Republic of the Philippines

SUPREME COURT
Manila
G.R. No. L-12219 March 15, 1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr.,
the sum of P31,000, as damages alleged to have been caused by an automobile driven by
the defendant. From a judgment of the Court of First Instance of the Province of La Union
absolving the defendant from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12,
1912, on the Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion
in question the plaintiff was riding on his pony over said bridge. Before he had gotten half way
across, the defendant approached from the opposite direction in an automobile, going at the
rate of about ten or twelve miles per hour. As the defendant neared the bridge he saw a
horseman on it and blew his horn to give warning of his approach. He continued his course
and after he had taken the bridge he gave two more successive blasts, as it appeared to him
that the man on horseback before him was not observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning signals. However,
being perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the
pony closely up against the railing on the right side of the bridge instead of going to the left.
He says that the reason he did this was that he thought he did not have sufficient time to get
over to the other side. The bridge is shown to have a length of about 75 meters and a width of
4.80 meters. As the automobile approached, the defendant guided it toward his left, that being
the proper side of the road for the machine. In so doing the defendant assumed that the
horseman would move to the other side. The pony had not as yet exhibited fright, and the
rider had made no sign for the automobile to stop. Seeing that the pony was apparently quiet,
the defendant, instead of veering to the right while yet some distance away or slowing down,
continued to approach directly toward the horse without diminution of speed. When he had
gotten quite near, there being then no possibility of the horse getting across to the other side,
the defendant quickly turned his car sufficiently to the right to escape hitting the horse
alongside of the railing where it as then standing; but in so doing the automobile passed in
such close proximity to the animal that it became frightened and turned its body across the
bridge with its head toward the railing. In so doing, it as struck on the hock of the left hind leg
by the flange of the car and the limb was broken. The horse fell and its rider was thrown off
with some violence. From the evidence adduced in the case we believe that when the
accident occurred the free space where the pony stood between the automobile and the

railing of the bridge was probably less than one and one half meters. As a result of its injuries
the horse died. The plaintiff received contusions which caused temporary unconsciousness
and required medical attention for several days.
The question presented for decision is whether or not the defendant in maneuvering his car in
the manner above described was guilty of negligence such as gives rise to a civil obligation to
repair the damage done; and we are of the opinion that he is so liable. As the defendant
started across the bridge, he had the right to assume that the horse and the rider would pass
over to the proper side; but as he moved toward the center of the bridge it was demonstrated
to his eyes that this would not be done; and he must in a moment have perceived that it was
too late for the horse to cross with safety in front of the moving vehicle. In the nature of things
this change of situation occurred while the automobile was yet some distance away; and from
this moment it was not longer within the power of the plaintiff to escape being run down by
going to a place of greater safety. The control of the situation had then passed entirely to the
defendant; and it was his duty either to bring his car to an immediate stop or, seeing that there
were no other persons on the bridge, to take the other side and pass sufficiently far away
from the horse to avoid the danger of collision. Instead of doing this, the defendant ran
straight on until he was almost upon the horse. He was, we think, deceived into doing this by
the fact that the horse had not yet exhibited fright. But in view of the known nature of horses,
there was an appreciable risk that, if the animal in question was unacquainted with
automobiles, he might get exited and jump under the conditions which here confronted him.
When the defendant exposed the horse and rider to this danger he was, in our opinion,
negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be stated
as follows: Did the defendant in doing the alleged negligent act use that person would have
used in the same situation? If not, then he is guilty of negligence. The law here in effect
adopts the standard supposed to be supplied by the imaginary conduct of the discreet
paterfamilias of the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation
must of course be always determined in the light of human experience and in view of the facts
involved in the particular case. Abstract speculations cannot here be of much value but this
much can be profitably said: Reasonable men govern their conduct by the circumstances
which are before them or known to them. They are not, and are not supposed to be,
omniscient of the future. Hence they can be expected to take care only when there is
something before them to suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued? If so, it was the duty
of the actor to take precautions to guard against that harm. Reasonable foresight of harm,
followed by ignoring of the suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper criterion for determining the
existence of negligence in a given case is this: Conduct is said to be negligent when a
prudent man in the position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing conduct or guarding against its
consequences.
Applying this test to the conduct of the defendant in the present case we think that negligence

is clearly established. A prudent man, placed in the position of the defendant, would in our
opinion, have recognized that the course which he was pursuing was fraught with risk, and
would therefore have foreseen harm to the horse and the rider as reasonable consequence of
that course. Under these circumstances the law imposed on the defendant the duty to guard
against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself on the wrong side of the road. But as we have
already stated, the defendant was also negligent; and in such case the problem always is to
discover which agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance to avoid the impending
harm and fails to do so is chargeable with the consequences, without reference to the prior
negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should
perhaps be mentioned in this connection. This Court there held that while contributory
negligence on the part of the person injured did not constitute a bar to recovery, it could be
received in evidence to reduce the damages which would otherwise have been assessed
wholly against the other party. The defendant company had there employed the plaintiff, as a
laborer, to assist in transporting iron rails from a barge in Manila harbor to the company's
yards located not far away. The rails were conveyed upon cars which were hauled along a
narrow track. At certain spot near the water's edge the track gave way by reason of the
combined effect of the weight of the car and the insecurity of the road bed. The car was in
consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It
appeared in evidence that the accident was due to the effects of the typhoon which had
dislodged one of the supports of the track. The court found that the defendant company was
negligent in having failed to repair the bed of the track and also that the plaintiff was, at the
moment of the accident, guilty of contributory negligence in walking at the side of the car
instead of being in front or behind. It was held that while the defendant was liable to the
plaintiff by reason of its negligence in having failed to keep the track in proper repair
nevertheless the amount of the damages should be reduced on account of the contributory
negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted in
an omission only. The liability of the company arose from its responsibility for the dangerous
condition of its track. In a case like the one now before us, where the defendant was actually
present and operating the automobile which caused the damage, we do not feel constrained
to attempt to weigh the negligence of the respective parties in order to apportion the damage
according to the degree of their relative fault. It is enough to say that the negligence of the
defendant was in this case the immediate and determining cause of the accident and that the
antecedent negligence of the plaintiff was a more remote factor in the case.
A point of minor importance in the case is indicated in the special defense pleaded in the
defendant's answer, to the effect that the subject matter of the action had been previously
adjudicated in the court of a justice of the peace. In this connection it appears that soon after
the accident in question occurred, the plaintiff caused criminal proceedings to be instituted
before a justice of the peace charging the defendant with the infliction of serious injuries
(lesiones graves). At the preliminary investigation the defendant was discharged by the
magistrate and the proceedings were dismissed. Conceding that the acquittal of the

defendant at the trial upon the merits in a criminal prosecution for the offense mentioned
would be res adjudicata upon the question of his civil liability arising from negligence -- a point
upon which it is unnecessary to express an opinion -- the action of the justice of the peace in
dismissing the criminal proceeding upon the preliminary hearing can have no effect. (See U.
S. vs. Banzuela and Banzuela, 31 Phil. Rep., 564.)
From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred
pesos (P200), with costs of other instances. The sum here awarded is estimated to include
the value of the horse, medical expenses of the plaintiff, the loss or damage occasioned to
articles of his apparel, and lawful interest on the whole to the date of this recovery. The other
damages claimed by the plaintiff are remote or otherwise of such character as not to be
recoverable. So ordered.
Arellano, C.J., Torres, Carson,
Johnson, J., reserves his vote.

Araullo,

Avancea,

and

Fisher,

JJ.,

concur.

Separate Opinions
MALCOLM, J., concurring:
After mature deliberation, I have finally decided to concur with the judgment in this case. I do
so because of my understanding of the "last clear chance" rule of the law of negligence as
particularly applied to automobile accidents. This rule cannot be invoked where the
negligence of the plaintiff is concurrent with that of the defendant. Again, if a traveler when he
reaches the point of collision is in a situation to extricate himself and avoid injury, his
negligence at that point will prevent a recovery. But Justice Street finds as a fact that the
negligent act of the interval of time, and that at the moment the plaintiff had no opportunity to
avoid the accident. Consequently, the "last clear chance" rule is applicable. In other words,
when a traveler has reached a point where he cannot extricate himself and vigilance on his
part will not avert the injury, his negligence in reaching that position becomes the condition
and not the proximate cause of the injury and will not preclude a recovery. (Note especially
Aiken vs. Metcalf [1917], 102 Atl., 330.)

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
ROBERTO C. SICAM and AGENCIA G.R. NO. 159617
de R.C. SICAM, INC.,
Petitioners,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.
LULU V. JORGE and CESAR
JORGE, Promulgated:
Respondents. August 8, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
AUSTRIA-MARTINEZ, J.:
Before

us

is

a Petition

for

Review

on Certiorari filed

by

Roberto

C. Sicam,

Jr.

(petitioner Sicam) and Agencia de R.C. Sicam, Inc. (petitioner corporation) seeking to annul
the Decision[1] of the Court of Appeals dated March 31, 2003, and its Resolution[2] dated
August 8, 2003, in CA G.R. CV No. 56633.
It appears that on different dates from September to October 1987, Lulu V. Jorge (respondent
Lulu) pawned several pieces of jewelry with Agencia de R. C. Sicam located at No. 17 Aguirre
Ave., BF Homes, Paraaque, Metro Manila, to secure a loan in the total amount
of P59,500.00.
On October 19, 1987, two armed men entered the pawnshop and took away whatever cash
and jewelry were found inside the pawnshop vault. The incident was entered in the police
blotter of the Southern Police District, Paraaque Police Station as follows:
Investigation shows that at above TDPO, while victims were inside the office, two
(2) male unidentified persons entered into the said office with guns

drawn. Suspects(sic) (1) went straight inside and poked his gun toward
Romeo Sicam and thereby tied him with an electric wire while suspects (sic) (2)
poked his gun toward Divina Mata and Isabelita Rodriguez and ordered them to
lay (sic) face flat on the floor. Suspects asked forcibly the case and assorted
pawned jewelries items mentioned above.
Suspects after taking the money and jewelries fled on board a Marson Toyota
unidentified plate number.[3]
Petitioner Sicam sent respondent Lulu a letter dated October 19, 1987 informing her of the
loss of her jewelry due to the robbery incident in the pawnshop. On November 2, 1987,
respondent Lulu then wrote a letter[4] to petitioner Sicam expressing disbelief stating that
when the robbery happened, all jewelry pawned were deposited with Far East Bank near the
pawnshop since it had been the practice that before they could withdraw, advance notice
must be given to the pawnshop so it could withdraw the jewelry from the bank. Respondent
Lulu then requested petitioner Sicam to prepare the pawned jewelry for withdrawal
on November 6, 1987 but petitioner Sicam failed to return the jewelry.
On September 28, 1988, respondent Lulu joined by her husband, Cesar Jorge, filed a
complaint

against

petitioner Sicam with

the

Regional

Trial

Court

of Makati seeking

indemnification for the loss of pawned jewelry and payment of actual, moral and exemplary
damages as well as attorney's fees. The case was docketed as Civil Case No. 88-2035.
Petitioner Sicam filed his Answer contending that he is not the real party-in-interest as the
pawnshop was incorporated on April 20, 1987 and known as Agencia de R.C. Sicam, Inc; that
petitioner corporation had exercised due care and diligence in the safekeeping of the articles
pledged with it and could not be made liable for an event that is fortuitous.
Respondents subsequently filed an Amended Complaint to include petitioner corporation.
Thereafter, petitioner Sicam filed a Motion to Dismiss as far as he is concerned considering
that he is not the real party-in-interest. Respondents opposed the same. The RTC denied the
motion in an Order dated November 8, 1989.[5]
After trial on the merits, the RTC rendered its Decision[6] dated January 12, 1993, dismissing

respondents

complaint

as

well

as

petitioners

counterclaim. The

RTC

held

that

petitioner Sicam could not be made personally liable for a claim arising out of a corporate
transaction; that in the Amended Complaint of respondents, they asserted that plaintiff
pawned assorted jewelries in defendants' pawnshop; and that as a consequence of the
separate juridical personality of a corporation, the corporate debt or credit is not the debt or
credit of a stockholder.
The RTC further ruled that petitioner corporation could not be held liable for the loss of the
pawned jewelry since it had not been rebutted by respondents that the loss of the pledged
pieces of jewelry in the possession of the corporation was occasioned by armed robbery; that
robbery is a fortuitous event which exempts the victim from liability for the loss, citing the case
of Austria v.

Court

of

Appeals;[7] and

that

the

parties

transaction

was

that

of a pledgor and pledgee and under Art. 1174 of the Civil Code, the pawnshop as a pledgee is
not responsible for those events which could not be foreseen.
Respondents appealed the RTC Decision to the CA. In a Decision dated March 31, 2003,
the CA reversed the RTC, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the instant Appeal is GRANTED, and the
Decision dated January 12, 1993,of the Regional Trial Court of Makati, Branch
62, is hereby REVERSED and SET ASIDE, ordering the appellees to pay
appellants the actual value of the lost jewelry amounting to P272,000.00, and
attorney' fees of P27,200.00.[8]
In finding petitioner Sicam liable together with petitioner corporation, the CA applied the
doctrine of piercing the veil of corporate entity reasoning that respondents were misled into
thinking that they were dealing with the pawnshop owned by petitioner Sicam as all the
pawnshop tickets issued to them bear the words Agencia de R.C. Sicam; and that there was
no indication on the pawnshop tickets that it was the petitioner corporation that owned the
pawnshop

which

explained

why

respondents

had

to

amend

their

complaint impleadingpetitioner corporation.

The CA further held that the corresponding diligence required of a pawnshop is that it should

take steps to secure and protect the pledged items and should take steps to insure itself
against the loss of articles which are entrusted to its custody as it derives earnings from the
pawnshop trade which petitioners failed to do; that Austria is not applicable to this case since
the robbery incident happened in 1961 when the criminality had not as yet reached the levels
attained in the present day; that they are at least guilty of contributory negligence and should
be held liable for the loss of jewelries; and that robberies and hold-ups are foreseeable risks
in that those engaged in the pawnshop business are expected to foresee.
The CA concluded that both petitioners should be jointly and severally held liable to
respondents for the loss of the pawned jewelry.
Petitioners motion for reconsideration was denied in a Resolution dated August 8, 2003.
Hence, the instant petition for review with the following assignment of errors:
THE COURT OF APPEALS ERRED AND WHEN IT DID, IT OPENED ITSELF
TO REVERSAL, WHEN IT ADOPTED UNCRITICALLY (IN FACT IT
REPRODUCED
AS
ITS
OWN
WITHOUT
IN
THE
MEANTIME
ACKNOWLEDGING IT) WHAT THE RESPONDENTS ARGUED IN THEIR
BRIEF, WHICH ARGUMENT WAS PALPABLY UNSUSTAINABLE.
THE COURT OF APPEALS ERRED, AND WHEN IT DID, IT OPENED ITSELF
TO REVERSAL BY THIS HONORABLE COURT, WHEN IT AGAIN ADOPTED
UNCRITICALLY (BUT WITHOUT ACKNOWLEDGING IT) THE SUBMISSIONS
OF THE RESPONDENTS IN THEIR BRIEF WITHOUT ADDING ANYTHING
MORE THERETO DESPITE THE FACT THAT THE SAID ARGUMENT OF THE
RESPONDENTS COULD NOT HAVE BEEN SUSTAINED IN VIEW OF
UNREBUTTED EVIDENCE ON RECORD.[9]
Anent the first assigned error, petitioners point out that the CAs finding that petitioner Sicam is
personally liable for the loss of the pawned jewelries is a virtual and uncritical reproduction of
the arguments set out on pp. 5-6 of the Appellants brief.[10]
Petitioners argue that the reproduced arguments of respondents in their Appellants Brief
suffer from infirmities, as follows:
(1)
Respondents
conclusively
asserted
in
paragraph
2
of their Amended Complaint that Agencia de R.C. Sicam, Inc. is the present
owner of Agencia de R.C. Sicam Pawnshop, and therefore, the CA cannot rule
against said conclusive assertion of respondents;

(2) The issue resolved against petitioner Sicam was not among those raised
and litigated in the trial court; and
(3) By reason of the above infirmities, it was error for the CA to have pierced the
corporate veil since a corporation has a personality distinct and separate from
its individual stockholders or members.
Anent the second error, petitioners point out that the CA finding on their negligence is likewise
an unedited reproduction of respondents brief which had the following defects:
(1) There were unrebutted evidence on record that petitioners had observed the
diligence required of them, i.e, they wanted to open a vault with a nearby bank
for purposes of safekeeping the pawned articles but was discouraged by the
Central Bank (CB) since CB rules provide that they can only store the pawned
articles in a vault inside the pawnshop premises and no other place;
(2) Petitioners were adjudged negligent as they did not take insurance against
the loss of the pledged jelweries, but it is judicial notice that due to high
incidence of crimes, insurance companies refused to cover pawnshops and
banks because of high probability of losses due to robberies;
(3) In Hernandez v. Chairman, Commission on Audit (179 SCRA 39, 45-46), the
victim of robbery was exonerated from liability for the sum of money belonging
to others and lost by him to robbers.
Respondents filed their Comment and petitioners filed their Reply thereto. The parties
subsequently submitted their respective Memoranda.
We find no merit in the petition.
To begin with, although it is true that indeed the CA findings were exact reproductions of the
arguments raised in respondents (appellants) brief filed with the CA, we find the same to be
not fatally infirmed. Upon examination of the Decision, we find that it expressed clearly and
distinctly the facts and the law on which it is based as required by Section 8, Article VIII of the
Constitution. The discretion to decide a case one way or another is broad enough to justify
the adoption of the arguments put forth by one of the parties, as long as these are legally
tenable and supported by law and the facts on records.[11]
Our jurisdiction under Rule 45 of the Rules of Court is limited to the review of errors of law
committed by the appellate court. Generally, the findings of fact of the appellate court are
deemed conclusive and we are not duty-bound to analyze and calibrate all over again the

evidence adduced by the parties in the court a quo.[12] This rule, however, is not without
exceptions, such as where the factual findings of the Court of Appeals and the trial court are
conflicting or contradictory[13] as is obtaining in the instant case.
However, after a careful examination of the records, we find no justification to absolve
petitioner Sicam from liability.
The CA correctly pierced the veil of the corporate fiction and adjudged petitioner Sicam liable
together with petitioner corporation. The rule is that the veil of corporate fiction may be
pierced when made as a shield to perpetrate fraud and/or confuse legitimate issues. [14] The
theory of corporate entity was not meant to promote unfair objectives or otherwise to shield
them.[15]
Notably, the evidence on record shows that at the time respondent Lulu pawned her jewelry,
the pawnshop was owned by petitioner Sicam himself. As correctly observed by the CA, in all
the pawnshop receipts issued to respondent Lulu in September 1987, all bear the
words Agencia de R.

C. Sicam,

notwithstanding

that

the

pawnshop

was

allegedly

incorporated in April 1987. The receipts issued after such alleged incorporation were still in
the name of Agencia de R. C. Sicam, thus inevitably misleading, or at the very least, creating
the wrong impression to respondents and the public as well, that the pawnshop was owned
solely by petitioner Sicam and not by a corporation.
Even petitioners counsel, Atty. Marcial T. Balgos, in his letter[16] dated addressed to the
Central Bank, expressly referred to petitioner Sicam as the proprietor of the pawnshop
notwithstanding the alleged incorporation in April 1987.
We also find no merit in petitioners' argument that since respondents had alleged in their
Amended Complaint that petitioner corporation is the present owner of the pawnshop, the CA
is bound to decide the case on that basis.
Section 4 Rule 129 of the Rules of Court provides that an admission, verbal or written, made
by a party in the course of the proceedings in the same case, does not require proof. The

admission may be contradicted only by showing that it was made through palpable mistake or
that no such admission was made.
Thus, the general rule that a judicial admission is conclusive upon the party making it and
does not require proof, admits of two exceptions, to wit: (1) when it is shown that such
admission was made through palpable mistake, and (2) when it is shown that no such
admission was in fact made. The latter exception allows one to contradict an admission
by denying that he made such an admission.[17]
The Committee on the Revision of the Rules of Court explained the second exception in this
wise:
x x x if a party invokes an admission by an adverse party, but cites the
admission out of context, then the one making the admission may show that he
made no such admission, or that his admission was taken out of context.
x x x that the party can also show that he made no such
admission, i.e., not in the sense in which the admission is made to appear.
That is the reason for the modifier such because if the rule simply states that the
admission may be contradicted by showing that no admission was made, the
rule would not really be providing for a contradiction of the admission but just a
denial.[18] (Emphasis supplied).
While it is true that respondents alleged in their Amended Complaint that petitioner
corporation is the present owner of the pawnshop, they did so only because
petitioner Sicamalleged in his Answer to the original complaint filed against him that he was
not the real party-in-interest as the pawnshop was incorporated in April 1987. Moreover, a
reading of the Amended Complaint in its entirety shows that respondents referred to both
petitioner Sicam and petitioner corporation where they (respondents) pawned their assorted
pieces of jewelry and ascribed to both the failure to observe due diligence commensurate with
the business which resulted in the loss of their pawned jewelry.
Markedly, respondents, in their Opposition to petitioners Motion to Dismiss Amended
Complaint, insofar as petitioner Sicam is concerned, averred as follows:
Roberto C. Sicam was named the defendant in the original complaint because
the pawnshop tickets involved in this case did not show that the

R.C. Sicam Pawnshop was a corporation. In paragraph 1 of his Answer, he

admitted the allegations in paragraph 1 and 2 of the Complaint. He merely
added that defendant is not now the real party in interest in this case.
It was defendant Sicam's omission to correct the pawnshop tickets used in the
subject transactions in this case which was the cause of the instant action. He
cannot now ask for the dismissal of the complaint against him simply on the
mere allegation that his pawnshop business is now incorporated. It is a matter of
defense, the merit of which can only be reached after consideration of the
evidence to be presented in due course.[19]
Unmistakably, the alleged admission made in respondents' Amended Complaint was taken
out of context by petitioner Sicam to suit his own purpose. Ineluctably, the fact that
petitioner Sicam continued to issue pawnshop receipts under his name and not under the
corporation's name militates for the piercing of the corporate veil.
We likewise find no merit in petitioners' contention that the CA erred in piercing the veil of
corporate fiction of petitioner corporation, as it was not an issue raised and litigated before the
RTC.
Petitioner Sicam had alleged in his Answer filed with the trial court that he was not the real
party-in-interest because since April 20, 1987, the pawnshop business initiated by him was
incorporated

and

known

as Agencia de R.C. Sicam. In

the

pre-trial

brief

filed

by

petitioner Sicam, he submitted that as far as he was concerned, the basic issue was whether
he is the real party in interest against whom the complaint should be directed.[20] In fact, he
subsequently moved for the dismissal of the complaint as to him but was not favorably acted
upon by the trial court. Moreover, the issue was squarely passed upon, although erroneously,
by the trial court in its Decision in this manner:
x x x The defendant Roberto Sicam, Jr likewise denies liability as far as he is
concerned for the reason that he cannot be made personally liable for a claim
arising from a corporate transaction.
This Court sustains the contention of the defendant Roberto C. Sicam, Jr. The
amended complaint itself asserts that plaintiff pawned assorted jewelries in
defendant's pawnshop. It has been held that as a consequence of the separate
juridical personality of a corporation, the corporate debt or credit is not the debt
or credit of the stockholder, nor is the stockholder's debt or credit that of a

corporation.[21]
Clearly, in view of the alleged incorporation of the pawnshop, the issue of whether
petitioner Sicam is personally liable is inextricably connected with the determination of the
question whether the doctrine of piercing the corporate veil should or should not apply to the
case.
The next question is whether petitioners are liable for the loss of the pawned articles in their
possession.
Petitioners insist that they are not liable since robbery is a fortuitous event and they are not
negligent at all.
We are not persuaded.
Article 1174 of the Civil Code provides:
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which could
not be foreseen or which, though foreseen, were inevitable.
Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is
therefore, not enough that the event should not have been foreseen or anticipated, as is
commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossibility to foresee the same. [22]
To constitute a fortuitous event, the following elements must concur: (a) the cause of the
unforeseen and unexpected occurrence or of the failure of the debtor to comply with
obligations must be independent of human will; (b) it must be impossible to foresee the event
that constitutes the caso fortuito or, if it can be foreseen, it must be impossible to avoid; (c)
the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a
normal manner; and, (d) the obligor must be free from any participation in the aggravation of
the injury or loss. [23]
The burden of proving that the loss was due to a fortuitous event rests on him who invokes it.
[24] And, in order for a fortuitous event to exempt one from liability, it is necessary that one

has committed no negligence or misconduct that may have occasioned the loss. [25]
It has been held that an act of God cannot be invoked to protect a person who has failed to
take steps to forestall the possible adverse consequences of such a loss. One's negligence
may have concurred with an act of God in producing damage and injury to another;
nonetheless, showing that the immediate or proximate cause of the damage or injury was a
fortuitous event would not exempt one from liability. When the effect is found to be partly the
result of a person's participation -- whether by active intervention, neglect or failure to act -the whole occurrence is humanized and removed from the rules applicable to acts of
God. [26]
Petitioner Sicam had testified that there was a security guard in their pawnshop at the time of
the robbery. He likewise testified that when he started the pawnshop business in 1983, he
thought of opening a vault with the nearby bank for the purpose of safekeeping the valuables
but was discouraged by the Central Bank since pawned articles should only be stored in a
vault inside the pawnshop. The very measures which petitioners had allegedly adopted show
that to them the possibility of robbery was not only foreseeable, but actually foreseen and
anticipated. Petitioner Sicams testimony, in effect, contradicts petitioners defense of fortuitous
event.
Moreover, petitioners failed to show that they were free from any negligence by which the loss
of the pawned jewelry may have been occasioned.
Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the
possibility of negligence on the part of herein petitioners. In Co v. Court of Appeals,[27] the
Court held:
It is not a defense for a repair shop of motor vehicles to escape liability simply
because the damage or loss of a thing lawfully placed in its possession was
due to carnapping. Carnappingper se cannot be considered as a fortuitous
event. The fact that a thing was unlawfully and forcefully taken from
another's rightful possession, as in cases of carnapping, does not
automatically give rise to a fortuitous event. To be considered as

such, carnapping entails more than the mere forceful taking of another's
property. It must be proved and established that the event was an act of
God or was done solely by third parties and that neither the claimant nor
the person alleged to be negligent has any participation. In accordance
with the Rules of Evidence, the burden of proving that the loss was due
to a fortuitous event rests on him who invokes it which in this case is the
private respondent. However, other than the police report of the
alleged carnapping incident, no other evidence was presented by private
respondent to the effect that the incident was not due to its fault. A police report
of an alleged crime, to which only private respondent is privy, does not suffice
to establish the carnapping. Neither does it prove that there was no fault on the
part of private respondent notwithstanding the parties' agreement at the pretrial that the car was carnapped. Carnapping does not foreclose the possibility
of fault or negligence on the part of private respondent.[28]
Just like in Co, petitioners merely presented the police report of the Paraaque Police Station
on the robbery committed based on the report of petitioners' employees which is not sufficient
to establish robbery. Such report also does not prove that petitioners were not at fault.
On the contrary, by the very evidence of petitioners, the CA did not err in finding that
petitioners are guilty of concurrent or contributory negligence as provided in Article 1170 of
the Civil Code, to wit:
Art. 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor
thereof, are liable for damages.[29]
Article 2123 of the Civil Code provides that with regard to pawnshops and other
establishments which are engaged in making loans secured by pledges, the special laws and
regulations concerning them shall be observed, and subsidiarily, the provisions on pledge,
mortgage and antichresis.
The provision on pledge, particularly Article 2099 of the Civil Code, provides that the creditor
shall take care of the thing pledged with the diligence of a good father of a family. This means
that petitioners must take care of the pawns the way a prudent person would as to his own
property.
In this connection, Article 1173 of the Civil Code further provides:

Art. 1173. The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with
the circumstances of the persons, of time and of the place. When negligence
shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall
apply.
If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be
required.
We expounded in Cruz v. Gangan[30] that negligence is the omission to do something which
a reasonable man, guided by those considerations which ordinarily regulate the conduct of
human affairs, would do; or the doing of something which a prudent and reasonable man
would not do.[31] It is want of care required by the circumstances.
A review of the records clearly shows that petitioners failed to exercise reasonable care and
caution that an ordinarily prudent person would have used in the same situation. Petitioners
were

guilty

of

negligence

in

the

operation

of

their

pawnshop

business.

