]/private prosecutor filed the instant
motion to dismiss.
[6]
(Citations omitted)
Ruling of the Court of Appeals
The CA ruled that the institution of a criminal case implied the institution also of the civil
action arising from the offense. Thus, once determined in the criminal case against the accused-
employee, the employers subsidiary civil liability as set forth in Article 103 of the Revised Penal
Code becomes conclusive and enforceable.
The appellate court further held that to allow an employer to dispute independently the
civil liability fixed in the criminal case against the accused-employee would be to amend, nullify
or defeat a final judgment. Since the notice of appeal filed by the accused had already been
dismissed by the CA, then the judgment of conviction and the award of civil liability became final
and executory. Included in the civil liability of the accused was the employers subsidiary liability.
Hence, this Petition.
[7]

The Issues
Petitioner states the issues of this case as follows:
A. Whether or not an employer, who dutifully participated in the defense of its accused-
employee, may appeal the judgment of conviction independently of the accused.
B. Whether or not the doctrines of Alvarez v. Court of Appeals (158 SCRA 57) and Yusay v.
Adil (164 SCRA 494) apply to the instant case.
[8]

There is really only one issue. Item B above is merely an adjunct to Item A.
The Courts Ruling
The Petition has no merit.
Main Issue:
Propriety of Appeal by the Employer
Pointing out that it had seasonably filed a notice of appeal from the RTC Decision,
petitioner contends that the judgment of conviction against the accused-employee has not
attained finality. The former insists that its appeal stayed the finality, notwithstanding the fact
that the latter had jumped bail. In effect, petitioner argues that its appeal takes the place of that
of the accused-employee.
We are not persuaded.
Appeals in Criminal Cases
Section 1 of Rule 122 of the 2000 Revised Rules of Criminal Procedure states thus:
Any party may appeal from a judgment or final order, unless the accused will be placed in
double jeopardy.
Clearly, both the accused and the prosecution may appeal a criminal case, but the
government may do so only if the accused would not thereby be placed in double
Page 48 of 94

jeopardy.
[9]
Furthermore, the prosecution cannot appeal on the ground that the accused should
have been given a more severe penalty.
[10]
On the other hand, the offended parties may also
appeal the judgment with respect to their right to civil liability. If the accused has the right to
appeal the judgment of conviction, the offended parties should have the same right to appeal as
much of the judgment as is prejudicial to them.
[11]

Appeal by the Accused
Who Jumps Bail
Well-established in our jurisdiction is the principle that the appellate court may, upon
motion or motu proprio, dismiss an appeal during its pendency if the accused jumps bail. The
second paragraph of Section 8 of Rule 124 of the 2000 Revised Rules of Criminal Procedure
provides:
The Court of Appeals may also, upon motion of the appellee or motu proprio, dismiss the appeal
if the appellant escapes from prison or confinement, jumps bail or flees to a foreign country
during the pendency of the appeal.
[12]

This rule is based on the rationale that appellants lose their standing in court when they
abscond. Unless they surrender or submit to the courts jurisdiction, they are deemed to have
waived their right to seek judicial relief.
[13]

Moreover, this doctrine applies not only to the accused who jumps bail during the appeal,
but also to one who does so during the trial. Justice Florenz D. Regalado succinctly explains the
principle in this wise:
x x x. When, as in this case, the accused escaped after his arraignment and during the trial, but
the trial in absentia proceeded resulting in the promulgation of a judgment against him and his
counsel appealed, since he nonetheless remained at large his appeal must be dismissed by
analogy with the aforesaid provision of this Rule [Rule 124, 8 of the Rules on Criminal
Procedure+. x x x
[14]

The accused cannot be accorded the right to appeal unless they voluntarily submit to the
jurisdiction of the court or are otherwise arrested within 15 days from notice of the judgment
against them.
[15]
While at large, they cannot seek relief from the court, as they are deemed to
have waived the appeal.
[16]

Finality of a Decision
in a Criminal Case
As to when a judgment of conviction attains finality is explained in Section 7 of Rule 120 of
the 2000 Rules of Criminal Procedure, which we quote:
A judgment of conviction may, upon motion of the accused, be modified or set aside before it
becomes final or before appeal is perfected. Except where the death penalty is imposed, a
judgment becomes final after the lapse of the period for perfecting an appeal, or when the
sentence has been partially or totally satisfied or served, or when the accused has waived in
writing his right to appeal, or has applied for probation.
In the case before us, the accused-employee has escaped and refused to surrender to the
proper authorities; thus, he is deemed to have abandoned his appeal. Consequently, the
judgment against him has become final and executory.
[17]

Liability of an Employer
in a Finding of Guilt
Article 102 of the Revised Penal Code states the subsidiary civil liabilities of innkeepers, as
follows:
In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or
corporations shall be civilly liable for crimes committed in their establishments, in all cases where
a violation of municipal ordinances or some general or special police regulation shall have been
committed by them or their employees.
Innkeepers are also subsidiary liable for restitution of goods taken by robbery or theft within
their houses from guests lodging therein, or for payment of the value thereof, provided that such
guests shall have notified in advance the innkeeper himself, or the person representing him, of
the deposit of such goods within the inn; and shall furthermore have followed the directions
which such innkeeper or his representative may have given them with respect to the care and
vigilance over such goods. No liability shall attach in case of robbery with violence against or
intimidation of persons unless committed by the innkeepers employees.
Moreover, the foregoing subsidiary liability applies to employers, according to Article 103
which reads:
The subsidiary liability established in the next preceding article shall also apply 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.
Having laid all these basic rules and principles, we now address the main issue raised by
petitioner.
Civil Liability Deemed Instituted
in the Criminal Prosecution
At the outset, we must explain that the 2000 Rules of Criminal Procedure has clarified what
civil actions are deemed instituted in a criminal prosecution.
Section 1 of Rule 111 of the current Rules of Criminal Procedure provides:
When a criminal action is instituted, the civil action for the recovery of civil liability arising from
the offense charged shall be deemed instituted with the criminal action unless the offended
party waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
x x x x x x x x x
Only the civil liability of the accused arising from the crime charged is deemed impliedly
instituted in a criminal action, that is, unless the offended party waives the civil action, reserves
the right to institute it separately, or institutes it prior to the criminal action.
[18]
Hence, the
subsidiary civil liability of the employer under Article 103 of the Revised Penal Code may be
enforced by execution on the basis of the judgment of conviction meted out to the employee.
[19]

It is clear that the 2000 Rules deleted the requirement of reserving independent civil
actions and allowed these to proceed separately from criminal actions. Thus, the civil actions
referred to in Articles 32,
[20]
33,
[21]
34
[22]
and 2176
[23]
of the Civil Code shall remain separate,
distinct and independent of any criminal prosecution based on the same act. Here are some
direct consequences of such revision and omission:
1. The right to bring the foregoing actions based on the Civil Code need not be reserved in
the criminal prosecution, since they are not deemed included therein.
2. The institution or the waiver of the right to file a separate civil action arising from the
crime charged does not extinguish the right to bring such action.
Page 49 of 94

3. The only limitation is that the offended party cannot recover more than once for the
same act or omission.
[24]

What is deemed instituted in every criminal prosecution is the civil liability arising from the
crime or delict per se (civil liability ex delicto), but not those liabilities arising from quasi-delicts,
contracts or quasi-contracts. In fact, even if a civil action is filed separately, the ex delicto civil
liability in the criminal prosecution remains, and the offended party may -- subject to the control
of the prosecutor -- still intervene in the criminal action, in order to protect the remaining civil
interest therein.
[25]

This discussion is completely in accord with the Revised Penal Code, which states that
*e+very person criminally liable for a felony is also civilly liable.
[26]

Petitioner argues that, as an employer, it is considered a party to the criminal case and is
conclusively bound by the outcome thereof. Consequently, petitioner must be accorded the
right to pursue the case to its logical conclusion -- including the appeal.
The argument has no merit. Undisputedly, petitioner is not a direct party to the criminal
case, which was filed solely against Napoleon M. Roman, its employee.
In its Memorandum, petitioner cited a comprehensive list of cases dealing with the
subsidiary liability of employers. Thereafter, it noted that none can be applied to it, because in
all th*o+se cases, the accuseds employer did not interpose an appeal.
[27]
Indeed, petitioner
cannot cite any single case in which the employer appealed, precisely because an appeal in such
circumstances is not possible.
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.
[28]
Although in substance and in effect, they have an interest therein, this fact should
be viewed in the light of their subsidiary liability. While they may assist their employees to the
extent of supplying the latters lawyers, as in the present case, the former cannot act
independently on their own behalf, but can only defend the accused.
Waiver of Constitutional Safeguard
Against Double Jeopardy
Petitioners appeal obviously aims to have the accused-employee absolved of his criminal
responsibility and the judgment reviewed as a whole. These intentions are apparent from its
Appellants Brief
[29]
filed with the CA and from its Petition
[30]
before us, both of which claim that
the trial courts finding of guilt is not supported by competent evidence.
[31]

An appeal from the sentence of the trial court implies a waiver of the constitutional
safeguard against double jeopardy and throws the whole case open to a review by the appellate
court. The latter is then called upon to render judgment as law and justice dictate, whether
favorable or unfavorable to the appellant.
[32]
This is the risk involved when the accused decides
to appeal a sentence of conviction.
[33]
Indeed, appellate courts have the power to reverse, affirm
or modify the judgment of the lower court and to increase or reduce the penalty it imposed.
[34]

If the present appeal is given course, the whole case against the accused-employee
becomes open to review. It thus follows that a penalty higher than that which has already been
imposed by the trial court may be meted out to him. Petitioners appeal would thus violate his
right against double jeopardy, since the judgment against him could become subject to
modification without his consent.
We are not in a position to second-guess the reason why the accused effectively waived his
right to appeal by jumping bail. It is clear, though, that petitioner may not appeal without
violating his right against double jeopardy.
Effect of Absconding
on the Appeal Process
Moreover, within the meaning of the principles governing the prevailing criminal
procedure, the accused impliedly withdrew his appeal by jumping bail and thereby made the
judgment of the court below final.
[35]
Having been a fugitive from justice for a long period of
time, he is deemed to have waived his right to appeal. Thus, his conviction is now final and
executory. The Court inPeople v. Ang Gioc
[36]
ruled:
There are certain fundamental rights which cannot be waived even by the accused himself, but
the right of appeal is not one of them. This right is granted solely for the benefit of the
accused. He may avail of it or not, as he pleases. He may waive it either expressly or by
implication. When the accused flees after the case has been submitted to the court for decision,
he will be deemed to have waived his right to appeal from the judgment rendered against him. x
x x.
[37]

By fleeing, the herein accused exhibited contempt of the authority of the court and placed
himself in a position to speculate on his chances for a reversal. In the process, he kept himself
out of the reach of justice, but hoped to render the judgment nugatory at his option.
[38]
Such
conduct is intolerable and does not invite leniency on the part of the appellate court.
[39]

Consequently, the judgment against an appellant who escapes and who refuses to
surrender to the proper authorities becomes final and executory.
[40]

Thus far, we have clarified that petitioner has no right to appeal the criminal case against
the accused-employee; that by jumping bail, he has waived his right to appeal; and that the
judgment in the criminal case against him is now final.
Subsidiary Liability
Upon Finality of Judgment
As a matter of law, the subsidiary liability of petitioner now accrues. Petitioner argues that
the rulings of this Court in Miranda v. Malate Garage & Taxicab, Inc.,
[41]
Alvarez v.
CA
[42]
andYusay v. Adil
[43]
do not apply to the present case, because it has followed the Courts
directive to the employers in these cases to take part in the criminal cases against their
employees. By participating in the defense of its employee, herein petitioner tries to shield itself
from the undisputed rulings laid down in these leading cases.
Such posturing is untenable. In dissecting these cases on subsidiary liability, petitioner lost
track of the most basic tenet they have laid down -- that an employers liability in a finding of
guilt against its accused-employee is subsidiary.
Under Article 103 of the Revised Penal Code, employers are subsidiarily liable for the
adjudicated civil liabilities of their employees in the event of the latters insolvency.
[44]
The
provisions of the Revised Penal Code on subsidiary liability -- Articles 102 and 103 -- are deemed
written into the judgments in the cases to which they are applicable.
[45]
Thus, in the dispositive
portion of its decision, the trial court need not expressly pronounce the subsidiary liability of the
employer.
Page 50 of 94

In the absence of any collusion between the accused-employee and the offended party, the
judgment of conviction should bind the person who is subsidiarily liable.
[46]
In effect and
implication, the stigma of a criminal conviction surpasses mere civil liability.
[47]

To allow employers to dispute the civil liability fixed in a criminal case would enable them
to amend, nullify or defeat a final judgment rendered by a competent court.
[48]
By the same
token, to allow them to appeal the final criminal conviction of their employees without the
latters consent would also result in improperly amending, nullifying or defeating the judgment.
The decision convicting an employee in a criminal case is binding and conclusive upon the
employer not only with regard to the formers civil liability, but also with regard to its amount.
The liability of an employer cannot be separated from that of the employee.
[49]

Before the employers subsidiary liability is exacted, however, there must be adequate
evidence establishing that (1) they are indeed the employers of the convicted employees; (2)
that the former are engaged in some kind of industry; (3) that the crime was committed by the
employees in the discharge of their duties; and (4) that the execution against the latter has not
been satisfied due to insolvency.
[50]

The resolution of these issues need not be done in a separate civil action. But the
determination must be based on the evidence that the offended party and the employer may
fully and freely present. Such determination may be done in the same criminal action in which
the employees liability, criminal and civil, has been pronounced;
[51]
and in a hearing set for that
precise purpose, with due notice to the employer, as part of the proceedings for the execution of
the judgment.
Just because the present petitioner participated in the defense of its accused-employee
does not mean that its liability has transformed its nature; its liability remains
subsidiary. Neither will its participation erase its subsidiary liability. The fact remains that since
the accused-employees conviction has attained finality, then the subsidiary liability of the
employer ipso facto attaches.
According to the argument of petitioner, fairness dictates that while the finality of
conviction could be the proper sanction to be imposed upon the accused for jumping bail, the
same sanction should not affect it. In effect, petitioner-employer splits this case into two: first,
for itself; and second, for its accused-employee.
The untenability of this argument is clearly evident. There is only one criminal case against
the accused-employee. A finding of guilt has both criminal and civil aspects. It is the height of
absurdity for this single case to be final as to the accused who jumped bail, but not as to an
entity whose liability is dependent upon the conviction of the former.
The subsidiary liability of petitioner is incidental to and dependent on the pecuniary civil
liability of the accused-employee. Since the civil liability of the latter has become final and
enforceable by reason of his flight, then the formers subsidiary civil liability has also become
immediately enforceable. Respondent is correct in arguing that the concept of subsidiary liability
is highly contingent on the imposition of the primary civil liability.
No Deprivation
of Due Process
As to the argument that petitioner was deprived of due process, we reiterate that what is
sought to be enforced is the subsidiary civil liability incident to and dependent upon the
employees criminal negligence. In other words, the employer becomes ipso facto subsidiarily
liable upon the conviction of the employee and upon proof of the latters insolvency, in the same
way that acquittal wipes out not only his primary civil liability, but also his employers subsidiary
liability for his criminal negligence.
[52]

It should be stressed that the right to appeal is neither a natural right nor a part of due
process.
[53]
It is merely a procedural remedy of statutory origin, a remedy that may be exercised
only in the manner prescribed by the provisions of law authorizing such exercise.
[54]
Hence, the
legal requirements must be strictly complied with.
[55]

It would be incorrect to consider the requirements of the rules on appeal as merely
harmless and trivial technicalities that can be discarded.
[56]
Indeed, deviations from the rules
cannot be tolerated.
[57]
In these times when court dockets are clogged with numerous litigations,
such rules have to be followed by parties with greater fidelity, so as to facilitate the orderly
disposition of those cases.
[58]

After a judgment has become final, vested rights are acquired by the winning party. If the
proper losing party has the right to file an appeal within the prescribed period, then the former
has the correlative right to enjoy the finality of the resolution of the case.
[59]

In fact, petitioner admits that by helping the accused-employee, it participated in the
proceedings before the RTC; thus, it cannot be said that the employer was deprived of due
process. It might have lost its right to appeal, but it was not denied its day in court.
[60]
In fact, it
can be said that by jumping bail, the accused-employee, not the court, deprived petitioner of the
right to appeal.
All told, what is left to be done is to execute the RTC Decision against the accused. It
should be clear that only after proof of his insolvency may the subsidiary liability of petitioner be
enforced. It has been sufficiently proven that there exists an employer-employee relationship;
that the employer is engaged in some kind of industry; and that the employee has been adjudged
guilty of the wrongful act and found to have committed the offense in the discharge of his
duties. The proof is clear from the admissions of petitioner that *o+n 26 August 1990, while on
its regular trip from Laoag to Manila, a passenger bus owned by petitioner, being then operated
by petitioners driver, Napoleon Roman, figured in an accident in San Juan, La Union x x
x.
[61]
Neither does petitioner dispute that there was already a finding of guilt against the accused
while he was in the discharge of his duties.
WHEREFORE, the Petition is hereby DENIED, and the assailed Resolutions AFFIRMED. Costs
against petitioner.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
SECOND DIVISION
[G.R. No. 151452. July 29, 2005]
SPS. ANTONIO C. SANTOS and ESPERANZA C. SANTOS, NORA BARNALO, BELINDA LUMACTAD,
MARIENELA DY, NIKKA SANTOS and LEONARDO FERRER, petitioners, vs. HON.
NORMANDIE B. PIZARDO, as Presiding Judge, RTC of Quezon City, Branch 101,
DIONISIO M SIBAYAN, and VIRON TRANSPORTATION COMPANY, INC., represented by
VIRGILIO Q. RONDARIS, President/Chairman, respondents.
D E C I S I O N
TINGA, J.:
Page 51 of 94

In this Petition for Review on Certiorari
[1]
dated March 1, 2002, petitioners assail
the Resolutions of the Court of Appeals dated September 10, 2001 and January 9, 2002,
respectively dismissing their petition for certiorari and denying their motion for reconsideration,
arising from the dismissal of their complaint to recover civil indemnity for the death and physical
injuries of their kin.
The following facts are matters of record.
In an Information dated April 25, 1994, Dionisio M. Sibayan (Sibayan) was charged with
Reckless Imprudence Resulting to Multiple Homicide and Multiple Physical Injuries in connection
with a vehicle collision between a southbound Viron Transit bus driven by Sibayan and a
northbound Lite Ace Van, which claimed the lives of the vans driver and three (3) of its
passengers, including a two-month old baby, and caused physical injuries to five (5) of the vans
passengers. After trial, Sibayan was convicted and sentenced to suffer the penalty of
imprisonment for two (2) years, four (4) months and one (1) day to four (4) years and two (2)
months. However, as there was a reservation to file a separate civil action, no pronouncement of
civil liability was made by the municipal circuit trial court in its decision promulgated on
December 17, 1998.
[2]

On October 20, 2000, petitioners filed a complaint for damages against Sibayan, Viron
Transit and its President/Chairman, Virgilio Q. Rondaris, with the Regional Trial Court of Quezon
City, pursuant to their reservation to file a separate civil action.
[3]
They cited therein the
judgment convicting Sibayan.
Viron Transit moved to dismiss the complaint on the grounds of improper service of
summons, prescription and laches, and defective certification of non-forum shopping. It also
sought the dropping of Virgilio Q. Rondaris as defendant in view of the separate personality of
Viron Transit from its officers.
[4]

Petitioners opposed the motion to dismiss contending, among others, that the right to file a
separate action in this case prescribes in ten (10) years reckoned from the finality of the
judgment in the criminal action. As there was no appeal of the decision convicting Sibayan, the
complaint which was filed barely two (2) years thence was clearly filed within the prescriptive
period.
The trial court dismissed the complaint on the principal ground that the cause of action had
already prescribed. According to the trial court, actions based on quasi delict, as it construed
petitioners cause of action to be, prescribe four (4) years from the accrual of the cause of action.
Hence, notwithstanding the fact that petitioners reserved the right to file a separate civil action,
the complaint ought to be dismissed on the ground of prescription.
[5]

Improper service of summons was likewise cited as a ground for dismissal of the complaint
as summons was served through a certain Jessica Ubalde of the legal department without
mentioning her designation or position.
Petitioners filed a motion for reconsideration pointing out yet again that the complaint is
not based on quasi delict but on the final judgment of conviction in the criminal case which
prescribes ten (10) years from the finality of the judgment.
[6]
The trial court denied petitioners
motion for reconsideration reiterating that petitioners cause of action was based on quasi
delict and had prescribed under Article 1146 of the Civil Code because the complaint was filed
more than four (4) years after the vehicular accident.
[7]
As regards the improper service of
summons, the trial court reconsidered its ruling that the complaint ought to be dismissed on this
ground.
Petitioners filed a petition for certiorari with the Court of Appeals which dismissed the
same for error in the choice or mode of appeal.
[8]
The appellate court also denied petitioners
motion for reconsideration reasoning that even if the respondent trial court judge committed
grave abuse of discretion in issuing the order of dismissal, certiorari is still not the permissible
remedy as appeal was available to petitioners and they failed to allege that the petition was
brought within the recognized exceptions for the allowance of certiorari in lieu of appeal.
[9]

In this petition, petitioners argue that a rigid application of the rule that certiorari cannot
be a substitute for appeal will result in a judicial rejection of an existing obligation arising from
the criminal liability of private respondents. Petitioners insist that the liability sought to be
enforced in the complaint arose ex delicto and is not based on quasi delict. The trial court
allegedly committed grave abuse of discretion when it insisted that the cause of action invoked
by petitioners is based on quasi delict and concluded that the action had prescribed. Since the
action is based on the criminal liability of private respondents, the cause of action accrued from
the finality of the judgment of conviction.
Assuming that their petition with the appellate court was procedurally flawed, petitioners
implore the Court to exempt this case from the rigid operation of the rules as they allegedly have
a legitimate grievance to vindicate, i.e., damages for the deaths and physical injuries caused by
private respondents for which no civil liability had been adjudged by reason of their reservation
of the right to file a separate civil action.
In their Comment
[10]
dated June 13, 2002, private respondents insist that the dismissal of
the complaint on the ground of prescription was in order. They point out that the averments in
the complaint make out a cause of action for quasi delict under Articles 2176 and 2180 of the
Civil Code. As such, the prescriptive period of four (4) years should be reckoned from the time
the accident took place.
Viron Transit also alleges that its subsidiary liability cannot be enforced since Sibayan was
not ordered to pay damages in the criminal case. It is Viron Transits contention that the
subsidiary liability of the employer contemplated in Article 103 of the Revised Penal Code
presupposes a situation where the civil aspect of the case was instituted in the criminal case and
no reservation to file a separate civil case was made.
Private respondents likewise allege that the recourse to the Court of Appeals via certiorari
was improper as petitioners should have appealed the adverse order of the trial court.
Moreover, they point out several other procedural lapses allegedly committed by petitioners,
such as lack of certification against forum-shopping; lack of duplicate original or certified true
copy of the assailed order of the trial court; and non-indication of the full names and addresses
of petitioners in the petition.
Petitioners filed a Reply
[11]
dated September 14, 2002, while private respondents filed
a Rejoinder
[12]
dated October 14, 2002, both in reiteration of their arguments.
We grant the petition.
Our Revised Penal Code provides that every person criminally liable for a felony is also
civilly liable.
[13]
Such civil liability may consist of restitution, reparation of the damage caused and
indemnification of consequential damages.
[14]
When a criminal action is instituted, the civil
liability arising from the offense is impliedly instituted with the criminal action, subject to three
Page 52 of 94

notable exceptions: first, when the injured party expressly waives the right to recover damages
from the accused; second, when the offended party reserves his right to have the civil damages
determined in a separate action in order to take full control and direction of the prosecution of
his cause; and third, when the injured party actually exercises the right to maintain a private suit
against the offender by instituting a civil action prior to the filing of the criminal case.
Notably, it was the 1985 Rules on Criminal Procedure, as amended in 1988, which governed
the institution of the criminal action, as well as the reservation of the right to file a separate civil
action. Section 1, Rule 111 thereof states:
Section 1. Institution of criminal and civil actions.When a criminal action is instituted, the civil
action for the recovery of civil liability is impliedly instituted with the criminal action, unless the
offended party waives the civil action, reserves his right to institute it separately, or institutes the
civil action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal Code, and damages
under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act
or omission of the accused.
A waiver of any of the civil actions extinguishes the others. The institution of, or the reservation
of the right to file, any of said civil actions separately waives the others.
The reservation of the right to institute the separate civil actions shall be made before the
prosecution starts to present its evidence and under circumstances affording the offended party
a reasonable opportunity to make such reservation.
In no case may the offended party recover damages twice for the same act or omission of the
accused.
When the offended party seeks to enforce civil liability against the accused by way of moral,
nominal, temperate or exemplary damages, the filing fees for such action as provided in these
Rules shall constitute a first lien on the judgment except in an award for actual damages.
In cases wherein the amount of damages, other than actual, is alleged in the complaint or
information, the corresponding filing fees shall be paid by the offended party upon filing thereof
in court for trial.
Petitioners expressly made a reservation of their right to file a separate civil action as a
result of the crime committed by Sibayan. On account of this reservation, the municipal circuit
trial court, in its decision convicting Sibayan, did not make any pronouncement as to the latters
civil liability.
Predicating their claim on the judgment of conviction and their reservation to file a
separate civil action made in the criminal case, petitioners filed a complaint for damages against
Sibayan, Viron Transit and its President/Chairman. Petitioners assert that by the institution of the
complaint, they seek to recover private respondents civil liability arising from crime.
Unfortunately, based on its misreading of the allegations in the complaint, the trial court
dismissed the same, declaring that petitioners cause of action was based on quasi delict and
should have been brought within four (4) years from the time the cause of action
accrued, i.e., from the time of the accident.
A reading of the complaint reveals that the allegations therein are consistent with
petitioners claim that the action was brought to recover civil liability arising from crime.
Although there are allegations of negligence on the part of Sibayan and Viron Transit, such does
not necessarily mean that petitioners were pursuing a cause of action based on quasi
delict, considering that at the time of the filing of the complaint, the cause of action ex quasi
delicto had already prescribed. Besides, in cases of negligence, the offended party has the choice
between an action to enforce civil liability arising from crime under the Revised Penal Code and
an action for quasi delict under the Civil Code.
An act or omission causing damage to another may give rise to two separate civil liabilities
on the part of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised Penal
Code; and (2) independent civil liabilities, such as those (a) not arising from an act or omission
complained of as a felony, e.g., culpa contractual or obligations arising from law under Article 31
of the Civil Code, intentional torts under Articles 32 and 34, and culpa aquiliana under Article
2176 of the Civil Code; or (b) where the injured party is granted a right to file an action
independent and distinct from the criminal action under Article 33 of the Civil Code.
[15]
Either of
these liabilities may be enforced against the offender subject to the caveat under Article 2177 of
the Civil Code that the plaintiff cannot recover damages twice for the same act or omission of the
defendant and the similar proscription against double recovery under the Rules above-quoted.
At the time of the filing of the complaint for damages in this case, the cause of action ex
quasi delicto had already prescribed. Nonetheless, petitioners can pursue the remaining avenue
opened for them by their reservation, i.e., the surviving cause of action ex delicto. This is so
because the prescription of the action ex quasi delicto does not operate as a bar to an action to
enforce the civil liability arising from crime especially as the latter action had been expressly
reserved.
The case of Mendoza v. La Mallorca Bus Company
[16]
was decided upon a similar set of
facts. Therein, the driver of La Mallorca Bus Company was charged with reckless imprudence
resulting to damage to property. The plaintiff made an express reservation for the filing of a
separate civil action. The driver was convicted which conviction was affirmed by this Court.
Later, plaintiff filed a separate civil action for damages based on quasi delict which was ordered
dismissed by the trial court upon finding that the action was instituted more than six (6) years
from the date of the accident and thus, had already prescribed. Subsequently, plaintiff instituted
another action, this time based on the subsidiary liability of the bus company. The trial court
dismissed the action holding that the dismissal of the earlier civil case operated as a bar to the
filing of the action to enforce the bus companys subsidiary liability.
We held that the dismissal of the action based on culpa aquiliana is not a bar to the
enforcement of the subsidiary liability of the employer. Once there is a conviction for a felony,
final in character, the employer becomes subsidiarily liable if the commission of the crime was in
the discharge of the duties of the employees. This is so because Article 103 of the Revised Penal
Code operates with controlling force to obviate the possibility of the aggrieved party being
deprived of indemnity even after the rendition of a final judgment convicting the employee.
Seen in this light, the trial court should not have dismissed the complaint on the ground of
prescription, but instead allowed the complaint for damages ex delicto to be prosecuted on the
merits, considering petitioners allegations in their complaint, opposition to the motion to
dismiss
[17]
and motion for reconsideration
[18]
of the order of dismissal, insisting that the action
was to recover civil liability arising from crime.
This does not offend the policy that the reservation or institution of a separate civil action
waives the other civil actions. The rationale behind this rule is the avoidance of multiple suits
between the same litigants arising out of the same act or omission of the offender.
[19]
However,
Page 53 of 94

since the stale action for damages based on quasi delict should be considered waived, there is no
more occasion for petitioners to file multiple suits against private respondents as the only
recourse available to them is to pursue damages ex delicto. This interpretation is also consistent
with the bar against double recovery for obvious reasons.
Now the procedural issue. Admittedly, petitioners should have appealed the order of
dismissal of the trial court instead of filing a petition for certiorari with the Court of Appeals.
Such procedural misstep, however, should be exempted from the strict application of the rules in
order to promote their fundamental objective of securing substantial justice.
[20]
We are loathe to
deprive petitioners of the indemnity to which they are entitled by law and by a final judgment of
conviction based solely on a technicality. It is our duty to prevent such an injustice.
[21]

WHEREFORE, judgment is hereby rendered SETTING ASIDE the resolutions of the Court of
Appeals dated September 10, 2001 and January 9, 2002, respectively dismissing the present
action and denying petitioners motion for reconsideration, as well as the orders of the lower
court dated February 26, 2001 and July 16, 2001. Let the case be REMANDED to the trial court for
further proceedings.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
[G.R. No. 160286. July 30, 2004]
SPOUSES FRANCISCO M. HERNANDEZ and ANICETA ABEL-HERNANDEZ and JUAN
GONZALES, petitioners, vs. SPOUSES LORENZO DOLOR and MARGARITA DOLOR, FRED
PANOPIO, JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES FRANCISCO VALMOCINA and
VIRGINIA VALMOCINA, SPOUSES VICTOR PANOPIO and MARTINA PANOPIO, and
HON. COURT OF APPEALS, respondents.
D E C I S I O N
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 April 29, 2003, in CA-G.R. CV No. 60357, which affirmed
with modification the amount of damages awarded in the November 24, 1997 decision
[2]
of the
Regional Trial Court of Batangas City, Branch IV.
The undisputed facts are as follows:
At about 3:00 p.m. of December 19, 1986, Lorenzo Menard Boyet Dolor, Jr. was driving
an owner-type jeepney with plate no. DEB 804 owned by her mother, Margarita, towards Anilao,
Batangas. As he was traversing the road at Barangay Anilao East, Mabini, Batangas, his vehicle
collided with a passenger jeepney bearing plate no. DEG 648, driven by petitioner Juan Gonzales
and owned by his co-petitioner Francisco Hernandez, which was travelling towards Batangas City.
Boyet Dolor and his passenger, Oscar Valmocina, died as a result of the collision. Fred
Panopio, Rene Castillo and Joseph Sandoval, who were also on board the owner-type jeep, which
was totally wrecked, suffered physical injuries. The collision also damaged the passenger
jeepney of Francisco Hernandez and caused physical injuries to its passengers, namely, Virgie
Cadavida, Fiscal Artemio Reyes and Francisca Corona.
[3]

Consequently, respondents commenced an action
[4]
for damages against petitioners before
the Regional Trial Court of Batangas City, alleging that driver Juan Gonzales was guilty of
negligence and lack of care and that the Hernandez spouses were guilty of negligence in the
selection and supervision of their employees.
[5]

Petitioners countered that the proximate cause of the death and injuries sustained by the
passengers of both vehicles was the recklessness of Boyet Dolor, the driver of the owner-type
jeepney, who was driving in a zigzagging manner under the influence of alcohol. Petitioners also
alleged that Gonzales was not the driver-employee of the Hernandez spouses as the former only
leased the passenger jeepney on a daily basis. The Hernandez spouses further claimed that even
if an employer-employee relationship is found to exist between them, they cannot be held liable
because as employers they exercised due care in the selection and supervision of their
employee.
During the trial of the case, it was established that the drivers of the two vehicles were duly
licensed to drive and that the road where the collision occurred was asphalted and in fairly good
condition.
[6]
The owner-type jeep was travelling uphill while the passenger jeepney was going
downhill. It was further established that the owner-type jeep was moderately moving and had
just passed a road bend when its passengers, private respondents Joseph Sandoval and Rene
Castillo, saw the passenger jeepney at a distance of three meters away. The passenger jeepney
was traveling fast when it bumped the owner type jeep.
[7]
Moreover, the evidence presented by
respondents before the trial court showed that petitioner Juan Gonzales obtained his
professional drivers license only on September 24, 1986, or three months before the
accident. Prior to this, he was holder of a student drivers permit issued on April 10, 1986.
[8]

On November 24, 1997, the trial court rendered a decision in favor of respondents, the
dispositive portion of which states:
Premises duly considered and the plaintiffs having satisfactorily convincingly and credibly
presented evidence clearly satisfying the requirements of preponderance of evidence to sustain
the complaint, this Court hereby declares judgment in favor of the plaintiffs and against the
defendants. Defendants-spouses Francisco Hernandez and Aniceta Abel Hernandez and Juan
Gonzales are therefore directed to pay jointly and severally, the following:
1) To spouses Lorenzo Dolor and Margarita Dolor:
a) P50,000.00 for the death of their son, Lorenzo Menard Boyet Dolor, Jr.;
b) P142,000.00 as actual and necessary funeral expenses;
c) P50,000.00 reasonable value of the totally wrecked owner-type
jeep with plate no. DEB 804 Phil 85;
d) P20,000.00 as moral damages;
e) P20,000.00 as reasonable litigation expenses and attorneys fees.
2) To spouses Francisco Valmocina and Virginia Valmocina:
a) P50,000.00 for the death of their son, Oscar Balmocina (sic);
b) P20,000.00 as moral damages;
c) P18,400.00 for funeral expenses;
d) P10,000.00 for litigation expenses and attorneys fees.
3) To spouses Victor Panopio and Martina Panopio:
a) P10,450.00 for the cost of the artificial leg and crutches being used by their son Fred
Panopio;
b) P25,000.00 for hospitalization and medical expenses they incurred for the treatment
of their son, Fred Panopio.
4) To Fred Panopio:
a) P25,000.00 for the loss of his right leg;
Page 54 of 94

b) P10,000.00 as moral damages.
5) To Joseph Sandoval:
a) P4,000.00 for medical treatment.
The defendants are further directed to pay the costs of this proceedings.
SO ORDERED.
[9]