Petitioner Sicam testified, thus:

Court:
Q. Do you have security guards in your pawnshop?
A. Yes, your honor.
Q. Then how come that the robbers were able to enter the premises when
according to you there was a security guard?
A. Sir, if these robbers can rob a bank, how much more a pawnshop.
Q. I am asking you how were the robbers able to enter despite the fact
that there was a security guard?
A. At the time of the incident which happened about 1:00 and
2:00 o'clock in the afternoon and it happened on a Saturday and everything
was quiet in the area BF Homes Paraaque they pretended to pawn an article
in the pawnshop, so one of my employees allowed him to come in and it was
only when it was announced that it was a hold up.
Q. Did you come to know how the vault was opened?
A. When the pawnshop is official (sic) open your honor the pawnshop is partly
open. The combination is off.
Q. No one open (sic) the vault for the robbers?
A. No one your honor it was open at the time of the robbery.
Q. It is clear now that at the time of the robbery the vault was open the reason
why the robbers were able to get all the items pawned to you inside the vault.

A. Yes sir.[32]
revealing that there were no security measures adopted by petitioners in the operation of the
pawnshop. Evidently, no sufficient precaution and vigilance were adopted by petitioners to
protect the pawnshop from unlawful intrusion. There was no clear showing that there was any
security guard at all. Or if there was one, that he had sufficient training in securing a
pawnshop. Further, there is no showing that the alleged security guard exercised all that was
necessary to prevent any untoward incident or to ensure that no suspicious individuals were
allowed to enter the premises. In fact, it is even doubtful that there was a security guard, since
it is quite impossible that he would not have noticed that the robbers were armed with caliber .
45 pistols each, which were allegedly poked at the employees.[33] Significantly, the alleged
security guard was not presented at all to corroborate petitioner Sicam'sclaim; not
one of petitioners' employees who were present during the robbery incident testified in court.
Furthermore, petitioner Sicam's admission that the vault was open at the time of robbery is
clearly a proof of petitioners' failure to observe the care, precaution and vigilance that the
circumstances justly demanded. Petitioner Sicam testified that once the pawnshop was open,
the combination was already off. Considering petitioner Sicam's testimony that the robbery
took place on a Saturday afternoon and the area in BF Homes Paraaque at that time was
quiet, there was more reason for petitioners to have exercised reasonable foresight and
diligence in protecting the pawned jewelries. Instead of taking the precaution to protect them,
they let open the vault, providing no difficulty for the robbers to cart away the pawned articles.
We, however, do not agree with the CA when it found petitioners negligent for not taking steps
to insure themselves against loss of the pawned jewelries.
Under Section 17 of Central Bank Circular No. 374, Rules and Regulations for Pawnshops,
which took effect on July 13, 1973, and which was issued pursuant to Presidential Decree No.
114, Pawnshop Regulation Act, it is provided that pawns pledged must be insured, to wit:
Sec. 17. Insurance of and Pawns- The place of business of a pawnshop and
the pawns pledged to it must be insured against fire and against burglary as

well as for the latter(sic), by an insurance company accredited by the Insurance

Commissioner.
However, this Section was subsequently amended by CB Circular No. 764 which took effect
on October 1, 1980, to wit:
Sec. 17 Insurance of Office Building and Pawns The office building/premises
and pawns of a pawnshop must be insured against fire. (emphasis supplied).
where the requirement that insurance against burglary was deleted. Obviously, the Central
Bank considered it not feasible to require insurance of pawned articles against burglary.
The robbery in the pawnshop happened in 1987, and considering the above-quoted
amendment, there is no statutory duty imposed on petitioners to insure the pawned jewelry in
which case it was error for the CA to consider it as a factor in concluding that petitioners were
negligent.
Nevertheless, the preponderance of evidence shows that petitioners failed to exercise the
diligence required of them under the Civil Code.
The diligence with which the law requires the individual at all times to govern his conduct
varies with the nature of the situation in which he is placed and the importance of the act
which he is to perform.[34] Thus, the cases of Austria v. Court of Appeals,[35] Hernandez v.
Chairman, Commission on Audit[36] and Cruz v. Gangan[37] cited by petitioners in their
pleadings, where the victims of robbery were exonerated from liability, find no application to
the present case.
In Austria, Maria Abad received from Guillermo Austria a pendant with diamonds to be sold
on commission basis, but which Abad failed to subsequently return because of a robbery
committed upon her in 1961. The incident became the subject of a criminal case filed against
several persons. Austria filed an action against Abad and her husband (Abads) for recovery of
the pendant or its value, but the Abads set up the defense that the robbery extinguished their
obligation. The RTC ruled in favor of Austria, as the Abads failed to prove robbery; or, if
committed, that Maria Abad was guilty of negligence. The CA, however, reversed the RTC

decision holding that the fact of robbery was duly established and declared the Abads not
responsible for the loss of the jewelry on account of a fortuitous event. We
held that for the Abads to be relieved from the civil liability of returning the pendant under Art.
1174 of the Civil Code, it would only be sufficient that the unforeseen event, the robbery, took
place without any concurrent fault on the debtors part, and this can be done by
preponderance of evidence; that to be free from liability for reason of fortuitous event, the
debtor must, in addition to the casus itself, be free of any concurrent or contributory fault or
negligence.[38]
We found in Austria that under the circumstances prevailing at the time the Decision was
promulgated in 1971, the City of Manila and its suburbs had a high incidence of crimes
against persons and property that rendered travel after nightfall a matter to be sedulously
avoided without suitable precaution and protection; that the conduct of Maria Abad in
returning alone to her house in the evening carrying jewelry of considerable value would have
been negligence per se and would not exempt her from responsibility in the case of robbery.
However we did not hold Abad liable for negligence since, the robbery happened ten years
previously; i.e., 1961, when criminality had not reached the level of incidence obtaining in
1971.
In contrast, the robbery in this case took place in 1987 when robbery was already prevalent
and petitioners in fact had already foreseen it as they wanted to deposit the pawn with a
nearby bank for safekeeping. Moreover, unlike in Austria, where no negligence was
committed, we found petitioners negligent in securing their pawnshop as earlier discussed.
In Hernandez, Teodoro Hernandez was the OIC and special disbursing officer of the Ternate
Beach Project of the Philippine Tourism in Cavite. In the morning of July 1, 1983, a Friday, he
went to Manila to encash two checks covering the wages of the employees and the operating
expenses of the project. However for some reason, the processing of the check was delayed
and was completed at about 3 p.m. Nevertheless, he decided to encash the check because

the project employees would be waiting for their pay the following day; otherwise, the workers
would have to wait until July 5, the earliest time, when the main office would open. At that
time, he had two choices: (1) return to Ternate, Cavite that same afternoon and arrive early
evening; or (2) take the money with him to his house in Marilao, Bulacan, spend the night
there, and leave for Ternate the following day. He chose the second option, thinking it was the
safer one. Thus, a little past 3 p.m., he took a passenger jeep bound for Bulacan. While the
jeep was on Epifanio de los Santos Avenue, the jeep was held up and the money kept by
Hernandez was taken, and the robbers jumped out of the jeep and ran. Hernandez chased
the robbers and caught up with one robber who was subsequently charged with robbery and
pleaded guilty. The other robber who held the stolen money escaped. The Commission on
Audit found Hernandez negligent because he had not brought the cash proceeds of the
checks to his office in Ternate, Cavite for safekeeping, which is the normal procedure in the
handling of funds. We held that Hernandez was not negligent in deciding to encash the check
and bringing it home to Marilao, Bulacan instead of Ternate, Cavite due to the lateness of the
hour for the following reasons: (1) he was moved by unselfish motive for his co-employees to
collect their wages and salaries the following day, a Saturday, a non-working, because
to encash the check on July 5, the next working day after July 1, would have caused
discomfort to laborers who were dependent on their wages for sustenance; and (2) that
choosing Marilao as a safer destination, being nearer, and in view of the comparative hazards
in the trips to the two places, said decision seemed logical at that time. We further held that
the fact that two robbers attacked him in broad daylight in the jeep while it was on a busy
highway and in the presence of other passengers could not be said to be a result of his
imprudence and negligence.
Unlike in Hernandez where the robbery happened in a public utility, the robbery in this case
took place in the pawnshop which is under the control of petitioners. Petitioners had the
means to screen the persons who were allowed entrance to the premises and to protect itself

from unlawful intrusion. Petitioners had failed to exercise precautionary measures in ensuring
that the robbers were prevented from entering the pawnshop and for keeping the vault open
for the day, which paved the way for the robbers to easily cart away the pawned articles.
In Cruz, Dr. Filonila O. Cruz, Camanava District Director of Technological Education and Skills
Development

Authority

(TESDA),

boarded

the

Light

Rail

Transit

(LRT)

from Sen.Puyat Avenue to Monumento when her handbag was slashed and the contents
were stolen by an unidentified person. Among those stolen were her wallet and the
government-issued cellular phone. She then reported the incident to the police
authorities; however, the thief was not located, and the cellphone was not recovered. She
also reported the loss to the Regional Director of TESDA, and she requested that she be
freed from accountability for the cellphone. The Resident Auditor denied her request on the
ground that she lacked the diligence required in the custody of government property and was
ordered to pay the purchase value in the total amount of P4,238.00. The COA found no
sufficient justification to grant the request for relief from accountability. We reversed the ruling
and found that riding the LRT cannot per se be denounced as a negligent act more so
because Cruzs mode of transit was influenced by time and money considerations; that she
boarded the LRT to be able to arrive in Caloocan in time for her 3 pm meeting; that any
prudent and rational person under similar circumstance can reasonably be expected to do the
same; that possession of a cellphone should not hinder one from boarding the LRT coach as
Cruz did considering that whether she rode a jeep or bus, the risk of theft would have also
been present; that because of her relatively low position and pay, she was not expected to
have her own vehicle or to ride a taxicab; she did not have a government assigned vehicle;
that placing the cellphone in a bag away from covetous eyes and holding on to that bag as
she did is ordinarily sufficient care of a cellphone while traveling on board the LRT; that the
records did not show any specific act of negligence on her part and negligence can never be
presumed.

Unlike in the Cruz case, the robbery in this case happened in petitioners' pawnshop
and they were negligent in not exercising the precautions justly demanded of a pawnshop.
WHEREFORE, except for the insurance aspect, the Decision of the Court of Appeals
dated March 31, 2003 and its Resolution dated August 8, 2003, are AFFIRMED.
Costs against petitioners.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO
Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
attestation, it is hereby certified that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
CORINTHIAN GARDENS
ASSOCIATION, INC.,
Petitioner,
- versus SPOUSES REYNALDO and
MARIA LUISA TANJANGCO, and SPOUSES FRANK and
TERESITA CUASO,
Respondents.
G.R. No. 160795
Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
June 27, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil
Procedure seeking the reversal of the Court of Appeals (CA) Decision[2] dated January 31,
2003 in CA-G.R. CV No. 43217, which reversed and set aside the Decision[3] of the Regional
Trial Court (RTC) of Quezon City, dated March 30, 1993.
The Antecedents:

Respondents-spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) own Lots 68
and 69 covered by Transfer Certificates of Title (TCT) No. 242245[4] and 282961[5]
respectively, located at Corinthian Gardens Subdivision, Quezon City, which is managed by
petitioner Corinthian Gardens Association, Inc. (Corinthian). On the other hand, respondentsspouses Frank and Teresita Cuaso (the Cuasos) own Lot 65 which is adjacent to the
Tanjangcos lots.
Before the Cuasos constructed their house on Lot 65, a relocation survey was necessary. As
Geodetic Engineer Democrito De Dios (Engr. De Dios), operating under the business name
D.M. De Dios Realty and Surveying, conducted all the previous surveys for the subdivision's
developer, Corinthian referred Engr. De Dios to the Cuasos. Before, during and after the
construction of the said house, Corinthian conducted periodic ocular inspections in order to
determine compliance with the approved plans pursuant to the Manual of Rules and
Regulations of Corinthian.[6] Unfortunately, after the Cuasos constructed their house
employing the services of C.B. Paraz & Construction Co., Inc. (C.B. Paraz) as builder, their
perimeter fence encroached on the Tanjangcos Lot 69 by 87 square meters.
No amicable settlement was reached between the parties. Thus, the Tanjangcos demanded
that the Cuasos demolish the perimeter fence but the latter failed and refused, prompting the
Tanjangcos to file with the RTC a suit against the Cuasos for Recovery of Possession with
Damages.[7]
Eventually, the Cuasos filed a Third-Party Complaint[8] against Corinthian, C.B. Paraz and
Engr. De Dios. The Cuasos ascribed negligence to C.B. Paraz for its failure to ascertain the
proper specifications of their house, and to Engr. De Dios for his failure to undertake an
accurate relocation survey, thereby, exposing them to litigation. The Cuasos also faulted
Corinthian for approving their relocation survey and building plans without verifying their
accuracy and in making representations as to Engr. De Dios' integrity and competence. The
Cuasos alleged that had Corinthian exercised diligence in performing its duty, they would not
have been involved in a boundary dispute with the Tanjangcos. Thus, the Cuasos opined that
Corinthian should also be held answerable for any damages that they might incur as a result
of such construction.
On March 30, 1993, the RTC rendered a Decision in favor of the Tanjangcos. It ruled that the
Cuasos perimeter wall encroached on the land of the Tanjangos by 87 square meters. It,
however, ruled that the Cuasos were builders in good faith, and gave the Tanjangcos the
option to sell and the Cuasos the option to buy the encroaching portion of the land, at a price
to be agreed upon by the parties within sixty (60) days from receipt of the said Decision. In
the event that the Cuasos were unable and unwilling to purchase the said portion, the
perimeter wall should be demolished at the latters expense. The RTC also ordered the
Cuasos to pay monthly rentals of P2,000.00 commencing from the time of the filing of the
complaint. The RTC likewise held that C.B. Paraz was grossly negligent in not taking into
account the correct boundaries of Cuasos lot when it constructed the house. It, thus, ordered
C.B. Paraz to pay moral and exemplary damages as well as attorneys fees to the Tanjangcos
and the Cuasos. The third-party complaint against Corinthian and Engr. De Dios, on the other
hand, was dismissed for lack of cause of action.
The Tanjangcos filed a Motion for Reconsideration[9] of the said RTC Decision which the

RTC, however, denied in its Order[10] dated June 28, 1993.

Dissatisfied with the RTC ruling, the Tanjangcos, the Cuasos, and C.B. Paraz all appealed to
the CA.
On appeal, the CA reversed and set aside the RTC Decision. It held that the Cuasos acted in
bad faith in land-grabbing the 87 square meter-portion of Lot 69 as of April 5, 1989.
Correlatively, the CA allowed the Tanjangcos to exercise the rights granted under Articles 449,
450, 451 and 549 of the New Civil Code, which include the right to demand the demolition of
the offending perimeter wall after reimbursing the Cuasos the necessary expenses for the
preservation of the encroached area. The Cuasos were ordered to pay monthly rentals of
P10,000.00 for the use, enjoyment and occupancy of the lot from 1989 up to the time they
vacate the property considering the location and category of the same. They were, likewise,
ordered to pay the Tanjangcos P100,000.00, as moral damages, P50,000.00 as exemplary
damages, and P150,000.00 as attorneys fees. The CA also imposed six percent (6%) interest
per annum on all the awards. The Cuasos appeal against the Tanjangcos, on the other hand,
was dismissed for lack of merit. On the third-party complaints, Corinthian, C.B. Paraz and
Engr. De Dios were all found negligent in performing their respective duties and so they were
ordered to contribute five percent (5%) each, or a total of fifteen percent (15%) to all judgment
sums and amounts that the Cuasos shall eventually pay under the decision, also with interest
of six percent (6%) per annum.
Only Corinthian filed a Motion for Reconsideration[11] of the CA Decision within the 15-day
reglementary period. No motion for reconsideration was filed by the Cuasos, C.B. Paraz
and/or Engr. De Dios.
About six (6) months later, or on August 12, 2003, the Cuasos filed a
Comment/Manifestation[12] praying that they be allowed to adopt Corinthians Motion for
Reconsideration.
In its Resolution[13] dated November 14, 2003, the CA denied Corinthians Motion for
Reconsideration.
Hence, Corinthian filed the instant Petition for Review on Certiorari assailing the CA Decision
and Resolution, and impleading the Cuasos as one of the respondents being the third-party
plaintiffs in the RTC.
This Court gave due course to Corinthians petition and required the parties to submit their
respective memorandum.[14] In compliance, the Cuasos submitted their Memorandum[15]
and Supplement to Memorandum,[16] which were both noted by this Court in its Resolutions
dated January 10, 2005[17] and February 2, 2005, [18] respectively.
In the meantime, the Tanjangcos moved for partial entry of judgment of the CA Decision which
was granted by the CA in its Resolution[19] dated May 26, 2006, directing the issuance of an
Entry of Judgment and a Certification that its Decision dated January 31 2003 has become
final and executory with respect to the Cuasos, C.B. Paraz and Engr. De Dios for their failure
to file an appeal assailing the said Decision before this Court.
The Tanjangcos then moved for the execution of the judgment against the Cuasos,
specifically the demolition of the perimeter fence,[20] which was also granted by the RTC in

its Order[21] dated December 18, 2006.

Other than the filing of an Opposition[22] and a Motion for Reconsideration[23] before the
RTC, the Cuasos prayed for the issuance of a temporary restraining order (TRO) and/or
preliminary injunction before this Court to enjoin the demolition of the perimeter fence. They
averred that the premature demolition of the alleged encroaching perimeter wall and other
improvements will cause grave and irreparable damage to them, because what is sought to
be demolished is part of their residence. They claimed that no amount of money will
compensate for the damage they stand to suffer should any demolition subsequently prove to
be wrongful. They argued that before any execution can be carried out, it is necessary to first
determine whether or not Corinthian was negligent in approving the building plan and whether
or not it acted in good faith in doing so. Such determination, according to the Cuasos, will in
turn determine whether or not they were in good faith in constructing the house.[24]
The Tanjangcos opposed the Cuasos' application for TRO. They countered that the only
pending matter with this Court is the appeal by Corinthian; hence, the implementation of the
January 31, 2003 Decision of the CA against the Cuasos will not preempt the outcome of the
said pending incidents. Also, any action taken by this Court on Corinthians petition would not
benefit the Cuasos for they did not appeal the adverse decision against them. Accordingly,
they cannot obtain affirmative relief from this Court by reason or on account of the appeal
taken by Corinthian. The appeal, they added, is personal to Corinthian. Finally, they argued
that the Cuasos are now estopped from questioning the enforcement of the CA Decision since
they issued a managers check to pay the money judgment.[25]
In this Court's Resolution dated July 18, 2007, we denied the Cuasos' application for TRO
and/or writ of preliminary injunction for lack of merit.
The denial was based on sound legal principles. It is axiomatic that to be entitled to the
injunctive writ, one must show that there exists a right to be protected which is directly
threatened by the act sought to be enjoined. Furthermore, there must be a showing that the
invasion of the right is material and substantial, that the right of complainant is clear and
unmistakable, and that there is an urgent and paramount necessity for the writ to issue in
order to prevent serious damage.[26]
In the Cuasos case, their right to injunctive relief had not been clearly and unmistakably
demonstrated. They failed to show proof that there is material and substantial invasion of their
right to warrant the issuance of an injunctive writ. Indeed, the enforcement of the writ of
execution, which would demolish the Cuasos perimeter fence, is manifestly prejudicial to their
interest. However, they possess no clear and unmistakable legal right that merits protection
through the writ of preliminary injunction.[27] Their right to maintain the said fence had been
declared inferior to the Tanjangcos right to the demolition of the fence, after the CA judgment
had become final and executory as to the Cuasos.
It bears stressing that the Cuasos failed to appeal the ruling of the CA. This failure to contest
the CA decision before this Court was fatal to their cause. It had the effect of an admission
that they indeed acted in bad faith, as they accepted the CA ruling. The decision of the CA,
therefore, became binding and final as to them.[28] As a matter of fact, the CA already issued
a partial entry of judgment against the Cuasos.
An injunction to stay a final and executory decision is unavailing except only after a showing
that facts and circumstances exist which would render execution unjust or inequitable, or that

a change in the situation of the parties occurred. Here, no such exception exists as shown by
the facts earlier narrated.[29]
While it is true that this Court noted the Memorandum and Supplemental Memorandum filed
by the Cuasos, such notation was made only insofar as Corinthian made them respondents in
this petition. This Court cannot grant to the Cuasos any affirmative relief as they did not file a
petition questioning the CA ruling. Consequently, the Decision of the CA holding that the
Cuasos acted in bad faith and that the perimeter fence may now be demolished cannot be put
in issue by the Cuasos. It is a fundamental principle that a party who does not appeal, or file a
petition for certiorari, is not entitled to any affirmative relief.[30] An appellee who is not an
appellant may assign errors in his brief where his purpose is to maintain the judgment, but he
cannot seek modification or reversal of the judgment or claim affirmative relief unless he has
also appealed.[31] This applies to C.B. Paraz and Engr. De Dios who likewise failed to assail
the aforementioned CA Decision.
With this matter put to rest, we now go to the main issues raised by Corinthian, the sole
petitioner in this case, to wit:
a) Whether or not there is legal basis for the Court of Appeals to hold petitioner Corinthian
Gardens Association, Inc. liable to pay 5% of the judgment money to Sps. Tanjangco on
account of the encroachment made by Sps. Cuaso[; and]
b)
Whether or not the Court of Appeals has legal basis to increase unilaterally and without
proof the amount prayed for in the Complaint, i.e., P2,000.00, as reasonable compensation
for the use and enjoyment of the portion of the lot encroached upon, to P10,000.00.[32]
Corinthian claims that the approval of the building plan of the Cuasos was not tainted with
negligence as it did not approve the survey relocation plan but merely the architectural,
structural and sanitary plans for Cuasos' house; that the purpose of the said approval is not to
ensure that the house to be erected on a particular lot is constructed within its boundaries but
only to ensure compliance with the Manual of Rules and Regulations; that while Corinthian
conducts actual site inspections, the inspection and approval of the building plans are limited
to table inspection only; that the survey relocation plan was never submitted for Corinthian's
approval; that the acceptance of the builder's bond did not make Corinthian automatically
liable for the encroachment and for damages; and that Corinthian approved the building plan
with the good faith and due diligence required under the circumstances. It, thus, concludes
that it cannot be held liable to pay five percent (5%) of the money judgment to the Tanjangcos
on account of the encroachment made by the Cuasos. Likewise, it finds no legal basis for the
CA to unilaterally increase the amount of the adjudged rent from P2,000.00 to P10,000.00
which was not prayed for by the Tanjangcos in their complaint and in the absence of evidence
adduced by the parties.[33]
On the other hand, the Tanjangcos stand by the ruling of the CA and opine that Corinthian
was negligent in approving the building plan of the Cuasos. They submit that Corinthian's
claim that it merely conducts table inspections of buildings further bolsters their argument that
Corinthian was negligent in conveniently and unilaterally restricting and limiting the coverage
of its approval, contrary to its own Manual of Rules and Regulations; that the acceptance of a
builder's bond does not automatically make Corinthian liable but the same affirms the fact that
a homeowner can hold it liable for the consequences of the approval of a building plan; and
that Corinthian, by regularly demanding and accepting membership dues, must be wary of its

responsibility to protect the rights and interests of its members. Lastly, the Tanjangcos
contend that a court can take judicial notice of the general increase in the rentals of real
estate, as in this case, where the CA considered the value of their lot in the posh-and-swank
Corinthian Gardens Subdivision and the fact that they were deprived of it for almost two
decades. The Tanjangcos pray that this Court sustain the ruling of the CA.[34]
The instant case is obviously one for tort, as governed by Article 2176 of the Civil Code, which
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 preexisting contractual relation between the parties, is called a quasi-delict and is governed by
the provisions of this Chapter.
In every tort case filed under this provision, plaintiff has to prove by a preponderance of
evidence: (1) the damages suffered by the plaintiff; (2) the fault or negligence of the
defendant or some other person for whose act he must respond; and (3) the connection of
cause and effect between the fault or negligence and the damages incurred.[35]
Undeniably, the perimeter fence of the Cuasos encroached on Lot 69 owned by the
Tanjangcos by 87 square meters as duly found by both the RTC and the CA in accordance
with the evidence on record. As a result, the Tanjangcos suffered damage in having been
deprived of the use of that portion of their lot encroached upon. Thus, the primordial issue to
be resolved in this case is whether Corinthian was negligent under the circumstances and, if
so, whether such negligence contributed to the injury suffered by the Tanjangcos.
A negligent act is an inadvertent act; it may be merely carelessly done from a lack of ordinary
prudence and may be one which creates a situation involving an unreasonable risk to another
because of the expectable action of the other, a third person, an animal, or a force of nature.
A negligent act is one from which an ordinary prudent person in the actor's position, in the
same or similar circumstances, would foresee such an appreciable risk of harm to others as
to cause him not to do the act or to do it in a more careful manner.[36]
The test to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in committing the alleged negligent act use that reasonable care
and caution which an ordinary person would have used in the same situation? If not, then he
is guilty of negligence. The law, in effect, adopts the standard supplied by the imaginary
conduct of the discreet paterfamilias in Roman law. The existence of negligence in a given
case is not determined by reference to the personal judgment of the actor in the situation
before him. The law considers what would be reckless, blameworthy, or negligent in a man of
ordinary intelligence and prudence, and determines liability according to that standard.[37]
By this test, we find Corinthian negligent.
While the issue of Corinthian's alleged negligence is factual in character,[38] a review by this
Court is proper because the CA's factual findings differ from those of the RTC's.[39] Thus,
after a meticulous review of the evidence on record, we hold that the CA committed no
reversible error when it deviated from the findings of fact of the RTC. The CA's findings and
conclusions are substantiated by the evidence on record and are more in accord with law and
reason. Indeed, it is clear that Corinthian failed to exercise the requisite diligence in insuring

that the Cuasos abide by its Manual of Rules and Regulations, thereby resulting in the
encroachment on the Tanjangcos property.
We agree with the CA when it aptly held:
Corinthian cannot and should not be allowed to justify or excuse its negligence by claiming
that its approval of the Cuasos building plans was only limited to a so-called table inspection;
and not actual site measurement. To accept some such postulate is to put a premium on
negligence. Corinthian was not organized solely for the defendants Cuasos. It is also the
subdivision of the plaintiffs-spouses Tanjangcos - and of all others who have their dwelling
units or abodes therein. Pertinently, its Manual of Rules and Regulations stipulates in Section
3 thereof (under the heading Construction), thus:
A. Rules and Regulations
No new construction can be started unless the building plans are approved by the Association
and the appropriate Builders cash bond and pre-construction fees are paid. The Association
will not allow the entry of construction materials and process identification cards for workers if
the above conditions are not complied with. Likewise, all renovations, repairs, additions and
improvements to a finished house except electrical wiring, will have to be approved by the
Association. Water service connection of a homeowner who undertakes construction work
without prior approval of the Association will be cut-off in addition to the sanctions previously
mentioned.
It goes without saying that this Manual of Rules and Regulations applies to all - or it does not
apply at all. To borrow a popular expression, what is sauce for the gander is sauce for the
goose - or ought to be. To put it matter-of-factly and bluntly, thus, its so-called table inspection
approval of the Cuasos building plans is no less of an approval, as approvals come and go.
And since it is an approval tainted with negligence, the necessary and inevitable
consequences which law and justice attach to such negligence must, as a matter of law and
justice, also necessarily attach to Corinthian.
And then again third party defendant-appellee Corinthian Garden required the posting of a
builders cash bond (Exh. 5-Corinthian) from the defendants-appellants Cuasos and the thirdparty defendant C.B. Paraz Construction to secure the performance of their undertaking.
Surely, Corinthian does not imply that while it may take the benefits from the Builders cash
bond, it may, Pilate-like, wash its hands of any responsibility or liability that would or might
arise from the construction or building of the structure for which the cash bond was in the first
place posted. That is not only unjust and immoral, but downright unchristian and iniquitous.
Under the same parity of reasoning, the payment by the appellants-Cuasos to the appellee
Corinthian of pre-construction and membership fees in the Association must necessarily entail
the creation of certain obligations on the part of Corinthian. For duties and responsibilities
always go hand in hand with rights and privileges. That is the law of life - and that is the law of
every civilized society. It is an axiom of equity that he who receives the benefits must share
the burdens.[40]
By its Manual of Rules and Regulations, it is reasonable to assume that Corinthian, through
its representative, in the approval of building plans, and in the conduct of periodic inspections
of on-going construction projects within the subdivision, is responsible in insuring compliance

with the approved plans, inclusive of the construction of perimeter walls, which in this case is
the subject of dispute between the Tanjangcos and the Cuasos.[41] It is not just or equitable
to relieve Corinthian of any liability when, by its very own rules, it imposes its authority over all
its members to the end that no new construction can be started unless the plans are
approved by the Association and the appropriate cash bond and pre-construction fees are
paid. Moreover, Corinthian can impose sanctions for violating these rules. Thus, the
proposition that the inspection is merely a table inspection and, therefore, should exempt
Corinthian from liability, is unacceptable. After all, if the supposed inspection is merely a table
inspection and the approval granted to every member is a mere formality, then the purpose of
the rules would be defeated. Compliance therewith would not be mandatory, and sanctions
imposed for violations could be disregarded. Corinthian's imprimatur on the construction of
the Cuasos' perimeter wall over the property of the Tanjangcos assured the Cuasos that
everything was in order.
In sum, Corinthians failure to prevent the encroachment of the Cuasos perimeter wall into
Tanjangcos property despite the inspection conducted constitutes negligence and, at the very
least, contributed to the injury suffered by the Tanjangcos.
On the second issue, our ruling in Spouses Badillo v. Tayag[42] is instructive:
Citing Sia v. Court of Appeals [272 SCRA 141, May 5, 1997], petitioners argue that the MTC
may take judicial notice of the reasonable rental or the general price increase of land in order
to determine the amount of rent that may be awarded to them. In that case, however, this
Court relied on the CA's factual findings, which were based on the evidence presented before
the trial court. In determining reasonable rent, the RTC therein took account of the following
factors:
1) the realty assessment of the land, 2) the increase in realty taxes, and 3) the prevailing rate
of rentals in the vicinity. Clearly, the trial court relied, not on mere judicial notice, but on the
evidence presented before it.
Indeed, courts may fix the reasonable amount of rent for the use and occupation of a disputed
property. However, petitioners herein erred in assuming that courts, in determining the
amount of rent, could simply rely on their own appreciation of land values without considering
any evidence. As we have said earlier, a court may fix the reasonable amount of rent, but it
must still base its action on the evidence adduced by the parties.
In Herrera v. Bollos [G.R. No. 138258, January 18, 2002], the trial court awarded rent to the
defendants in a forcible entry case. Reversing the RTC, this Court declared that the
reasonable amount of rent could be determined not by mere judicial notice, but by supporting
evidence:
x x x A court cannot take judicial notice of a factual matter in controversy. The court may take
judicial notice of matters of public knowledge, or which are capable of unquestionable
demonstration, or ought to be known to judges because of their judicial functions. Before
taking such judicial notice, the court must allow the parties to be heard thereon. Hence, there
can be no judicial notice on the rental value of the premises in question without supporting
evidence.