Petitioners appealed
[10]
the decision to the Court of Appeals, which affirmed the same with
modifications as to the amount of damages, actual expenses and attorneys fees awarded to the
private respondents. The decretal portion of the decision of the Court of Appeals reads:
WHEREFORE, the foregoing premises considered, the appealed decision is AFFIRMED. However,
the award for damages, actual expenses and attorneys fees shall be MODIFIED as follows:
1) To spouses Lorenzo Dolor and Margarita Dolor:
a) P50,000.00 civil indemnity for their son Lorenzo Menard Dolor, Jr.;
b) P58,703.00 as actual and necessary funeral expenses;
c) P25,000,00 as temperate damages;
d) P100,000.00 as moral damages;
e) P20,000.00 as reasonable litigation expenses and attorneys fees.
2) To Spouses Francisco Valmocina and Virginia Valmocina:
a) P50,000.00 civil indemnity for the death of their son, Oscar
Valmocina;
b) P100,000.00 as moral damages;
c) P10,000.00 as temperate damages;
d) P10,000.00 as reasonable litigation expenses and attorneys
fees.
3) To Spouses Victor Panopio and Martina Panopio:
a) P10,352.59 as actual hospitalization and medical expenses;
b) P5,000.00 as temperate damages.
4) To Fred Panopio:
a) P50,000.00 as moral damages.
5) To Joseph Sandoval:
a) P3,000.00 as temperate damages.
SO ORDERED.
[11]

Hence the present petition raising the following issues:
1. Whether the Court of Appeals was correct when it pronounced the Hernandez spouses as
solidarily liable with Juan Gonzales, although it is of record that they were not in the passenger
jeepney driven by latter when the accident occurred;
2. Whether the Court of Appeals was correct in awarding temperate damages to private
respondents namely the Spouses Dolor, Spouses Valmocina and Spouses Panopio and to Joseph
Sandoval, although the grant of temperate damages is not provided for in decision of the court a
quo;
3. Whether the Court of Appeals was correct in increasing the award of moral damages to
respondents, Spouses Dolor, Spouses Valmocina and Fred Panopio;
4. Whether the Court of Appeals was correct in affirming the grant of attorneys fees to
Spouses Dolor and to Spouses Valmocina although the lower court did not specify the fact and
the law on which it is based.
Petitioners contend that the absence of the Hernandez spouses inside the passenger
jeepney at the time of the collision militates against holding them solidarily liable with their co-
petitioner, Juan Gonzales, invoking Article 2184 of the Civil Code, which provides:
ARTICLE 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the
former, who was in the vehicle, could have, by the use of the due diligence, prevented the
misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty of
reckless driving or violating traffic regulations at least twice within the next preceding two
months.
If the owner was not in the motor vehicle, the provisions of article 2180 are applicable.
The Hernandez spouses argues that since they were not inside the jeepney at the time of
the collision, the provisions of Article 2180 of the Civil Code, which does not provide for solidary
liability between employers and employees, should be applied.
We are not persuaded.
Article 2180 provides:
ARTICLE 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, 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. (Underscoring supplied)
On the other hand, 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.
While the above provisions of law do not expressly provide for solidary liability, the same
can be inferred from the wordings of the first paragraph of Article 2180 which 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.
Page 55 of 94

Moreover, Article 2180 should be read with Article 2194 of the same Code, which
categorically states that the responsibility of two or more persons who are liable for quasi-delict is
solidary. In other words, the liability of joint tortfeasors is solidary.
[12]
Verily, under Article 2180
of the Civil Code, an employer may be held solidarily liable for the negligent act of his
employee.
[13]

The solidary liability of employers with their employees for quasi-delicts having been
established, the next question is whether Julian Gonzales is an employee of the Hernandez
spouses. An affirmative answer will put to rest any issue on the solidary liability of the
Hernandez spouses for the acts of Julian Gonzales. The Hernandez spouses maintained that
Julian Gonzales is not their employee since their relationship relative to the use of the jeepney is
that of a lessor and a lessee. They argue that Julian Gonzales pays them a daily rental of P150.00
for the use of the jeepney.
[14]
In essence, petitioners are practicing the boundary system of
jeepney operation albeit disguised as a lease agreement between them for the use of the
jeepney.
We hold that an employer-employee relationship exists between the Hernandez spouses
and Julian Gonzales.
Indeed to exempt from liability the owner of a public vehicle who operates it under the
boundary system on the ground that he is a mere lessor would be not only to abet flagrant
violations of the Public Service Law, but also to place the riding public at the mercy of reckless
and irresponsible drivers reckless because the measure of their earnings depends largely upon
the number of trips they make and, hence, the speed at which they drive; and irresponsible
because most if not all of them are in no position to pay the damages they might cause.
[15]

Anent the award of temperate damages to the private respondents, we hold that the
appellate court committed no reversible error in awarding the same to the respondents.
Temperate or moderate damages are damages which are more than nominal but less than
compensatory which may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with
certainty.
[16]
Temperate damages are awarded for those cases where, from the nature of the
case, definite proof of pecuniary loss cannot be offered, although the court is convinced that
there has been such loss. A judge should be empowered to calculate moderate damages in such
cases, rather than the plaintiff should suffer, without redress, from the defendants wrongful
act.
[17]
The assessment of temperate damages is left to the sound discretion of the court
provided that such an award is reasonable under the circumstances.
[18]

We have gone through the records of this case and we find that, indeed, respondents
suffered losses which cannot be quantified in monetary terms. These losses came in the form of
the damage sustained by the owner type jeep of the Dolor spouses; the internment and burial of
Oscar Valmocina; the hospitalization of Joseph Sandoval on account of the injuries he sustained
from the collision and the artificial leg and crutches that respondent Fred Panopio had to use
because of the amputation of his right leg. Further, we find that the amount of temperate
damages awarded to the respondents were reasonable under the circumstances.
As to the amount of moral damages which was awarded to respondents, a review of the
records of this case shows that there exists no cogent reason to overturn the action of the
appellate court on this aspect.
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, thus:
. . . 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.
[19]

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.
[20]

Truly, the pain of the sudden loss of ones offspring, especially of a son who was in the
prime of his youth, and who holds so much promise waiting to be fulfilled is indeed a wellspring
of intense pain which no parent should be made to suffer. While it is true that there can be no
exact or uniform rule for measuring the value of a human life and the measure of damages
cannot be arrived at by a precise mathematical calculation,
[21]
we hold that the Court of Appeals
award of moral damages of P100,000.00 each to the Spouses Dolor and Spouses Valmocina for
the death of their respective sons, Boyet Dolor and Oscar Valmocina, is in full accord with
prevailing jurisprudence.
[22]

With respect to the award of attorneys fees to respondents, no sufficient basis was
established for the grant thereof.
It is well settled that attorneys fees should not be awarded in the absence of stipulation
except under the instances enumerated in Article 2208 of the Civil Code. As we have held
in Rizal Surety and Insurance Company v. Court of Appeals:
[23]

Article 2208 of the Civil Code allows attorneys fees to be awarded by a court when its claimant is
compelled to litigate with third persons or to incur expenses to protect his interest by reason of
an unjustified act or omission of the party from whom it is sought. While judicial discretion is
here extant, an award thereof demands, nevertheless, a factual, legal or equitable
justification. The matter cannot and should not be left to speculation and conjecture (Mirasol vs.
De la Cruz, 84 SCRA 337; Stronghold Insurance Company, Inc. vs. Court of Appeals, 173 SCRA 619).
In the case at bench, the records do not show enough basis for sustaining the award for
attorneys fees and to adjudge its payment by petitioner. x x x.
Likewise, this Court held in Stronghold Insurance Company, Inc. vs. Court of Appeals that:
In Abrogar v. Intermediate Appellate Court [G.R. No. 67970, January 15, 1988, 157 SCRA 57], the
Court had occasion to state that *t+he reason for the award of attorneys fees must be stated in
the text of the courts decision, otherwise, if it is stated only in the dispositive portion of the
decision, the same must be disallowed on appeal. x x x.
[24]

WHEREFORE, the petition is DENIED. The assailed decision of the Court of Appeals is
AFFIRMED with the MODIFICATION that the grant of attorneys fees is DELETED for lack of basis.
Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.
[G.R. No. 141538. March 23, 2004]
Hermana R. Cerezo, petitioner, vs. David Tuazon, respondent.
Page 56 of 94

D E C I S I O N
CARPIO, J.:
The Case
This is a petition for review on certiorari
[1]
to annul the Resolution
[2]
dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January
2000 denying the motion for reconsideration. The Court of Appeals denied the petition for
annulment of the Decision
[3]
dated 30 May 1995 rendered by
the Regional Trial Court of Angeles City, Branch 56 (trial court), in Civil Case No. 7415. The trial
court ordered petitioner Hermana R. Cerezo (Mrs. Cerezo) to pay respondent David Tuazon
(Tuazon) actual damages, loss of earnings, moral damages, and costs of suit.
Antecedent Facts
Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number
NYA 241 collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo Street,
Sta. Ines, Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a complaint for
damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo (Atty.
Cerezo), and bus driver Danilo A. Foronda (Foronda). The complaint alleged that:
7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-
named defendant [Foronda], being then the driver and person in charge of the Country Bus with
plate number NYA 241, did then and there willfully, unlawfully, and feloniously operate the said
motor vehicle in a negligent, careless, and imprudent manner without due regard to traffic rules
and regulations, there being a Slow Down sign near the scene of the incident, and without
taking the necessary precaution to prevent loss of lives or injuries, his negligence, carelessness
and imprudence resulted to severe damage to the tricycle and serious physical injuries to
plaintiff thus making him unable to walk and becoming disabled, with his thumb and middle
finger on the left hand being cut[.]
[4]

On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial
court issued summons against Atty. Cerezo and Mrs. Cerezo (the Cerezo spouses) at
the Makatiaddress stated in the complaint. However, the summons was returned unserved
on 10 November 1993 as the Cerezo spouses no longer held office nor resided in Makati. On 18
April 1994, the trial court issued alias summons against the Cerezo spouses at their address in
Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a copy of the complaint were
finally served on20 April 1994 at the office of Atty. Cerezo, who was then working as Tarlac
Provincial Prosecutor. Atty. Cerezo reacted angrily on learning of the service of summons upon
his person. Atty. Cerezo allegedly told Sheriff William Canlas: Punyeta, ano ang gusto mong
mangyari? Gusto mong hindi ka makalabas ng buhay dito? Teritoryo ko ito. Wala ka sa
teritoryo mo.
[5]

The records show that the Cerezo spouses participated in the proceedings before the trial
court. The Cerezo spouses filed a comment with motion for bill of particulars dated 29 April
1994and a reply to opposition to comment with motion dated 13 June 1994.
[6]
On 1 August 1994,
the trial court issued an order directing the Cerezo spouses to file a comment to the opposition
to the bill of particulars. Atty. Elpidio B. Valera (Atty. Valera) of Valera and Valera Law Offices
appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty. Valera filed an urgent ex-
parte motion praying for the resolution of Tuazons motion to litigate as a pauper and for the
issuance of new summons on the Cerezo spouses to satisfy proper service in accordance with the
Rules of Court.
[7]

On 30 August 1994, the trial court issued an order resolving Tuazons motion to litigate as a
pauper and the Cerezo spouses urgent ex-parte motion. The order reads:
At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless;
that at the time of the filing of this case, his son who is working in Malaysia helps him and sends
him once in a while P300.00 a month, and that he does not have any real property. Attached to
the Motion to Litigate as Pauper are his Affidavit that he is unemployed; a Certification by the
Barangay Captain of his poblacion that his income is not enough for his familys subsistence; and
a Certification by the Office of the Municipal Assessor that he has no landholding in
the Municipality of Mabalacat, Province of Pampanga.
The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to
prosecute his complaint in this case as a pauper under existing rules.
On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion
requiring new summons to be served to the defendants. The Court is of the opinion that any
infirmity in the service of the summons to the defendant before plaintiff was allowed to
prosecute his complaint in this case as a pauper has been cured by this Order.
If within 15 days from receipt of this Order, the defendants do not question on appeal this Order
of this Court, the Court shall proceed to resolve the Motion for Bill of Particulars.
[8]

On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for
reconsideration. The trial court denied the motion for reconsideration.
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file
their answer within fifteen days from receipt of the order. The Cerezo spouses did not file an
answer. On 27 January 1995, Tuazon filed a motion to declare the Cerezo spouses in
default. On 6 February 1995, the trial court issued an order declaring the Cerezo spouses in
default and authorizing Tuazon to present his evidence.
[9]

On 30 May 1995, after considering Tuazons testimonial and documentary evidence, the
trial court ruled in Tuazons favor. The trial court made no pronouncement on Forondas liability
because there was no service of summons on him. The trial court did not hold Atty. Cerezo liable
as Tuazon failed to show that Mrs. Cerezos business benefited the family, pursuant to Article
121(3) of the Family Code. The trial court held Mrs. Cerezo solely liable for the damages
sustained by Tuazon arising from the negligence of Mrs. Cerezos employee, pursuant to Article
2180 of the Civil Code. The dispositive portion of the trial courts decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay the
plaintiff:
a) For Actual Damages
1) Expenses for operation and medical
Treatment - P69,485.35
2) Cost of repair of the tricycle - 39,921.00
b) For loss of earnings - 43,300.00
c) For moral damages - 20,000.00
d) And to pay the cost of the suit.
The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment
may be rendered in favor of the plaintiff.
Page 57 of 94

SO ORDERED.
[10]

Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo
filed before the trial court a petition for relief from judgment on the grounds of fraud, mistake
or excusable negligence. Testifying before the trial court, both Mrs. Cerezo and Atty. Valera
denied receipt of notices of hearings and of orders of the court. Atty. Valera added that he
received no notice before or during the 8 May 1995 elections, when he was a senatorial
candidate for the KBL Party, and very busy, using his office and residence as Party National
Headquarters. Atty. Valera claimed that he was able to read the decision of the trial court only
after Mrs. Cerezo sent him a copy.
[11]

Tuazon did not testify but presented documentary evidence to prove the participation of
the Cerezo spouses in the case. Tuazon presented the following exhibits:
Exhibit 1 - Sheriffs return and summons;
Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendants counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendants counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Courts return slip addressed to Atty. Elpidio
Valera;
Exhibit 7-B - Courts return slip addressed to Spouses Juan
and Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Courts return slip addressed to defendant Hermana
Cerezo;
Exhibit 8-B - Courts return slip addressed to defendants counsel,
Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Courts return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Courts return slip addressed to plaintiffs counsel,
Atty. Norman Dick de Guzman.
[12]

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

Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition
for annulment of judgment

under Rule 47 with prayer for restraining order. Atty. Valera and
Atty. Dionisio S. Daga (Atty. Daga) represented Mrs. Cerezo in the petition, docketed as CA-G.R.
SP No. 53572.
[17]
The petition prayed for the annulment of the 30 May 1995 decision of the trial
court and for the issuance of a writ of preliminary injunction enjoining execution of the trial
courts decision pending resolution of the petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution
dated 21 October 1999. The resolution reads in part:
In this case, records show that the petitioner previously filed with the lower court a Petition for
Relief from Judgment on the ground that they were wrongfully declared in default while waiting
for an amicable settlement of the complaint for damages. The court a quo correctly ruled that
such petition is without merit. The defendant spouses admit that during the initial hearing they
appeared before the court and even mentioned the need for an amicable settlement. Thus, the
lower court acquired jurisdiction over the defendant spouses.
Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of
judgment is no longer available. The proper action for the petitioner is to appeal the order of the
lower court denying the petition for relief.
Wherefore, the instant petition could not be given due course and should accordingly be
dismissed.
SO ORDERED.
[18]

On 20 January 2000, the Court of Appeals denied the Cerezo spouses motion for
reconsideration.
[19]
The Court of Appeals stated:
Page 58 of 94

A distinction should be made between a courts jurisdiction over a person and its jurisdiction
over the subject matter of a case. The former is acquired by the proper service of summons or
by the parties voluntary appearance; while the latter is conferred by law.
Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas] P[ambansa]
129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction in all civil
actions in which the subject of the litigation is incapable of pecuniary estimation. Thus it was
proper for the lower court to decide the instant case for damages.
Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law; any
defects [sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil complaint
or improper service of summons) may be waived by the voluntary appearance of parties.
The lower court admits the fact that no summons was served on defendant Foronda. Thus,
jurisdiction over the person of defendant Foronda was not acquired, for which reason he was not
held liable in this case. However, it has been proven that jurisdiction over the other defendants
was validly acquired by the court a quo.
The defendant spouses admit to having appeared in the initial hearings and in the hearing for
plaintiffs motion to litigate as a pauper. They even mentioned conferences where attempts
were made to reach an amicable settlement with plaintiff. However, the possibility of amicable
settlement is not a good and substantial defense which will warrant the granting of said petition.
x x x
Assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and
question the lower courts jurisdiction because petitioner and her husband have waived such
right by voluntarily appearing in the civil case for damages. Therefore, the findings and the
decision of the lower court may bind them.
Records show that the petitioner previously filed with the lower court a Petition for Relief from
Judgment on the ground that they were wrongfully declared in default while waiting for an
amicable settlement of the complaint for damages. The court a quo correctly ruled that such
petition is without merit, jurisdiction having been acquired by the voluntary appearance of
defendant spouses.
Once again, it bears stressing that having availed of a petition for relief, the remedy of
annulment of judgment is no longer available.
Based on the foregoing, the motion for reconsideration could not be given due course and is
hereby DENIED.
SO ORDERED.
[20]