Truly, mere judicial notice is inadequate, because evidence is required for a court to
determine the proper rental value. But contrary to Corinthian's arguments, both the RTC and
the CA found that indeed rent was due the Tanjangcos because they were deprived of
possession and use of their property. This uniform factual finding of the RTC and the CA was
based on the evidence presented below. Moreover, in Spouses Catungal v. Hao,[43] we
considered the increase in the award of rentals as reasonable given the particular
circumstances of each case. We noted therein that the respondent denied the petitioners the
benefits, including rightful possession, of their property for almost a decade.
Similarly, in the instant case, the Tanjangcos were deprived of possession and use of their
property for more than two decades through no fault of their own. Thus, we find no cogent
reason to disturb the monthly rental fixed by the CA.
All told, the CA committed no reversible error.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
FOOTNOTES
[1] Rollo, pp. 8-53.
[2] Penned by Associate Justice Renato C. Dacudao (now retired), with Associate Justices
Eugenio S. Labitoria (now retired) and Danilo B. Pine (now retired), concurring; id. at 56-108.
[3] Particularly docketed as Civil Case No. Q-89-2706; id. at 172-199.
[4] Rollo, pp. 148-149.
[5] Id. at 150.
[6] Id. at 119-139.
[7] Id. at 143-147.
[8] Id. at 153-164.
[9] Id. at 200-207.
[10] Id. at 208.
[11] Id. at 209-216.
[12] Id. at 225-227.
[13] Id. at 110-115.
[14] Resolution dated September 15, 2004; id. at 308.
[15] Rollo, pp. 310-325.
[16] Id. at 419-433.
[17] Id. at 450.
[18] Id. at 452.

[19] Penned by Associate Justice Renato C. Dacudao (now retired), with Associate Justices
Celia C. Librea-Leagogo and Mariflor Punzalan-Castillo, concurring; id. at 457-460.
[20] Motion for Execution dated July 10, 2006; id. at 493-501.
[21] Rollo, pp. 509-511.
[22] Id. at 502-508.
[23] Id. at 517-529.
[24] Application for a Temporary Restraining Order and/or Writ of Preliminary Injunction dated
May 4, 2007; id. at 465-491.
[25] Opposition dated May 17, 2007; id. at 556-574.
[26] Almeida v. Court of Appeals, G.R. No. 159124, January 17, 2005, 448 SCRA 681, 694.
[27] Philippine School of Business Administration-Quezon City v. Tolentino-Genilo, G.R. No.
159277, December 21, 2004, 447 SCRA 442, 448.
[28] In GSIS v. Court of Appeals, 368 Phil. 36, 50 (1999), citing Firestone Tire and Rubber
Company of the Philippines v. Tempongko, 27 SCRA 418, 424 (1969) and Singapore Airlines
Limited v. Court of Appeals, 243 SCRA 143, 148 (1995), this Court held: The decision of the
trial court as affirmed by the Court of Appeals not having been appealed by the insurer
(MIGC) of the Toyota Tamaraw, the same is now final as far as that entity is concerned, and
may not be modified by this Court. Failure of any parties to appeal the judgment as against
him makes such judgment final and executory. By the same token, an appeal by one party
from such judgment does not inure to the benefit of the other party who had not appealed nor
can it be deemed to be an appeal of such other party from the judgment against him.
[29] Philippine Sinter Corporation v. Cagayan Electric Power and Light Co., Inc., 431 Phil.
324, 333 (2002).
[30] Alauya, Jr. v. COMELEC, 443 Phil. 893, 907 (2003).
[31] Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 976 (2000).
[32] Corinthian's Memorandum dated December 6, 2004, rollo, pp. 384-385.
[33] Id. at 363-407.
[34] Tanjangcos' Memorandum dated November 29, 2004; id. at 331-361.
[35] Child Learning Center, Inc. v. Tagorio, G.R. No. 150920, November 25, 2005, 476 SCRA
236, 242.
[36] Capili v. Cardaa, G.R. No. 157906, November 2, 2006, 506 SCRA 569, 575, citing 65
C.J.S. 1(14), p. 462.
[37] Fernando v. Court of Appeals, G.R. No. 92087, May 8, 1992, 208 SCRA 714, 718, citing
Picart v. Smith, 37 Phil. 809, 813 (1992).
[38] Pestao v. Sumayang, 400 Phil. 740, 749 (2000).
[39] Manila Electric Company v. Court of Appeals, 413 Phil. 338, 354 (2001).
[40] Rollo, pp. 104-105 (Citations omitted).
[41] Art. IV, Section 3(d) of Corinthian's Manual of Rules and Regulations provides:
All on-going construction shall be subject to inspection of the Association's representative for
the purpose of determining compliance to the approved plans. It shall be considered a
violation if the contractor/lot owner does not permit entry of the Association representative
doing inspection works. Such violation will be subject to the sanctions available to the
Association such as (a) denial of entry of construction materials (b) renovation of ID's of
construction workers and (c) cutting-off of water service. The schedule of inspection shall be
as follows:
A. For original construction
xxx
2. When the perimeter walls are being constructed.

xxx
[42] 448 Phil. 606, 623 (2003).
[43] 407 Phil. 309, 323 (2001).

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
THE HEIRS OF REDENTOR COMPLETO and ELPIDIO
ABIAD,
Petitioners,
- versus SGT. AMANDO C. ALBAYDA, JR.,
Respondent.

G.R. No. 172200

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:
July 6, 2010
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision[1] dated January 2, 2006 and the Resolution[2] dated March 30, 2006
of the Court of Appeals (CA) in CA-G.R. CV No. 68405.
The Facts
The facts of the case are as follows:
Respondent Amando C. Albayda, Jr. (Albayda) is a Master Sergeant of the Philippine Air
Force, 527th Base Security Squadron, 520th Airbase, Philippine Air Force, located at Villamor
Air Base (VAB), . Petitioner Redentor Completo (Completo), now represented by his heirs,
was the taxi driver of a Toyota Corolla, bearing Plate No. PYD-128, owned and operated by
co-petitioner Elpidio Abiad (Abiad).[3] Albayda and Completo figured in an accident along the
intersection of 8th and 11th Streets, VAB. Albayda filed a complaint for damages before the
Regional Trial Court (RTC) of . The case was docketed as Civil Case No. 98-1333.[4]
The amended complaint alleged that, on August 27, 1997, while Albayda was on his way to
the office to report for duty, riding a bicycle along th Street, the taxi driven by Completo
bumped and sideswiped him, causing serious physical injuries. Albayda was brought to the

Philippine Air Force General Hospital (PAFGH) inside VAB. However, he was immediately
transferred to the Armed Forces of the Philippines Medical Center (AFPMC) on , , because
there was a fracture in his left knee and there was no orthopedic doctor available at PAFGH.
From August 27, 1997 until February 11, 1998, he was confined therein. He was again
hospitalized at PAFGH from February 23, 1998 until March 22, 1998.[5]
Conciliation between the parties before the barangay failed. Thus, Albayda filed a complaint
for physical injuries through reckless imprudence against Completo before the Office of the
City Prosecutor of Pasay City. On the other hand, Completo filed a counter-charge of damage
to property through reckless imprudence against Albayda. On January 13, 1998, the Office of
the City Prosecutor issued a resolution,[6] recommending the filing of an information for
reckless imprudence resulting in physical injuries against Completo. The counter-charge of
damage to property was recommended dismissed.[7]
The case was raffled to the

, Branch 45, where Albayda manifested his reservation to file a

separate civil action for damages against petitioners Completo and Abiad.[8]
Albayda alleged that the proximate cause of the incident which necessitated his stay in the
hospital for approximately seven (7) months was the negligence of Completo who, at the time
of the accident, was in the employ of Abiad. The pain he suffered required him to undergo
medical physiotherapy for a number of years to regain normality of his left knee joint, and he
claimed that he incurred actual damages totaling Two Hundred Seventy-Six Thousand Five
Hundred Fifty Pesos (P276,550.00), inclusive of his anticipated operations.[9]
He further stated that aggravating the physical sufferings, mental anguish, frights, serious
anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation
resulting from his injuries, his wife abandoned him in May 1998, and left their children in his
custody. He thus demanded the amount of Six Hundred Thousand Pesos (P600,000.00) as
moral damages. He likewise asked for exemplary damages in the amount of Two Hundred
Thousand Pesos (P200,000.00) and attorneys fees of Twenty-Five Thousand Pesos

(P25,000.00), plus One Thousand Pesos (P1,000.00) per court appearance.[10]

In his answer to the amended complaint, Completo alleged that, on August 27, 1997, he was
carefully driving the taxicab along th Street, VAB, when suddenly he heard a strange sound
from the rear right side of the taxicab. When he stopped to investigate, he found Albayda lying
on the road and holding his left leg. He immediately rendered assistance and brought Albayda
to PAFGH for emergency treatment.[11]
Completo also asserted that he was an experienced driver who, in accordance with traffic
rules and regulations and common courtesy to his fellow motorists, had already reduced his
speed to twenty (20) kilometers per hour even before reaching the intersection of 8 th and
11th Streets. In contrast, Albayda rode his bicycle at a very high speed, causing him to
suddenly lose control of the bicycle and hit the rear door on the right side of the taxicab.[12]
The deep indentation on the rear right door of the taxicab was caused by the impact of
Albaydas body that hit the taxicab after he had lost control of the bicycle; while the slight
indentation on the right front door of the taxicab was caused by the impact of the bike that hit
the taxicab after Albayda let go of its handles when he had lost control of it.[13]
Completo maintained that Albayda had no cause of action. The accident and the physical
injuries suffered by Albayda were caused by his own negligence, and his purpose in filing the
complaint was to harass petitioners and unjustly enrich himself at their expense.[14]
After submission of the parties respective pleadings, a pretrial conference was held. On
December 8, 1998, the RTC issued a pretrial order. Thereafter, trial on the merits ensued.[15]
Albayda presented himself, Michael Navarro (Navarro), Dr. Rito Barrosa, Jr. (Dr. Barrosa), Dr.
Armando Sta. Ana, Jr., Dr. Ranny Santiago, (Dr. Santiago), and Dr. Manuel Fidel Magtira (Dr.
Magtira) as witnesses in open court.[16]
On direct examination, Navarro testified that, on August 27, 1997, at around 1:45 p.m., he
saw a taxicab, with Plate No. PYD-128, coming from th Street, running at an unusual speed.
The normal speed should have been twenty-five (25) kilometers per hour. He was at the

corner of 9th and 8th Streets when the taxicab passed by him. The side of the bicycle was hit
by the taxicab at the intersection of 11th and 8th Streets. He saw Albayda fall to the ground,
grimacing in pain. The taxicab at that moment was about ten (10) meters away from Albayda.
On cross-examination, Navarro reiterated that the taxicab was running quite fast. The bicycle
ridden by Albayda reached the intersection of 8 th and 11th Streets before the taxicab hit it.[17]
Dr. Santiago, the orthopedic surgeon who treated Albayda when the latter was admitted at
AFPMC, testified that the cause of the injury was hard impact, and recommended an
operation to alleviate the suffering. On cross-examination, he said that there was a separation
of the fragments of the proximal leg, the injured extremity, called levia. They placed the victim
on knee traction or calcaneal traction,[18] in order to avoid further swelling. They bore the
calcanean bone with a stainless steel pin so that they could put five percent (5%) of the body
weight of the patient to cool down the leg. He treated Albayda for three (3) months. He
recommended surgery, but the victim had other medical problems, like an increase in sugar
level, and they were waiting for the availability of the implant. The implant was supposed to be
placed on the lateral aspect of the proximal leg or the levia, the part with the separation. It
was a long implant with screws.[19] Dr. Magtira testified that Albayda was readmitted at
AFPMC on January 25, 1999 because of complaints of pain and limitation of motion on the
knee joint. Upon evaluation, the pain was caused by traumatic arthritis brought about by
malunion of the lateral trivial condial. An operation of the soft tissue release was conducted
for him to mobilize his knee joint and attain proper range of motion. After the operation,
Albayda attained functional range of motion, but because of subsisting pain, they had to do
osteoplasty[20] of the malunion, which was another operation. On cross-examination, Dr.
Magtira testified that he rendered free medical service at AFPMC.[21]
Albayda testified that he was thirty-six (36) years old and a soldier of the Armed Forces of
the . On August 27, 1997, at around 1:40 p.m., he was riding his bike on his way to the office,
located on 916 Street, VAB. He had to stop at the corner of 11 th and 8th Streets because an

oncoming taxicab was moving fast. However, the taxicab still bumped the front tire of his bike,
hit his left knee and threw him off until he fell down on the road. The taxicab stopped about
ten meters away, and then moved backwards. Its driver, Completo, just stared at him. When
somebody shouted to bring him to the hospital, two (2) persons, one of whom was Dr.
Barrosa, helped him and carried him into the taxicab driven by Completo, who brought him to
PAFGH.[22]
Upon examination, it was found that Albayda suffered fracture in his left knee and that it
required an operation. No orthopedic doctor was available at PAFGH. Thus, he was
transferred that same afternoon to AFPMC, where he was confined until February 11, 1998.
[23]
At AFPMC, Albaydas left leg was drilled on and attached to traction. When his leg was drilled,
it was so painful that he had to shout. After his release from the hospital, he continued to
suffer pain in his leg. He underwent reflexology and therapy which offered temporary relief
from pain. But after some time, he had to undergo therapy and reflexology again.[24]
On January 25, 1999, Albayda was readmitted at AFPMC and operated on. On June 24,
1999, he was operated on again. Wire and screw were installed so that he could bend his
knee. Nonetheless, he continued to suffer pain. As of the date of his testimony in court, he
was scheduled for another operation in January 2000, when the steel that would be installed
in his leg arrives.[25]
For his food, Albayda spent Thirty Pesos (P30.00) each day during his six (6) months of
confinement; for his bed pan, One Thousand Pesos (P1,000.00); for his twice weekly
reflexology, Three Hundred Pesos (P300.00) every session since April 1997; for his
caretaker, P300.00 per day for six months. He also asked for P600,000.00 in moral damages
because Completo did not lend him a helping hand, and he would be suffering deformity for
the rest of his life. He demanded P25,000.00 as attorneys fees and P1,000.00 for every court
appearance of his lawyer.[26]

On cross-examination, Albayda testified that, on the date of the incident, he was the base
guard at VAB, and his duty was from 2 p.m. to 8 p.m. That afternoon, he was not in a hurry to
go to his place of work because it was only about 1:45 p.m., and his place of work was only
six (6) meters away. After the accident, he was brought to PAFGH, and at 3:00 p.m., he was
brought to the AFPMC. When he was discharged from the hospital, he could no longer walk.
[27]
Dr. Barrosas testimony during cross-examination emphasized that he was with 2 other
persons when he carried Albayda into the taxicab driven by Completo. He was certain that it
was not Completo who carried the victim into the taxicab. It was only a matter of seconds
when he rushed to the scene of the accident. The taxicab backed up fifteen (15) seconds
later. Albayda lay 2 meters away from the corner of 8th and 11th Streets.[28]
Completo, Abiad, and Benjamin Panican (Panican) testified for the defense.[29]
Completo alleged that he had been employed as taxi driver of FOJS Transport, owned by
Abiad, since February 1997. On August 27, 1997, he was driving the taxicab, with Plate No.
PYD-128, from 10:00 a.m. At around 1:45 p.m., he was on his way home when a bicycle
bumped his taxicab at the intersection of 8 th and 11th Streets, VAB. The bicycle was travelling
from south to north, and he was going east coming from the west. The bicycle was coming
from th Street, while he was travelling along th Street.[30]
On cross-examination, Completo testified that when Albayda hit the rear right door of the
taxicab, the latter fell to the ground. When he heard a noise, he immediately alighted from the
taxicab. He denied that he stopped about 10 meters away from the place where Albayda fell.
He carried Albayda and drove him to the hospital.[31]
Panican testified that he worked as an airconditioner technician in a shop located
on th Street corner th Street. On the date and time of the incident, he was working in front of
the shop near the roadside. He saw a bicycle bump the rear right side of the taxicab. Then,
the driver of the taxicab alighted, carried Albayda, and brought him to the hospital.[32]

When questioned by the trial court, Panican testified that the bicycle was running fast and that
he saw it bump the taxicab. The taxicab already passed the intersection of 11 th and
8thStreets when the bicycle arrived.[33]
Abiad testified that, aside from being a soldier, he was also a franchise holder of taxicabs and
passenger jeepneys. When Completo applied as a driver of the taxicab, Abiad required the
former to show his bio-data, NBI clearance, and drivers license. Completo never figured in a
vehicular accident since the time he was employed in February 1997. Abiad averred that
Completo was a good driver and a good man. Being the operator of taxicab, Abiad would
wake up early and personally check all the taxicabs.[34]
On July 31, 2000, the trial court rendered a decision,[35] the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff [Albayda]
and against the defendants [Completo and Abiad]. Accordingly, the defendants
[Completo and Abiad] are hereby ordered to pay the plaintiff [Albayda] the
following sum:
1. P46,000.00 as actual damages;
2. P400,000.00 as moral damages; [and]
3. P25,000.00 as attorneys fees.
Costs against the defendants [Completo and Abiad].
SO ORDERED.[36]
Completo and Abiad filed an appeal. The CA affirmed the trial court with modification in a
Decision[37] dated January 2, 2006, viz.:
WHEREFORE, premises considered, the appeal is DENIED for lack of merit.
The assailed Decision dated 31 July 2000 rendered by the
, Branch 117, in
Civil
Case
No.
98-1333
is
hereby AFFIRMED with
the
following MODIFICATIONS:
1. the award of Php 46,000.00 as actual damages is DELETED;
2. temperate damages in the amount of Php 40,000.00 is awarded in favor of
appellee;
3. moral damages in favor of appellee is REDUCED to Php 200,000.00;
4. appellants Redentor Completo and Elpidio Abiad are solidarily liable to pay
appellee Amando C. Albayda, Jr. said temperate and moral damages, as well as
the attorneys fees in the amount of Php 25,000.00 awarded by the trial court;

5. the temperate and moral damages shall earn legal interest at 6% per
annum computed from the date of promulgation of Our Decision;
6. upon finality of Our Decision, said moral and temperate damages shall earn
legal interest at the rate of 12% per annum, in lieu of 6% per annum, until full
payment. Costs against appellants.
SO ORDERED.[38]
Hence, this petition.
The Issues
Petitioners presented the following issues for resolution: (1) whether the CA erred in finding
that Completo was the one who caused the collision;
(2) whether Abiad failed to prove that he observed the diligence of a good father of the family;
and (3) whether the award of moral and temperate damages and attorneys fees to Albayda
had no basis.[39]
The Ruling of the Court
The petition is bereft of merit.
I. On Negligence
The issues raised by petitioners essentially delve into factual matters which were already
passed upon by the RTC and the CA. Conclusions and findings of fact of the trial court are
entitled to great weight on appeal and should not be disturbed unless for strong and cogent
reasons, because the trial court is in a better position to examine real evidence, as well as to
observe the demeanor of the witnesses while testifying in the case. The fact that the CA
adopted the findings of fact of the trial court makes the same binding upon this Court. Wellsettled is the rule that the Supreme Court is not a trier of facts.[40] To be sure, findings of fact
of lower courts are deemed conclusive and binding upon the Supreme Court, save only for
clear and exceptional reasons,[41] none of which is present in the case at bar.
The instant case involved a collision between a taxicab and a bicycle which resulted in
serious physical injuries to the bicycle rider, Albayda. It is a rule in negligence suits that the
plaintiff has the burden of proving by a preponderance of evidence the motorists breach in his

duty of care owed to the plaintiff, that the motorist was negligent in failing to exercise the
diligence required to avoid injury to the plaintiff, and that such negligence was the proximate
cause of the injury suffered.[42]
Article 2176 of the Civil Code provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no preexisting contractual relation between the parties, is called a
quasi-delict. In this regard, the question of the motorist's negligence is a question of fact.
It was proven by a preponderance of evidence that Completo failed to exercise reasonable
diligence in driving the taxicab because he was over-speeding at the time he hit the bicycle
ridden by Albayda. Such negligence was the sole and proximate cause of the serious physical
injuries sustained by Albayda. Completo did not slow down even when he approached the
intersection of 8th and 11th Streets of VAB. It was also proven that Albayda had the right of
way, considering that he reached the intersection ahead of Completo.
The bicycle occupies a legal position that is at least equal to that of other vehicles lawfully on
the highway, and it is fortified by the fact that usually more will be required of a motorist than a
bicyclist in discharging his duty of care to the other because of the physical advantages the
automobile has over the bicycle.[43]
At the slow speed of ten miles per hour, a bicyclist travels almost fifteen feet per second,
while a car traveling at only twenty-five miles per hour covers almost thirty-seven feet per
second, and split-second action may be insufficient to avoid an accident. It is obvious that a
motor vehicle poses a greater danger of harm to a bicyclist than vice versa. Accordingly,while
the duty of using reasonable care falls alike on a motorist and a bicyclist, due to the inherent
differences in the two vehicles, more care is required from the motorist to fully discharge the
duty than from the bicyclist.[44] Simply stated, the physical advantages that the motor vehicle
has over the bicycle make it more dangerous to the bicyclist than vice versa.[45]
Under Article 2180 of the Civil Code, the obligation imposed by Article 2176 is demandable

not only for ones own acts or omissions, but also for those persons for whom one is
responsible. Employers shall be liable for the damages caused by their employees, but the
employers responsibility shall cease upon proof that they observed all the diligence of a good
father of the family in the selection and supervision of their employees.
When an injury is caused by the negligence of an employee, a legal presumption instantly
arises that the employer was negligent. This presumption may be rebutted only by a clear
showing on the part of the employer that he exercised the diligence of a good father of a
family in the selection and supervision of his employee. If the employer successfully
overcomes the legal presumption of negligence, he is relieved of liability. In other words, the
burden of proof is on the employer.[46]
The trial courts finding that Completo failed to exercise reasonable care to avoid collision with
Albayda at the intersection of 11th and 8th Streets of VAB gives rise to liability on the part of
Completo, as driver, and his employer Abiad. The responsibility of two or more persons who
are liable for quasi-delict is solidary.[47] The civil liability of the employer for the negligent acts
of his employee is also primary and direct, owing to his own negligence in selecting and
supervising his employee.[48] The civil liability of the employer attaches even if the employer
is not inside the vehicle at the time of the collision.[49]
In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience, and service records. On the other hand, with respect to the
supervision of employees, employers should formulate standard operating procedures,
monitor their implementation, and impose disciplinary measures for breaches thereof. To
establish these factors in a trial involving the issue of vicarious liability, employers must
submit concrete proof, including documentary evidence.[50]
Abiad testified that before he hired Completo, he required the latter to show his bio-data, NBI
clearance, and drivers license. Abiad likewise stressed that Completo was never involved in a
vehicular accident prior to the instant case, and that, as operator of the taxicab, he would

wake up early to personally check the condition of the vehicle before it is used.
The protestation of Abiad to escape liability is short of the diligence required under the
law. Abiads evidence consisted entirely of testimonial evidence, and the unsubstantiated and
self-serving testimony of Abiad was insufficient to overcome the legal presumption that he
was negligent in the selection and supervision of his driver.
II. On Damages
The CA rightfully deleted the award of actual damages by the RTC because Albayda failed to
present documentary evidence to establish with certainty the amount that he incurred during
his hospitalization and treatment for the injuries he suffered. In the absence of stipulation,
actual damages are awarded only for such pecuniary loss suffered that was duly proved.[51]
While the amount of actual damages was not duly established with certainty, the Court
recognizes the fact that, indeed, Albayda incurred a considerable amount for the necessary
and reasonable medical expenses, loss of salary and wages, loss of capacity to earn
increased wages, cost of occupational therapy, and harm from conditions caused by
prolonged immobilization. Temperate damages, more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot, from the nature of the case, be proved with
certainty.[52] Temperate damages must be reasonable under the circumstances.[53] Thus,
the Court finds the award of One Hundred Thousand Pesos (P100,000.00) as temperate
damages reasonable under the circumstances.
Doubtless, Albayda suffered immeasurable pain because of the incident caused by petitioners
negligence. The CA explained:
The court vicariously feels the pain the plaintiff [Albayda] suffered a number of
times. After he was bumped by defendants cab, he cried in pain. When the
doctors bore holes into his left knee, he cried in pain. When he was tractioned,
when he was subjected to an operation after operation he suffered pain. When
he took the witness stand to testify, he walked with crutches, his left knee in
bandage, stiff and unfuctional. Pain was written [on] his face. He does deserve

moral damages.[54]
Moral damages are awarded in quasi-delicts causing physical injuries. The permanent
deformity and the scar left by the wounds suffered by Albayba will forever be a reminder of
the pain and suffering that he had endured and continues to endure because of petitioners
negligence. Thus, the award of moral damages in the amount of Five Hundred Thousand
Pesos (P500,000.00) is proper.
Finally, an interest rate of six percent (6%) per annum is due on the amount of P100,000.00,
as temperate damages, and P500,000.00, as moral damages, which we have awarded. The
6% per annum interest rate on the temperate and moral damages shall commence to run
from the date of the promulgation of this Decision. Upon finality of the Decision, an interest
rate of twelve percent (12%) per annum shall be imposed on the amount of the temperate and
moral damages until full payment thereof.[55]
The award of attorneys fees is hereby deleted for failure to prove that petitioners acted in bad
faith in refusing to satisfy respondents just and valid claim.
WHEREFORE, in view of the foregoing, the Decision dated January 2, 2006 and the
Resolution dated March 30, 2006 of the Court of Appeals in CA-G.R. CV No. 68405 are
hereby AFFIRMED with MODIFICATION, viz.:
(1) The estate of the late Redentor Completo and Elpidio Abiad are solidarily liable to pay One
Hundred Thousand Pesos (P100,000.00), as temperate damages, and Five Hundred
Thousand Pesos (P500,000.00), as moral damages;
(2) The temperate and moral damages hereby awarded shall earn legal interest at the rate of
six percent (6%) per annum from the date of the promulgation of this Decision. Upon finality of
this Decision, an interest rate of twelve percent (12%) per annum shall be imposed on the
amount of the temperate and moral damages until full payment thereof.
Costs against petitioners.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice
JOSE CATRAL
Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
FOOTNOTES
[1] Penned by Associate Justice Celia C. Librea-Leagogo, with Associate Justices Renato C.
Dacudao and Lucas P. Bersamin (now a member of this Court), concurring; rollo, pp. 50-91.
[2] Id. at 93-94.
[3] Completo died pending appeal of the instant case to this Court.
[4] Rollo, p. 51.
[5] Id. 51-52.
[6] Id. at 117-118.
[7] Id. at 52.
[8] Id. at 52-53.
[9] Id. at 53.
[10] Id. at 53-54.
[11] Id. at 54.
[12] Id. at 54-55.
[13] Id. at 55.
[14] Id.
[15] Id.
[16] Id.

[17] Id. at 55-56.

[18] Traction is the use of a pulling force to treat muscle and skeleton disorders. Traction is
usually applied to the arms and legs, the neck, the backbone, or the pelvis. It is used to treat
fractures, dislocations, and long-duration muscle spasms, and to prevent or correct
deformities. Traction can either be short-term, as at an accident scene, or long-term, when it
is used in a hospital setting. <http://medical-dictionary.thefreedictionary.com/traction> (visited
June 8, 2010.)
[19] Rollo, pp. 56-57.
[20] Bone grafting or bone repair of the malunion.
[21] Rollo, p. 57.
[22] Id. at 57-58.
[23] Id. at 58.
[24] Id.
[25] Id.
[26] Id.
[27] Id. at 58-59.
[28] Id. at 59.
[29] Id. at 61.
[30] Id.
[31] Id.
[32] Id.
[33] Id. at 62.
[34] Id.
[35] Penned by Judge Henrick F. Gingoyon, RTC, Branch 117, Pasay City; id. at 175-188.
[36] Id. at 188.
[37] Supra note 1.
[38] Id. at 87-88.
[39] Rollo, p. 325.
[40] Spouses Patricio and Myrna Bernales vs. Heirs of Julian Sambaan, G.R. No. 163271,
January 15, 2010; Poliand Industrial Limited v. National Development Company, G.R. Nos.
143866 and 143877, August 22, 2005, 467 SCRA 500, 543.
[41] Empire East Land Holdings, Inc. v. Capitol Industrial Construction Groups, Inc., G.R. No.
168074, September 26, 2008, 566 SCRA 473; Bulay-og v. Bacalso, G.R. No. 148795, July 17,
2006, 495 SCRA 308.
[42] 11 AMJUR POF 3d 395.
[43] Id.
[44] Id.
[45] Id.
[46] Skyi v. Begasa, 460 Phil. 381 (2003); Delsan Transport Lines, Inc. v. C & A Construction,
Inc., 459 Phil. 156 (2003).
[47] CIVIL CODE, Art. 2194.
[48] Cerezo v. Tuazon, 469 Phil. 1020 (2004).
[49] Sps. Hernandez v. Sps. Dolor, 479 Phil. 593 (2004).
[50] Skyi v. Begasa, supra note 46.
[51] CIVIL CODE, Art. 2199.
[52] CIVIL CODE, Art. 2224.
[53] CIVIL CODE, Art. 2225.
[54] Rollo, p. 65.
[55] Eastern Shipping Lines, Inc. v. CA, G.R. No. 97412, July 12, 1994, 234 SCRA 78.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
ALFREDO P. PACIS and CLEOPATRA D.
PACIS,
Petitioners,
- versus JEROME JOVANNE MORALES,
Respondent.

G.R. No. 169467

Present:
CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
Promulgated:
February 25, 2010
x--------------------------------------------------x
DECISION
CARPIO, J.:
The Case

This petition for review[1] assails the 11 May 2005 Decision[2] and the 19 August 2005
Resolution of the Court of Appeals in CA-G.R. CV No. 60669.
The Facts
On 17 January 1995, petitioners Alfredo P. Pacis and Cleopatra D. Pacis (petitioners) filed
with the trial court a civil case for damages against respondent Jerome Jovanne Morales
(respondent). Petitioners are the parents of Alfred Dennis Pacis, Jr. (Alfred), a 17-year old
student who died in a shooting incident inside the Top Gun Firearms and Ammunitions Store
(gun store) in Baguio City. Respondent is the owner of the gun store.
The facts as found by the trial court are as follows:
On January 19, 1991, Alfred Dennis Pacis, then 17 years old and a first year
student at the Baguio Colleges Foundation taking up BS Computer Science,
died due to a gunshot wound in the head which he sustained while he was at
the Top Gun Firearm[s] and Ammunition[s] Store located at Upper Mabini Street,
Baguio City. The gun store was owned and operated by defendant Jerome
Jovanne Morales.
With Alfred Pacis at the time of the shooting were Aristedes Matibag and Jason Herbolario.
They were sales agents of the defendant, and at that particular time, the caretakers of the gun
store.

The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer of
the gun store for repair.
The gun, an AMT Automag II Cal. 22 Rimfire Magnum with Serial No. SN-H34194 (Exhibit Q),
was left by defendant Morales in a drawer of a table located inside the gun store.
Defendant Morales was in Manila at the time. His employee Armando Jarnague, who was the
regular caretaker of the gun store was also not around. He left earlier and requested sales
agents Matibag and Herbolario to look after the gun store while he and defendant Morales
were away. Jarnague entrusted to Matibag and Herbolario a bunch of keys used in the gun
store which included the key to the drawer where the fatal gun was kept.
It appears that Matibag and Herbolario later brought out the gun from the drawer
and placed it on top of the table. Attracted by the sight of the gun, the young
Alfred Dennis Pacis got hold of the same. Matibag asked Alfred Dennis Pacis to
return the gun. The latter followed and handed the gun to Matibag. It went off,
the bullet hitting the young Alfred in the head.
A criminal case for homicide was filed against Matibag before branch VII of this Court.
Matibag, however, was acquitted of the charge against him because of the exempting
circumstance of accident under Art. 12, par. 4 of the Revised Penal Code.
By agreement of the parties, the evidence adduced in the criminal case for
homicide against Matibag was reproduced and adopted by them as part of their
evidence in the instant case.[3]
On 8 April 1998, the trial court rendered its decision in favor of petitioners. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
the plaintiffs [Spouses Alfredo P. Pacis and Cleopatra D. Pacis] and against the
defendant [Jerome Jovanne Morales] ordering the defendant to pay plaintiffs
(1) P30,000.00 as indemnity for the death of Alfred Pacis;
(2) P29,437.65 as actual damages for the hospitalization and burial
expenses incurred by the plaintiffs;
(3) P100,000.00 as compensatory damages;
(4) P100,000.00 as moral damages;
(5) P50,000.00 as attorneys fees.
SO ORDERED.[4]
Respondent appealed to the Court of Appeals. In its Decision[5] dated 11 May 2005, the
Court of Appeals reversed the trial courts Decision and absolved respondent from civil liability
under Article 2180 of the Civil Code.[6]
Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its
Resolution dated 19 August 2005.
Hence, this petition.

The Trial Courts Ruling

The trial court held respondent civilly liable for the death of Alfred under Article 2180 in
relation to Article 2176 of the Civil Code.[7] The trial court held that the accidental shooting of
Alfred which caused his death was partly due to the negligence of respondents employee
Aristedes Matibag (Matibag). Matibag and Jason Herbolario (Herbolario) were employees of
respondent even if they were only paid on a commission basis. Under the Civil Code,
respondent is liable for the damages caused by Matibag on the occasion of the performance
of his duties, unless respondent proved that he observed the diligence of a good father of a
family to prevent the damage. The trial court held that respondent failed to observe the
required diligence when he left the key to the drawer containing the loaded defective gun
without instructing his employees to be careful in handling the loaded gun.
The Court of Appeals Ruling
The Court of Appeals held that respondent cannot be held civilly liable since there was no
employer-employee relationship between respondent and Matibag. The Court of Appeals
found that Matibag was not under the control of respondent with respect to the means and
methods in the performance of his work. There can be no employer-employee relationship
where the element of control is absent. Thus, Article 2180 of the Civil Code does not apply in
this case and respondent cannot be held liable.
Furthermore, the Court of Appeals ruled that even if respondent is considered an employer of
Matibag, still respondent cannot be held liable since no negligence can be attributed to him.
As explained by the Court of Appeals:
Granting arguendo that an employer-employee relationship existed between
Aristedes Matibag and the defendant-appellant, we find that no negligence can
be attributed to him.
Negligence is best exemplified in the case of Picart vs. Smith (37 Phil. 809). The test of
negligence is this:
x x x. Could a prudent man, in the position of the person to whom
negligence is attributed, foresee harm to the person injured as a
reasonable consequence of the course about to be pursued? If so,
the law imposes a duty on the actor to refrain from that course or
take precaution against its mischievous results, and the failure to
do so constitutes negligence. x x x.
Defendant-appellant maintains that he is not guilty of negligence and lack of due
care as he did not fail to observe the diligence of a good father of a family. He
submits that he kept the firearm in one of his table drawers, which he locked
and such is already an indication that he took the necessary diligence and care
that the said gun would not be accessible to anyone. He puts [sic] that his store
is engaged in selling firearms and ammunitions. Such items which are per
se dangerous are kept in a place which is properly secured in order that the
persons coming into the gun store would not be able to take hold of it unless it is

done intentionally, such as when a customer is interested to purchase any of the

firearms, ammunitions and other related items, in which case, he may be
allowed to handle the same.
We agree. Much as We sympathize with the family of the deceased, defendantappellant is not to be blamed. He exercised due diligence in keeping his loaded
gun while he was on a business trip in Manila. He placed it inside the drawer
and locked it. It was taken away without his knowledge and authority. Whatever
happened to the deceased was purely accidental.[8]
The Issues
Petitioners raise the following issues:
I. THE APPELLATE COURT COMMITTED SERIOUS ERROR IN
RENDERING THE DECISION AND RESOLUTION IN QUESTION IN
DISREGARD OF LAW AND JURISPRUDENCE BY REVERSING THE
ORDER OF THE REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO
CITY NOTWITHSTANDING CLEAR, AUTHENTIC RECORDS AND
TESTIMONIES PRESENTED DURING THE TRIAL WHICH NEGATE AND
CONTRADICT ITS FINDINGS.
II. THE APPELLATE COURT COMMITTED GRAVE, REVERSIBLE ERROR
IN RENDERING THE DECISION AND RESOLUTION IN QUESTION BY
DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS THEREBY IGNORING THE FACTUAL FINDINGS OF THE
REGIONAL TRIAL COURT (BRANCH 59) OF BAGUIO CITY SHOWING
PETITIONERS CLEAR RIGHTS TO THE AWARD OF DAMAGES.[9]
The Ruling of the Court
We find the petition meritorious.
This case for damages arose out of the accidental shooting of petitioners son. Under Article
1161[10] of the Civil Code, petitioners may enforce their claim for damages based on the civil
liability arising from the crime under Article 100[11] of the Revised Penal Code or they may
opt to file an independent civil action for damages under the Civil Code. In this case, instead
of enforcing their claim for damages in the homicide case filed against Matibag, petitioners
opted to file an independent civil action for damages against respondent whom they alleged
was Matibags employer. Petitioners based their claim for damages under Articles 2176 and
2180 of the Civil Code.
Unlike the subsidiary liability of the employer under Article 103[12] of the Revised Penal

Code,[13] the liability of the employer, or any person for that matter, under Article 2176 of the
Civil Code is primary and direct, based on a persons own negligence. Article 2176 states:
Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called quasi-delict and is governed by the provisions of this Chapter.
This case involves the accidental discharge of a firearm inside a gun store. Under PNP
Circular No. 9, entitled the Policy on Firearms and Ammunition Dealership/Repair, a person
who is in the business of purchasing and selling of firearms and ammunition must maintain
basic security and safety requirements of a gun dealer, otherwise his License to Operate
Dealership will be suspended or canceled.[14]
Indeed, a higher degree of care is required of someone who has in his possession or under
his control an instrumentality extremely dangerous in character, such as dangerous weapons
or substances. Such person in possession or control of dangerous instrumentalities has the
duty to take exceptional precautions to prevent any injury being done thereby.[15]Unlike the
ordinary affairs of life or business which involve little or no risk, a business dealing with
dangerous weapons requires the exercise of a higher degree of care.
As a gun store owner, respondent is presumed to be knowledgeable about firearms safety
and should have known never to keep a loaded weapon in his store to avoid unreasonable
risk of harm or injury to others. Respondent has the duty to ensure that all the guns in his
store are not loaded. Firearms should be stored unloaded and separate from ammunition
when the firearms are not needed for ready-access defensive use.[16] With more reason,
guns accepted by the store for repair should not be loaded precisely because they are
defective and may cause an accidental discharge such as what happened in this case.
Respondent was clearly negligent when he accepted the gun for repair and placed it inside
the drawer without ensuring first that it was not loaded. In the first place, the defective gun
should have been stored in a vault. Before accepting the defective gun for repair, respondent

should have made sure that it was not loaded to prevent any untoward accident. Indeed,
respondent should never accept a firearm from another person, until the cylinder or action is
open and he has personally checked that the weapon is completely unloaded.[17] For failing
to insure that the gun was not loaded, respondent himself was negligent. Furthermore, it was
not shown in this case whether respondent had a License to Repair which authorizes him to
repair defective firearms to restore its original composition or enhance or upgrade firearms.
[18]
Clearly, respondent did not exercise the degree of care and diligence required of a good
father of a family, much less the degree of care required of someone dealing with dangerous
weapons, as would exempt him from liability in this case.
WHEREFORE, we GRANT the petition. We SET ASIDE the 11 May 2005 Decision and the
19 August 2005

Resolution of the

Court of Appeals in CA-G.R. CV No. 60669.

WeREINSTATE the trial courts Decision dated 8 April 1998.

SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
D. BRION
ASSOCIATE JUSTICE
MARIANO C. DEL CASTILLO
ASSOCIATE JUSTICE
JUSTICE

ROBERTO A. ABAD
ASSOCIATE

JOSE P. PEREZ
ASSOCIATE JUSTICE
ATTESTATION
I ATTEST THAT THE CONCLUSIONS IN THE ABOVE DECISION HAD BEEN REACHED IN
CONSULTATION BEFORE THE CASE WAS ASSIGNED TO THE WRITER OF THE
OPINION OF THE COURTS DIVISION.

ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice

FIRST DIVISION
[G.R. No. 4977. March 22, 1910.]
DAVID TAYLOR, plaintiff-appellee, vs. THE MANILA ELECTRIC RAILROAD
AND LIGHT COMPANY, defendant-appellant.
W.H. Lawrence, for appellant.
W.L. Wright, for appellee.
SYLLABUS
1.LIABILITY FOR DAMAGES; CONTRIBUTORY NEGLIGENCE. When the
immediate cause of an accident resulting in an injury is the plaintiff's own act, which
contributed to the principal occurrence as one of its determining factors, he can not
recover damages for the injury.

DECISION

CARSON, J p:
An action to recover damages for the loss of an eye and other injuries, instituted by
David Taylor, a minor, by his father, his nearest relative.
The defendant is a foreign corporation engaged in the operation of a street railway
and an electric light system in the city of Manila. Its power plant is situated at the eastern
end of a small island in the Pasig River within the city of Manila, known as the Isla del
Provisor. The power plant may be reached by boat or by crossing a footbridge, impassable
for vehicles, at the westerly end of the island.
The plaintiff, David Taylor, was at the same time when he received the injuries
complained of, 15 years of age, the son of a mechanical engineer, more mature than the
average boy of his age, and having considerable aptitude and training in mechanics.
On the 30th of September, 1905, plaintiff, with a boy named Manuel Claparols,
about 12 years of age, crossed the footbridge of the Isla del Provisor, for the purpose of
visiting one Murphy, an employee of the defendant, who had promised to make them a
cylinder for a miniature engine. Finding on inquiry that Mr. Murphy was not in his quarters,
the boys, impelled apparently by youthful curiosity and perhaps by the unusual interest
which both seem to have taken in machinery, spent some time in wandering about the
company's premises. The visit made on a Sunday afternoon, and it does not appear that

they saw or spoke to anyone after leaving the power house where they had asked for Mr.
Murphy.
After watching the operation of the traveling crane used in handling the defendant's
coal, they walked across the open space in the neighborhood of the place where the
company dumped the cinders and ashes from its furnaces. Here they found some twenty
or thirty brass fulminating caps scattered on the ground. These caps are approximately of
the size and appearance of small pistol cartridges and each has attached to it two long
thin wires by means of which it may be discharged by the use of electricity. They are
intended for use in the explosion of blasting charges of dynamite, and have in themselves
considerable explosive power. After some discussion as to the ownership of caps, and
their right to take them, the boys picked up all they could find, hung them of a stick, of
which each took one end, and carried them home. After crossing the footbridge, they met
a little girl named Jessie Adrian, less than 9 years old, and all three went to the home of
the boy Manuel. The boys then made a series of experiments with the caps. They thrust
the ends of the wires into an electric light socket and obtained no result. They next tried to
break the cap with a stone and failed. Manuel looked for a hammer, but could not find one.
They then opened one of the caps with a knife, and finding that it was filled with a
yellowish substance they got matches, and David held the cap while Manuel applied a
lighted match to the contents. An explosion followed, causing more or less serious injuries
to all three. Jessie, who, when the boys proposed purring a match to the contents of the
cap, became frightened and started to run away, received a slight cut in the neck. Manuel
had his hand burned and wounded, and David was struck in the face by several particles
of the metal capsule, one of which injured his right eye to such an extent as to necessitate
its removal by the surgeons who were called in to care for his wounds.
The evidence does not definitely and conclusively disclose how the caps came to
be on the defendant's premises, not how long they had been there when the boys found
them. It appeared, however, that some months before the accident, during the
construction of the defendant's plant, detonating caps of the same kind as those found by
the boys were used in sinking a well at the power plant near the place where the caps
were found; and it also appears that at or about the time when these caps were found,
similar caps were in use in the construction of an extension of defendant's street car line
to Fort William McKinley. The caps when found appeared to the boys who picked them up
to have been lying there for a considerable time, and from the place where they were
found would seem to have been discarded as defective or worthless and fir only to be
thrown upon the rubbish heap.
No measures seem to have been adapted by the defendant company to prohibit or
prevent visitors from entering and walking about its premises unattended, when they felt
disposed as to do. As admitted in defendant counsel's brief, "it is undoubtedly true that
children in their play sometimes crossed the footbridge to the island;" and, we may add,
roamed about at will on the unenclosed premises of the defendant, in the neighborhood of
the place where the caps were found. There is no evidence that any effort ever was made
to forbid these children from visiting the defendant company's premises, although it must
be assumed that the company or its employees were aware of the fact that they not
infrequently did so.
Two years before the accident, plaintiff spent four months at sea, as a cabin boy on

one of the interisland transports. later he took upon work in his father's office learning
mechanical drawing and mechanical engineering. About a month after his accident he
obtained employment as a mechanical draftsman and continued in the employment for six
months at a salary of P2.50 a day; and it appears that he was a boy of more than average
intelligence, taller and more mature both mentally and physically than most boys of fifteen.
The facts set our in the foregoing statement are to our mind fully and conclusively
established by the evidence of record, and are substantially admitted by counsel. The only
questions of fact which are seriously disputed are plaintiff's allegations that the caps which
were found by plaintiff on defendant company's premises were the property of the
defendant, or that they had come from its possession and control, and that the company
or some of its employees left them exposed on its premises at the point where they were
found.
The evidence in support of these allegations is meager, and the defendant
company, apparently relying on the rule of law which places the burden of proof of such
allegations upon the plaintiff, offered no evidence in rebuttal, and insists that plaintiff failed
in his proof. We think, however, the plaintiff's evidence is sufficient to sustain a findings in
accord with his allegations in this regard.
It was proven that caps, similar to those found by the plaintiff, were used, more or
less extensively, on the McKinley extension of the defendant company's track; that some
of these caps were used in blasting a well on the company's premises a few months
before the accident; that not far from the place where the caps were found the company
has a storehouse for the materials, supplies, and so forth, used by it in its operations as a
street railway and a a purveyor of electric light; and that the place, in the neighborhood of
which the caps were found, was being used by the company as a short of dumping ground
for ashes and cinders. Fulminating caps or detonators for the discharge by electricity of
blasting charges by dynamite are not articles in common use by the average citizen, and
under all the circumstances, and in the absence of all evidence to the contrary, we thing
that the discovery of twenty or thirty of these caps at the place where they were found by
the plaintiff on defendant's premises fairly justifies the inference that the defendant
company was either the owner of the caps in question or had these caps under its
possession and control. We think also that the evidence tends to disclose that these caps
or detonators were willfully and knowingly thrown by the company or its employees at the
spot where they were found, with the expectations that they would be buried out of sight
by the ashes which it was engaged in dumping in that neighborhood, they being old and
perhaps defective; and, however this may be, we are satisfied that the evidence is
sufficient to sustained a finding that the company or some of employees either willfully or
through an oversight left them exposed at a point on its premises which the general public
including children at play, were not prohibited from visiting, and over which the company
knew or ought to have known that young boys were likely to roam abound in pastime or in
play.
Counsel for appellant endeavors to weaken or destroy the probative value of the
facts on which these conclusions are based by intimating or rather assuming that the
blasting worked on the company's well and on its McKinley extension was done by
contractors. It was conclusively proven, however, that while the workman employed in
blasting the well was regularly employed by J.G. White & Co., a firm of contractors, he did

the work on the well directly and immediately under the supervision and control of one of
defendant company's foremen, and there is no proof whatever in the record that the
blasting on the McKinley extension was done by independent contractors. Only one
witness testified upon this point, and while he stated that he understood that a part of this
work was done by contract, he could not say so of his own knowledge, and knew nothing
of the terms and conditions of the alleged contract, or of the relations of the alleged
contractor to the defendant company. The fact having been proven that detonating caps
were more or less extensively employed on work done by the defendant company's
directions and on its behalf, we think that the company should have introduced the
necessary evidence to support its contention if it wished to avoid the not unreasonable
inference that it was the owner of the material used in these operations and that it was
responsible for tortious of negligent acts of the agents employed therein, on the ground
that this work had been intrusted to independent contractors as to whose acts the maxim
respondent superior should not be applied. If the company did not in fact own or make use
of caps such as those found on its premises, as intimated by counsel, it was a very simple
matter for it to prove that fact, and in the absence of such proof we think that the other
evidence in the record sufficiently establishes the contrary, and justifies the court in
drawing the reasonable inference that the caps found on its premises were its property,
and were left where they were found by the company or some of its employees.

Plaintiff appears to have rested his case, as did the trial judge his decision in
plaintiff's favor, upon the provisions of article 1089 of the Civil Code read together with
articles 1902, 1903, and 1908 of that Code.
"ART. 1089.Obligations are created by law, by contracts, by quasi
contracts, and by illicit acts and omissions or by those in which any kind of
fault or negligence occurs."
"ART. 1902.Any person who by an act or omission causes damage to
another when there is fault or negligence shall be obliged to repair the
damage so done.
"ART. 1903.The obligation imposed by the preceding article is
demandable, not only for personal acts and omission, but also for those of the
persons for whom they should be responsible.
"The father, and on his death or incapacity the mother, is liable for the
damages caused by the minors who alive with them.
xxx xxx xxx
"Owners or directors of an establishment or enterprises are equally
liable for the damages caused by their employees in the service of the
branches in which the latter may be employed or on account of their duties.
xxx xxx xxx

"The liability referred to in this article shall cease when the persons
mentioned therein prove that they employed all the diligence of a good father
of a family to avoid the damage."
"ART. 1908.The owners shall be also be liable for the damages caused

"1.By the explosion of machines which may not have been cared for
with due diligence, and for kindling of explosive substance which may not
have been placed in a safe and proper place."
Counsel for defendant and appellant rests his appeal strictly upon his contention
that the facts proven at the trial do not establish the liability of the defendant company
under the provisions of these articles, and since we agree with this view of the case, it is
not necessary for us to consider the various questions as to the form and the right of
action (analogous to those raised in the case of Rakes vs. Atlantic, Gulf & Pacific Co., 7
Phil. Rep., 359), which would perhaps, be involved in a decision affirming the judgment of
the court below.
We agree with counsel for appellant that under the Civil Code, as under the
generally accepted doctrine in the United States, the plaintiff in an action such as that
under consideration, in order to establish his right to a recovery, must establish by
competent evidence:
(1)Damages to the plaintiff.
(2)Negligence by act or omission of which defendant personally, or some person for
whose acts it must respond, was guilty.
(3)The connection of cause and effect between the negligence and the damage.
The propositions are, or course, elementary, and do not admit of discussion, the
real difficulty arising in the application of these principles to the particular facts developed
in the case under consideration.
It is clear that the accident could not have happened had not the fulminating caps
been left exposed at the point where they were found, or if their owner had exercised due
care in keeping them in a appropriate place; but it is equally clear that plaintiff would not
have been injured had he not, for his own pleasure and convenience, entered upon
defendant's premised, and strolled around thereon without the express permission of the
defendant, and had he not picked up and carried away the property of the defendant
which he found on its premises, and had he not thereafter deliberately cut open one of the
caps and applied a match to its contents.
But counsel for plaintiff contends that because of plaintiff's youth and inexperience,
his entry upon defendant company's premises, and the intervention of his action between
the negligent act of defendant in leaving the caps exposed on its premises and the
accident which resulted in his injury should not be held to have contributed in any wise
accident, which should be deemed to be the direct result of defendant's negligence in

leaving the caps exposed at the pace where they were found by the plaintiff, and this latter
the proximate cause of the accident which occasioned the injuries sustained by him.
In support of his contention, counsel for plaintiff relied on the doctrine laid down in
many of the courts of last result in the United States in the cases known as the "Torpedo"
and "Turntable" cases, and the cases based thereon.
In the typical cases, the question involved has been whether a railroad company is
liable for an injury received by an infant of tender years, who from mere idle curiosity, or
for purposes of amusement, enters upon the railroad company's premises, at a place
where the railroad company's premises, at a place where the railroad company knew, or
had a good reason to suppose, children who would likely to come, and there found
explosive signal torpedoes left exposed by the railroad company's employees, one of
which when carried away by the visitor, exploded and injured him; or where such infant
found upon the premises a dangerous machine, such as a turntable left in such condition
as to make it probable that children in playing with it would be exposed to accident or
injury therefrom and where the infant did in fact suffer injury in playing with such machine.
In these, and in a great variety of similar cases, the great weight of authority holds
the owner of the premises liable.
As laid down in Railroad Co. vs. Stout ( 17 Wall. (84 U.S.), 657), (wherein the
principal question was whether a railroad company was liable for an injury received by an
infant while upon its premises, from idle curiosity, or for purposed of amusement, if such
injury was, under the circumstances, attributable to the negligence of the company), the
principles on which these cases turn are that "while railroad company is not bound to the
same degree of care in regard to mere strangers who are unlawfully upon its premises
that it owes to passengers conveyed by it, it is not exempt from responsibility to such
strangers for injuries arising from its negligence or from its tortious acts;" and that "the
conduct of an infant of tender years is not to be judged by the same rule which governs
that of an adult. While it is the general rule in regard to an adult that to entitle him to
recover damages for an injury resulting from the fault or negligence of another he must
himself have been free from fault, such is not the rule in regard to an infant of tender
years. The care and caution required of a child is according to his maturity and capacity
only, and this is to be determined in such case by the circumstances of the case."
The doctrine of the case of Railroad Company vs. Stout was vigorously
controverted and sharply criticized in severally state courts, and the supreme court of
Michigan in the case of Ryan vs. Towar (128 Mich., 463) formally repudiated and
disapproved the doctrine of the Turntable cased, especially that laid down in Railroad
Company vs. Stout, in a very able decision wherein it held, in the language of the syllabus:
(1) That the owner of land is not liable to trespassers thereon for injuries sustained by
them, not due to his wanton or willful acts; (2) that no exception to this rule exists in favor
of children who are injured by dangerous machinery naturally calculated to attract them to
the premises; (3) that an invitation of license to cross the premises of another can not be
predicated on the mere fact that no steps have been taken to interfere with such practice;
(4) that there is no difference between children and adults of an invitation or a license to
enter upon another's premises.