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

The Courts Ruling
The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available
to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and
signed pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty.
Cerezo. Despite their number, Mrs. Cerezos counsels failed to avail of the proper remedies. It is
either by sheer ignorance or by malicious manipulation of legal technicalities that they have
managed to delay the disposition of the present case, to the detriment of pauper litigant Tuazon.
Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses
in default. Mrs. Cerezo asserts that she only came to know of the default order on 25 June 1995,
when she received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before the trial
court a petition for relief from judgment under Rule 38, alleging fraud, mistake, or excusable
negligence as grounds. On 4 March 1998, the trial court denied Mrs. Cerezos petition for relief
from judgment. The trial court stated that Mrs. Cerezo could have availed of appeal as a remedy
and that she failed to prove that the judgment was entered through fraud, accident, mistake, or
excusable negligence. Mrs. Cerezo then filed before the Court of Appeals a petition
for certiorariunder Section 1 of Rule 65 assailing the denial of the petition for relief from
judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezos petition. On 24
February 1999, the appellate court denied Mrs. Cerezos motion for reconsideration. On 11
March 1999, Mrs. Cerezo filed before this Court a petition for review on certiorari under Rule 45,
questioning the denial of the petition for relief from judgment. We denied the petition and our
resolution became final and executory on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs.
Cerezo filed before the Court of Appeals a petition for annulment of the judgment of the trial
court under Rule 47. Meanwhile, on 25 August 1999, the trial court issued over the objection of
Mrs. Cerezo an order of execution of the judgment in Civil Case No. 7415. On 21 October 1999,
the Court of Appeals dismissed the petition for annulment of judgment. On 20 January 2000, the
Court of Appeals denied Mrs. Cerezos motion for reconsideration. On 7 February 2000, Mrs.
Cerezo filed the present petition for review on certiorari under Rule 45 challenging the dismissal
of her petition for annulment of judgment.
Page 59 of 94

Lina v. Court of Appeals
[22]
enumerates the remedies available to a party declared in
default:
a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion under oath to set aside the order of default on the
ground that his failure to answer was due to fraud, accident, mistake or excusable
negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b),
Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file
a motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 [now Section 1] of Rule
38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has
been presented by him (Sec. 2, Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or even if the trial court
properly declared a party in default, if grave abuse of discretion attended such declaration.
[23]

Mrs. Cerezo admitted that she received a copy of the trial courts decision on 25 June
1995. Based on this admission, Mrs. Cerezo had at least three remedies at her disposal: an
appeal, a motion for new trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 41
[24]
from the default judgment within 15
days from notice of the judgment. She could have availed of the power of the Court of Appeals
to try cases and conduct hearings, receive evidence, and perform all acts necessary to resolve
factual issues raised in cases falling within its appellate jurisdiction.
[25]

Mrs. Cerezo also had the option to file under Rule 37
[26]
a motion for new trial within the
period for taking an appeal. If the trial court grants a new trial, the original judgment is vacated,
and the action will stand for trial de novo. The recorded evidence taken in the former trial, as far
as the same is material and competent to establish the issues, shall be used at the new trial
without retaking the same.
[27]

Mrs. Cerezo also had the alternative of filing under Rule 65
[28]
a petition
for certiorari assailing the order of default within 60 days from notice of the judgment. An order
of default is interlocutory, and an aggrieved party may file an appropriate special civil action
under Rule 65.
[29]
In a petition for certiorari, the appellate court may declare void both the order
of default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the
reglementary periods provided under the Rules of Court. However, Mrs. Cerezo opted to file a
petition for relief from judgment, which is available only in exceptional cases. A petition for
relief from judgment should be filed within the reglementary period of 60 days from knowledge
of judgment and six months from entry of judgment, pursuant to
Rule 38 of the Rules of Civil Procedure.
[30]
Tuason v. Court of Appeals
[31]
explained the
nature of a petition for relief from judgment:
When a party has another remedy available to him, which may either be a motion for new trial
or appeal from an adverse decision of the trial court, and he was not prevented by fraud,
accident, mistake or excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks
avoidance from the effects of the judgment when the loss of the remedy at law was due to his
own negligence; otherwise the petition for relief can be used to revive the right to appeal which
has been lost thru inexcusable negligence.
Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented
Mrs. Cerezo from filing an appeal, a motion for new trial or a petition for certiorari. It was error
for her to avail of a petition for relief from judgment.
After our resolution denying Mrs. Cerezos petition for relief became final and executory,
Mrs. Cerezo, in her last ditch attempt to evade liability, filed before the Court of Appeals a
petition for annulment of the judgment of the trial court. Annulment is available only on the
grounds of extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, a party must file
the petition within four years from its discovery, and if based on lack of jurisdiction, before
laches or estoppel bars the petition. Extrinsic fraud is not a valid ground if such fraud was used
as a ground, or could have been used as a ground, in a motion for new trial or petition for relief
from judgment.
[32]

Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the
petition for annulment of judgment. However, a party may avail of the remedy of annulment of
judgment under Rule 47 only if the ordinary remedies of new trial, appeal, petition for relief from
judgment, or other appropriate remedies are no longer available through no fault of the
party.
[33]
Mrs. Cerezo could have availed of a new trial or appeal but through her own fault she
erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus,
Mrs. Cerezo may no longer avail of the remedy of annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezos person. Mrs.
Cerezo actively participated in the proceedings before the trial court, submitting herself to the
jurisdiction of the trial court. The defense of lack of jurisdiction fails in light of her active
participation in the trial court proceedings. Estoppel or laches may also bar lack of jurisdiction as
a ground for nullity especially if raised for the first time on appeal by a party who participated in
the proceedings before the trial court, as what happened in this case.
[34]

For these reasons, the present petition should be dismissed for utter lack of merit. The
extraordinary action to annul a final judgment is restricted to the grounds specified in the
rules. The reason for the restriction is to prevent this extraordinary action from being used by a
losing party to make a complete farce of a duly promulgated decision that has long become final
and executory. There would be no end to litigation if parties who have unsuccessfully availed of
any of the appropriate remedies or lost them through their fault could still bring an action for
annulment of judgment.
[35]
Nevertheless, we shall discuss the issues raised in the present
petition to clear any doubt about the correctness of the decision of the trial court.
Mrs. Cerezos Liability and the
Trial Courts Acquisition of Jurisdiction
Mrs. Cerezo contends that the basis of the present petition for annulment is lack of
jurisdiction. Mrs. Cerezo asserts that the trial court could not validly render judgment since it
failed to acquire jurisdiction over Foronda. Mrs. Cerezo points out that there was no service of
Page 60 of 94

summons on Foronda. Moreover, Tuazon failed to reserve his right to institute a separate civil
action for damages in the criminal action. Such contention betrays a faulty foundation. Mrs.
Cerezos contention proceeds from the point of view of criminal law and not of civil law, while
the basis of the present action of Tuazon is quasi-delict under the Civil Code, not delict under the
Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of
the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the
Civil Code. An aggrieved party may choose between the two remedies. An action based on a
quasi-delict may proceed independently from the criminal action.
[36]
There is, however, a
distinction between civil liability arising from a delict and civil liability arising from a quasi-
delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the procedural
and jurisdictional issues of the action.
[37]

Tuazon chose to file an action for damages based on a quasi-delict. In his complaint,
Tuazon alleged that Mrs. Cerezo, without exercising due care and diligence in the supervision
and management of her employees and buses, hired Foronda as her driver. Tuazon became
disabled because of Forondas recklessness, gross negligence and imprudence, aggravated by
Mrs. Cerezos lack of due care and diligence in the selection and supervision of her employees,
particularly Foronda.
[38]

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

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

Thus, there is no need in this case for the trial court to acquire jurisdiction over
Foronda. The trial courts acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of
the present case on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Article 103 of the Revised
Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved
party must initiate a criminal action where the employees delict and corresponding primary
liability are established.
[47]
If the present action proceeds from a delict, then the trial courts
jurisdiction over Foronda is necessary. However, the present action is clearly for the quasi-delict
of Mrs. Cerezo and not for the delict of Foronda.
The Cerezo spouses contention that summons be served anew on them is untenable in
light of their participation in the trial court proceedings. To uphold the Cerezo spouses
contention would make a fetish of a technicality.
[48]
Moreover, any irregularity in the service of
summons that might have vitiated the trial courts jurisdiction over the persons of the Cerezo
spouses was deemed waived when the Cerezo spouses filed a petition for relief from
judgment.
[49]

We hold that the trial court had jurisdiction and was competent to decide the case in favor
of Tuazon and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezos
contention, Foronda is not an indispensable party to the present case. It is not even necessary
for Tuazon to reserve the filing of a separate civil action because he opted to file a civil action for
damages against Mrs. Cerezo who is primarily and directly liable for her own civil
negligence. The words of Justice Jorge Bocobo in Barredo v. Garcia still hold true today as much
as it did in 1942:
x x x *T+o hold that there is only one way to make defendants liability effective, and that is, to
sue the driver and exhaust his (the latters) property first, would be tantamount to compelling
the plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such
a remedy under our laws, but there is also a more expeditious way, which is based on the
primary and direct responsibility of the defendant under article [2180] of the Civil Code. Our
view of the law is more likely to facilitate remedy for civil wrongs, because the procedure
indicated by the defendant is wasteful and productive of delay, it being a matter of common
knowledge that professional drivers of taxis and other similar public conveyances do not have
sufficient means with which to pay damages. Why, then, should the plaintiff be required in all
cases to go through this roundabout, unnecessary, and probably useless procedure? In
Page 61 of 94

construing the laws, courts have endeavored to shorten and facilitate the pathways of right and
justice.
[50]

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

R E S O L U T I O N
Professional Service vs Agana
CORONA, J.:

With prior leave of court,
[1]
petitioner Professional Services, Inc. (PSI) filed a second
motion for reconsideration
[2]
urging referral thereof to the Court en banc and seeking
modification of the decision dated January 31, 2007 and resolution dated February 11, 2008
which affirmed its vicarious and direct liability for damages to respondents Enrique Agana and
the heirs of Natividad Agana (Aganas).

Manila Medical Services, Inc. (MMSI),
[3]
Asian Hospital, Inc. (AHI),
[4]
and Private Hospital
Association of the Philippines (PHAP)
[5]
all sought to intervene in these cases invoking the
common ground that, unless modified, the assailed decision and resolution will jeopardize the
financial viability of private hospitals and jack up the cost of health care.

The Special First Division of the Court granted the motions for intervention of MMSI,
AHI and PHAP (hereafter intervenors),
[6]
and referred en consulta to the Court en banc the
motion for prior leave of court and the second motion for reconsideration of PSI.
[7]


Due to paramount public interest, the Court en banc accepted the referral
[8]
and heard the
parties on oral arguments on one particular issue: whether a hospital may be held liable for the
negligence of physicians-consultants allowed to practice in its premises.
[9]


To recall the salient facts, PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan
Fuentes (Dr. Fuentes), was impleaded by Enrique Agana and Natividad Agana (later substituted
by her heirs), in a complaint
[10]
for damages filed in the Regional Trial Court (RTC) of Quezon City,
Branch 96, for the injuries suffered by Natividad when Dr. Ampil and Dr. Fuentes neglected to
remove from her body two gauzes
[11]
which were used in the surgery they performed on her on
April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and
manager of the hospital.

In a decision
[12]
dated March 17, 1993, the RTC held PSI solidarily liable with Dr. Ampil and
Dr. Fuentes for damages.
[13]
On appeal, the Court of Appeals (CA), absolved Dr. Fuentes but
affirmed the liability of Dr. Ampil and PSI, subject to the right of PSI to claim reimbursement from
Dr. Ampil.
[14]


On petition for review, this Court, in its January 31, 2007 decision, affirmed the CA
decision.
[15]
PSI filed a motion for reconsideration
[16]
but the Court denied it in a resolution
dated February 11, 2008.
[17]


The Court premised the direct liability of PSI to the Aganas on the following facts and
law:

First, there existed between PSI and Dr. Ampil an employer-employee relationship as
contemplated in the December 29, 1999 decision in Ramos v. Court of Appeals
[18]
that for
purposes of allocating responsibility in medical negligence cases, an employer-employee
relationship exists between hospitals and their consultants.
[19]
Although the Court
in Ramos later issued a Resolution dated April 11, 2002
[20]
reversing its earlier finding on the
existence of an employment relationship between hospital and doctor, a similar reversal was not
warranted in the present case because the defense raised by PSI consisted of a mere general
denial of control or responsibility over the actions of Dr. Ampil.
[21]


Second, by accrediting Dr. Ampil and advertising his qualifications, PSI created the
public impression that he was its agent.
[22]
Enrique testified that it was on account of Dr. Ampil's
accreditation with PSI that he conferred with said doctor about his wife's (Natividad's)
condition.
[23]
After his meeting with Dr. Ampil, Enrique asked Natividad to personally consult Dr.
Ampil.
[24]
In effect, when Enrigue and Natividad engaged the services of Dr. Ampil, at the back of
their minds was that the latter was a staff member of a prestigious hospital. Thus, under the
doctrine of apparent authority applied in Nogales, et al. v. Capitol Medical Center, et al.,
[25]
PSI
was liable for the negligence of Dr. Ampil.

Finally, as owner and operator of Medical City General Hospital, PSI was bound by its
duty to provide comprehensive medical services to Natividad Agana, to exercise reasonable care
to protect her from harm,
[26]
to oversee or supervise all persons who practiced medicine within
its walls, and to take active steps in fixing any form of negligence committed within its
premises.
[27]
PSI committed a serious breach of its corporate duty when it failed to conduct an
immediate investigation into the reported missing gauzes.
[28]


PSI is now asking this Court to reconsider the foregoing rulings for these reasons:
I

Page 62 of 94

The declaration in the 31 January 2007 Decision vis-a-vis the 11 February
2009 Resolution that the ruling in Ramos vs. Court of Appeals (G.R. No. 134354,
December 29, 1999) that an employer-employee relations exists between
hospital and their consultants stays should be set aside for being inconsistent
with or contrary to the import of the resolution granting the hospital's motion
for reconsideration in Ramos vs. Court of Appeals (G.R. No. 134354, April 11,
2002), which is applicable to PSI since the Aganas failed to prove an employer-
employee relationship between PSI and Dr. Ampil and PSI proved that it has no
control over Dr. Ampil. In fact, the trial court has found that there is no
employer-employee relationship in this case and that the doctor's are
independent contractors.

II

Respondents Aganas engaged Dr. Miguel Ampil as their doctor and did
not primarily and specifically look to the Medical City Hospital (PSI) for medical
care and support; otherwise stated, respondents Aganas did not select Medical
City Hospital (PSI) to provide medical care because of any apparent authority of
Dr. Miguel Ampil as its agent since the latter was chosen primarily and
specifically based on his qualifications and being friend and neighbor.

III

PSI cannot be liable under doctrine of corporate negligence since the
proximate cause of Mrs. Agana's injury was the negligence of Dr. Ampil, which
is an element of the principle of corporate negligence.
[29]


In their respective memoranda, intervenors raise parallel arguments

that the Court's
ruling on the existence of an employer-employee relationship between private hospitals and
consultants will force a drastic and complex alteration in the long-established and currently
prevailing relationships among patient, physician and hospital, with burdensome operational and
financial consequences and adverse effects on all three parties.
[30]



The Aganas comment that the arguments of PSI need no longer be entertained for they
have all been traversed in the assailed decision and resolution.
[31]


After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas,
not under the principle of respondeat superior for lack of evidence of an employment
relationship with Dr. Ampil but under the principle of ostensible agency for the negligence of Dr.
Ampil and, pro hac vice, under the principle of corporate negligence for its failure to perform its
duties as a hospital.
While in theory a hospital as a juridical entity cannot practice medicine,
[32]
in reality it
utilizes doctors, surgeons and medical practitioners in the conduct of its business of facilitating
medical and surgical treatment.
[33]
Within that reality, three legal relationships crisscross: (1)
between the hospital and the doctor practicing within its premises; (2) between the hospital and
the patient being treated or examined within its premises and (3) between the patient and the
doctor. The exact nature of each relationship determines the basis and extent of the liability of
the hospital for the negligence of the doctor.

Where an employment relationship exists, the hospital may be held vicariously liable
under Article 2176
[34]
in relation to Article 2180
[35]
of the Civil Code or the principle of respondeat
superior. Even when no employment relationship exists but it is shown that the hospital holds
out to the patient that the doctor is its agent, the hospital may still be vicariously liable under
Article 2176 in relation to Article 1431
[36]
and Article 1869
[37]
of the Civil Code or the principle of
apparent authority.
[38]
Moreover, regardless of its relationship with the doctor, the hospital may
be held directly liable to the patient for its own negligence or failure to follow established
standard of conduct to which it should conform as a corporation.
[39]


This Court still employs the control test to determine the existence of an employer-
employee relationship between hospital and doctor. In Calamba Medical Center, Inc. v. National
Labor Relations Commission, et al.
[40]
it held:

Under the "control test", an employment relationship exists between a
physician and a hospital if the hospital controls both the means and the details
of the process by which the physician is to accomplish his task.

xx xx xx

As priorly stated, private respondents maintained specific work-
schedules, as determined by petitioner through its medical director, which
consisted of 24-hour shifts totaling forty-eight hours each week and which were
strictly to be observed under pain of administrative sanctions.

That petitioner exercised control over respondents gains light from
the undisputed fact that in the emergency room, the operating room, or any
department or ward for that matter, respondents' work is monitored through
its nursing supervisors, charge nurses and orderlies. Without the approval or
consent of petitioner or its medical director, no operations can be undertaken
in those areas. For control test to apply, it is not essential for the employer to
actually supervise the performance of duties of the employee, it being
enough that it has the right to wield the power. (emphasis supplied)


Even in its December 29, 1999 decision
[41]
and April 11, 2002 resolution
[42]
in Ramos, the
Court found the control test decisive.

In the present case, it appears to have escaped the Court's attention that both the RTC
and the CA found no employment relationship between PSI and Dr. Ampil, and thatthe Aganas
Page 63 of 94

did not question such finding. In its March 17, 1993 decision, the RTC found that defendant
doctors were not employees of PSI in its hospital, they being merely consultants without any
employer-employee relationship and in the capacity of independent contractors.
[43]
The Aganas
never questioned such finding.