Similar criticisms of the opinion in the case of Railroad Company vs. Stout were
indulged in by the courts in Connecticut and Massachusetts. (Nolan vs. Railroad Co., 53
Conn., 461; 154 Mass., 349). And the doctrine has been questioned in Wisconsin,
Pennsylvania, New Hampshire, and perhaps in other States.
On the other hand, many if not most of the courts of last resort in the United States,
citing and approving the doctrine laid down in England in the leading case of Lynch vs.
Nurding (1 Q.B., 29, 35, 36), lay down the rule in these cases in accord with that
announced in Railroad Company vs. Stout (supra), and the Supreme Court of the United
States, in a unanimous opinion delivered by Justice Harlan in the case of Union Pacific
Railway Co. vs. McDonald (152 U.S, 262) on the 5th of March, 1894, reexamined and
reconsidered the doctrine laid down in Railroad Co. vs. Stout, and after an exhaustive and
critical analysis and review of may of the adjudged cases, both English and America,
formally declared that it adhered "to the principles announced in the case of Railroad Co.
vs. Stout."
In the case of Union Pacific Railway Co. vs. McDonald (supra) the facts were as
follows: The plaintiff, a boy 12 years of age, our of curiosity and for his own pleasure,
entered upon and visited the defendant's premises, without defendant's express
permission or invitation, and, while there, was by an accident injured by failing into a
burning slack pile of whose existence he had knowledge, but which had been left by
defendant on its premises without any fence around it or anything to give warning of its
dangerous condition, although defendant knew or had reason to believe that it was in a
place where it would attract the interest or curiosity of passers-by. On these facts the court
held that the plaintiff could not be regarded as a mere trespasser, for whose safety and
protection while on the premises in question, against the unseen danger referred to, the
defendant was under no obligation to make provision.
We quote at length from the discussion by the court of the application of the
principles involved to the facts in that case, because what is said there is strikingly
applicable in the case at bar, and would seem to dispose of defendant's contention that,
the plaintiff in this case being a trespasser, the defendant's company owed him no duty,
and in no case could be held liable for injuries which would not have resulted but for the
entry of plaintiff on defendant's premises.

"We adhere to the principle announced in Railroad Co., vs. Stout

(supra). Applied to the case now before us, they require us to hold that the
defendant was guilty of negligence in leaving unguarded the slack pile, made
by it in the vicinity of its depot building. It could have forbidden all the persons
from coming to its coal mine for purposes merely of curiosity and pleasure. But
it did not do so. On the contrary, it permitted all, without regard to age, to visit
its mine, and witness its operation. It knew that the usual approach to the mine
was by a narrow path skirting its slack pit, close to its depot building, at which
the people of the village, old and young, would often assemble. It knew that
children were in the habit of frequenting that locality and playing around the
shaft house in the immediate vicinity of the slack pit. The slightest regard for
the safety of these children would have suggested that they were in danger

from being so near a pit, beneath the surface of which was concealed (except
when snow, wind, or rain prevailed) a mass of burning coals into which a child
might accidentally fall and be burned to death. Under all the circumstances,
the railroad company ought not to be heard to say that the plaintiff, a mere lad,
moved by curiosity to see the mine, in the vicinity of the slack pit, was a
trespasser, to whom it owed no duty, or for whose protection it was under no
obligation to make provisions.
"In Townsend vs. Wathen (9 East., 277, 281) it was held that if a man
place dangerous traps, baited with flesh, in his own ground, so near to a
highway, or to the premises of another, that dogs passing along the highway,
or kept in his neighbors premises, would probably be attracted by their instinct
into the traps, and in consequence of such act his neighbor's dog be so
attracted and thereby injured, an action on the case would lie. 'What
difference,' said Lord Ellenborough, C.J., 'is there a reason between drawing
the animal into the trap by means of his instinct which he can not resist, and
putting him there by manual force?' What difference, in reason we may
observe in this case, is there between an express license to the children of this
village to visit the defendant's coal mine, in the vicinity of its slack pile, and an
implied license, resulting from the habit of the defendant to permit them,
without objection or warning, to do so at will, for purposes of curiosity or
pleasure? Referring to the case of Townsend vs. Wathen, Judge Thompson, in
his work on the Law of negligence, volume 1, page 305, note, well ways: "It
would be a barbarous rule of law that would make the owner of land liable for
setting a trap thereon, baited with stinking meat, so that his neighbor's dog
attracted by his natural instincts, might run into it and be killed, and which
would exempt him from liability for the consequences of leaving exposed and
unguarded on his land a dangerous machine, so that his neighbor's child
attracted to it and tempted to intermeddle with it by instincts equally strong,
might thereby be killed of maimed for life."
Chief Justice Cooley, voicing the opinion of the supreme court of Michigan, in the
case of Powers vs. Marlow (53 Mich., 507), said that (p. 515):
"Children, wherever they go, must be expected to act upon childlike
instincts and impulses; and others who are chargeable with a duty of care and
caution toward them must calculate upon this, and take precautions
accordingly. If they leave exposed to the observation of children anything
which would be tempting to them, and which they in their immature judgment
might naturally suppose they were at liberty to handle or play with, they should
expect that liberty to be taken."
And the same eminent jurist in his treaties on torts, alluding to the doctrines of
implied invitations to visit the premises of another, says:
"In the case of young children, and other persons not fully sui juris, an
implied license might sometimes arise when it would not on behalf of others.
Thus leaving a tempting thing for children to play with exposed, where they
would be likely to gather for that purpose, may be equivalent to an invitation to

them to make use of it; and, perhaps if one were to throw away upon his
premises, near the common way, things tempting to children, the same
implication should arise." (Chap. 10, p. 303.)
The reasoning which led the Supreme Court of the United States to its conclusions
in the cases of Railroad Co., vs. Stout (supra) and Union Pacific Railroad Co. vs.
McDonald (supra) is not less cogent and convincing in this jurisdiction than in that than in
that wherein those cases originated. Children here are actuated by similar childish
instincts and impulses. Drawn by curiosity and impelled by the restless spirit of youth,
boys here as well as there will usually be found wherever the public permitted to
congregate. The movement of machinery, and indeed anything which arouses the
attention of the young and inquiring mind, will draw them to the neighborhood as inevitably
as does the magnet draw the iron which comes within the range of its magnetic influence.
The owners of premises, therefore, whereon things attractive to children are exposed, or
upon which the public are expressively or impliedly permitted to enter to or upon which the
owner knows or ought to know children are likely to roam about for pastime and in play,
"must calculate upon this, and take precautions accordingly." In such cases the owner of
the premises can not be heard to say that because the child has entered upon his
premises without his express permission he is a trespasser to whom the owner owes no
duty or obligation whatever. The owner's failure to take reasonable precautions to prevent
the child form entering premises at a place where he knows or ought to know that children
are accustomed to roam about or to which their childish instincts and impulses are likely to
attract them is at least equivalent to an implied license to enter, and where the child does
not enter under such conditions the owner's failure to make reasonable precaution to
guard the child against the injury from unknown or unseen dangers, placed upon such
premises by the owner, is clearly a breach of duty, a negligent omission, for which he may
and should be held responsible, if the child is actually injured, without other fault on its part
than that it had entered on the premises of a stranger without his express invitation or
permission. To hold otherwise would be expose to all the children in the community to
unknown perils and unnecessary danger at the whim of the owners or occupants of land
upon which they might naturally and reasonably be expected to enter.
This conclusion is founded on reason, justice, and necessary, and neither the
contention that a man has a right to do what he will with his own property of that children
should be kept under the care of the parents or guardian, so as to prevent their entering
on the premises of others is of sufficient weight to put it in doubt. In this jurisdiction as well
as in the United States all private property is acquired and held under the tacit condition
that it shall not be so used as to injure the equal rights of others or greatly impair the
public rights and interests of the community (see U.S. vs. Toribio, 1 No. 5060, decided
January 26, 1910), and except as to infants of very tender years it would be absurd and
unreasonable in community organized as is that in which we live to hold that parents or
guardians are guilty of negligence or imprudence in every case wherein they permit
growing boys and girls to leave the parental roof unattended, even if in the event of
accident to the child the negligence of the parents could in any event be imputed to the
child so as to deprive it of a right to recover in such cases a point which we neither
discuss not decide.
But while we hold that the entry of the plaintiff upon defendant's property without
defendant's express invitation or permission would not have relieved defendant from

responsibility for injuries incurred there by the plaintiff, without other fault on his part, if
such injury were attributable to the negligence of the defendant, we are of opinion that
under all the circumstances of this case the negligence of the defendant in leaving the
caps exposed on its premises was not the proximate cause of the injury received by the
plaintiff, which therefore was not, properly speaking, "attributable to the negligence of the
defendant," and, on the other hand, we are satisfied that plaintiff's action in cutting open
the detonating cap and putting a match to its contents was the proximate cause of the
explosion and of the resultant injuries inflicted upon the plaintiff, and that the defendant,
therefore, is not civilly responsible for the injuries thus incurred.
Plaintiff contends, upon the authority of the Turntable and Torpedo cases, that
because of plaintiff's youth the intervention of his action between the negligent act of the
defendant leaving the caps exposed on its premises and the explosion which resulted in
his injury should not be held to have contributed in any wise to the accident; and it is
because we can not agree with this proposition, although we accept the doctrine on the
Turntable and Torpedo cases, that we have thought of proper to discuss and to consider
that doctrine at length in this decision. As was said in case of Railroad Co. vs. Stout
(supra), "While it is the general rule in regard to an adult that entitle him to recover
damages for an injury resulting from the fault or negligence of another he must himself
have been free from fault, such is not the rule in regard to an infant of tender years. The
care and caution required of a child is according to his maturity and capacity only, and this
is to be determined in each case by the circumstance of the case." As we think we have
shown, under the reasoning on which rests the doctrine of the Turntable and Torpedo
cases, no fault which would relieve defendant of responsibility for injuries resulting from
negligence can be attributed to the plaintiff, a well-grown boy of 15 years of age, because
of his entry upon defendant's uninclosed premises without express permission or
invitation; but it is a wholly different question whether such a youth can be said to have
been free from fault when he willfully and deliberately cut upon the detonating cap, and
placed a match to the contents, knowing, as he undoubtedly did, that his action would
result in an explosion. On this point, which must be determined by "the particular
circumstances of this case," the doctrine laid down in the Turntable and Torpedo cases
lends us no direct aid, although it is worthy of observation that in all of the "Torpedo" and
analogous cases to which our attention has been directed, the record discloses that the
plaintiffs, is whose favor judgments have been affirmed, were of such tender years that
they were held not to have the capacity to understand the nature or character of the
explosive instruments which fell into their hands.

In the case at bar, plaintiff at the time of the accident was wellgrown youth of 15,
more mature both mentally and physically than the average boy of his age; he had been to
sea as a cabin boy; was able to earn P2.50 a day as a mechanical draftsman thirty days
after the injury was incurred; and the record discloses throughout that he was
exceptionally well qualified to take care. The evidence of record leaves no room for doubt
that, despite his denials on the witness stands, he well knew the explosive character of the
cap with which he was amusing himself. The series of experiments made by him in his
attempt to produce an explosion, as described by the little girl who was present, admit of
no other explanation. His attempt to discharge the cap by the use of electricity, followed by
his efforts to explode it with a stone or a hammer, and the final success of his endeavors

brought about by the applications of a match to the contents of the cap, show clearly that
he knew what he was about. Nor can there be any reasonable doubt that he had reason to
anticipate that the explosion might be dangerous, in view of the fact that the little girl, 9
years of age, who was with him at the time when he put the match to the contents of the
cap, became frightened and ran away.
True, he may not have known and probably did not know the precise nature of the
explosion which might be expected from the ignition of the contents of the cap, and of
course he did not anticipate the resultant injuries which he incurred; but he well knew that
a more or less dangerous explosion might be expected from his act, and yet he willfully,
recklessly, and knowingly produced the explosion. It would be going far to say that
"according to his maturity and capacity" he exercised such "care and caution" as might
reasonably be required of him, or that the defendant or anyone else should be held civilly
responsible for injuries incurred by him under such circumstances.
The law fixed no arbitrary age at which a minor can be said to have the necessary
capacity to understand and appreciate the nature and consequences of his own acts, so
as to make it negligence on his part to fail to exercise with due care an precaution in the
commission of such acts; and indeed it would be impracticable and perhaps impossible so
to do, for in the very nature of things the question of negligence necessarily depends on
the ability of the minor to understand the character of his own acts and their
consequences; and the age at which a minor can be said to have such ability will
necessarily vary in accordance with the varying nature of the infinite variety of acts which
may be done by him. But some idea of the presumed capacity of infants under the laws in
force in these Islands may be gathered from an examination of the varying ages fixed by
our laws at which minors are conclusively presumed to be capable to exercising certain
rights and incurring certain responsibilities, through it can not be said that these provisions
of law are of much practical assistance in cases such as that at bar, except so far as they
illustrate the rule that the capacity of a minor to become responsible for his own acts
varies with the varying circumstances of each case. Under the provisions of the Penal
code a minor over fifteen years of age is presumed to be capable of committing a crime
and is to be held criminally responsible therefore, although the fact that he is less than
eighteen years of age will be taken into consideration as an extenuating circumstance
(Penal code, arts, 8 and 9). At 10 years of age a child may, under certain circumstances,
choose which parent it prefers to live with (Code of Civil Procedure, sec. 771). At 14 it may
petition for the appointment of a guardian (Id., sec. 551), and may consent or refuse to be
adopted (Id., sec. 765). And males of 14 and females of 12 are capable of contracting of
legal marriage (Civil Code, art. 83; G.O., No., 68, sec. 1).
We are satisfied that the plaintiff in this case had sufficient capacity and
understanding to be sensible to the danger to which he exposed himself when he put the
match to the contents of the cap; that he was sui juris in the sense that his age and his
experience qualified him to understand and appreciate the necessity for the exercise of
that degree of caution which would have avoided the injury which resulted from his own
deliberate act; and that the injury incurred by him must be held to have been the direct and
immediate result of his own willful and reckless act, so that while it may be true that these
injuries would not have been incurred but for the negligent act of the defendant in leaving
the caps exposed on its premises, nevertheless plaintiff's own act was the proximate and
principal cause of the accident which inflicted the injury.

The rule of the Roman law was: Quod quis ex culpa sua damnum sentit, non
intelligitur damnum sentire. (Digest, book 50, tit. 17, rule 203.)
The partidas contain the following provisions:
"The just thing is that a man should suffer the damage which comes to
him through his own fault, and that he can not demand reparation therefore
from another." (Law 25, tit. 5 Partida 3.)
"And they even said that when a man received an injury through his
own negligence he should blame himself for it." (Rule 22, tit. 34 Partida 7.)
"According to ancient sages, when a man received an injury through his
own acts the grievance should be against himself and not against another."
(Law 2, tit. 7 Partida 2.)
And while there does not appear to be anything in the Civil Code which expressly
lays down the law touching contributory negligence in this jurisdiction, nevertheless, the
interpretation placed upon its provisions by the supreme court of Spain, and by this court
in the case of Rakes vs. Atlantic Gulf and Pacific Co., (7 Phil. Rep., 359), clearly deny to
the plaintiff in the case at bar the right to recover damages from the defendant, in whole or
in part, for the injuries sustained by him.
The judgment of the supreme court of Spain of the 7th of March, 1902 (93
Jurispredencia Civil, 391), is directly in point. In that case the court said:
"According to the doctrine expressed in article 1902 of the Civil Code,
fault or negligence is a source of obligation when between such negligence
and the injury there exists, the relation of cause and effect: but if the injury
produced should not be the result of acts or omissions of a third party, the
latter has no obligation to repair the same, although such acts or omissions
were imprudent or unlawful, and much less when it is shown that the
immediate cause of the injury was the negligence of the injured party himself."
The same court, in its decision of June 12, 1900, said that "the existence of the
alleged fault or negligence is not sufficient without proof that it, and no other cause, gave
rise to the damage."
See also judgment of October 21, 1903.
To similar effect Scaevola, the learned Spanish writer, writing under that title in his
Jurisprudencia del Codigo Civil (1902 Anuario, p. 455), commenting on the decision of
March 7, 1902, says that "in accordance with the doctrine expressed by article 1902 of the
Civil Code, fault or negligence gives rise to an obligation when between it and the damage
there exists the relation of cause and effect' but if the damage caused does not arise from
acts or omissions of a third person, there is no obligation to make good upon the latter,
even though such acts or omissions be imprudent or illegal, and much less so when it is
shown that the immediate cause of the damage has been the recklessness the injured
party himself."

And again
"In accordance with the fundamental principle of proof, that the burden
thereof is upon the plaintiff, it is apparent that it is the duty of him who shall
claim damages to establish their existence. The decisions of April 9, 1896, and
March 18, July 6, and September 27, 1898, have especially supported the
principle, the first setting forth in detail the necessary points of the proof, which
are two: An act or omission on the part of the person who is to be charged with
the liability, and the production of the damage by said act or omission.
"This includes, by inference, the establishment of a relation of cause or
effect between the act or the omission and the damage; the latter must be
direct result of one of the first two. As the decision of March 22, 1881, said, it is
necessary that damages result immediately and directly from an act performed
culpably and wrongfully' 'necessarily presupposing a legal ground for
imputability.'" (Decision of October 29, 1877.)
"Negligence is not presumed, but be proven by him who alleges it."
(Scaevola, Jurisprudencia del Codigo Civil, vol. 6, pp. 551, 552.)
(Cf. decisions of supreme court of Spain of June 12, 1900. and June 23, 1900.)
Finally, we think the doctrine is in this jurisdiction applicable to the case at bar was
definitely settled in this court in the maturely considered case of Rakes vs. Atlantic, Gulf
and Pacific Co. (supra), wherein we held that while "There are many cases (personal
injury cases) in the supreme court of Spain in which the defendant was exonerated." on
the ground that "the negligence of the plaintiff was immediate cause of the casualty"
(decisions of the 15th of January, the 19th of February, and the 7th of March, 1902, stated
in Alcubilla's Index of that year); none of the cases decided by the supreme court of Spain
"define the effect to be given the negligence of a plaintiff which contributed to his injury as
one of its causes, though not the principal one, and we left to seek the theory of the civil
law in the law in the practice of another countries;" and in such cases we declared the law
in this jurisdiction to require the application of 'the principle of proportional damages," but
expressly and definitely denied the right of recovery when the acts of the injured party
were the immediate causes of the accident.
The doctrine as laid down in that case as follows:

"Difficulty seems to be apprehended in deciding which acts of the

injured party shall be considered immediate causes of the accident. The test is
simple. Distinction must be made between the accident and the injury,
between the event itself, without which there could have been no accident,
and those acts of the victim not entering into it, independence of it, but
contributing to his own proper hurt. For instance, the cause of the accident
under review was the displacement of the crosspiece or the failure to replace
it. This produced the event giving occasion for damages that is, sinking of
the track and the sliding of the iron rails. To this event, the act of the plaintiff in

walking by the side of the car did not contribute, although it was an element of
the damage which came to himself. Had the crosspiece been out of place
wholly or partly through this act or omission of duty, that would have been one
of the determining causes of the event or accident, for which he would have
been responsible. Where he contributes to the principal occurrence, as one of
its determining factors, he can not recover. Where, in conjunction with the
occurrence, he contributes only to his own injury, he may recover the amount
that the defendant responsible for the event should pay for such injury, less a
sum deemed a suitable equivalent for his own imprudence."
We think it is quite clear that under the doctrine thus stated, the immediate cause of
the explosion , the accident which resulted in plaintiff's injury, was his own act of putting a
match to the contents of the cap, and that having "contributed to the principal occurrence,
as one of its determining factors, he can not recover."
We have not deemed it necessary to examine the effect of plaintiff's action in
picking up upon defendant's premises the detonating caps, the property of the defendant,
and carrying them sway to the home of his friend, as interrupting the relation of cause and
effect between the negligent act or omission of the defendant in leaving the caps exposed
on its premises and the injuries inflicted upon the plaintiff by the explosion of one of these
caps. Under the doctrine of the Torpedo cases, such action on the part of an infant of very
tender years would have no effect in relieving defendant of responsibility, but whether in
view of the well known facts admitted in defendant's brief that "boys are snappers-up of
unconsidered trifles," a youth of the age and maturity of plaintiff should be deemed without
fault in picking up the caps in question under all the circumstances of this case, we neither
discuss not decide.
Twenty days after the date of this decision let judgment be entered reversing the
judgment of the court below, without costs to either party in this instance, and ten days
thereafter let the record be returned to the court wherein it originated, where judgment will
be entered in favor of the defendant for the costs in first instance and the complaint
dismissed without day. So ordered.
Arellano, C.J., Torres and Moreland, JJ., concur.
Johnson, J., concurs in the result.

[G.R. No. 129792. December 21, 1999]

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA
PANELO, petitioners, vs. HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and
CRISELDA R. AGUILAR, respondents.
DECISION
DAVIDE, JR., C.J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek
the reversal of the 17 June 1996 decisioni[1] of the Court of Appeals in C.A. G.R. No. CV
37937 and the resolutionii[2]denying their motion for reconsideration. The assailed decision
set aside the 15 January 1992 judgment of the Regional Trial Court (RTC), Makati City,
Branch 60 in Civil Case No. 7119 and ordered petitioners to pay damages and attorneys fees
to private respondents Conrado and Criselda (CRISELDA) Aguilar.
Petitioner Jarco Marketing Corporation is the owner of Syvels Department Store, Makati City.
Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the stores branch manager,
operations manager, and supervisor, respectively. Private respondents are spouses and the
parents of Zhieneth Aguilar (ZHIENETH).
In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvels
Department Store, Makati City. CRISELDA was signing her credit card slip at the payment
and verification counter when she felt a sudden gust of wind and heard a loud thud. She
looked behind her. She then beheld her daughter ZHIENETH on the floor, her young body
pinned by the bulk of the stores gift-wrapping counter/structure. ZHIENETH was crying and
screaming for help. Although shocked, CRISELDA was quick to ask the assistance of the
people around in lifting the counter and retrieving ZHIENETH from the floor.iii[3]
ZHIENETH was quickly rushed to the Makati Medical Center where she was operated on.
The next day ZHIENETH lost her speech and thereafter communicated with CRISELDA by
writing on a magic slate. The injuries she sustained took their toil on her young body. She
died fourteen (14) days after the accident or on 22 May 1983, on the hospital bed. She was
six years old.iv[4]
The cause of her death was attributed to the injuries she sustained. The provisional medical
certificatev[5] issued by ZHIENETHs attending doctor described the extent of her injuries:
Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private respondents demanded upon petitioners the
reimbursement of the hospitalization, medical bills and wake and funeral expensesvi[6] which
they had incurred. Petitioners refused to pay. Consequently, private respondents filed a

complaint for damages, docketed as Civil Case No. 7119 wherein they sought the payment of
P157,522.86 for actual damages, P300,000 for moral damages, P20,000 for attorneys fees
and an unspecified amount for loss of income and exemplary damages.
In their answer with counterclaim, petitioners denied any liability for the injuries and
consequent death of ZHIENETH. They claimed that CRISELDA was negligent in exercising
care and diligence over her daughter by allowing her to freely roam around in a store filled
with glassware and appliances. ZHIENETH too, was guilty of contributory negligence since
she climbed the counter, triggering its eventual collapse on her. Petitioners also emphasized
that the counter was made of sturdy wood with a strong support; it never fell nor collapsed for
the past fifteen years since its construction.
Additionally, petitioner Jarco Marketing Corporation maintained that it observed the diligence
of a good father of a family in the selection, supervision and control of its employees. The
other petitioners likewise raised due care and diligence in the performance of their duties and
countered that the complaint was malicious for which they suffered besmirched reputation
and mental anguish. They sought the dismissal of the complaint and an award of moral and
exemplary damages and attorneys fees in their favor.
In its decisioni[7] the trial court dismissed the complaint and counterclaim after finding that the
preponderance of the evidence favored petitioners. It ruled that the proximate cause of the
fall of the counter on ZHIENETH was her act of clinging to it. It believed petitioners witnesses
who testified that ZHIENETH clung to the counter, afterwhich the structure and the girl fell
with the structure falling on top of her, pinning her stomach. In contrast, none of private
respondents witnesses testified on how the counter fell. The trial court also held that
CRISELDAs negligence contributed to ZHIENETHs accident.
In absolving petitioners from any liability, the trial court reasoned that the counter was situated
at the end or corner of the 2nd floor as a precautionary measure hence, it could not be
considered as an attractive nuisance.viii[8] The counter was higher than ZHIENETH. It has
been in existence for fifteen years. Its structure was safe and well-balanced. ZHIENETH,
therefore, had no business climbing on and clinging to it.
Private respondents appealed the decision, attributing as errors of the trial court its findings
that: (1) the proximate cause of the fall of the counter was ZHIENETHs misbehavior; (2)
CRISELDA was negligent in her care of ZHIENETH; (3) petitioners were not negligent in the
maintenance of the counter; and (4) petitioners were not liable for the death of ZHIENETH.
Further, private respondents asserted that ZHIENETH should be entitled to the conclusive
presumption that a child below nine (9) years is incapable of contributory negligence. And
even if ZHIENETH, at six (6) years old, was already capable of contributory negligence, still it
was physically impossible for her to have propped herself on the counter. She had a small
frame (four feet high and seventy pounds) and the counter was much higher and heavier than
she was. Also, the testimony of one of the stores former employees, Gerardo Gonzales, who
accompanied ZHIENETH when she was brought to the emergency room of the Makati
Medical Center belied petitioners theory that ZHIENETH climbed the counter. Gonzales
claimed that when ZHIENETH was asked by the doctor what she did, ZHIENETH replied,
[N]othing, I did not come near the counter and the counter just fell on me.ix[9] Accordingly,
Gonzales testimony on ZHIENETHs spontaneous declaration should not only be considered

as part of res gestae but also accorded credit.

Moreover, negligence could not be imputed to CRISELDA for it was reasonable for her to
have let go of ZHIENETH at the precise moment that she was signing the credit card slip.
Finally, private respondents vigorously maintained that the proximate cause of ZHIENETHs
death, was petitioners negligence in failing to institute measures to have the counter
permanently nailed.
On the other hand, petitioners argued that private respondents raised purely factual issues
which could no longer be disturbed. They explained that ZHIENETHs death while
unfortunate and tragic, was an accident for which neither CRISELDA nor even ZHIENETH
could entirely be held faultless and blameless. Further, petitioners adverted to the trial courts
rejection of Gonzales testimony as unworthy of credence.
As to private respondents claim that the counter should have been nailed to the ground,
petitioners justified that it was not necessary. The counter had been in existence for several
years without any prior accident and was deliberately placed at a corner to avoid such
accidents. Truth to tell, they acted without fault or negligence for they had exercised due
diligence on the matter. In fact, the criminal casex[10] for homicide through simple negligence
filed by private respondents against the individual petitioners was dismissed; a verdict of
acquittal was rendered in their favor.
The Court of Appeals, however, decided in favor of private respondents and reversed the
appealed judgment. It found that petitioners were negligent in maintaining a structurally
dangerous counter. The counter was shaped like an inverted Lxi[11] with a top wider than
the base. It was top heavy and the weight of the upper portion was neither evenly distributed
nor supported by its narrow base. Thus, the counter was defective, unstable and dangerous;
a downward pressure on the overhanging portion or a push from the front could cause the
counter to fall. Two former employees of petitioners had already previously brought to the
attention of the management the danger the counter could cause. But the latter ignored their
concern. The Court of Appeals faulted the petitioners for this omission, and concluded that
the incident that befell ZHIENETH could have been avoided had petitioners repaired the
defective counter. It was inconsequential that the counter had been in use for some time
without a prior incident.
The Court of Appeals declared that ZHIENETH, who was below seven (7) years old at the
time of the incident, was absolutely incapable of negligence or other tort. It reasoned that
since a child under nine (9) years could not be held liable even for an intentional wrong, then
the six-year old ZHIENETH could not be made to account for a mere mischief or reckless act.
It also absolved CRISELDA of any negligence, finding nothing wrong or out of the ordinary in
momentarily allowing ZHIENETH to walk while she signed the document at the nearby
counter.
The Court of Appeals also rejected the testimonies of the witnesses of petitioners. It found
them biased and prejudiced. It instead gave credit to the testimony of disinterested witness
Gonzales. The Court of Appeals then awarded P99,420.86 as actual damages, the amount
representing the hospitalization expenses incurred by private respondents as evidenced by
the hospital's statement of account.xii[12] It denied an award for funeral expenses for lack of
proof to substantiate the same. Instead, a compensatory damage of P50,000 was awarded

for the death of ZHIENETH.

We quote the dispositive portion of the assailed decision,[13] thus:
WHEREFORE, premises considered, the judgment of the lower court is SET ASIDE and
another one is entered against [petitioners], ordering them to pay jointly and severally unto
[private respondents] the following:
1. P50,000.00 by way of compensatory damages for the death of Zhieneth Aguilar, with legal
interest (6% p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for hospitalization expenses incurred; with legal interest
(6% p.a.) from 27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorneys fees; and
5. Costs.
Private respondents sought a reconsideration of the decision but the same was denied in the
Court of Appeals resolutionxiv[14] of 16 July 1997.
Petitioners now seek the reversal of the Court of Appeals decision and the reinstatement of
the judgment of the trial court. Petitioners primarily argue that the Court of Appeals erred in
disregarding the factual findings and conclusions of the trial court. They stress that since the
action was based on tort, any finding of negligence on the part of the private respondents
would necessarily negate their claim for damages, where said negligence was the proximate
cause of the injury sustained. The injury in the instant case was the death of ZHIENETH.
The proximate cause was ZHIENETHs act of clinging to the counter. This act in turn caused
the counter to fall on her. This and CRISELDAs contributory negligence, through her failure
to provide the proper care and attention to her child while inside the store, nullified private
respondents claim for damages. It is also for these reasons that parents are made
accountable for the damage or injury inflicted on others by their minor children. Under these
circumstances, petitioners could not be held responsible for the accident that befell
ZHIENETH.
Petitioners also assail the credibility of Gonzales who was already separated from Syvels at
the time he testified; hence, his testimony might have been tarnished by ill-feelings against
them.
For their part, private respondents principally reiterated their arguments that neither
ZHIENETH nor CRISELDA was negligent at any time while inside the store; the findings and
conclusions of the Court of Appeals are substantiated by the evidence on record; the
testimony of Gonzales, who heard ZHIENETH comment on the incident while she was in the
hospitals emergency room should receive credence; and finally, ZHIENETHs part of the res
gestae declaration that she did nothing to cause the heavy structure to fall on her should be
considered as the correct version of the gruesome events.
We deny the petition.
The two issues to be resolved are: (1) whether the death of ZHIENETH was accidental or
attributable to negligence; and (2) in case of a finding of negligence, whether the same was
attributable to private respondents for maintaining a defective counter or to CRISELDA and

ZHIENETH for failing to exercise due and reasonable care while inside the store premises.
An accident pertains to an unforeseen event in which no fault or negligence attaches to the
defendant.xv[15] It is a fortuitous circumstance, event or happening; an event happening
without any human agency, or if happening wholly or partly through human agency, an event
which under the circumstances is unusual or unexpected by the person to whom it
happens.xvi[16]
On the other hand, negligence is the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs, would
do, or the doing of something which a prudent and reasonable man would not do.xvii[17]
Negligence is the failure to observe, for the protection of the interest of another person, that
degree of care, precaution and vigilance which the circumstances justly demand, whereby
such other person suffers injury.xviii[18]
Accident and negligence are intrinsically contradictory; one cannot exist with the other.
Accident occurs when the person concerned is exercising ordinary care, which is not caused
by fault of any person and which could not have been prevented by any means suggested by
common prudence.xix[19]
The test in determining the existence of negligence is enunciated in the landmark case of
Picart v. Smith,xx[20] thus: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence.xxi[21]
We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETHs death
could only be attributed to negligence.
We quote the testimony of Gerardo Gonzales who was at the scene of the incident and
accompanied CRISELDA and ZHIENETH to the hospital:
Q While at the Makati Medical Center, did you hear or notice anything while the child was
being treated?
A At the emergency room we were all surrounding the child. And when the doctor asked
the child what did you do, the child said nothing, I did not come near the counter and the
counter just fell on me.
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate wala po, hindi po ako lumapit doon. Basta bumagsak.xxii[22]
This testimony of Gonzales pertaining to ZHIENETHs statement formed (and should be
admitted as) part of the res gestae under Section 42, Rule 130 of the Rules of Court, thus:
Part of res gestae. Statements made by a person while a startling occurrence is taking place
or immediately prior or subsequent thereto with respect to the circumstances thereof, may be
given in evidence as part of the res gestae. So, also, statements accompanying an equivocal
act material to the issue, and giving it a legal significance, may be received as part of the res
gestae.
It is axiomatic that matters relating to declarations of pain or suffering and statements made to

a physician are generally considered declarations and admissions.xxiii[23] All that is required
for their admissibility as part of the res gestae is that they be made or uttered under the
influence of a startling event before the declarant had the time to think and concoct a
falsehood as witnessed by the person who testified in court. Under the circumstances thus
described, it is unthinkable for ZHIENETH, a child of such tender age and in extreme pain, to
have lied to a doctor whom she trusted with her life. We therefore accord credence to
Gonzales testimony on the matter, i.e., ZHIENETH performed no act that facilitated her tragic
death. Sadly, petitioners did, through their negligence or omission to secure or make stable
the counters base.
Gonzales earlier testimony on petitioners insistence to keep and maintain the structurally
unstable gift-wrapping counter proved their negligence, thus:
Q When you assumed the position as gift wrapper at the second floor, will you please
describe the gift wrapping counter, were you able to examine?
A Because every morning before I start working I used to clean that counter and since it is
not nailed and it was only standing on the floor, it was shaky.
xxx
Q Will you please describe the counter at 5:00 oclock [sic] in the afternoon on [sic] May 9
1983?
A At that hour on May 9, 1983, that counter was standing beside the verification counter.
And since the top of it was heavy and considering that it was not nailed, it can collapse at
anytime, since the top is heavy.
xxx
Q And what did you do?
A I informed Mr. Maat about that counter which is [sic] shaky and since Mr. Maat is fond of
putting display decorations on tables, he even told me that I would put some decorations. But
since I told him that it not [sic] nailed and it is shaky he told me better inform also the
company about it. And since the company did not do anything about the counter, so I also did
not do anything about the counter.xxiv[24] [Emphasis supplied]
Ramon Guevarra, another former employee, corroborated the testimony of Gonzales, thus:
Q Will you please described [sic] to the honorable Court the counter where you were
assigned in January 1983?
xxx
A That counter assigned to me was when my supervisor ordered me to carry that counter to
another place. I told him that the counter needs nailing and it has to be nailed because it
might cause injury or accident to another since it was shaky.
Q When that gift wrapping counter was transferred at the second floor on February 12,
1983, will you please describe that to the honorable Court?
A I told her that the counter wrapper [sic] is really in good [sic] condition; it was shaky. I told
her that we had to nail it.
Q When you said she, to whom are you referring to [sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when you told her that the counter was shaky?
A She told me Why do you have to teach me. You are only my subordinate and you are to
teach me? And she even got angry at me when I told her that.
xxx
Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo or any employee
of the management do to that (sic)
xxx

Witness:
None, sir. They never nailed the counter. They only nailed the counter after the accident
happened.xxv[25] [Emphasis supplied]
Without doubt, petitioner Panelo and another store supervisor were personally informed of the
danger posed by the unstable counter. Yet, neither initiated any concrete action to remedy
the situation nor ensure the safety of the stores employees and patrons as a reasonable and
ordinary prudent man would have done. Thus, as confronted by the situation petitioners
miserably failed to discharge the due diligence required of a good father of a family.
On the issue of the credibility of Gonzales and Guevarra, petitioners failed to establish that
the formers testimonies were biased and tainted with partiality. Therefore, the allegation that
Gonzales and Guevarras testimonies were blemished by ill feelings against petitioners
since they (Gonzales and Guevarra) were already separated from the company at the time
their testimonies were offered in court was but mere speculation and deserved scant
consideration.
It is settled that when the issue concerns the credibility of witnesses, the appellate courts will
not as a general rule disturb the findings of the trial court, which is in a better position to
determine the same. The trial court has the distinct advantage of actually hearing the
testimony of and observing the deportment of the witnesses.xxvi[26] However, the rule admits
of exceptions such as when its evaluation was reached arbitrarily or it overlooked or failed to
appreciate some facts or circumstances of weight and substance which could affect the result
of the case.xxvii[27] In the instant case, petitioners failed to bring their claim within the
exception.
Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that favors
children below nine (9) years old in that they are incapable of contributory negligence. In his
book,xxviii[28] former Judge Cezar S. Sangco stated:
In our jurisdiction, a person under nine years of age is conclusively presumed to have acted
without discernment, and is, on that account, exempt from criminal liability. The same
presumption and a like exemption from criminal liability obtains in a case of a person over
nine and under fifteen years of age, unless it is shown that he has acted with discernment.
Since negligence may be a felony and a quasi-delict and required discernment as a condition
of liability, either criminal or civil, a child under nine years of age is, by analogy, conclusively
presumed to be incapable of negligence; and that the presumption of lack of discernment or
incapacity for negligence in the case of a child over nine but under fifteen years of age is a
rebuttable one, under our law. The rule, therefore, is that a child under nine years of age
must be conclusively presumed incapable of contributory negligence as a matter of law.
[Emphasis supplied]
Even if we attribute contributory negligence to ZHIENETH and assume that she climbed over
the counter, no injury should have occurred if we accept petitioners theory that the counter
was stable and sturdy. For if that was the truth, a frail six-year old could not have caused the
counter to collapse. The physical analysis of the counter by both the trial court and Court of
Appeals and a scrutiny of the evidencexxix[29]on record reveal otherwise, i.e., it was not
durable after all. Shaped like an inverted L, the counter was heavy, huge, and its top laden
with formica. It protruded towards the customer waiting area and its base was not

secured.xxx[30]
CRISELDA too, should be absolved from any contributory negligence. Initially, ZHIENETH
held on to CRISELDAs waist, later to the latters hand.xxxi[31] CRISELDA momentarily
released the childs hand from her clutch when she signed her credit card slip. At this precise
moment, it was reasonable and usual for CRISELDA to let go of her child. Further, at the time
ZHIENETH was pinned down by the counter, she was just a foot away from her mother; and
the gift-wrapping counter was just four meters away from CRISELDA.xxxii[32] The time and
distance were both significant. ZHIENETH was near her mother and did not loiter as
petitioners would want to impress upon us. She even admitted to the doctor who treated her
at the hospital that she did not do anything; the counter just fell on her.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the challenged
decision of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is hereby
AFFIRMED.
Costs against petitioners.
SO ORDERED

G.R. No. L-35283

November 5, 1932

JULIAN DEL ROSARIO, plaintiff-appellant,

vs.
MANILA ELECTRIC COMPANY, defendant-appellee.
Vicente Sotto for appellant.
Ross, Lawrence & Selph and Antonio T. Carrascoso, Jr. for appellee.
STREET, J.:
This action was instituted by Julian del Rosario for the purpose of recovering damages
from the Manila Electric Company for the death of his son, Alberto del Rosario, resulting from
a shock from a wire used by the defendant for the transmission of electricity. The accident
occurred on Dimas-Alang Street, in the municipality of Caloocan, Province of Rizal. Damages
are claimed in the complaint in the amount of P30,000. Upon hearing the cause the trial court
absolved the defendant, and the plaintiff appealed.
Shortly after 2 o'clock on the afternoon of August 4, 1930, trouble developed in a wire
used by the defendant on Dimas-Alang Street for the purpose of conducting electricity used in
lighting the City of Manila and its suburbs. Jose Noguera, who had charge of a tienda nearby,
first noticed that the wire was burning and its connections smoking. In a short while the wire
parted and one of the ends of the wire fell to the ground among some shrubbery close to the
way. As soon as Noguera took cognizance of the trouble, he stepped into a garage which was
located nearby and asked Jose Soco, the timekeeper, to telephone the Malabon station of the
Manila Electric Company that an electrical wire was burning at that place. Soco transmitted
the message at 2.25 p.m. and received answer from the station to the effect that they would
send an inspector. From the testimony of the two witnesses mentioned we are justified in the
conclusion that information to the effect that the electric wire at the point mentioned had
developed trouble was received by the company's servant at the time stated. At the time that
message was sent the wire had not yet parted, but from the testimony of Demetrio Bingao,
one of the witnesses for the defense, it is clear that the end of the wire was on the ground
shortly after 3 p.m.
At 4 p. m. the neighborhood school was dismissed and the children went home. Among
these was Alberto del Rosario, of the age of 9 years, who was a few paces ahead of two other
boys, all members of the second grade in the public school. These other two boys were Jose
Salvador, of the age of 8, and Saturnino Endrina, of the age of 10. As the three neared the
place where the wire was down, Saturnino made a motion as if it touch it. His companion,
Jose Salvador, happened to be the son of an electrician and his father had cautioned him
never to touch a broken electrical wire, as it might have a current. Jose therefore stopped
Saturnino, telling him that the wire might be charged. Saturnino yielded to this admonition and
desisted from his design, but Alberto del Rosario, who was somewhat ahead, said, I have for
some time been in the habit of touching wires ("Yo desde hace tiempo cojo alambres"). Jose
Salvador rejoined that he should into touch wires as they carry a current, but Alberto, no
doubt feeling that he was challenged in the matter, put out his index finger and touch the wire.
He immediately fell face downwards, exclaiming "Ay! madre". The end of the wire remained in
contact with his body which fell near the post. A crowd soon collected, and some one cut the

wire and disengaged the body. Upon being taken to St. Luke's Hospital the child was
pronounced dead.
The wire was an ordinary number 6 triple braid weather proof wire, such as is
commonly used by the defendant company for the purpose of conducting electricity for
lighting. The wire was cased in the usual covering, but this had been burned off for some
distance from the point where the wire parted. The engineer of the company says that it was
customary for the company to make a special inspection of these wires at least once in six
months, and that all of the company's inspectors were required in their daily rounds to keep a
lookout for trouble of this kind. There is nothing in the record indicating any particular cause
for the parting of the wire.lawphil.net
We are of the opinion that the presumption of negligence on the part of the company
from the breakage of this wire has not been overcome, and the defendant is in our opinion
responsible for the accident. Furthermore, when notice was received at the Malabon station at
2.25 p. m., somebody should have been dispatched to the scene of the trouble at once, or
other measures taken to guard the point of danger; but more than an hour and a half passed
before anyone representing the company appeared on the scene, and in the meantime this
child had been claimed as a victim.
It is doubtful whether contributory negligence can properly be imputed to the deceased,
owing to his immature years and the natural curiosity which a child would feel to do something
out of the ordinary, and the mere fact that the deceased ignored the caution of a companion
of the age of 8 years does not, in our opinion, alter the case. But even supposing that
contributory negligence could in some measure be properly imputed to the deceased, a
proposition upon which the members of the court do not all agree, yet such negligence
would not be wholly fatal to the right of action in this case, not having been the determining
cause of the accident. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil., 359.)
With respect to the amount of damages recoverable the majority of the members of this
court are of the opinion that the plaintiff is entitled to recover P250 for expenses incurred in
connection with the death and burial of the boy. For the rest, in accordance with the
precedents cited in Astudillo vs. Manila Electric Company (55 Phil., 427), the majority of the
court are of the opinion that the plaintiff should recover the sum of P1,000 as general
damages for loss of service.
The judgment appealed from is therefore reversed and the plaintiff will recover of the
defendant the sum of P1,250, with costs of both instances. So ordered.
Avancea, C.J., Malcolm, Ostrand, Villa-Real, Vickers, Imperial and Butte, JJ., concur.
Separate Opinions
ABAD SANTOS, J., concurring in part and dissenting in part:
I concur in so far as the defendant company is held liable for the death of the plaintiff's
son, but I dissent in so far as the decision allows the plaintiff to recover of the defendant the
sum of P1,250 only.

It is well settled in this jurisdiction that an action will lie to recover damages for death
caused by the wrongful act. (Manzanares vs. Moreta, 38 Phil., 821.) The question, however,
arises as to the amount of damages recoverable in this case. In criminal cases, this court has
adopted the rule of allowing, as a matter of course, the sum of P1,000 as indemnity to the
heirs of the deceased. Following that rule, the court has allowed the plaintiff in this case to
recover the sum of P1,000 as general damages for loss of service. Whatever may be the
reasons for the rule followed in criminal cases, I am of the opinion that those reasons do not
obtain in fixing the amount of the damages recoverable in the present case. The indemnity
allowed in criminal case is merely incidental to the main object sought, which is the
punishment of the guilty party. In a civil action, the principal object is the recovery of damages
for wrongful death; and where, as in this case, the defendant is a corporation, not subject to
criminal prosecution for the act complained of, the question assumes a vastly different aspect.
Both in reason and in justice, there should be a distinction between the civil liability of an
ordinary person who, by wrongful act, has caused the death of another; and the civil liability of
a corporation, organized primarily for profit, which has caused the death of a person by failure
to exercise due care in the prosecution of its business. The liability of such a corporation for
damages must be regarded as a part of the risks which it assumes when it undertakes to
promote its own business; and just as it is entitled to earn adequate profits from its business,
so it should be made adequately to compensate those who have suffered damage by its
negligence.
Considering the circumstances of this case, I am of the opinion that the plaintiff should
recover the sum of P2,250 as damages.

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 teacherin-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 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.
(Sgd.) MELQUIADES A.
BRAVO
Physician
on Duty. 1
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 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 tenyear 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-12858

THE UNITED STATES, plaintiff-appellee,
vs.
SANTIAGO PINEDA, defendant-appellant.
Francisco and Lualhati for appellant.
Acting Attorney-General Paredes for appellee.
Malcolm, J.:
This appeal requires a construction and an application, for the first time, of the penal
provisions of the Pharmacy Law.
Santiago Pineda, the defendant, is a registered pharmacist of long standing and the owner of
a drug store located at Nos. 442, 444, Calle Santo Cristo, city of Manila. One Feliciano
Santos, having some sick horses, presented a copy of a prescription obtained from Dr.
Richardson, and which on other occasions Santos had given to his horses with good results,
at Pinedas drug store for filling. The prescription read clorato de potasa 120 gramos en
seis papelitos de 20 gramos, para caballo. Under the supervision of Pineda, the prescription
was prepared and returned to Santos in the form of six papers marked, Botica Pineda
Clorato potasa 120.00 en seis papeles para caballo Sto. Cristo 442, 444, Binondo,
Manila. Santos, under the belief that he had purchased the potassium chlorate which he had
asked for, put two of the packages in water the doses to two of his sick horses. Another
package was mixed with water for another horse, but was not used. The two horses, to which
had been given the preparation, died shortly afterwards. Santos, thereupon, took the three
remaining packages to the Bureau of Science for examination. Drs. Pea and Darjuan, of the
Bureau of Science, on analysis found that the packages contained not potassium chlorate but
barium chlorate. At the instance of Santos, the two chemists also went to the drug store of the
defendant and bought potassium chlorate, which when analyzed was found to be barium
chlorate. (Barium chlorate, it should be noted, is a poison; potassium chlorate is not.) Dr.
Buencamino, a veterinarian, performed an autopsy on the horses, and found that death was
the result of poisoning.
Four assignments of error are made. The first is that the lower court erred in admitting the
testimony of the chemist Pena and Darjuan as to their purchase of potassium chlorate at the
drug store of the accused, which substance proved on analysis to be barium chlorate. What
the appellant is here relying on is the maxim res inter alios acta. As a general rule, the
evidence of other offenses committed by a defendant is inadmissible. But appellant has
confused this maxim and this rule with certain exceptions thereto. The effort is not to convict
the accused of a second offense. Nor is there an attempt to draw the mind away from the
point at issue and thus to prejudice defendants case. The purpose is to ascertain defendants
knowledge and intent, and to fix his negligence. If the defendant has on more than one
occasion performed similar acts, accident in good faith is possibly excluded, negligence is
intensified, and fraudulent intent may even be established. It has been said that there is no
better evidence of negligence than the frequency of accidents. (See 10 R. C. L., pp. 938,
940.) The United States Supreme Court has held that:
On the trial of a criminal case the question relates to the tendency of certain testimony to

throw light upon a particular fact, or to explain the conduct of a particular person, there is a
certain discretion on the part of the trial judge which a court of errors will not interfere with,
unless it manifestly appear that the testimony has no legitimate bearing upon the question at
issue, and is calculated to prejudice the accused.
Whenever the necessity arises for a resort to circumstantial evidence, either from the nature
of the inquiry or the failure of direct proof, objections to the testimony on the ground of
irrelevancy are not favored.
Evidence is admissible in a criminal action which tends to show motive, although it tends to
prove the commission of another offense by the defendant. (Moore vs. U. S. [1893], 150 U.
S., 57.)
The second assignment of error is that the lower court erred in finding that the substance sold
by the accused to Feliciano Santos on the 22d of June, 1916, was barium chlorate and not
potassium chlorate. The proof demonstrates the contrary.
The third and fourth assignments of error that the lower court erred in finding that the accused
has been proved guilty beyond a reasonable doubt of an infraction of Act No. 597, section 17,
as amended. The third assignment contains the points we should consider, including, we may
remark, a somewhat difficult question concerning which the briefs have given little assistance.
The Pharmacy Law was first enacted as Act No. 597, was later amended by Act Nos. 1921,
2236, and 2382, and is now found as Chapter 30 of the Administrative Code. The law
provides for a board of pharmaceutical examiners, and the examination and registration of
pharmacists, and finally contains sundry provisions relative to the practice of pharmacy. High
qualification for applicants for the pharmaceutical; examination are established. The program
of subjects for the examination is wide. Responsibility for the quality of drugs is fixed by
section 17 of the Pharmacy Law, as amended (now Administrative Code [1917], section 751),
in the following term:
Every pharmacist shall be responsible for the quality of all drugs, chemicals, medicines, and
poisons he may sell or keep for sale; and it shall be unlawful for any person whomsoever to
manufacture, prepare, sell, or administer any prescription, drug, chemical, medicine, or
poison under any fraudulent name, direction, or pretense, or to adulterate any drug, chemical,
medicine, or poison so used, sold or offered for sale. Any drug, chemical, medicine, or poison
shall be held to be adulterated or deteriorated within the meaning of this section if it differs
from the standard of quality or purity given in the United States Pharmacopoeia.
The same section of the Pharmacy Law also contains the following penal provision: Any
person violating the provisions of this Act shall, upon conviction, be punished by a fine of not
more than five hundred dollar. The Administrative Code, section 2676, changes the penalty
somewhat by providing that:
Any person engaging in the practice of pharmacy in the Philippine Islands contrary to any
provision of the Pharmacy Law or violating any provisions of said law for which no specific
penalty s provided shall, for each offense, be punished by a fine not to exceed two hundred
pesos, or by imprisonment for not more than ninety days, or both, in the discretion of the
court.