PSI, Dr. Ampil and Dr. Fuentes appealed
[44]
from the RTC decision but only on the issues
of negligence, agency and corporate liability. In its September 6, 1996decision, the CA
mistakenly referred to PSI and Dr. Ampil as employer-employee, but it was clear in its discussion
on the matter that it viewed their relationship as one of mere apparent agency.
[45]


The Aganas appealed from the CA decision, but only to question the exoneration of Dr.
Fuentes.
[46]
PSI also appealed from the CA decision, and it was then that the issue of
employment, though long settled, was unwittingly resurrected.

In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no
employer-employee relationship, such finding became final and conclusive even to this
Court.
[47]
There was no reason for PSI to have raised it as an issue in its petition. Thus, whatever
discussion on the matter that may have ensued was purely academic.

Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this
particular instance, the concurrent finding of the RTC and the CA that PSI was not the employer
of Dr. Ampil is correct. Control as a determinative factor in testing the employer-employee
relationship between doctor and hospital under which the hospital could be held vicariously
liable to a patient in medical negligence cases is a requisite fact to be established by
preponderance of evidence. Here, there was insufficient evidence that PSI exercised the power
of control or wielded such power over the means and the details of the specific process by which
Dr. Ampil applied his skills in the treatment of Natividad. Consequently, PSI cannot be held
vicariously liable for the negligence of Dr. Ampil under the principle of respondeat superior.
There is, however, ample evidence that the hospital (PSI) held out to the patient
(Natividad)
[48]
that the doctor (Dr. Ampil) was its agent. Present are the two factors that
determine apparent authority: first, the hospital's implied manifestation to the patient which led
the latter to conclude that the doctor was the hospital's agent; and second, the patients reliance
upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence.
[49]


Enrique testified that on April 2, 1984, he consulted Dr. Ampil regarding the condition
of his wife; that after the meeting and as advised by Dr. Ampil, he asked [his] wife to go to
Medical City to be examined by *Dr. Ampil+; and that the next day, April 3, he told his daughter
to take her mother to Dr. Ampil.
[50]
This timeline indicates that it was Enrique who actually made
the decision on whom Natividad should consult and where, and that the latter merely acceded to
it. It explains the testimony of Natividad that she consulted Dr. Ampil at the instigation of her
daughter.
[51]


Moreover, when asked what impelled him to choose Dr. Ampil, Enrique testified:
Atty. Agcaoili

On that particular occasion, April 2, 1984, what was your reason for
choosing Dr. Ampil to contact with in connection with your wife's illness?

A. First, before that, I have known him to be a specialist on that part of the
body as a surgeon, second, I have known him to be a staff member of
the Medical City which is a prominent and knownhospital. And third, because
he is a neighbor, I expect more than the usual medical service to be given to us,
than his ordinary patients.
[52]
(emphasis supplied)

Clearly, the decision made by Enrique for Natividad to consult Dr. Ampil was
significantly influenced by the impression that Dr. Ampil was a staff member
of Medical CityGeneral Hospital, and that said hospital was well known and prominent. Enrique
looked upon Dr. Ampil not as independent of but as integrally related to Medical City.

PSI's acts tended to confirm and reinforce, rather than negate, Enrique's view. It is of
record that PSI required a consent for hospital care
[53]
to be signed preparatory to the surgery
of Natividad. The form reads:

Permission is hereby given to the medical, nursing and laboratory staff of
the Medical City General Hospital to perform such diagnostic procedures and to
administer such medications and treatments as may be deemed necessary or
advisable by the physicians of this hospital for and during the confinement of
xxx. (emphasis supplied)

By such statement, PSI virtually reinforced the public impression that Dr. Ampil was a
physician of its hospital, rather than one independently practicing in it; that the medications and
treatments he prescribed were necessary and desirable; and that the hospital staff was prepared
to carry them out.

PSI pointed out in its memorandum that Dr. Ampil's hospital affiliation was not the
exclusive basis of the Aganas decision to have Natividad treated in Medical CityGeneral Hospital,
meaning that, had Dr. Ampil been affiliated with another hospital, he would still have been
chosen by the Aganas as Natividad's surgeon.
[54]


The Court cannot speculate on what could have been behind the Aganas decision but
would rather adhere strictly to the fact that, under the circumstances at that time,
Enrique decided to consult Dr. Ampil for he believed him to be a staff member of a prominent
and known hospital. After his meeting with Dr. Ampil, Enrique advised his wife Natividad to go to
the Medical City General Hospital to be examined by said doctor, and the hospital acted in a way
that fortified Enrique's belief.

This Court must therefore maintain the ruling that PSI is vicariously liable for the
negligence of Dr. Ampil as its ostensible agent.
Page 64 of 94


Moving on to the next issue, the Court notes that PSI made the following admission in
its Motion for Reconsideration:

51. Clearly, not being an agent or employee of petitioner PSI, PSI [sic] is not
liable for Dr. Ampil's acts during the operation. Considering further that Dr.
Ampil was personally engaged as a doctor by Mrs. Agana, it is incumbent upon
Dr. Ampil, as Captain of the Ship, and as the Agana's doctor to advise her on
what to do with her situation vis-a-vis the two missing gauzes. In addition to
noting the missing gauzes, regular check-ups were made and no signs of
complications were exhibited during her stay at the hospital, which could
have alerted petitioner PSI's hospital to render and provide post-operation
services to and tread on Dr. Ampil's role as the doctor of Mrs. Agana. The
absence of negligence of PSI from the patient's admission up to her discharge
is borne by the finding of facts in this case. Likewise evident therefrom is the
absence of any complaint from Mrs. Agana after her discharge from the
hospital which had she brought to the hospital's attention, could have alerted
petitioner PSI to act accordingly and bring the matter to Dr. Ampil's attention.
But this was not the case. Ms. Agana complained ONLY to Drs. Ampil and
Fuentes, not the hospital. How then could PSI possibly do something to fix the
negligence committed by Dr. Ampil when it was not informed about it at
all.
[55]
(emphasis supplied)

PSI reiterated its admission when it stated that had Natividad Agana informed the
hospital of her discomfort and pain, the hospital would have been obliged to act on it.
[56]


The significance of the foregoing statements is critical.

First, they constitute judicial admission by PSI that while it had no power to control the
means or method by which Dr. Ampil conducted the surgery on Natividad Agana, it had
the power to review or cause the review of what may have irregularly transpired within its walls
strictly for the purpose of determining whether some form of negligence may have attended any
procedure done inside its premises, with the ultimate end of protecting its patients.

Second, it is a judicial admission that, by virtue of the nature of its business as well as its
prominence
[57]
in the hospital industry, it assumed a duty to tread on the captain of the ship
role of any doctor rendering services within its premises for the purpose of ensuring the safety of
the patients availing themselves of its services and facilities.

Third, by such admission, PSI defined the standards of its corporate conduct under the
circumstances of this case, specifically: (a) that it had a corporate duty to Natividad even after
her operation to ensure her safety as a patient; (b) that its corporate duty was not limited to
having its nursing staff note or record the two missing gauzes and (c) that its corporate duty
extended to determining Dr. Ampil's role in it, bringing the matter to his attention,
and correcting his negligence.

And finally, by such admission, PSI barred itself from arguing in its second motion for
reconsideration that the concept of corporate responsibility was not yet in existence at the time
Natividad underwent treatment;
[58]
and that if it had any corporate responsibility, the same was
limited to reporting the missing gauzes and did not include taking an active step in fixing the
negligence committed.
[59]
An admission made in the pleading cannot be controverted by the
party making such admission and is conclusive as to him, and all proofs submitted by him
contrary thereto or inconsistent therewith should be ignored, whether or not objection is
interposed by a party.
[60]


Given the standard of conduct that PSI defined for itself, the next relevant inquiry is
whether the hospital measured up to it.

PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the
personal responsibility of informing Natividad about the two missing gauzes.
[61]
Dr. Ricardo
Jocson, who was part of the group of doctors that attended to Natividad, testified that toward
the end of the surgery, their group talked about the missing gauzes but Dr. Ampil assured them
that he would personally notify the patient about it.
[62]
Furthermore, PSI claimed that there was
no reason for it to act on the report on the two missing gauzes because Natividad Agana showed
no signs of complications. She did not even inform the hospital about her discomfort.
[63]


The excuses proffered by PSI are totally unacceptable.

To begin with, PSI could not simply wave off the problem and nonchalantly delegate to
Dr. Ampil the duty to review what transpired during the operation. The purpose of such review
would have been to pinpoint when, how and by whom two surgical gauzes were mislaid so that
necessary remedial measures could be taken to avert any jeopardy to Natividads recovery.
Certainly, PSI could not have expected that purpose to be achieved by merely hoping that the
person likely to have mislaid the gauzes might be able to retrace his own steps. By its own
standard of corporate conduct, PSI's duty to initiate the review was non-delegable.

While Dr. Ampil may have had the primary responsibility of notifying Natividad about
the missing gauzes, PSI imposed upon itself the separate and independent responsibility of
initiating the inquiry into the missing gauzes. The purpose of the first would have been to apprise
Natividad of what transpired during her surgery, while the purpose of the second would have
been to pinpoint any lapse in procedure that led to the gauze count discrepancy, so as to prevent
a recurrence thereof and to determine corrective measures that would ensure the safety of
Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI from its self-
imposed separate responsibility.

Corollary to its non-delegable undertaking to review potential incidents of negligence
committed within its premises, PSI had the duty to take notice of medical records prepared by its
Page 65 of 94

own staff and submitted to its custody, especially when these bear earmarks of a surgery gone
awry. Thus, the record taken during the operation of Natividad which reported a gauze count
discrepancy should have given PSI sufficient reason to initiate a review. It should not have waited
for Natividad to complain.

As it happened, PSI took no heed of the record of operation and consequently did not
initiate a review of what transpired during Natividads operation. Rather, it shirked its
responsibility and passed it on to others to Dr. Ampil whom it expected to inform Natividad,
and to Natividad herself to complain before it took any meaningful step. By its inaction,
therefore, PSI failed its own standard of hospital care. It committed corporate negligence.

It should be borne in mind that the corporate negligence ascribed to PSI is different
from the medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from
those of the doctor-consultant practicing within its premises in relation to the patient; hence, the
failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the
Aganas distinct from that of Dr. Ampil.

All this notwithstanding, we make it clear that PSIs hospital liability based on
ostensible agency and corporate negligence applies only to this case, pro hac vice. It is not
intended to set a precedent and should not serve as a basis to hold hospitals liable for every form
of negligence of their doctors-consultants under any and all circumstances. The ruling is unique
to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted
corporate duty to Natividad.
[64]

Other circumstances peculiar to this case warrant this ruling,
[65]
not the least of which
being that the agony wrought upon the Aganas has gone on for 26 long years, with Natividad
coming to the end of her days racked in pain and agony. Such wretchedness could have been
avoided had PSI simply done what was logical: heed the report of a guaze count discrepancy,
initiate a review of what went wrong and take corrective measures to ensure the safety of
Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn, disowning any such
responsibility to its patient. Meanwhile, the options left to the Aganas have all but dwindled, for
the status of Dr. Ampil can no longer be ascertained.
[66]


Therefore, taking all the equities of this case into consideration, this Court believes P15
million would be a fair and reasonable liability of PSI, subject to 12% p.a. interest from the
finality of this resolution to full satisfaction.

WHEREFORE, the second motion for reconsideration is DENIED and the motions for
intervention are NOTED.

Professional Services, Inc. is ORDERED pro hac vice to pay Natividad (substituted by
her children Marcelino Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and
Raymund Agana) and Enrique Agana the total amount of P15 million, subject to 12% p.a. interest
from the finality of this resolution to full satisfaction.

No further pleadings by any party shall be entertained in this case.

Let the long-delayed entry of judgment be made in this case upon receipt by all concerned
parties of this resolution.

SO ORDERED.

LIABILITY OF SCHOOLS, TEACHERS, AND ADMINISTRATORS

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.
PARAS, J.:p
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
Page 66 of 94

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
Page 67 of 94

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-vis the 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,
Page 68 of 94

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.
Page 69 of 94

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
Page 70 of 94

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.
ST. FRANCIS HIGH SCHOOL VS. CA

FACTS: Ferdinand Castillo, a freshman student at the St. Francis High School, wanted to join a
school picnic. His 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, 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. He died. Respondent spouses filed a civil case against petitioner and some of their
teachers. Trial court found teachers liable but dismissed complaint against the school.

ISSUE: W/N petitioner school and teachers are liable.

RULING: Petition granted.

RATIO: Before an employer may be held liable for the negligence of his employee, the act or
omission which caused damage 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. What was held was a purely private affair, a picnic, which
did not have permit from the school since it was not a school sanctioned activity. Mere
knowledge by petitioner/principal of the planning of the picnic does not in any way consent to
the holding of the same.
No negligence could be attributable to the petitioners-teachers to warrant the award of damages
to the respondents-spouses. The class adviser of 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.

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
Page 71 of 94

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 ofreddendo 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
Page 72 of 94

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 someculpa 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
Page 73 of 94

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 ofrespondeat superior, but then it may exculpate
itself from liability by proof that it had exercised the diligence of abonus 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.
Page 74 of 94

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 Grio-Aquino, JJ., concur.
Fernan, Padilla and Teehankee, C.J., JJ, took no part.
FACTS:
Alfredo Amadora, while in the auditorium of the school, was mortally hit by a gun by Pablito
Daffon resulting to the formers death. Daffon was convicted of homicide through reckless
imprudence. The victims parents, herein petitioners, filed a civil action for damages against
Colegio de San Jose-Recoletos, its rectors, high school principal, dean of boys, the physics teacher
together with Daffon and 2 other students. Complaints against the students were dropped.
Respondent Court absolved the defendants completely and reversed CFI Cebus decision for the
following reasons: 1. Since the school was an academic institution of learning and not a school of
arts and trades 2. That students were not in the custody of the school since the semester has
already ended 3. There was no clear identification of the fatal gun, and 4. In any event,
defendants exercised the necessary diligence through enforcement of the school regulations in
maintaining discipline. Petitioners on othe other hand claimed their son was under school
custody because he went to school to comply with a requirement for graduation (submission of
Physics reports).
ISSUE: WON Collegio de San Jose-Recoletos should be held liable.
HELD:
The time Alfredo was fatally shot, he was in the custody of the authorities of the school
notwithstanding classes had formally ended when the incident happened. It was immaterial if he
was in the school auditorium to finish his physics requirement. What was important is that he
was there for a legitimate purpose. On the other hand, the rector, high school principal and the
dean of boys cannot be held liable because none of them was the teacher-in-charge as defined in
the provision. Each was exercising only a general authority over the students and not direct
control and influence exerted by the teacher placed in-charge of particular classes.
In the absence of a teacher- in charge, dean of boys should probably be held liable considering
that he had earlier confiscated an unlicensed gun from a student and later returned to him
without taking disciplinary action or reporting the matter to the higher authorities. Though it
was clear negligence on his part, no proof was shown to necessarily link this gun with the
shooting incident.
Collegio San Jose-Recoletos cannot directly be held liable under the provision because only the
teacher of the head of school of arts and trade is made responsible for the damage caused by the
student. Hence, under the facts disclosed, none of the respondents were held liable for the
injury inflicted with Alfredo resulting to his death.
Petition was denied.

G.R. No. L-33722 July 29, 1988
FEDERICO YLARDE and ADELAIDA DORONIO petitioners,
vs.
EDGARDO AQUINO, MAURO SORIANO and COURT OF APPEALS, respondents.
Buenaventura C. Evangelista for petitioners.
Modesto V. Cabanela for respondent Edgardo Aquino.
Manuel P. Pastor for respondent Mauro Soriano.