These are the provisions of law, pursuant to which prosecution has been initiated and which it
is now incumbent upon us to construe.
Turning to the law, certain points therein as bearing on our present facts must be admitted.
Thus, defendant is a pharmacist. As a pharmacist, he is made responsible for the quality of all
drugs and poisons which he sells. And finally it is provided that it shall be unlawful for him to
sell any drug or poison under any fraudulent name. It is the one word fraudulent which has
given the court trouble. What did the Legislature intend to convey by this restrictive adjective?
Were we to adhere to the technical definition of fraud, which the appellant vigorously insists
upon, it would be difficult, if not impossible, to convict any druggist of a violation of the law.
The prosecution would have to prove to a reasonable degree of certainty that the druggist
made a material representation; that it was false; that when he made it he knew that it was
false or made it recklessly without any knowledge of its truth and as positive assertion; that he
made it with the intention that it should be acted upon by the purchaser; that the purchaser
acted in reliance upon it, and that the purchased thereby suffered injury. Such a construction
with a literal following of well-known principles on the subject of fraud would strip the law of at
least much of its force. It would leave the innocent purchaser of drugs, who must blindly trust
in the good faith and vigilance of the pharmacist, at the mercy of any unscrupulous vendor.
We should not, therefore, without good reason so devitalize the law.
The profession of pharmacy, it has been said again and again, is one demanding care and
skill. The responsibility of the druggist to use care has been variously qualified as ordinary
care, care of a special high degree, the highest degree of care known to practical men.
Even under the first conservative expression, ordinary care with reference to the business of
a druggist, the Supreme Court of Connecticut has said must be held to signify the highest
practicable degree of prudence, thoughtfulness, and vigilance, and most exact and reliable
safeguards consistent with the reasonable conduct of the business, in order that human life
may not be constantly be exposed to the danger flowing from the substitution of deadly
poisons for harmless medicine. (Tombari vs. Connors [1912], 85 Conn., 235. See also
Willson vs. Faxon, Williams and Faxon [1913], 208 N. Y., 108; Knoefel vs. Atkins [1907], 81 N.
E., 600.) The skill required of a druggist is denominated as high or ample. (Peters vs.
Jackson [1902], 50 W. Va., 644; 57 L. R. A., 428.) In other words, the care required must be
commensurate with the danger involved, and the skill employed must correspond with the
superior knowledge of the business which the law demands.
Under one conception, and it should not be forgotten that the case we consider are civil in
nature, the question of negligence or ignorance is irrelevant. The druggist is responsible as an
absolute guarantor of what he sells. In a decision which stands alone, the Supreme Court of
Kentucky said:
As applicable to the owners of drug stores, or persons engaged in vending drugs and
medicines by retail, the legal maxim should be reversed. Instead of caveat emptor, it should
be caveat venditor. That is to say, let him be certain that he does not sell to a purchaser or
send to a patient one drug for another, as arsenic for calomel, cantharides for or mixed with
snakeroot and Peruvian bark, or even one innocent drug, calculated to produce a certain
effect, in place of another sent for and designed to produce a different effect. If he does these
things, he cannot escape civil responsibility, upon the alleged pretext that it was an accidental
or an innocent mistake; that he had been very careful and particular, and had used

extraordinary care and diligence in preparing or compounding the medicines as required, etc.
Such excuses will not avail him. (Fleet vs. Hollenkemp [1852], 56 Am. Dec., 563.)
Under the other conception, in which the proof of negligence is considered as material, where
a customer calls upon a druggist for a harmless remedy, delivery of a poisonous drug by
mistake by the druggist is prima facie negligence, placing the burden on him to show that the
mistake was under the circumstances consistent with the exercise of due care. (See Knoefel
vs. Atkins, supra,) The druggist cannot, for example in filling a prescription calling for
potassium chlorate give instead to the customer barium chlorate, a poison, place this poison
in a package labeled potassium chlorate, and expect to escape responsibility on plea of
mistake. His mistake, under the most favorable aspect for himself, was negligence. So in a
case where a druggist filled an order for calomel tablets with morphine and placed the
morphine in a box labeled calomel, it was said:
It is not suggested, nor can we apprehend that it is in any wise probable, that the act of
furnishing the wrong drug in this case was willful. If it was furnished by the clerk, it was
undoubtedly a mistake and unintentional. However, it was a mistake of the gravest kind, and
of the most disastrous effect. We cannot say that one holding himself out as competent to
handle such drugs, and who does so, having rightful access to them, and relied upon by
those dealing with him to exercise that high degree of caution and care called for by the
peculiarly dangerous nature of this business, can be heard to say that his mistakes by which
he furnishes a customer the most deadly of drugs for those comparatively harmless is not, in
and of itself, gross negligence, and that of an aggravated form. (Smiths Admrx. vs. Middleton
[1902], 56 L. R. A., 484.)
The rule of caveat emptor cannot apply to the purchase and sale of drugs. The vendor and
the vendee do not stand at arms length as in ordinary transactions. An imperative duty is on
the druggist to take precautions to prevent death or serious injury to anyone who relies on his
absolute honesty and peculiar leaning. The nature of drugs is such that examination would
not avail the purchaser anything. It would be idle mockery for the customer to make an
examination of a compound of which he can know nothing. Consequently, it must be that the
druggist warrants that he will deliver the drug called for.
In civil cases, the druggist is made liable for any injury approximately resulting from his
negligence. If B negligently sells poison under the guise of a beneficial drug to A, he is liable
for the injury done to A. In a case, which has repeatedly been termed the leading case on the
subject and which has been followed by the United States Supreme Court, it was said,
Pharmacists or apothecaries who compound or sell medicines, if they carelessly label a
poison as a harmless medicine, and sent it so labeled into the market, are liable to all persons
who, without fault on their part, are injured by using it as such medicine, in consequence of
the false label; the rule being that the liability in such a case arises not out of any contract or
direct privity between the wrong-doer and the person injured, but out of the duty which the law
imposes on him to avoid acts in their nature dangerous to the lives of others. (Nat. Savings
Bank vs. Ward [1879], 100 U. S., 195, following Thomas vs. Winchester [1852], 2 Seld. [N. Y.],
387.) In reality, for the druggist, mistake is negligence and care is no defense. Throughout the
criminal law, run the same rigorous rules. For example, apothecaries or apothecary clerks,
who are guilty of negligence in the sale of medicine when death ensues in consequence,
have been held guilty of manslaughter. (See Tessymonds Case [1828], 1 Lewin, C. C., 169.)

Bearing these general principles in mind, and remembering particularly the care and skill
which are expected of druggist, that in some jurisdictions they are liable even for their mistake
and in others have the burden placed upon them to establish that they were not negligent, it
cannot be that the Philippine Legislature intended to use the word fraudulent in all its
strictness. A plea of accident and mistake cannot excuse for they cannot take place unless
there be wanton and criminal carelessness and neglect. How the misfortune occurs is
unimportant, if under all the circumstances the fact of occurrence is attributed to the druggist
as a legal fault. Rather considering the responsibility for the quality of drugs which the law
imposes on druggists and the position of the word fraudulent in juxtaposition to name, what
is made unlawful is the giving of a false name to the drug asked for. This view is borne out by
Spanish translation, which we are permitted to consult to explain the English text. In the
Spanish supuesto is used, and this word is certainly not synonymous with fraudulent. The
usual badges of fraud, falsify, deception, and injury must be present-but not scienter.
In view of the tremendous an imminent danger to the public from the careless sale of poisons
and medicines, we do not deem it too rigid a rule to hold that the law penalizes any druggist
who shall sell one drug for another whether it be through negligence or mistake.
The judgment of the lower court, sentencing the defendant to pay a fine of P100, with
subsidiary imprisonment in case of insolvency, and to pay the costs, is affirmed with the cost
of this instance against the appellant, without prejudice to any civil action which may be
instituted. So ordered.
Arellano, C.J., Torres, Johnson, Carson, Araullo, and Street, JJ., concur.

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
MERCURY DRUG G.R. No. 165622
CORPORATION
and AURMELA GANZON, Present:
Petitioners,
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
RAUL DE LEON,
Respondent. October 17, 2008
x--------------------------------------------------x
DECISION
REYES, R.T., J.:
IN REALITY, for the druggist, mistake is negligence and care is no defense.[1] Sa isang
parmasyutika, ang pagkakamali ay kapabayaan at ang pagkalinga ay hindi angkop na
dipensa.
This is a petition for review on certiorari[2] of two Resolutions[3] of the Court of Appeals
(CA). The first Resolution granted respondents motion to dismiss while the second denied
petitioners motion for reconsideration.
The Facts
Respondent Raul T. De Leon was the presiding judge of Branch 258, Regional Trial Court
(RTC) in Paraaque.[4] On October 17, 1999, he noticed that his left eye was reddish. He also
had difficulty reading.[5] On the same evening, he met a friend for dinner at the Foohyui
Restaurant. The same friend happened to be a doctor, Dr. Charles Milla, and had just arrived
from abroad.[6]
Aside from exchanging pleasantries, De Leon consulted Dr. Milla about his irritated left eye.

[7] The latter prescribed the drugs Cortisporin Opthalmic and Ceftin to relieve his eye
problems.[8] Before heading to work the following morning, De Leon went to the Betterliving,
Paraaque, branch of Mercury Drug Store Corporation to buy the prescribed medicines.[9] He
showed his prescription to petitioner Aurmela Ganzon, a pharmacist assistant.
[10] Subsequently, he paid for and took the medicine handed over by Ganzon.[11]
At his chambers, De Leon requested his sheriff to assist him in using the eye drops.[12] As
instructed, the sheriff applied 2-3 drops on respondents left eye.[13] Instead of relieving his
irritation, respondent felt searing pain.[14] He immediately rinsed the affected eye with water,
but the pain did not subside.[15] Only then did he discover that he was given the wrong
medicine, Cortisporin Otic Solution.[16]
De Leon returned to the same Mercury Drug branch, with his left eye still red and teary.
[17] When he confronted Ganzon why he was given ear drops, instead of the prescribed eye
drops,[18] she did not apologize and instead brazenly replied that she was unable to fully
read the prescription.[19] In fact, it was her supervisor who apologized andinformed
De Leon that they do not have stock of the needed Cortisporin Opthalmic.[20]
De Leon wrote Mercury Drug, through its president, Ms. Vivian K. Askuna, about the days
incident.[21] It did not merit any response.[22] Instead, two sales persons went to his office
and informed him that their supervisor was busy with other matters.[23] Having been denied
his simple desire for a written apology and explanation,[24] De Leon filed a complaint for
damages against Mercury Drug.[25]
Mercury Drug denied that it was negligent and therefore liable for damages.[26] It pointed out
that the proximate cause of De Leons unfortunate experience was his own negligence.[27] He
should have first read and checked to see if he had the right eye solution before he used any
on his eye.[28] He could have also requested his sheriff to do the same before the latter
applied the medicine on such a delicate part of his body.[29]
Also, Mercury Drug explained that there is no available medicine known as Cortisporin

Opthalmic in the Philippine market.[30] Furthermore, what was written on the piece of paper
De Leon presented to Ganzon was Cortisporin Solution.[31] Accordingly, she gave him the
only available Cortisporin Solution in the market.
Moreover, even the piece of paper De Leon presented upon buying the medicine can not be
considered as proper prescription.[32] It lacked the required information concerning the
attending doctors name and license number.[33] According to Ganzon, she entertained
De Leons purchase request only because he was a regular customer of their branch.[34]
RTC Disposition
On April 30, 2003, the RTC rendered judgment in favor of respondent, the dispositive portion
of which reads:
WHEREFORE, the court finds for the plaintiff.
For pecuniary loss suffered, Mercury Drug Store is to pay HUNDRED FIFTYTHREE PESOS TWENTY- CENTAVOS (Php 153.25), the value of the
medicine.
As moral damages defendants is (sic) ordered to pay HUNDRED THOUSAND
PESOS (Php 100,000.00).
To serve as a warning to those in the field of dispensing medicinal drugs
discretion of the highest degree is expected of them, Mercury Drug Store and
defendant Aurmila (sic) Ganzon are ordered to pay plaintiff the amount of
THREE HUNDRED THOUSAND PESOS (Php 300,000.00) as exemplary
damages.
Due to defendants callous reaction to the mistake done by their employee which
forced plaintiff to litigate, Defendant (sic) Mercury Drug Store is to pay plaintiff
attorneys fees ofP50,000.00 plus litigation expenses.
SO ORDERED.[35]
In ruling in favor of De Leon, the RTC ratiocinated:
The proximate cause of the ill fate of plaintiff was defendant Aurmila (sic)
Ganzons negligent exercise of said discretion. She gave a prescription drug to a
customer who did not have the proper form of prescription, she did not take a
good look at said prescription, she merely presumed plaintiff was looking for
Cortisporin Otic Solution because it was the only one available in the market
and she further presumed that by merely putting the drug by the counter
wherein plaintiff looked at it, paid and took the drug without any objection meant
he understood what he was buying.[36]

The RTC ruled that although De Leon may have been negligent by failing to read the
medicines label or to instruct his sheriff to do so, Mercury Drug was first to be negligent.
[37]Ganzon dispensed a drug without the requisite prescription.[38] Moreover, she did so
without fully reading what medicine was exactly being bought.[39] In fact, she presumed that
since what was available was the drug Cortisporin Otic Solution, it was what De Leon was
attempting to buy.[40] Said the court:
When the injury is caused by the negligence of a servant or employee, there
instantly arises a presumption of law that there was negligence on the part of
the employer or employer either in the selection of the servant or employee, or
in the supervision over him after the selection or both.
xxxx
The theory bases the responsibility of the master ultimately on his own
negligence and not on that of his servant.[41]
Dissatisfied with the RTC ruling, Mercury Drug and Ganzon elevated the matter to the
CA. Accordingly, they filed their respective briefs. Raising technical grounds, De Leonmoved
for the appeals dismissal.
CA Disposition
On July 4, 2008, the CA issued a resolution which granted De Leons motion and dismissed
the appeal. Said the appellate court:
As pointed out by the plaintiff-appellee, the Statement of Facts, Statement of the
Case, Assignment of Errors/issues, Arguments/ Discussions in the Brief make
no references to the pages of the records. We find this procedural lapse justify
the dismissal of the appeal, pursuant to Section 1(f), Rule 50 of the 1997 Rules
of Civil Procedure x x x.[42]
xxxx
The premise that underlies all appeals is that they are merely
rights which arise form a statute; therefore, they must be exercised
in the manner prescribed by law. It is to this end that rules
governing pleadings and practice before the appellate court were
imposed. These rules were designed to assist the appellate court
in the accomplishment of its tasks, and overall, to enhance the
orderly administration of justice.
xxxx
x x x If the statement of fact is unaccompanied by a page reference to the

record, it may be stricken or disregarded all together.[43]

On October 5, 2004, the CA denied Mercury Drugs and Ganzons joint motion for
reconsideration. Although mindful that litigation is not a game of technicalities,[44] the CA
found no persuasive reasons to relax procedural rules in favor of Mercury Drug and Ganzon.
[45] The CA opined:
In the case under consideration, We find no faithful compliance on the part of
the movants that will call for the liberal application of the Rules. Section 1(f) of
Rule 50 of the 1997 Rules of Civil Procedure explicitly provides that an appeal
may be dismissed by the Court of Appeals, on its own motion or on that of the
appellee, for want of page references to the records as required in Section 13 of
Rule 44 of the same rules[46]
Issues
Petitioner has resorted to the present recourse and assigns to the CA the following errors:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING
PETITIONERS APPEAL BASED ON THE CASES OF DE LIANA VS. CA (370
SCRA 349) AND HEIRS OF PALOMINIQUE VS. CA (134 SCRA 331).
II
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN DISMISSING PETITIONERS APPEAL DESPITE
SUBSTANTIAL COMPLIANCE WITH SECTION 1(F), RULE 60 AND SECTION
13, RULE 44 OF THE RULES OF COURT.
III
THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAVORED MERE
TECHNICALITY OVER SUBSTANTIAL JUSTICE WHICH WILL CERTAINLY
CAUSE GRAVE INJUSTICE AND GREAT PREJUDICE TO PETITIONER
CONSIDERING THAT THE ASSAILED DECISION ON APPEAL IS
CLUSTERED WITH ERRORS AND IN CONTRAST WITH THE DECISIONS OF
THIS HONORABLE SUPREME COURT.[47] (Underscoring supplied)
Our Ruling
The appeal succeeds in part.
Dismissal of an appeal under Rule 50 is discretionary.
In several cases,[48] this Court stressed that the grounds for dismissal of an appeal under

Section 1 of Rule 50[49] are discretionary upon the appellate court. The very wording of the
rule uses the word may instead of shall. This indicates that it is only directory and not
mandatory.[50] Sound discretion must be exercised in consonance with the tenets of justice
and fair play, keeping in mind the circumstances obtaining in each case.[51]
The importance of an appellants brief cannot be gainsaid. Its purpose is two-fold: (1) to
present to the court in coherent and concise form the point and questions in controversy; and
(2) to assist the court in arriving at a just and proper conclusion.[52] It is considered a vehicle
of counsel to convey to the court the essential facts of a clients case, a statement of the
questions of law involved, the law to be applied, and the application one desires of it by the
court.[53]
The absence of page reference to the record is a ground for dismissal. It is a requirement
intended to ultimately aid the appellate court in arriving at a just and proper conclusion of the
case.[54] However, as earlier discussed, such dismissal is not mandatory, but discretionary
on the part of the appellate court.
This Court has held that the failure to properly cite reference to the original records is
not a fatal procedural lapse.[55] When citations found in the appellants brief enable the
court to expeditiously locate the portions of the record referred to, there is substantial
compliance with the requirements of Section 13(c), (d), and (f) of Rule 44.[56]
In De Leon v. CA,[57] this Court ruled that the citations contained in the appellants brief
sufficiently enabled the appellate court to expeditiously locate the portions of the record
referred to. They were in substantial compliance with the rules. The Court said:
Nothing in the records indicate that it was exercised capriciously, whimsically, or
with a view of permitting injury upon a party litigant. For the same reasons, we
hold that the respondent Court of Appeals did not err when it did not dismiss the
appeal based on the allegation that appellants brief failed to comply with the
internal rules of said court.[58]
Similar to the instant case, the appellants brief in Yuchengco v. Court of
Appeals[59] contained references to Exhibits and Transcript of Stenographic Notes and

attachments.These were found to have substantially complied with the requirements of

Section 13(c) and (d) of Rule 44.
x x x The Appellants brief may not have referred to the exact pages of the
records, however, the same is not fatal to their cause since the references they
made enabled the appellate court to expeditiously locate the portions referred
to. x x x[60]
It is true that in De Liano v. Court of Appeals,[61] this Court held that a statement of facts
unaccompanied by a page reference to the record may be presumed to be without support in
the record and may be stricken or disregarded altogether. However, the instant case is not on
all fours with De Liano.
In De Liano, the appellants brief lacked a Subject Index and a Table of Cases and Authorities.
[62] Moreover, the Statement of the Case, Statements of Facts, and Statements of Arguments
had no page references to the record.[63] When notified of such defects, defendantsappellants failed to amend their brief to conform to the rules.[64] Instead, they continued to
argue that their errors were harmless.[65] All these omissions and non-compliance justified
the dismissal of the appeal by the CA.[66]
In the case under review, although there were no page references to the records, Mercury
Drug and Ganzon referred to the exhibits, TSN, and attachments of the case. Despite its
deficiencies, the brief is sufficient in form and substance as to apprise the appellate court of
the essential facts, nature of the case, the issues raised, and the laws necessary for the
disposition of the same.
Reliance on Heirs of Palomique v. Court of Appeals[67] is likewise misplaced. In Heirs of
Palomique, the appellants brief did not at all contain a separate statement of facts.[68] This
critical omission, together with the failure to make page references to the record to support
the factual allegations, justified the dismissal of the appeal.[69]
Rules of procedure are intended to promote, not to defeat, substantial justice. They should
not be applied in a very rigid and technical sense.[70] For reasons of justice and equity, this

Court has allowed exceptions to the stringent rules governing appeals.[71] It has, in the past,
refused to sacrifice justice for technicality.[72]
However, brushing aside technicalities, petitioners are still liable. Mercury Drug and
Ganzon failed to exercise the highest degree of diligence expected of them.
Denying that they were negligent, Mercury Drug and Ganzon pointed out that De Leons own
negligence was the proximate cause of his injury. They argued that any injury would have
been averted had De Leon exercised due diligence before applying the medicine on his
eye. Had he cautiously read the medicine bottle label, he would have known that he had the
wrong medicine.
Mercury Drug and Ganzon can not exculpate themselves from any liability. As active players
in the field of dispensing medicines to the public, the highest degree of care and diligence is
expected of them.[73] Likewise, numerous decisions, both here and abroad, have laid
salutary rules for the protection of human life and human health.[74] In the United States case
of Tombari v. Conners,[75] it was ruled that the profession of pharmacy demands care and
skill, and druggists must exercise care of a specially high degree, the highest degree of care
known to practical men. In other words, druggists must exercise the highest practicable
degree of prudence and vigilance, and the most exact and reliable safeguards
consistent with the reasonable conduct of the business, so that human life may not constantly
be exposed to the danger flowing from the substitution of deadly poisons for harmless
medicines.[76]
In Fleet v. Hollenkemp,[77] the US Supreme Court ruled that a druggist that sells to a
purchaser or sends to a patient one drug for another or even one innocent drug, calculated to
produce a certain effect, in place of another sent for and designed to produce a different
effect, cannot escape responsibility, upon the alleged pretext that it was an accidental or
innocent mistake. His mistake, under the most favorable aspect for himself, is
negligence. And such mistake cannot be countenanced or tolerated, as it is a mistake of the

gravest kind and of the most disastrous effect.[78]

Smiths Admrx v. Middelton[79] teaches Us that one holding himself out as competent to
handle drugs, having rightful access to them, and relied upon by those dealing with him to
exercise that high degree of caution and care called for by the peculiarly dangerous nature of
the business, cannot be heard to say that his mistake by which he furnishes a customer the
most deadly of drugs for those comparatively harmless, is not in itself gross negligence.[80]
In our own jurisdiction, United States v. Pineda[81] and Mercury Drug Corporation v.
Baking are illustrative.[82] In Pineda, the potassium chlorate demanded by complainant had
been intended for his race horses. When complainant mixed with water what he thought and
believed was potassium chlorate, but which turned out to be the potently deadly barium
chlorate, his race horses died of poisoning only a few hours after.
The wisdom of such a decision is unquestionable. If the victims had been human beings
instead of horses, the damage and loss would have been irreparable.[83]
In the more recent Mercury Drug, involving no less than the same petitioner corporation,
Sebastian Baking went to the Alabang branch of Mercury Drug[84] and presented his
prescription for Diamicron, which the pharmacist misread as Dormicum.[85] Baking was given
a potent sleeping tablet, instead of medicines to stabilize his blood sugar.[86] On the third day
of taking the wrong medicine, Baking figured in a vehicular accident.[87] He fell asleep while
driving.[88]
This Court held that the proximate cause of the accident was the gross negligence of the
pharmacist who gave the wrong medicine to Baking. The Court said:
x x x Considering that a fatal mistake could be a matter of life and death for a
buying patient, the said employee should have been very cautious in dispensing
medicines. She should have verified whether the medicine she gave respondent
was indeed the one prescribed by his physician. The care required must be
commensurate with the danger involved, and the skill employed must
correspond with the superior knowledge of the business which the law
demands.[89]

This Court once more reiterated that the profession of pharmacy demands great care and
skill. It reminded druggists to exercise the highest degree of care known to practical men.
In cases where an injury is caused by the negligence of an employee, there instantly
arises a presumption of law that there has been negligence on the part of the employer,
either in the selection or supervision of ones employees. This presumption may be
rebutted by a clear showing that the employer has exercised the care and diligence of
a good father of the family.[90] Mercury Drug failed to overcome such presumption.[91]
Petitioners Mercury Drug and Ganzon have similarly failed to live up to high standard of
diligence expected of them as pharmacy professionals. They were grossly negligent in
dispensing ear drops instead of the prescribed eye drops to De Leon. Worse, they have once
again attempted to shift the blame to their victim by underscoring his own failure to read the
label.
As a buyer, De Leon relied on the expertise and experience of Mercury Drug and its
employees in dispensing to him the right medicine.[92] This Court has ruled that in the
purchase and sale of drugs, the buyer and seller do not stand at arms length.[93] There exists
an imperative duty on the seller or the druggist to take precaution to prevent death orinjury to
any person who relies on ones absolute honesty and peculiar learning.[94] The Court
emphasized:
x x x The nature of drugs is such that examination would not avail the purchaser
anything. It would be idle mockery for the customer to make an examination of a
compound of which he can know nothing. Consequently, it must be that the
druggist warrants that he will deliver the drug called for.[95]
Mercury Drug and Ganzons defense that the latter gave the only available Cortisporin solution
in the market deserves scant consideration. Ganzon could have easily verified whether the
medicine she gave De Leon was, indeed, the prescribed one or, at the very least, consulted
her supervisor. Absent the required certainty in the dispensation of the medicine, she could
have refused De Leons purchase of the drug.

The award of damages is proper and shall only be reduced considering the peculiar
facts of the case. 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 defendants wrongful act or omission.[96]
Moral damages are not intended to impose a penalty to the wrongdoer or to enrich the
claimant at the expense of defendant.[97] There is no hard and fast rule in determining what
would be a fair and reasonable amount of moral damages since each case must be governed
by its peculiar circumstances.[98] However, the award of damages must be commensurate to
the loss or injury suffered.[99]
Taking into consideration the attending facts of the case under review, We find the amount
awarded by the trial court to be excessive. Following the precedent case of Mercury Drug, We
reduce the amount from P100,000.00 to P50,000.00 only.[100] In addition, We also deem it
necessary to reduce the award of exemplary damages from the exorbitant amount
of P300,000.00 to P25,000.00 only.
This Court explained the propriety of awarding exemplary damages in the earlier Mercury
Drug case:
x x x Article 2229 allows the grant of exemplary damages by way of example or
correction for the public good. As mentioned earlier, the drugstore business is
affected by public interest.Petitioner should have exerted utmost diligence in the
selection and supervision of its employees. On the part of the employee
concerned, she should have been extremely cautious in dispensing
pharmaceutical products. Due to the sensitive nature of its business,
petitioner must at all times maintain a high level of meticulousness. Therefore,
an award of exemplary damages in the amount of P25,000.00 is in order.
[101] (Emphasis supplied)
It is generally recognized that the drugstore business is imbued with public interest. This can
not be more real for Mercury Drug, the countrys biggest drugstore chain. This Court can not
tolerate any form of negligence which can jeopardize the health and safety of its loyal

patrons. Moreover, this Court will not countenance the cavalier manner it treated
De Leon. Not only does a pharmacy owe a customer the duty of reasonable care, but it is also
duty-bound to accord one with respect.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decisions of the CA and
the RTC in Paraaque City are AFFIRMED WITH MODIFICATION, in that the award of moral
and exemplary damages is reduced to P50,000.00 and P25,000.00, respectively.
SO ORDERED.
RUBEN T. REYES
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

[G.R. No. 122445. November 18, 1997]

DR.

NINEVETCH CRUZ, petitioner, vs.

UMALI, respondents.

COURT

OF

APPEALS

and

LYDIA

DECISION
FRANCISCO, J.:
"Doctors are protected by a special law. They are not guarantors of care. They do not even
warrant a good result. They are not insurers against mishap or unusual
consequences. Furthermore they are not liable for honest mistake of judgment"[1]
The present case against petitioner is in the nature of a medical malpractice suit, which in
simplest term is the type of claim which a victim has available to him or her to redress a
wrong committed by a medical professional which has cause bodily harm.[2] In this
jurisdiction, however, such claims are most often brought as a civil action for damages under
Article 2176 of the Civil Code,[3] and in some instances, as a criminal case under Article 365
of the Revised Penal Code[4] with which the civil action for damages is impliedly instituted. It
is via the latter type of action that the heirs of the deceased sought redress for the petitioner's
alleged imprudence and negligence in treating the deceased thereby causing her death. The
petitioner and one Dr. Lina Ercillo who was the attending anaesthesiologist during the
operation of the deceased were charged with "reckless imprudence and negligence resulting
to (sic) homicide" in an information which reads:
"That on or about March 23, 1991, in the City of San Pablo, Republic of the Philippines and
within the jurisdiction of this Honorable Court, the accused abovenamed, being then the
attending anaesthesiologist and surgeon, respectively, did then and there, in a negligence
(sic), careless, imprudent, and incompetent manner, and failing to supply or store sufficient
provisions and facilities necessary to meet any and all exigencies apt to arise before, during
and/or after a surgical operation causing by such negligence, carelessness, imprudence, and
incompetence, and causing by such failure, including the lack of preparation and foresight
needed to avert a tragedy, the untimely death of said Lydia Umali on the day following said
surgical operation."[5]

Trial ensued after both the petitioner and Dr. Lina Ercillo pleaded not guilty to the abovementioned charge. On March 4, 1994, the Municipal Trial Court in Cities (MTCC) of San
Pablo City rendered a decision, the dispositive portion of which is hereunder quoted as
follows:
"WHEREFORE, the court finds the accused Dr. Lina Ercillo not guilty of the offense charged
for insufficiency of evidence while her co-accused Dra. Ninevetch Cruz is hereby held
responsible for the death of Lydia Umali on March 24, 1991, and therefore guilty under Art.
365 of the Revised Penal Code, and she is hereby sentenced to suffer the penalty of 2
months and 1 day imprisonment of arresto mayor with costs."[6]
The petitioner appealed her conviction to the Regional Trial Court (RTC) which affirmed in
toto the decision of the MTCC[7] prompting the petitioner to file a petition for review with the
Court of Appeals but to no avail. Hence this petition for review on certiorari assailing the
decision promulgated by the Court of Appeals on October 24, 1995 affirming petitioner's
conviction with modification that she is further directed to pay the heirs of Lydia
Umali P50,000.00 as indemnity for her death.[8]
In substance, the petition brought before this Court raises the issue of whether or not
petitioner's conviction of the crime of reckless imprudence resulting in homicide, arising from
an alleged medical malpractice, is supported by the evidence on record.
First the antecedent facts.
On March 22, 1991, prosecution witness, Rowena Umali De Ocampo, accompanied her
mother to the Perpetual Help Clinic and General Hospital situated in Balagtas Street, San
Pablo City, Laguna. They arrived at the said hospital at around 4:30 in the afternoon of the
same day.[9] Prior to March 22, 1991, Lydia was examined by the petitioner who found a
"myoma"[10] in her uterus, and scheduled her for a hysterectomy operation on March 23,
1991.[11] Rowena and her mother slept in the clinic on the evening of March 22, 1991 as the
latter was to be operated on the next day at 1:00 o'clock in the afternoon.[12] According to
Rowena, she noticed that the clinic was untidy and the window and the floor were very dusty
prompting her to ask the attendant for a rag to wipe the window and the floor with.
[13] Because of the untidy state of the clinic, Rowena tried to persuade her mother not to
proceed with the operation.[14] The following day, before her mother was wheeled into the
operating room, Rowena asked the petitioner if the operation could be postponed. The
petitioner called Lydia into her office and the two had a conversation. Lydia then informed
Rowena that the petitioner told her that she must be operated on as scheduled.[15]
Rowena and her other relatives, namely her husband, her sister and two aunts waited
outside the operating room while Lydia underwent operation. While they were waiting, Dr.
Ercillo went out of the operating room and instructed them to buy tagamet ampules which
Rowena's sister immediately bought. About one hour had passed when Dr. Ercillo came out
again this time to ask them to buy blood for Lydia. They bought type "A" blood from the St.