GANCAYCO, J.:
In this petition for review on certiorari seeking the reversal of the decision of the Court of
Appeals in CA-G.R. No. 36390-R entitled "Federico Ylarde, et al. vs. Edgardo Aquino, et al.," a case
which originated from the Court of First Instance of Pangasinan, We are again caned upon
determine the responsibility of the principals and teachers towards their students or pupils.
In 1963, private respondent Mariano Soriano was the principal of the Gabaldon Primary School, a
public educational institution located in Tayug, Pangasinan-Private respondent Edgardo Aquino
was a teacher therein. At that time, the school was fittered with several concrete blocks which
were remnants of the old school shop that was destroyed in World War II. Realizing that the
huge stones were serious hazards to the schoolchildren, another teacher by the name of Sergio
Banez started burying them one by one as early as 1962. In fact, he was able to bury ten of these
blocks all by himself.
Deciding to help his colleague, private respondent Edgardo Aquino gathered eighteen of his male
pupils, aged ten to eleven, after class dismissal on October 7, 1963. Being their teacher-in-
charge, he ordered them to dig beside a one-ton concrete block in order to make a hole wherein
the stone can be buried. The work was left unfinished. The following day, also after classes,
private respondent Aquino called four of the original eighteen pupils to continue the digging.
These four pupils Reynaldo Alonso, Francisco Alcantara, Ismael Abaga and Novelito Ylarde,
dug until the excavation was one meter and forty centimeters deep. At this point, private
respondent Aquino alone continued digging while the pupils remained inside the pit throwing
out the loose soil that was brought about by the digging.
When the depth was right enough to accommodate the concrete block, private respondent
Aquino and his four pupils got out of the hole. Then, said private respondent left the children to
level the loose soil around the open hole while he went to see Banez who was about thirty
meters away. Private respondent wanted to borrow from Banez the key to the school workroom
where he could get some rope. Before leaving. , private respondent Aquino allegedly told the
children "not to touch the stone."
A few minutes after private respondent Aquino left, three of the four kids, Alonso, Alcantara and
Ylarde, playfully jumped into the pit. Then, without any warning at all, the remaining Abaga
jumped on top of the concrete block causing it to slide down towards the opening. Alonso and
Page 75 of 94

Alcantara were able to scramble out of the excavation on time but unfortunately fo Ylarde, the
concrete block caught him before he could get out, pinning him to the wall in a standing position.
As a result thereof, Ylarde sustained the following injuries:
1. Contusion with hematoma, left inguinal region and suprapubic region.
2. Contusion with ecchymosis entire scrotal region.
3. Lacerated wound, left lateral aspect of penile skin with phimosis
4. Abrasion, gluteal region, bilateral.
5. Intraperitoneal and extrapertitoneal extravasation of blood and urine about
2 liters.
6. Fracture, simple, symphesis pubis
7. Ruptured (macerated) urinary bladder with body of bladder almost entirely
separated from its neck.
REMARKS:
1. Above were incurred by crushing injury.
2. Prognosis very poor.
Three days later, Novelito Ylarde died.
Ylarde's parents, petitioners in this case, filed a suit for damages against both private
respondents Aquino and Soriano. The lower court dismissed the complaint on the following
grounds: (1) that the digging done by the pupils is in line with their course called Work Education;
(2) that Aquino exercised the utmost diligence of a very cautious person; and (3) that the demise
of Ylarde was due to his own reckless imprudence.
2

On appeal, the Court of Appeals affirmed the Decision of the lower court.
Petitioners base their action against private respondent Aquino on Article 2176 of the Civil Code
for his alleged negligence that caused their son's death while the complaint against respondent
Soriano as the head of school is founded on Article 2180 of the same Code.
Article 2176 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.
On the other hand, the applicable provision of Article 2180 states:
Art. 2180. x x x
xxx xxx xxx
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.
3

The issue to be resolved is whether or not under the cited provisions, both private respondents
can be held liable for damages.
As regards the principal, We hold that he cannot be made responsible for the death of the child
Ylarde, he being the head of an academic school and not a school of arts and trades. This is in line
with Our ruling in Amadora vs. Court of Appeals,
4
wherein this Court thoroughly discussed the
doctrine that under Article 2180 of the Civil Code, it is only the teacher and not the head of an
academic school who should be answerable for torts committed by their students. This Court
went on to say that in a school of arts and trades, it is only the head of the school who can be
held liable. In the same case, We explained:
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 sinquilis 'teachers' should apply to the words
"pupils and students' and 'heads of establishments of arts and trades to the
word "apprentices."
Hence, applying the said doctrine to this case, We rule that private respondent Soriano, as
principal, cannot be held liable for the reason that the school he heads is an academic school and
not a school of arts and trades. Besides, as clearly admitted by private respondent Aquino,
private respondent Soriano did not give any instruction regarding the digging.
From the foregoing, it can be easily seen that private respondent Aquino can be held liable under
Article 2180 of the Civil Code as the teacher-in-charge of the children for being negligent in his
supervision over them and his failure to take the necessary precautions to prevent any injury on
their persons. However, as earlier pointed out, petitioners base the alleged liability of private
respondent Aquino on Article 2176 which is separate and distinct from that provided for in
Article 2180.
With this in mind, the question We need to answer is this: Were there acts and omissions on the
part of private respondent Aquino amounting to fault or negligence which have direct causal
relation to the death of his pupil Ylarde? Our answer is in the affirmative. He is liable for
damages.
From a review of the record of this case, it is very clear that private respondent Aquino acted
with fault and gross negligence when he: (1) failed to avail himself of services of adult manual
laborers and instead utilized his pupils aged ten to eleven to make an excavation near the one-
ton concrete stone which he knew to be a very hazardous task; (2) required the children to
remain inside the pit even after they had finished digging, knowing that the huge block was lying
nearby and could be easily pushed or kicked aside by any pupil who by chance may go to the
perilous area; (3) ordered them to level the soil around the excavation when it was so apparent
that the huge stone was at the brink of falling; (4) went to a place where he would not be able to
check on the children's safety; and (5) left the children close to the excavation, an obviously
attractive nuisance.
The negligent act of private respondent Aquino in leaving his pupils in such a dangerous site has
a direct causal connection to the death of the child Ylarde. Left by themselves, it was but natural
for the children to play around. Tired from the strenuous digging, they just had to amuse
themselves with whatever they found. Driven by their playful and adventurous instincts and not
knowing the risk they were facing three of them jumped into the hole while the other one
Page 76 of 94

jumped on the stone. Since the stone was so heavy and the soil was loose from the digging, it
was also a natural consequence that the stone would fall into the hole beside it, causing injury on
the unfortunate child caught by its heavy weight. Everything that occurred was the natural and
probable effect of the negligent acts of private respondent Aquino. Needless to say, the child
Ylarde would not have died were it not for the unsafe situation created by private respondent
Aquino which exposed the lives of all the pupils concerned to real danger.
We cannot agree with the finding of the lower court that the injuries which resulted in the death
of the child Ylarde were caused by his own reckless imprudence, It should be remembered that
he was only ten years old at the time of the incident, As such, he is expected to be playful and
daring. His actuations were natural to a boy his age. Going back to the facts, it was not only him
but the three of them who jumped into the hole while the remaining boy jumped on the block.
From this, it is clear that he only did what any other ten-year old child would do in the same
situation.
In ruling that the child Ylarde was imprudent, it is evident that the lower court did not consider
his age and maturity. This should not be the case. The degree of care required to be exercised
must vary with the capacity of the person endangered to care for himself. A minor should not be
held to the same degree of care as an adult, but his conduct should be judged according to the
average conduct of persons of his age and experience.
5
The standard of conduct to which a child
must conform for his own protection is that degree of care ordinarily exercised by children of the
same age, capacity, discretion, knowledge and experience under the same or similar
circumstances.
6
Bearing this in mind, We cannot charge the child Ylarde with reckless
imprudence.
The court is not persuaded that the digging done by the pupils can pass as part of their Work
Education. A single glance at the picture showing the excavation and the huge concrete
block
7
would reveal a dangerous site requiring the attendance of strong, mature laborers and
not ten-year old grade-four pupils. We cannot comprehend why the lower court saw it otherwise
when private respondent Aquino himself admitted that there were no instructions from the
principal requiring what the pupils were told to do. Nor was there any showing that it was
included in the lesson plan for their Work Education. Even the Court of Appeals made mention of
the fact that respondent Aquino decided all by himself to help his co-teacher Banez bury the
concrete remnants of the old school shop.
8
Furthermore, the excavation should not be placed in
the category of school gardening, planting trees, and the like as these undertakings do not
expose the children to any risk that could result in death or physical injuries.
The contention that private respondent Aquino exercised the utmost diligence of a very cautious
person is certainly without cogent basis. A reasonably prudent person would have foreseen that
bringing children to an excavation site, and more so, leaving them there all by themselves, may
result in an accident. An ordinarily careful human being would not assume that a simple warning
"not to touch the stone" is sufficient to cast away all the serious danger that a huge concrete
block adjacent to an excavation would present to the children. Moreover, a teacher who stands
in loco parentis to his pupils would have made sure that the children are protected from all harm
in his company.
We close by categorically stating that a truly careful and cautious person would have acted in all
contrast to the way private respondent Aquino did. Were it not for his gross negligence, the
unfortunate incident would not have occurred and the child Ylarde would probably be alive
today, a grown- man of thirty-five. Due to his failure to take the necessary precautions to avoid
the hazard, Ylarde's parents suffered great anguish all these years.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the questioned
judgment of the respondent court is REVERSED and SET ASIDE and another judgment is hereby
rendered ordering private respondent Edagardo Aquino to pay petitioners the following:
(1) Indemnity for the death of Child Ylarde P30,000.00
(2) Exemplary damages 10,000.00
(3) Moral damages 20,000.00
SO ORDERED.
Narvasa Cruz, Grio-Aquino and Medialdea, JJ., concur.
G.R. No. L-54357 April 25, 1988
REYNALDO PASCO, assisted by his father PEDRO PASCO, petitioner,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA and ARANETA
UNIVERSITY,respondents.
Ponciano G. Hernandez for petitioner.
Marcelo C. Aniana for respondents.

PARAS, J.:
The sole question of law raised by petitioner in this case is whether the provision of the
penultimate paragraph of Article 2180 of the Civil Code which states:
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.
is equally applicable to academic institutions.
The facts of this case are as follows:
On August 24, 1979 at about 5:00 o'clock in the afternoon, petitioner, together with two
companions, while walking inside the campus of the private respondent Araneta University, after
attending classes in said university, was accosted and mauled by a group of Muslim students led
by Abdul Karim Madidis alias "Teng." Said Muslim group were also students of the Araneta
University. Petitioner was subsequently stabbed by Abdul and as a consequence he was
hospitalized at the Manila Central University (MCU) Hospital where he underwent surgery to
save his life.
On October 5, 1979, petitioner, assisted by his father Pedro Pasco, filed a complaint for damages
against Abdul Karim Madidis and herein private respondent Gregorio Araneta University which
was docketed as Civil Case No. SM-1027. Said school was impleaded as a party defendant based
on the aforementioned provision of the Civil Code.
On October 26, 1979, respondent school filed a Motion to Dismiss on the following grounds:
a. The penultimate paragraph of Article 2180 of the New Civil Code under
which it was sued applies only to vocational schools and not to academic
institutions;
b. That every person criminally liable for a felony is also civilly liable under
Article 100 of the Revised Penal Code. Hence, the civil liability in this case
Page 77 of 94

arises from a criminal action which the defendant university has not
committed;
c. Since this is a civil case, a demand should have been made by the plaintiff,
hence, it would be premature to bring an action for damages against
defendant University. (Rollo, p. 96)
On May 12, 1980, respondent court issued an Order * granting said Motion to Dismiss. Petitioner
moved to reconsider the Order of Dismissal but the motion was likewise denied on the ground
that there is no sufficient justification to disturb its ruling. Hence, this instant Petition for
certiorari under Republic Act No. 5440, praying that judgment be rendered setting aside the
questioned order of May 12, 1980 dismissing the complaint as against respondent school and the
order of July 17, 1980 denying the reconsideration of the questioned order of dismissal, with
costs against respondent school.
We find no necessity of discussing the applicability of the Article to educational institutions
(which are not schools of arts and trades) for the issue in this petition is actually whether or not,
under the article, the school or the university itself (as distinguished from the teachers or heads)
is liable. We find the answer in the negative, for surely the provision concerned speaks only of
"teachers or heads."
WHEREFORE, this Petition is DISMISSED for lack of merit.
SO ORDERED.
Yap, C.J. and Padilla, JJ., concur.

G.R. No. 84698 February 4, 1992
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN P. PAULINO,
ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M. SORIANO, petitioners,
vs.
COURT OF APPEALS, HON. REGINA ORDOEZ-BENITEZ, in her capacity as Presiding Judge of
Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA and ARSENIA D.
BAUTISTA, respondents.
Balgos and Perez for petitioners.
Collantes, Ramirez & Associates for private respondents.

PADILLA, J.:
A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the
second-floor premises of the Philippine School of Business Administration (PSBA) prompted the
parents of the deceased to file suit in the Regional Trial Court of Manila (Branch 47) presided
over by Judge (now Court of Appeals justice) Regina Ordoez-Benitez, for damages against the
said PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the third
year commerce course at the PSBA. It was established that his assailants were not members of
the school's academic community but were elements from outside the school.
Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim
(President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier), Col.
Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant Chief of Security). Substantially,
the plaintiffs (now private respondents) sought to adjudge them liable for the victim's untimely
demise due to their alleged negligence, recklessness and lack of security precautions, means and
methods before, during and after the attack on the victim. During the proceedings a quo, Lt. M.
Soriano terminated his relationship with the other petitioners by resigning from his position in
the school.
Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they
are presumably sued under Article 2180 of the Civil Code, the complaint states no cause of action
against them, as jurisprudence on the subject is to the effect that academic institutions, such as
the PSBA, are beyond the ambit of the rule in the afore-stated article.
The respondent trial court, however, overruled petitioners' contention and thru an order dated 8
December 1987, denied their motion to dismiss. A subsequent motion for reconsideration was
similarly dealt with by an order dated 25 January 1988. Petitioners then assailed the trial court's
disposition before the respondent appellate court which, in a decision * promulgated on 10 June
1988, affirmed the trial court's orders. On 22 August 1988, the respondent appellate court
resolved to deny the petitioners' motion for reconsideration. Hence, this petition.
At the outset, it is to be observed that the respondent appellate court primarily anchored its
decision on the law ofquasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil
Code.
1
Pertinent portions of the appellate court's now assailed ruling state:
Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the
old Spanish Civil Code. The comments of Manresa and learned authorities on
its meaning should give way to present day changes. The law is not fixed and
flexible (sic); it must be dynamic. In fact, the greatest value and significance of
law as a rule of conduct in (sic) its flexibility to adopt to changing social
conditions and its capacity to meet the new challenges of progress.
Construed in the light of modern day educational system, Article 2180 cannot
be construed in its narrow concept as held in the old case of Exconde
vs. Capuno
2
and Mercado vs. Court of Appeals;
3
hence, the ruling in
the Palisoc
4
case that it should apply to all kinds of educational institutions,
academic or vocational.
At any rate, the law holds the teachers and heads of the school staff liable
unless they relieve themselves of such liability pursuant to the last paragraph
of Article 2180 by "proving that they observed all the diligence to prevent
damage." This can only be done at a trial on the merits of the case.
5

While we agree with the respondent appellate court that the motion to dismiss the complaint
was correctly denied and the complaint should be tried on the merits, we do not however agree
with the premises of the appellate court's ruling.
Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco
parentis. This Court discussed this doctrine in the afore-cited cases of Exconde, Mendoza,
Palisoc and, more recently, in Amadora vs.Court of Appeals.
6
In all such cases, it had been
stressed that the law (Article 2180) plainly provides that the damage should have been caused or
inflicted by pupils or students of he educational institution sought to be held liable for the acts of
its pupils or students while in its custody. However, this material situation does not exist in the
present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for
whose acts the school could be made liable.
However, does the appellate court's failure to consider such material facts mean the exculpation
of the petitioners from liability? It does not necessarily follow.
Page 78 of 94

When an academic institution accepts students for enrollment, there is established
a contract between them, resulting in bilateral obligations which both parties are bound to
comply with.
7
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.
Because the circumstances of the present case evince a contractual relation between the PSBA
and Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of Article 2176
shows that obligations arising from quasi-delicts or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound by contract, whether express or
implied. However, this impression has not prevented this Court from determining the existence
of a tort even when there obtains a contract. In Air France vs. Carrascoso (124 Phil. 722), the
private respondent was awarded damages for his unwarranted expulsion from a first-class seat
aboard the petitioner airline. It is noted, however, that the Court referred to the petitioner-
airline's liability as one arising from tort, not one arising from a contract of carriage. In effect, Air
France is authority for the view that liability from tort may exist even if there is a contract, for
the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed.
231).
This view was not all that revolutionary, for even as early as 1918, this Court was already of a
similar mind. InCangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:
The field of non-contractual obligation is much broader than that of
contractual obligation, comprising, as it does, the whole extent of juridical
human relations. These two fields, figuratively speaking, concentric; that is to
say, the mere fact that a person is bound to another by contract does not
relieve him from extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the contract would
have constituted the source of an extra-contractual obligation had no contract
existed between the parties.
Immediately what comes to mind is the chapter of the Civil Code on Human Relations,
particularly Article 21, which provides:
Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good custom or public policy shall compensate the latter
for the damage. (emphasis supplied).
Air France penalized the racist policy of the airline which emboldened the petitioner's employee
to forcibly oust the private respondent to cater to the comfort of a white man who allegedly
"had a better right to the seat." In Austro-American, supra, the public embarrassment caused to
the passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to award
damages to the latter. From the foregoing, it can be concluded that should the act which
breaches a contract be done in bad faith and be violative of Article 21, then there is a cause to
view the act as constituting a quasi-delict.
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 nonto 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.
This 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 the obligation and corresponding to the circumstances of
persons, time and place.
9

As the proceedings a quo have yet to commence on the substance of the private respondents'
complaint, the record is bereft of all the material facts. Obviously, at this stage, only the trial
court can make such a determination from the evidence still to unfold.
WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin (RTC,
Manila, Br. 47) is hereby ordered to continue proceedings consistent with this ruling of the Court.
Costs against the petitioners.
SO ORDERED.
Melencio-Herrera, Paras, Regalado and Nocon, JJ., concur.

LIABILITY OF STATE

G.R. No. 71159 November 15, 1989
CITY OF MANILA, and EVANGELINE SUVA, petitioners,
vs.
HON. INTERMEDIATE APPELLATE COURT, IRENE STO. DOMINGO and for and in behalf of her
minor children, VIVENCIO, JR., IRIS, VERGEL and IMELDA, all surnamed STO.
DOMINGO, respondents.
The City Legal Officer for petitioners.
Page 79 of 94

Jose M. Castillo for respondents.

PARAS, J.:
This is a petition for review on certiorari seeking to reverse and set aside: (a) the Decision of the
Intermediate Appellate Court now Court of Appeals
1
promulgated on May 31, 1984 in AC-G.R.
CV No. 00613-R entitled Irene Sto. Domingo et al., v. City Court of Manila et al., modifying the
decision of the then Court of First Instance of Manila, Branch VIII
2
in Civil Case No. 121921
ordering the defendants (herein petitioners,) to give plaintiffs (herein private respondents) the
right to use a burial lot in the North Cemetery corresponding to the unexpired term of the fully
paid lease sued upon, to search the remains of the late Vivencio Sto. Domingo, Sr. and to bury
the same in a substitute lot to be chosen by the plaintiffs; and (b) the Resolution of the Court of
Appeals dated May 28, 1985 denying petitioner's motion for reconsideration.
As found by the Court of Appeals and the trial court, the undisputed facts of the case are as
follows:
Brought on February 22, 1979 by the widow and children of the late Vivencio
Sto. Domingo, Sr. was this action for damages against the City of Manila;
Evangeline Suva of the City Health Office; Sergio Mallari, officer-in-charge of
the North Cemetery; and Joseph Helmuth, the latter's predecessor as officer-
in-charge of the said burial grounds owned and operated by the City
Government of Manila.
Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto. Domingo
and father of the litigating minors, died on June 4,1971 and buried on June
6,1971 in Lot No. 159, Block No. 194 of the North Cemetery which lot was
leased by the city to Irene Sto. Domingo for the period from June 6, 1971 to
June 6, 2021 per Official Receipt No. 61307 dated June 6, 1971 (see Exh. A)
with an expiry date of June 6, 2021 (see Exh. A-1). Full payment of the rental
therefor of P50.00 is evidenced by the said receipt which appears to be
regular on its face. Apart from the aforementioned receipt, no other
document was executed to embody such lease over the burial lot in question.
In fact, the burial record for Block No. 194 of Manila North Cemetery (see Exh.
2) in which subject Lot No. 159 is situated does not reflect the term of
duration of the lease thereover in favor of the Sto. Domingos.
Believing in good faith that, in accordance with Administrative Order No. 5,
Series of 1975, dated March 6, 1975, of the City Mayor of Manila (See Exh. 1)
prescribing uniform procedure and guidelines in the processing of documents
pertaining to and for the use and disposition of burial lots and plots within the
North Cemetery, etc., subject Lot No. 159 of Block 194 in which the mortal
remains of the late Vivencio Sto. Domingo were laid to rest, was leased to the
bereaved family for five (5) years only, subject lot was certified on January 25,
1978 as ready for exhumation.
On the basis of such certification, the authorities of the North Cemetery then
headed by defendant Joseph Helmuth authorized the exhumation and
removal from subject burial lot the remains of the late Vivencio Sto. Domingo,
Sr., placed the bones and skull in a bag or sack and kept the same in the
depository or bodega of the cemetery y Subsequently, the same lot in
question was rented out to another lessee so that when the plaintiffs herein
went to said lot on All Souls Day in their shock, consternation and dismay, that
the resting place of their dear departed did not anymore bear the stone
marker which they lovingly placed on the tomb. Indignant and disgusted over
such a sorrowful finding, Irene Sto. Domingo lost no time in inquiring from the
officer-in-charge of the North Cemetery, defendant Sergio Mallari, and was
told that the remains of her late husband had been taken from the burial lot in
question which was given to another lessee.
Irene Sto. Domingo was also informed that she can look for the bones of her
deceased husband in the warehouse of the cemetery where the exhumed
remains from the different burial lots of the North Cemetery are being kept
until they are retrieved by interested parties. But to the bereaved widow,
what she was advised to do was simply unacceptable. According to her, it was
just impossible to locate the remains of her late husband in a depository
containing thousands upon thousands of sacks of human bones. She did not
want to run the risk of claiming for the wrong set of bones. She was even
offered another lot but was never appeased. She was too aggrieved that she
came to court for relief even before she could formally present her claims and
demands to the city government and to the other defendants named in the
present complaint. (Decision, Court of Appeals, pp. 2-3; Rollo, pp. 34-55)
The trial court, on August 4, 1981, rendered its Decision, the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered, ordering the defendants to give
plaintiffs the right to make use of another single lot within the North
Cemetery for a period of forty-three (43) years four (4) months and eleven
(11) days, corresponding to the unexpired term of the fully paid lease sued
upon; and to search without let up and with the use of all means humanly
possible, for the remains of the late Vivencio Sto. Domingo, Sr. and thereafter,
to bury the same in the substitute lot to be chosen by the plaintiffs pursuant
to this decision.
For want of merit, defendant's counterclaim is DISMISSED.
No pronouncement as to costs.
SO ORDERED. (Rollo, p. 31)
The decision was appealed to the Court of Appeals which on May 31, 1984 rendered a decision
(Rollo, pp. 33-40) modifying the decision appealed from, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, the decision appealed from is hereby
REVERSED (is hereby modified) and another one is hereby entered:
1. Requiring in full force the defendants to look in earnest for the bones and
skull of the late Vivencio Sto. Domingo, Sr., and to bury the same in the
substitute lot adjudged in favor of plaintiffs hereunder;
2. Ordering defendants to pay plaintiffs-appellants jointly and severally
P10,000.00 for breach of contract;
3. Ordering defendants to pay plaintiffs-appellants, jointly and severally,
P20,000.00 for moral damages;
Page 80 of 94

4. Ordering defendants to pay plaintiffs-appellants jointly and severally,
P20,000.00 for exemplary damages;
5. Ordering defendants to pay plaintiffs-appellants, jointly and severally,
P10,000.00 as and for attorney's fees;
6. Ordering defendants, to pay plaintiffs-appellants, jointly and severally, on
the foregoing amounts legal rate of interest computed from filing hereof until
fully paid; and
7. Ordering defendants, to pay plaintiffs-appellants, jointly and severally, the
cost of suit.
SO ORDERED. (Rollo, p. 40)
The petitioners' motion for reconsideration was likewise denied.
Hence, this instant petition (Rollo, pp. 7-27) filed on July 27, 1985.
The grounds relied upon for this petition are as follows:
I
THE HONORABLE INTERMEDIATE APPELLATE COURT ERRED IN AWARDING
DAMAGES AGAINST THE PETITIONERS HEREIN, NOTWITHSTANDING THEIR
GOOD FAITH AND THEIR LACK OF KNOWLEDGE OR CONSENT TO THE
REMOVAL OF THE SKELETAL REMAINS OF THE LATE VIVENCIO STO. DOMINGO,
SR. FROM THE SUBJECT BURIAL LOT.
II
THE HON. INTERMEDIATE APPELLATE COURT ERRED IN HOLDING PETITIONERS
HEREIN RESPONSIBLE FOR THE ALLEGED TORTS OF THEIR SUBORDINATE
OFFICIALS AND EMPLOYEES, INSPITE OF THE PROVISIONS OF SECTION 4 OF
THE REPUBLIC ACT NO. 409 (REVISED CHARTER OF MANILA) AND OTHER
APPLICABLE JURISPRUDENCE ON THE SUBJECT EXEMPTING THE PETITIONERS
FROM DAMAGES FROM THE MALFEASANCE OR MISFEASANCE OF THEIR
OFFICIALS AND EMPLOYEES, IF THERE BE ANY IN THIS CASE. (Brief for
Petitioners, Rollo, pp. 93-94)
In the resolution dated November 13, 1985 (,Rollo, p. 84), the petition was given due course.
The pivotal issue of this case is whether or not the operations and functions of a public cemetery
are a governmental, or a corporate or proprietary function of the City of Manila. The resolution
of this issue is essential to the determination of the liability for damages of the petitioner city.
Petitioners alleged in their petition that the North Cemetery is exclusively devoted for public use
or purpose as stated in Sec. 316 of the Compilation of the Ordinances of the City of Manila. They
conclude that since the City is a political subdivision in the performance of its governmental
function, it is immune from tort liability which may be caused by its public officers and
subordinate employees. Further Section 4, Article I of the Revised Charter of Manila exempts the
city from liability for damages or injuries to persons or property arising from the failure of the
Mayor, the Municipal Board, or any other city officer, to enforce the provision of its charter or
any other laws, or ordinance, or from negligence of said Mayor, Municipal Board or any other
officers while enforcing or attempting to enforce said provisions. They allege that the Revised
Charter of Manila being a special law cannot be defeated by the Human Relations provisions of
the Civil Code being a general law.
Private respondents on the other hand maintain that the City of Manila entered into a contract
of lease which involve the exercise of proprietary functions with private respondent Irene Sto.
Domingo. The city and its officers therefore can be sued for any-violation of the contract of lease.
Private respondents' contention is well-taken.
Under Philippine laws, the City of Manila is a political body corporate and as such endowed with
the faculties of municipal corporations to be exercised by and through its city government in
conformity with law, and in its proper corporate name. It may sue and be sued, and contract and
be contracted with. Its powers are twofold in character-public, governmental or political on the
one hand, and corporate, private and proprietary on the other. Governmental powers are those
exercised in administering the powers of the state and promoting the public welfare and they
include the legislative, judicial, public and political. Municipal powers on the one hand are
exercised for the special benefit and advantage of the community and include those which are
ministerial, private and corporate. In McQuillin on Municipal Corporation, the rule is stated thus:
"A municipal corporation proper has ... a public character as regards the state at large insofar as
it is its agent in government, and private (so called) insofar as it is to promote local necessities
and conveniences for its own community (Torio v. Fontanilla, 85 SCRA 599 [1978]). In connection
with the powers of a municipal corporation, it may acquire property in its public or governmental
capacity, and private or proprietary capacity. The New Civil Code divides such properties into
property for public use and patrimonial properties (Article 423), and further enumerates the
properties for public use as provincial roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public works for public service paid for by said
provisions, cities or municipalities, all other property is patrimonial without prejudice to the
provisions of special laws (Article 424; Province of Zamboanga del Norte v. City of Zamboanga, et
al., 22 SCRA 1334 [1968]).
Thus in Torio v. Fontanilla, supra, the Court declared that with respect to proprietary functions
the settled rule is that a municipal corporation can be held liable to third persons ex
contractu (Municipality of Moncada v. Cajuigan, et al., 21 Phil. 184 (1912) or ex delicto (Mendoza
v. de Leon, 33 Phil. 508 (1916).
The Court further stressed:
Municipal corporations are subject to be sued upon contracts and in tort....
xxx xxx xxx
The rule of law is a general one, that the superior or employer must answer
civilly for the negligence or want of skill of its agent or servant in the course or
line of his employment, by which another who is free from contributory fault, is
injured. Municipal corporations under the conditions herein stated, fall within
tile operation of this rule of law, and are liable accordingly, to civil actions for
damages when the requisite elements of liability co-exist. ... (Emphasis
supplied)
The Court added:
... while the following are corporate or proprietary in character, viz: municipal
waterworks, slaughter houses, markets, stables, bathing establishments,
wharves, ferries and fisheries. Maintenance of parks, golf courses, cemeteries
and airports among others, are also recognized as municipal or city activities
of a proprietary character. (Dept. of Treasury v. City of Evansvulle, Sup. Ct. of
Page 81 of 94

Indiana, 60 N.E. 2nd 952, 954 cited in Torio v. Fontanilla, supra) (Emphasis
supplied)
Under the foregoing considerations and in the absence of a special law, the North Cemetery is a
patrimonial property of the City of Manila which was created by resolution of the Municipal
Board of August 27, 1903 and January 7, 1904 (Petition, Rollo pp. 20-21 Compilation of the
Ordinances of the City of Manila). The administration and government of the cemetery are under
the City Health Officer (Ibid., Sec. 3189), the order and police of the cemetery (Ibid., See. 319),
the opening of graves, niches, or tombs, the exhuming of remains, and the purification of the
same (Ibid., Sec. 327) are under the charge and responsibility of the superintendent of the
cemetery. The City of Manila furthermore prescribes the procedure and guidelines for the use
and dispositions of burial lots and plots within the North Cemetery through Administrative Order
No. 5, s. 1975 (Rollo, p. 44). With the acts of dominion, there is, therefore no doubt that the
North Cemetery is within the class of property which the City of Manila owns in its proprietary or
private character. Furthermore, there is no dispute that the burial lot was leased in favor of the
private respondents. Hence, obligations arising from contracts have the force of law between the
contracting parties. Thus a lease contract executed by the lessor and lessee remains as the law
between them. (Henson v. Intermediate Appellate Court, 148 SCRA 11 [1 987]). Therefore, a
breach of contractual provision entitles the other party to damages even if no penalty for such
breach is prescribed in the contract. (Boysaw v. Interphil Promotions, Inc., 148 SCRA 635 [1987]).
Noteworthy are the findings of the Court of Appeals as to the harrowing experience of private
respondents and their wounded feelings upon discovery that the remains of their loved one were
exhumed without their knowledge and consent, as said Court declared:
It has been fully established that the appellants, in spite or perhaps because,
of their lowly station in life have found great consolation in their bereavement
from the loss of their family head, by visiting his grave on special or even
ordinary occasions, but particularly on All Saints Day, in keeping with the
deep, beautiful and Catholic Filipino tradition of revering the memory of their
dead. It would have been but fair and equitable that they were notified of the
intention of the city government to transfer the skeletal remains of the late
Vivencio Sto. Domingo to give them an opportunity to demand the faithful
fulfillment of their contract, or at least to prepare and make provisions for said
transfer in order that they would not lose track of the remains of their beloved
dead, as what has actually happened on this case. We understand fully what
the family of the deceased must have felt when on All Saints Day of 1978, they
found a new marker on the grave they were to visit, only to be told to locate
their beloved dead among thousands of skeletal remains which to them was
desecration and an impossible task. Even the lower court recognized this
when it stated in its decision thus:
All things considered, even as the Court commiserates with
plaintiffs for the unfortunate happening complained of and
untimely desecration of the resting place and remains of
their deceased dearly beloved, it finds the reliefs prayed for
by them lacking in legal and factual basis. Under the
aforementioned facts and circumstances, the most that
plaintiffs ran ask for is the replacement of subject lot with
another lot of equal size and similar location in the North
Cemetery which substitute lot plaintiffs can make use of
without paying any rental to the city government for a
period of forty-three (43) years, four (4) months and eleven
(11) days corresponding to the unexpired portion of the
term of the lease sued upon as of January 25, 1978 when
the remains of the late Vivencio Sto. Domingo, Sr. were
prematurely removed from the disputed lot; and to require
the defendants to look in earnest for the bones and skull of
the late Vivencio Sto. Domingo Sr. and to bury the same in
the substitute lot adjudged in favor of plaintiffs hereunder.
(Decision, Intermediate Appellate Court, p. 7, Rollo, p. 39)
As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of
the North Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in
the receipt duly signed by the deputy treasurer of the City of Manila and sealed by the city
government, there is nothing in the record that justifies the reversal of the conclusion of both
the trial court and the Intermediate Appellate Court to the effect that the receipt is in itself a
contract of lease. (Decision, Intermediate Appellate Court, p. 3, Rollo, pp. 5-6).
Under the doctrine of respondent superior, (Torio v. Fontanilla, supra), petitioner City of Manila is
liable for the tortious act committed by its agents who failed to verify and check the duration of
the contract of lease. The contention of the petitioner-city that the lease is covered by
Administrative Order No. 5, series of 1975 dated March 6, 1975 of the City of Manila for five (5)
years only beginning from June 6, 1971 is not meritorious for the said administrative order
covers new leases. When subject lot was certified on January 25, 1978 as ready for exhumation,
the lease contract for fifty (50) years was still in full force and effect.
PREMISES CONSIDERED, the Decision of the Intermediate Appellate Court is hereby AFFIRMED.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera (Chairperson), J., is on leave.

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
Page 82 of 94

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.
Page 83 of 94

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 ironuntil 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
Page 84 of 94

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-52179 April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner
vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA, IAUREANO BANIA, JR., SOR
MARIETA BANIA, MONTANO BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents.
Mauro C. Cabading, Jr. for petitioner.
Simeon G. Hipol for private respondent.

MEDIALDEA, J.:p
This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory
injunction seeking the nullification or modification of the proceedings and the orders issued by
the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of First
Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case No. 107-
BG, entitled "Juana Rimando Bania, et al. vs. Macario Nieveras, et al." dated November 4, 1975;
July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979; September 7,
1979; November 7, 1979 and December 3, 1979 and the decision dated October 10, 1979
ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay, jointly and
severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of earning
capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint against
the Estate of Macario Nieveras and Bernardo Balagot.
The antecedent facts are as follows:
Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and
in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge
Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First
Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana Rimando-
Bania, Laureano Bania, Jr., Sor Marietta Bania, Montano Bania, Orja Bania and Lydia R.
Bania are heirs of the deceased Laureano Bania Sr. and plaintiffs in Civil Case No. 107-Bg
before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a
passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a
gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump
truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to the
impact, several passengers of the jeepney including Laureano Bania Sr. died as a result of the
injuries they sustained and four (4) others suffered varying degrees of physical injuries.
On December 11, 1966, the private respondents instituted a compliant for damages against the
Estate of Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the
passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La
Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck of petitioner.
Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent
judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated
May 7, 1975, the private respondents amended the complaint wherein the petitioner and its
regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed
its answer and raised affirmative defenses such as lack of cause of action, non-suability of the
State, prescription of cause of action and the negligence of the owner and driver of the
passenger jeepney as the proximate cause of the collision.
In the course of the proceedings, the respondent judge issued the following questioned orders,
to wit:
(1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo
Balagot;
(2) Order dated July 13, 1976 admitting the Amended Answer of the
Municipality of San Fernando, La Union and Bislig and setting the hearing on
the affirmative defenses only with respect to the supposed lack of jurisdiction;
(3) Order dated August 23, 1976 deferring there resolution of the grounds for
the Motion to Dismiss until the trial;
(4) Order dated February 23, 1977 denying the motion for reconsideration of
the order of July 13, 1976 filed by the Municipality and Bislig for having been
filed out of time;
Page 85 of 94

(5) Order dated March 16, 1977 reiterating the denial of the motion for
reconsideration of the order of July 13, 1976;
(6) Order dated July 26, 1979 declaring the case deemed submitted for
decision it appearing that parties have not yet submitted their respective
memoranda despite the court's direction; and
(7) Order dated September 7, 1979 denying the petitioner's motion for
reconsideration and/or order to recall prosecution witnesses for cross
examination.
On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder
quoted as follows:
IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the
plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo
Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-
Bania, Mrs. Priscilla B. Surell, Laureano Bania Jr., Sor Marietta Bania, Mrs.
Fe B. Soriano, Montano Bania, Orja Bania and Lydia B. Bania the sums of
P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of
the late Laureano Bania Sr., P30,000.00 as moral damages, and P2,500.00 as
attorney's fees. Costs against said defendants.
The Complaint is dismissed as to defendants Estate of Macario Nieveras and
Bernardo Balagot.
SO ORDERED. (Rollo, p. 30)
Petitioner filed a motion for reconsideration and for a new trial without prejudice to another
motion which was then pending. However, respondent judge issued another order dated
November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979 for
having been filed out of time.
Finally, the respondent judge issued an order dated December 3, 1979 providing that if
defendants municipality and Bislig further wish to pursue the matter disposed of in the order of
July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court.
Hence, this petition.
Petitioner maintains that the respondent judge committed grave abuse of discretion amounting
to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore,
petitioner asserts that while appeal of the decision maybe available, the same is not the speedy
and adequate remedy in the ordinary course of law.
On the other hand, private respondents controvert the position of the petitioner and allege that
the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition
for certiorari and prohibition. (Rollo,
p. 42.) In addition, the private respondents stress that petitioner has not considered that every
court, including respondent court, has the inherent power to amend and control its process and
orders so as to make them conformable to law and justice. (Rollo, p. 43.)
The controversy boils down to the main issue of whether or not the respondent court committed
grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of
the State amounting to lack of jurisdiction in a motion to dismiss.
In the case at bar, the respondent judge deferred the resolution of the defense of non-suability
of the State amounting to lack of jurisdiction until trial. However, said respondent judge failed to
resolve such defense, proceeded with the trial and thereafter rendered a decision against the
municipality and its driver.
The respondent judge did not commit grave abuse of discretion when in the exercise of its
judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of
the municipality. However, said judge acted in excess of his jurisdiction when in his decision
dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its
regular employee.
The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the
Constitution, to wit: "the State may not be sued without its consent."
Stated in simple parlance, the general rule is that the State may not be sued except when it gives
consent to be sued. Consent takes the form of express or implied consent.
Express consent may be embodied in a general law or a special law. The standing consent of the
State to be sued in case of money claims involving liability arising from contracts is found in Act
No. 3083. A special law may be passed to enable a person to sue the government for an alleged
quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see United
States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)
Consent is implied when the government enters into business contracts, thereby descending to
the level of the other contracting party, and also when the State files a complaint, thus opening
itself to a counterclaim. (Ibid)
Municipal corporations, for example, like provinces and cities, are agencies of the State when
they are engaged in governmental functions and therefore should enjoy the sovereign immunity
from suit. Nevertheless, they are subject to suit even in the performance of such functions
because their charter provided that they can sue and be sued. (Cruz, Philippine Political Law,
1987 Edition, p. 39)
A distinction should first be made between suability and liability. "Suability depends on the
consent of the state to be sued, liability on the applicable law and the established facts. The
circumstance that a state is suable does not necessarily mean that it is liable; on the other hand,
it can never be held liable if it does not first consent to be sued. Liability is not conceded by the
mere fact that the state has allowed itself to be sued. When the state does waive its sovereign
immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable."
(United States of America vs. Guinto, supra, p. 659-660)
Anent the issue of whether or not the municipality is liable for the torts committed by its
employee, the test of liability of the municipality depends on whether or not the driver, acting in
behalf of the municipality, is performing governmental or proprietary functions. As emphasized
in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599, 606), the
distinction of powers becomes important for purposes of determining the liability of the
municipality for the acts of its agents which result in an injury to third persons.
Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court
of Indiana in 1916, thus:
Municipal corporations exist in a dual capacity, and their functions are
twofold. In one they exercise the right springing from sovereignty, and while
in the performance of the duties pertaining thereto, their acts are political and
governmental. Their officers and agents in such capacity, though elected or
appointed by them, are nevertheless public functionaries performing a public
Page 86 of 94

service, and as such they are officers, agents, and servants of the state. In the
other capacity the municipalities exercise a private, proprietary or corporate
right, arising from their existence as legal persons and not as public agencies.
Their officers and agents in the performance of such functions act in behalf of
the municipalities in their corporate or individual capacity, and not for the
state or sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)
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 be held answerable only
if it can be shown that they were acting in a 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 its governmental capacity when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)
In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way
to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal
streets." (Rollo, p. 29.)
In the absence of any evidence to the contrary, the regularity of the performance of official duty
is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule
that the driver of the dump truck was performing duties or tasks pertaining to his office.
We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District
Engineer, and the Provincial Treasurer (102 Phil 1186) that "the construction or maintenance of
roads in which the truck and the driver worked at the time of the accident are admittedly
governmental activities."
After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that
the municipality cannot be held liable for the torts committed by its regular employee, who was
then engaged in the discharge of governmental functions. Hence, the death of the passenger
tragic and deplorable though it may be imposed on the municipality no duty to pay monetary
compensation.
All premises considered, the Court is convinced that the respondent judge's dereliction in failing
to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge
exceeded his jurisdiction when it ruled on the issue of liability.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby
modified, absolving the petitioner municipality of any liability in favor of private respondents.
SO ORDERED.
Narvasa, Cruz, Gancayco and Grio-Aquino, 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 adoptedverbatim:
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:
Page 87 of 94

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
Page 88 of 94

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
Page 89 of 94

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,
Page 90 of 94

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
ofUnited 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.,
Page 91 of 94

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:
Page 92 of 94

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.

FEB Leasing and finance corporation vs spouses sergio baylon

CARPIO, J.:
The Case
This is a petition for review on certiorari
1
of the 9 October 2007 Decision
2
and the 18 January
2008 Resolution
3
of the Court of Appeals in CA-G.R. CV No. 81446. The 9 October 2007 Decision
affirmed the 30 October 2003 Decision
4
of the Regional Trial Court (Branch 35) of Gapan City in
Civil Case No. 2334 ordering petitioner to pay respondents damages. The 18 January 2008
Resolution denied petitioners motion for reconsideration.
The Facts
On 2 September 2000, an Isuzu oil tanker running along Del Monte Avenue in Quezon City and
bearing plate number TDY 712 hit Loretta V. Baylon (Loretta), daughter of respondent spouses
Sergio P. Baylon and Maritess Villena-Baylon (spouses Baylon). At the time of the accident, the oil
tanker was registered
5
in the name of petitioner FEB Leasing and Finance
Corporation
6
(petitioner). The oil tanker was leased
7
to BG Hauler, Inc. (BG Hauler) and was being
driven by the latters driver, Manuel Y. Estilloso. The oil tanker was insured
8
by FGU Insurance
Corp. (FGU Insurance).

The accident took place at around 2:00 p.m. as the oil tanker was coming from Balintawak and
heading towards Manila. Upon reaching the intersection of Bonifacio Street and Del Monte
Avenue, the oil tanker turned left. While the driver of the oil tanker was executing a left turn side
by side with another vehicle towards Del Monte Avenue, the oil tanker hit Loretta who was then
crossing Del Monte Avenue coming from Mayon Street. Due to the strong impact, Loretta was
violently thrown away about three to five meters from the point of impact. She fell to the ground
unconscious. She was brought for treatment to the Chinese General Hospital where she
remained in a coma until her death two days after.
9

The spouses Baylon filed with the RTC (Branch 35) of Gapan City a Complaint
10
for damages
against petitioner, BG Hauler, the driver, and FGU Insurance. Petitioner filed its answer with
compulsory counterclaim while FGU Insurance filed its answer with counterclaim. On the other
hand, BG Hauler filed its answer with compulsory counterclaim and cross-claim against FGU
Insurance.
Petitioner claimed that the spouses Baylon had no cause of action against it because under its
lease contract with BG Hauler, petitioner was not liable for any loss, damage, or injury that the
leased oil tanker might cause. Petitioner claimed that no employer-employee relationship
existed between petitioner and the driver.
BG Hauler alleged that neither do the spouses Baylon have a cause of action against it since the
oil tanker was not registered in its name. BG Hauler contended that the victim was guilty of
contributory negligence in crossing the street. BG Hauler claimed that even if its driver was at
fault, BG Hauler exercised the diligence of a good father of a family in the selection and
supervision of its driver. BG Hauler also contended that FGU Insurance is obliged to assume all
liabilities arising from the use of the insured oil tanker.
For its part, FGU Insurance averred that the victim was guilty of contributory negligence. FGU
Insurance concluded that the spouses Baylon could not expect to be paid the full amount of their
claims. FGU Insurance pointed out that the insurance policy covering the oil tanker limited any
claim to a maximum of P400,000.00.

During trial, FGU Insurance moved that (1) it be allowed to deposit in court the amount
of P450,000.00 in the joint names of the spouses Baylon, petitioner, and BG Hauler and (2) it be
released from further participating in the proceedings. After the RTC granted the motion, FGU
Insurance deposited in the Branch Clerk of Court a check in the names of the spousesBaylon,
petitioner, and BG Hauler. The RTC then released FGU Insurance from its contractual obligations
under the insurance policy.
The Ruling of the RTC
After weighing the evidence submitted by the parties, the RTC found that the death of Loretta
was due to the negligent act of the driver. The RTC held that BG Hauler, as the employer,
Page 93 of 94

was solidarily liable with the driver. The RTC further held that petitioner, as the registered owner
of the oil tanker, was also solidarily liable.
The RTC found that since FGU Insurance already paid the amount of P450,000.00 to the
spouses Baylon, BG Hauler, and petitioner, the insurers obligation has been satisfactorily
fulfilled. The RTC thus dismissed the cross-claim of BG Hauler against FGU Insurance.
The decretal part of the RTCs decision reads:
Wherefore, premises considered, judgment is hereby rendered in favor of the plaintiffs
and against defendants FEB Leasing (now BPI Leasing), BG Hauler, and Manuel Estilloso,
to wit:

1. Ordering the defendants, jointly and severally, to pay plaintiffs the following:
a. the amount of P62,000.00 representing actual expenses incurred by the plaintiffs;
b. the amount of P50,000.00 as moral damages;
c. the amount of P2,400,000.00 for loss of earning capacity of the deceased victim,
Loretta V. Baylon;
d. the sum of P50,000.00 for death indemnity;
e. the sum of P50,000.00 for and as attorneys fees; and
f. with costs against the defendants.

2. Ordering the dismissal of defendants counter-claim for lack of merit and the cross
claim of defendant BG Hauler against defendant FGU Insurance.
SO ORDERED.
11

Petitioner, BG Hauler, and the driver appealed the RTC Decision to the Court of Appeals.
Petitioner claimed that as financial lessor, it is exempt from liability resulting from any loss,
damage, or injury the oil tanker may cause while being operated by BG Hauler as financial lessee.
On the other hand, BG Hauler and the driver alleged that no sufficient evidence existed proving
the driver to be at fault. They claimed that the RTC erred in finding BG Hauler negligent despite
the fact that it had exercised the diligence of a good father of a family in the selection and
supervision of its driver and in the maintenance of its vehicles. They contended that petitioner,
as the registered owner of the oil tanker, should be solely liable for Lorettas death.
The Ruling of the Court of Appeals
The Court of Appeals held that petitioner, BG Hauler, and the driver are solidarily liable for
damages arising from Lorettas death. Petitioners liability arose from the fact that it was the
registered owner of the oil tanker while BG Haulers liability emanated from a provision in the
lease contract providing that the lessee shall be liable in case of any loss, damage, or injury the
leased oil tanker may cause.
Thus, the Court of Appeals affirmed the RTC Decision but with the modification that the award
of attorneys fees be deleted for being speculative. The dispositive part of the appellate courts
Decision reads:
WHEREFORE, in the light of the foregoing, the instant appeal is DENIED. Consequently, the
assailed Decision of the lower court is AFFIRMED with the MODIFICATION that the award of
attorneys fees is DELETED.
IT IS SO ORDERED.
12

Dissatisfied, petitioner and BG Hauler, joined by the driver, filed two separate motions for
reconsideration. In its 18 January 2008 Resolution, the Court of Appeals denied both motions for
lack of merit.
Unconvinced, petitioner alone filed with this Court the present petition for review on
certiorari impleading the spouses Baylon, BG Hauler, and the driver as respondents.
13

The Issue
The sole issue submitted for resolution is whether the registered owner of a financially leased
vehicle remains liable for loss, damage, or injury caused by the vehicle notwithstanding an
exemption provision in the financial lease contract.
The Courts Ruling
Petitioner contends that the lease contract between BG Hauler and petitioner specifically
provides that BG Hauler shall be liable for any loss, damage, or injury the leased oil tanker may
cause even if petitioner is the registered owner of the said oil tanker. Petitioner claims that the
Court of Appeals erred in holding petitioner solidarily liable with BG Hauler despite having found
the latter liable under the lease contract.
For their part, the spouses Baylon counter that the lease contract between petitioner and BG
Hauler cannot bind third parties like them. The spouses Baylon maintain that the existence of the
lease contract does not relieve petitioner of direct responsibility as the registered owner of the
oil tanker that caused the death of their daughter.
On the other hand, BG Hauler and the driver argue that at the time petitioner and BG Hauler
entered into the lease contract, Republic Act No. 5980
14
was still in effect. They point out that
the amendatory law, Republic Act No. 8556,
15
which exempts from liability in case of any loss,
damage, or injury to third persons the registered owners of vehicles financially leased to another,
was not yet enacted at that time.
In point is the 2008 case of PCI Leasing and Finance, Inc. v. UCPB General Insurance Co.,
Inc.
16
There, we held liable PCI Leasing and Finance, Inc., the registered owner of an 18-wheeler
Fuso Tanker Truck leased to Superior Gas & Equitable Co., Inc. (SUGECO) and being driven by the
latters driver, for damages arising from a collision. This despite an express provision in the lease
contract to the effect that the lessee, SUGECO, shall indemnify and hold the registered owner
free from any liabilities, damages, suits, claims, or judgments arising from SUGECOs use of the
leased motor vehicle.
In the instant case, Section 5.1 of the lease contract between petitioner and BG Hauler provides:

Sec. 5.1. It is the principle of this Lease that while the title or ownership of the
EQUIPMENT, with all the rights consequent thereof, are retained by the LESSOR, the
risk of loss or damage of the EQUIPMENT from whatever source arising, as well as any
liability resulting from the ownership, operation and/or possession thereof, over and
above those actually compensated by insurance, are hereby transferred to and
assumed by the LESSEE hereunder which shall continue in full force and
effect.
17
(Emphasis supplied)
If it so wishes, petitioner may proceed against BG Hauler to seek enforcement of the latters
contractual obligation under Section 5.1 of the lease contract. In the present case, petitioner did
not file a cross-claim against BG Hauler. Hence, this Court cannot require BG Hauler to reimburse
Page 94 of 94

petitioner for the latters liability to the spouses Baylon. However, as the registered owner of the
oil tanker, petitioner may not escape its liability to third persons.
Under Section 5 of Republic Act No. 4136,
18
as amended, all motor vehicles used or operated on
or upon any highway of the Philippines must be registered with the Bureau of Land
Transportation (now Land Transportation Office) for the current year.
19
Furthermore, any
encumbrances of motor vehicles must be recorded with the Land Transportation Office in order
to be valid against third parties.
20

In accordance with the law on compulsory motor vehicle registration, this Court has consistently
ruled that, with respect to the public and third persons, the registered owner of a motor vehicle
is directly and primarily responsible for the consequences of its operation regardless of who the
actual vehicle owner might be.
21
Well-settled is the rule that the registered owner of the vehicle
is liable for quasi-delicts resulting from its use. Thus, even if the vehicle has already been sold,
leased, or transferred to another person at the time the vehicle figured in an accident, the
registered vehicle owner would still be liable for damages caused by the accident. The sale,
transfer or lease of the vehicle, which is not registered with the Land Transportation Office, will
not bind third persons aggrieved in an accident involving the vehicle. The compulsory motor
vehicle registration underscores the importance of registering the vehicle in the name of the
actual owner.

The policy behind the rule is to enable the victim to find redress by the expedient recourse of
identifying the registered vehicle owner in the records of the Land Transportation Office. The
registered owner can be reimbursed by the actual owner, lessee or transferee who is known to
him. Unlike the registered owner, the innocent victim is not privy to the lease, sale, transfer or
encumbrance of the vehicle. Hence, the victim should not be prejudiced by the failure to register
such transaction or encumbrance. As the Court held in PCI Leasing:
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.
22

In the landmark case of Erezo v. Jepte,
23
the Court succinctly laid down the public policy behind
the rule, thus:
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.
x x x

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, 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 be thereby be relieved of the responsibility to the injured person.
24

In this case, petitioner admits that it is the registered owner of the oil tanker that figured in an
accident causing the death of Loretta. As the registered owner, it cannot escape liability for the
loss arising out of negligence in the operation of the oil tanker. Its liability remains even if at the
time of the accident, the oil tanker was leased to BG Hauler and was being driven by the latters
driver, and despite a provision in the lease contract exonerating the registered owner from
liability.
As a final point, we agree with the Court of Appeals that the award of attorneys fees by the RTC
must be deleted for lack of basis. The RTC failed to justify the award of P50,000attorneys fees to
respondent spouses Baylon. The award of attorneys fees must have some factual, legal and
equitable bases and cannot be left to speculations and conjectures.
25
Consistent with prevailing
jurisprudence,
26
attorneys fees as part of damages are awarded only in the instances
enumerated in Article 2208 of the Civil Code.
27
Thus, the award of attorneys fees is the
exception rather than the rule. Attorneys fees are not awarded every time a party prevails in a
suit because of the policy that no premium should be placed on the right to litigate.
28

WHEREFORE, we DENY the petition. We AFFIRM the 9 October 2007 Decision and the 18
January 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 81446 affirming with
modification the 30 October 2003 Decision of the Regional Trial Court (Branch 35) of Gapan City
in Civil Case No. 2334 ordering petitioner FEB Leasing and Finance Corporation, BG Hauler, Inc.,
and driver Manuel Y. Estilloso to solidarily pay respondent spouses Sergio
P. Baylon and Maritess Villena-Baylon the following amounts:

a. P62,000.00 representing actual expenses incurred by the plaintiffs;
b. P50,000.00 as moral damages;
c. P2,400,000.00 for loss of earning capacity of the deceased victim, Loretta V. Baylon;
and
d. P50,000.00 for death indemnity.

Costs against petitioner.