Gerald Blood Bank and the same was brought by the attendant into the operating room. After
the lapse of a few hours, the petitioner informed them that the operation was finished. The
operating staff then went inside the petitioner's clinic to take their snacks. Some thirty minutes
after, Lydia was brought out of the operating room in a stretcher and the petitioner asked
Rowena and the other relatives to buy additional blood for Lydia. Unfortunately, they were not
able to comply with petitioner's order as there was no more type "A" blood available in the
blood bank. Thereafter, a person arrived to donate blood which was later transfused to Lydia.
Rowena then noticed her mother, who was attached to an oxygen tank, gasping for breath.
Apparently the oxygen supply had run out and Rowena's husband together with the driver of
the accused had to go to the San Pablo District Hospital to get oxygen. Lydia was given the
fresh supply of oxygen as soon as it arrived.[16] But at around 10:00 o'clock P.M. she went
into shock and her blood pressure dropped to 60/50. Lydia's unstable condition necessitated
her transfer to the San Pablo District Hospital so she could be connected to a respirator and
further examined.[17] The transfer to the San Pablo City District Hospital was without the prior
consent of Rowena nor of the other relatives present who found out about the intended
transfer only when an ambulance arrived to take Lydia to the San Pablo District Hospital.
Rowena and her other relatives then boarded a tricycle and followed the ambulance.[18]
Upon Lydia's arrival at the San Pablo District Hospital, she was wheeled into the
operating room and the petitioner and Dr. Ercillo re-operated on her because there was blood
oozing from the abdominal incision.[19] The attending physicians summoned Dr. Bartolome
Angeles, head of the Obstetrics and Gynecology Department of the San Pablo District
Hospital. However, when Dr. Angeles arrived, Lydia was already in shock and possibly dead
as her blood pressure was already 0/0. Dr. Angeles then informed petitioner and Dr. Ercillo
that there was nothing he could do to help save the patient.[20] While petitioner was closing
the abdominal wall, the patient died.[21] Thus, on March 24, 1991, at 3:00 o'clock in the
morning, Lydia Umali was pronounced dead. Her death certificate states "shock" as the
immediate cause of death and "Disseminated Intravascular Coagulation (DIC)" as the
antecedent cause.[22]
In convicting the petitioner, the MTCC found the following circumstances as sufficient
basis to conclude that she was indeed negligent in the performance of the operation:
"x x x, the clinic was untidy, there was lack of provision like blood and oxygen to prepare for
any contingency that might happen during the operation. The manner and the fact that the
patient was brought to the San Pablo District Hospital for reoperation indicates that there was
something wrong in the manner in which Dra. Cruz conducted the operation. There was no
showing that before the operation, accused Dr. Cruz had conducted a cardio pulmonary
clearance or any typing of the blood of the patient. It was (sic) said in medical parlance that
the "abdomen of the person is a temple of surprises" because you do not know the whole
thing the moment it was open (sic) and surgeon must be prepared for any eventuality thereof.
The patient (sic) chart which is a public document was not presented because it is only there

that we could determine the condition of the patient before the surgery. The court also noticed
in Exh. "F-1" that the sister of the deceased wished to postpone the operation but the patient
was prevailed upon by Dra. Cruz to proceed with the surgery. The court finds that Lydia Umali
died because of the negligence and carelessness of the surgeon Dra. Ninevetch Cruz
because of loss of blood during the operation of the deceased for evident unpreparedness
and for lack of skill, the reason why the patient was brought for operation at the San Pablo
City District Hospital. As such, the surgeon should answer for such negligence. With respect
to Dra. Lina Ercillo, the anaesthesiologist, there is no evidence to indicate that she should be
held jointly liable with Dra. Cruz who actually did the operation."[23]
The RTC reiterated the abovementioned findings of the MTCC and upheld the latter's
declaration of "incompetency, negligence and lack of foresight and skill of appellant (herein
petitioner) in handling the subject patient before and after the operation."[24] And likewise
affirming the petitioner's conviction, the Court of Appeals echoed similar observations, thus:
"x x x. While we may grant that the untidiness and filthiness of the clinic may not by itself
indicate negligence, it nevertheless shows the absence of due care and supervision over her
subordinate employees. Did this unsanitary condition permeate the operating room? Were the
surgical instruments properly sterilized? Could the conditions in the OR have contributed to
the infection of the patient? Only the petitioner could answer these, but she opted not to
testify. This could only give rise to the presumption that she has nothing good to testify on her
defense. Anyway, the alleged "unverified statement of the prosecution witness" remains
unchallenged and unrebutted.
Likewise undisputed is the prosecution's version indicating the following facts: that the
accused asked the patient's relatives to buy Tagamet capsules while the operation was
already in progress; that after an hour, they were also asked to buy type "A" blood for the
patient; that after the surgery, they were again asked to procure more type "A" blood, but such
was not anymore available from the source; that the oxygen given to the patient was empty;
and that the son-in-law of the patient, together with a driver of the petitioner, had to rush to the
San Pablo City District Hospital to get the much-needed oxygen. All these conclusively show
that the petitioner had not prepared for any unforeseen circumstances before going into the
first surgery, which was not emergency in nature, but was elective or pre-scheduled; she had
no ready antibiotics, no prepared blood, properly typed and cross-matched, and no sufficient
oxygen supply.
Moreover, there are a lot of questions that keep nagging Us. Was the patient given any
cardio-pulmonary clearance, or at least a clearance by an internist, which are standard
requirements before a patient is subjected to surgery. Did the petitioner determine as part of
the pre-operative evaluation, the bleeding parameters of the patient, such as bleeding time
and clotting time? There is no showing that these were done. The petitioner just appears to
have been in a hurry to perform the operation, even as the family wanted the postponement
to April 6, 1991. Obviously, she did not prepare the patient; neither did she get the family's

consent to the operation. Moreover, she did not prepare a medical chart with instructions for
the patient's care. If she did all these, proof thereof should have been offered. But there is
none. Indeed, these are overwhelming evidence of recklessness and imprudence."[25]
This court, however, holds differently and finds the foregoing circumstances insufficient to
sustain a judgment of conviction against the petitioner for the crime of reckless imprudence
resulting in homicide. The elements of reckless imprudence are: (1) that the offender does or
fails to do an act; (2) that the doing or the failure to do that act is voluntary; (3) that it be
without malice; (4) that material damage results from the reckless imprudence; and (5) that
there is inexcusable lack of precaution on the part of the offender, taking into consideration
his employment or occupation, degree of intelligence, physical condition, and other
circumstances regarding persons, time and place.
Whether or not a physician has committed an "inexcusable lack of precaution" in the
treatment of his patient is to be determined according to the standard of care observed by
other members of the profession in good standing under similar circumstances bearing in
mind the advanced state of the profession at the time of treatment or the present state of
medical science.[26] In the recent case of Leonila Garcia-Rueda v. Wilfred L. Pacasio, et. al.,
[27] this Court stated that in accepting a case, a doctor in effect represents that, having the
needed training and skill possessed by physicians and surgeons practicing in the same field,
he will employ such training, care and skill in the treatment of his patients. He therefore has a
duty to use at least the same level of care that any other reasonably competent doctor would
use to treat a condition under the same circumstances. It is in this aspect of medical
malpractice that expert testimony is essential to establish not only the standard of care of the
profession but also that the physician's conduct in the treatment and care falls below such
standard.[28] Further, inasmuch as the causes of the injuries involved in malpractice actions
are determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation.[29]
Immediately apparent from a review of the records of this case is the absence of any
expert testimony on the matter of the standard of care employed by other physicians of good
standing in the conduct of similar operations. The prosecution's expert witnesses in the
persons of Dr. Floresto Arizala and Dr. Nieto Salvador, Jr. of the National Bureau of
Investigation (NBI) only testified as to the possible cause of death but did not venture to
illuminate the court on the matter of the standard of care that petitioner should have
exercised.
All three courts below bewail the inadequacy of the facilities of the clinic and its
untidiness; the lack of provisions such as blood, oxygen, and certain medicines; the failure to
subject the patient to a cardio-pulmonary test prior to the operation; the omission of any form
of blood typing before transfusion; and even the subsequent transfer of Lydia to the San
Pablo Hospital and the reoperation performed on her by the petitioner. But while it may be
true that the circumstances pointed out by the courts below seemed beyond cavil to constitute

reckless imprudence on the part of the surgeon, this conclusion is still best arrived at not
through the educated surmises nor conjectures of laymen, including judges, but by the
unquestionable knowledge of expert witnesses. For whether a physician or surgeon has
exercised the requisite degree of skill and care in the treatment of his patient is, in the
generality of cases, a matter of expert opinion.[30]The deference of courts to the expert
opinion of qualified physicians stems from its realization that the latter possess unusual
technical skills which laymen in most instances are incapable of intelligently evaluating.
[31] Expert testimony should have been offered to prove that the circumstances cited by the
courts below are constitutive of conduct falling below the standard of care employed by other
physicians in good standing when performing the same operation. It must be remembered
that when the qualifications of a physician are admitted, as in the instant case, there is an
inevitable presumption that in proper cases he takes the necessary precaution and employs
the best of his knowledge and skill in attending to his clients, unless the contrary is sufficiently
established.[32] This presumption is rebuttable by expert opinion which is so sadly lacking in
the case at bench.
Even granting arguendo that the inadequacy of the facilities and untidiness of the clinic;
the lack of provisions; the failure to conduct pre-operation tests on the patient; and the
subsequent transfer of Lydia to the San Pablo Hospital and the reoperation performed on her
by the petitioner do indicate, even without expert testimony, that petitioner was recklessly
imprudent in the exercise of her duties as a surgeon, no cogent proof exists that any of these
circumstances caused petitioner's death. Thus, the absence of the fourth element of reckless
imprudence: that the injury to the person or property was a consequence of the reckless
imprudence.
In litigations involving medical negligence, the plaintiff has the burden of establishing
appellant's negligence and for a reasonable conclusion of negligence, there must be proof of
breach of duty on the part of the surgeon as well as a casual connection of such breach and
the resulting death of his patient. [33] In Chan Lugay v. St Luke's Hospital, Inc.,[34] where the
attending physician was absolved of liability for the death of the complainant's wife and
newborn baby, this court held that:
"In order that there may be a recovery for an injury, however, it must be shown that the 'injury
for which recovery is sought must be the legitimate consequence of the wrong done; the
connection between the negligence and the injury must be a direct and natural sequence of
events, unbroken by intervening efficient causes.' In other words, the negligence must be the
proximate cause of the injury. For, 'negligence, no matter in what it consists, cannot create a
right of action unless it is the proximate cause of the injury complained of.' And 'the proximate
cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result would not have
occurred.'''[35] (Underscoring supplied.)
Dr. Arizala who conducted an autopsy on the body of the deceased summarized his

findings as follows:
"Atty. Cachero:
Q. You mentioned about your Autopsy Report which has been marked as Exh. "A-1b". There appears here a signature above the typewritten name Floresto Arizala,
Jr., whose signature is that?
A. That is my signature, sir.
Q. Do you affirm the truth of all the contents of Exh. "A-1-b"?
A. Only as to the autopsy report no. 91-09, the time and place and everything after
the post mortem findings, sir.
Q. You mentioned on your "Post Mortem Findings" about surgical incision, 14:0 cm.,
infraumbilical area, anterior abdominal area, midline, will you please explain that
in your own language?
A. There was incision wound (sic) the area just below the navel, sir.
Q. And the last paragraph of the postmortem findings which I read: Uterus, pearshaped and pale measuring 7.5 x 5.5 x 5.0 cm, with some surface nodulation of
the fundic area posteriorly. Cut-section shows diffusely pale myometrium with
areas of streak induration. The ovaries and adnexal structures are missing with
the raw surfaces patched with clotted blood. Surgical sutures were noted on the
operative site.
Intestines and mesenteries are pale with blood clots noted between the
mesentric folds.
Hemoperitonium: 300 s.s.,
right paracolic gutter,
50 c.c., left paracolic gutter
200 c.c., mesentric area,
100 c.c., right pelvic gutter
stomach empty.
Other visceral organs, pale.',
will you please explain that on (sic) your own language or in ordinary
A. There was a uterus which was not attached to the adnexal structures namely
ovaries which were not present and also sign of previous surgical operation and
there were (sic) clotted blood, sir.

Q. How about the ovaries and adnexal structures?

A. They are missing, sir.
Q. You mean to say there are no ovaries?
A. During that time there are no ovaries, sir.
Q. And there were likewise sign of surgical sutures?
A. Yes, sir.
Q. How about the intestines and mesenteries are place (sic) with blood clots noted
between the mesenteric folds, will you please explain on (sic) this?
A. In the peritoneal cavity, they are mostly perritonial blood.
Q. And what could have caused this blood?
A. Well, ordinarily blood is found inside the blood vessel. Blood were (sic) outside as
a result of the injuries which destroyed the integrity of the vessel allowing blood to
sip (sic) out, sir.
Q. By the nature of the postmortem findings indicated in Exh. A-1-B, can you tell the
court the cause of death?
A. Yes, sir. The cause of death is: Gross findings are compatible with hemorrhagic
shock.
Q. Can you tell the us what could have caused this hemorrhagic shock?
A. Well hemorrhagic shock is the result of blood loss.
Q. What could have the effect of that loss of blood?
A. Unattended hemorrhage, sir.[36] (Underscoring supplied.)
The foregoing was corroborated by Dr. Nieto Salvador:
"Q. And were you able to determine the cause of death by virtue of the examination of
the specimen submitted by Dr. Arizala?
A. Without knowledge of the autopsy findings it would be difficult for me to determine
the cause of death, sir.
Q. Have you examined the post mortem of Dr. Arizala?
A. Yes, sir, and by virtue of the autopsy report in connection with your pathology
report.
Q. What could have caused the death of the victim?
A. This pathologic examination are (sic) compatible with the person who died, sir.

Q. Will you explain to us the meaning of hemorrhagic compatible?

A. It means that a person died of blood loss. Meaning a person died of nonreplacement of blood and so the victim before she died there was shock of
diminish of blood of the circulation. She died most probably before the actual
complete blood loss, sir.
Court: Is it possible doctor that the loss of the blood was due on (sic) operation?
A. Based on my pathology findings, sir.
Q. What could have caused this loss of blood?
A. Many, sir. A patient who have undergone surgery. Another may be a blood vessel
may be cut while on operation and this cause (sic) bleeding, or may be set in the
course of the operation, or may be (sic) he died after the operation. Of course
there are other cause (sic).
Atty. Cachero:
Q. Especially so doctor when there was no blood replacement?
A. Yes, sir."[37] (Underscoring supplied.)
The testimonies of both doctors establish hemorrhage or hemorrhagic shock as the cause
of death. However, as likewise testified to by the expert witnesses in open court, hemorrhage
or hemorrhagic shock during surgery may be caused by several different factors. Thus, Dr.
Salvador's elaboration on the matter:
"Atty. Pascual:
Q. Doctor, among the causes of hemorrhage that you mentioned you said that it could
be at the moment of operation when one losses (sic) control of the presence, is
that correct? During the operation there is lost (sic) of control of the cut vessel?
A. Yes, sir.
Q. Or there is a failure to ligate a vessel of considerable size?
A. Yes, sir.
Q. Or even if the vessel were ligated the knot may have slipped later on?
A. Yes, sir.
Q. And you also mentioned that it may be possible also to some clotting defect, is
that correct?
A. May be (sic)."[38] (Underscoring supplied).
Defense witness, Dr. Bu C. Castro also gave the following expert opinion:

"Q. Doctor even a patient after an operations (sic) would suffer hemorrage what
would be the possible causes of such hemorrage (sic)?
A. Among those would be what we call Intravascular Coagulation and this is the
reason for the bleeding, sir, which cannot be prevented by anyone, it will happen
to anyone, anytime and to any persons (sic), sir.
COURT:
What do you think of the cause of the bleeding, the cutting or the operations done in
the body?
A. Not related to this one, the bleeding here is not related to any cutting or operation
that I (sic) have done.
Q. Aside from the DIC what could another causes (sic) that could be the cause for the
hemorrhage or bleeding in a patient by an operations (sic)?
A. In general sir, if there was an operations (sic) and it is possible that the ligature in
the suture was (sic) become (sic) loose, it is (sic) becomes loose if proven.
xxxxxxxxx
Q. If the person who performed an autopsy does not find any untight (sic) clot (sic)
blood vessel or any suture that become (sic) loose the cause of the bleeding
could not be attributed to the fault of the subject?
A. Definitely, sir."[39] (Underscoring supplied.)
According to both doctors, the possible causes of hemorrhage during an operation are:
(1) the failure of the surgeon to tie or suture a cut blood vessel; (2) allowing a cut blood vessel
to get out of control; (3) the subsequent loosening of the tie or suture applied to a cut blood
vessel; and (4) and a clotting defect known as DIC. It is significant to state at this juncture that
the autopsy conducted by Dr. Arizala on the body of Lydia did not reveal any untied or
unsutured cut blood vessel nor was there any indication that the tie or suture of a cut blood
vessel had become loose thereby causing the hemorrhage.[40] Hence the following pertinent
portion of Dr. Arizala's testimony:
"Q: Doctor, in examining these structures did you know whether these were sutured
ligature or plain ligature
A: Ligature, sir.
Q: We will explain that later on. Did you recall if the cut structures were tied by first
suturing it and then tying a knot or the tie was merely placed around the cut
structure and tied?
A: I cannot recall, sir.

Q: As a matter of fact, you cannot recall because you did not even bothered (sic) to
examine, is that correct?
A: Well, I bothered enough to know that they were sutured, sir.
Q: So, therefore, Doctor, you would not know whether any of the cut structures were
not sutured or tied neither were you able to determine whether any loose suture
was found in the peritoneal cavity?
A: I could not recall any loose sutured (sic), sir."[41]
On the other hand, the findings of all three doctors do not preclude the probability that
DIC caused the hemorrhage and consequently, Lydia's death. DIC which is a clotting defect
creates a serious bleeding tendency and when massive DIC occurs as a complication of
surgery leaving raw surface, major hemorrhage occurs.[42] And as testified to by defense
witness, Dr. Bu C. Castro, hemorrhage due to DIC "cannot be prevented, it will happen to
anyone, anytime."[43] He testified further:
"Q. Now, under the circumstance one of the possibility as you mentioned in (sic) DIC?
A. Yes, sir.
Q. And you mentioned that it cannot be prevented?
A. Yes, sir.
Q. Can you even predict if it really happen (sic)?
A. Possible, sir.
Q. Are there any specific findings of autopsy that will tell you whether this patient
suffered among such things as DIC?
A. Well, I did reserve because of the condition of the patient.
Q. Now, Doctor you said that you went through the record of the deceased Lydia
Umali looking for the chart, the operated (sic) records, the post mortem findings
on the histophanic (sic) examination based on your examination of record, doctor,
can you more or less says (sic) what part are (sic) concerned could have been
the caused (sic) of death of this Lydia Umali?
A. As far as the medical record is concern (sic) the caused (sic) of death is
dessimulated (sic) Intra Vascular Coagulation or the DIC which resulted to
hemorrhage or bleedings, sir.
Q. Doctor based on your findings then there is knowing (sic) the doctor would say
whether the doctor her (sic) has been (sic) fault?
ATTY. MALVEDA:

We will moved (sic) to strike out the (sic) based on finding they just read the chart as
well as the other record.
ATTY. PASCUAL:
Precisely based on this examination.
ATTY. MALVEDA:
Not finding, there was no finding made.
COURT:
He is only reading the record.
ATTY. PASCUAL:
Yes, sir.
A. No, sir, there is no fault on the part of the surgeon, sir." [44]
This court has no recourse but to rely on the expert testimonies rendered by both
prosecution and defense witnesses that substantiate rather than contradict petitioner's
allegation that the cause of Lydia's death was DIC which, as attested to by an expert witness,
cannot be attributed to the petitioner's fault or negligence. The probability that Lydia's death
was caused by DIC was unrebutted during trial and has engendered in the mind of this Court
a reasonable doubt as to the petitioner's guilt. Thus, her acquittal of the crime of reckless
imprudence resulting in homicide. While we condole with the family of Lydia Umali, our hands
are bound by the dictates of justice and fair dealing which hold inviolable the right of an
accused to be presumed innocent until proven guilty beyond reasonable doubt. Nevertheless,
this Court finds the petitioner civilly liable for the death of Lydia Umali, for while a conviction of
a crime requires proof beyond reasonable doubt, only a preponderance of evidence is
required to establish civil liability.[45]
The petitioner is a doctor in whose hands a patient puts his life and limb. For insufficiency
of evidence this Court was not able to render a sentence of conviction but it is not blind to the
reckless and imprudent manner in which the petitioner carried out her duties. A precious life
has been lost and the circumstances leading thereto exacerbated the grief of those left
behind. The heirs of the deceased continue to feel the loss of their mother up to the present
time[46] and this Court is aware that no amount of compassion and commiseration nor words
of bereavement can suffice to assuage the sorrow felt for the loss of a loved one. Certainly,
the award of moral and exemplary damages in favor of the heirs of Lydia Umali are proper in
the instant case.
WHEREFORE, premises considered, petitioner DR. NINEVETCH CRUZ is hereby
ACQUITTED of the crime of reckless imprudence resulting in homicide but is ordered to pay
the heirs of the deceased Lydia Umali the amount of FIFTY THOUSAND PESOS

(P50,000.00) as civil liability, ONE HUNDRED THOUSAND PESOS (P100,000.00) as moral

damages, and FIFTY THOUSAND PESOS (P50,000.00) as exemplary damages.
Let the copy of this decision be furnished to the Professional Regulation Commission
(PRC) for appropriate action.
SO ORDERED.
Romero, Melo, and Panganiban, JJ., concur.
Narvasa, C.J., (Chairman), on leave.

G.R. No. 102383 November 26, 1992

BANK OF THE PHILIPPINE ISLANDS, petitioner,
vs.
THE HON. COURT OF APPEALS (SEVENTH JUDICIAL), HON. JUDGE REGIONAL TRIAL
COURT OF MAKATI, BRANCH 59, CHINA BANKING CORP., and PHILIPPINE CLEARING
HOUSE CORPORATION, respondents.
GUTIERREZ, JR., J.:
The present petition asks us to set aside the decision and resolution of the Court of Appeals
in CA-G.R. SP No. 24306 which affirmed the earlier decision of the Regional Trial Court of
Makati, Branch 59 in Civil Case No. 14911 entitled Bank of the Philippine Islands v. China
Banking Corporation and the Philippine Clearing House Corporation, the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is hereby rendered dismissing
petitioner-appellant's (BPI's) appeal and affirming the appealed order of August
26, 1986 (Annex B of BPI's Petition) with modification as follows:
1. Ordering the petitioner-appellant (BPI) to pay respondent-appellee (CBC):
(a) the amount of One Million Two Hundred Six Thousand, Six Hundred Seven
Pesos and Fifty Eight Centavos (P1,206,607.58) with interest at the legal rate of
twelve percent (12%) per annum starting August 26, 1986, the date when the
order of the PCHC Board of Directors was issued until the full amount is finally
paid; and
(b) the amount of P150,000.00 representing attorney's fees;
2. BPI shall also bear 75% or P5,437.50 and CBC, 25% or P1,812.50 of the cost
of the arbitration proceedings amounting to P7,250.00;
3. The ownership of respondent-appellee (CBC) of the other sum of One Million
Two Hundred Six Thousand Six Hundred Seven Pesos and Fifty Eight Centavos
(P1,206,607.58) previously credited to its clearing account on August 12, 1983
per PCHC Stockholders' Resolution No. 6083 dated April 6, 1983, is hereby
confirmed.
4. The PCHC is hereby directed to immediately debit the clearing account of BPI
the sum of One Million Two Hundred Six Thousand Six Hundred Pesos and Fifty
Eight Centavos (P1,206,607.58) together with its interest as decreed in
paragraph 1 (a) herein above stated and credit the same to the clearing account
of CBC;
5. The PCHC's counterclaim and cross-claim are dismissed for lack of merit;
and

6. With costs against the petitioner-appellant. (Rollo, pp. 161-162)

The controversy in this case arose from the following facts as found by the Arbitration
Committee of respondent Philippine Clearing House Corporation in Arbicom Case No. 83-029
entitled Bank of the Philippine Island v. China Banking Corporation:
The story underlying this case began in the afternoon of October 9, 1981 with a
phone call to BPI's Money Market Department by a woman who identified
herself as Eligia G. Fernando who had a money market placement as evidenced
by a promissory note with a maturity date of November 11, 1981 and a maturity
value of P2,462,243.19. The caller wanted to preterminate the placement, but
Reginaldo Eustaquio, Dealer Trainee in BPI's Money Market Department, who
received the call and who happened to be alone in the trading room at the time,
told her "trading time" was over for the day, which was a Friday, and suggested
that she call again the following week. The promissory note the caller wanted to
preterminate was a roll-over of an earlier 50-day money market placement that
had matured on September 24, 1981.
Later that afternoon, Eustaquio conveyed the request for pretermination to the
officer who before had handled Eligia G. Fernando's account, Penelope Bulan,
but Eustaquio was left to attend to the pretermination process.
The next Monday, October 12, 1981, in the morning, the caller of the previous
Friday followed up with Eustaquio, merely by phone again, on the
pretermination of the placement. Although not familiar with the voice of the real
Eligia G. Fernando, Eustaquio "made certain" that the caller was the real Eligia
G. Fernando by "verifying" that the details the caller gave about the placement
tallied with the details in "the ledger/folder" of the account. Eustaquio knew the
real Eligia G. Fernando to be the Treasurer of Philippine American Life
Insurance Company (Philamlife) since he was handling Philamlife's corporate
money market account. But neither Eustaquio nor Bulan who originally handled
Fernando's account, nor anybody else at BPI, bothered to call up Fernando at
her Philamlife office to verify the request for pretermination.
Informed that the placement would yield less than the maturity value because of
its pretermination, the caller insisted on the pretermination just the same and
asked that two checks be issued for the proceeds, one for P1,800,000.00 and
the second for the balance, and that the checks be delivered to her office at
Philamlife.
Eustaquio, thus, proceeded to prepare the "purchase order slip" for the
requested pretermination as required by office procedure, and from his desk,
the papers, following the processing route, passed through the position analyst,
securities clerk, verifier clerk and documentation clerk, before the two cashier's
checks, nos. 021759 and 021760 for P1,800,000.00 and P613,215.16,
respectively, both payable to Eligia G. Fernando, covering the preterminated
placement, were prepared. The two cashier's checks, together with the papers
consisting of the money market placement was to be preterminated and the
promissory note (No. 35623) to be preterminated, were sent to Gerlanda E. de

Castro and Celestino Sampiton, Jr., Manager and Administrative Assistant,

respectively, in BPI's Treasury Operations Department, both authorized
signatories for BPI, who signed the two checks that very morning. Having been
singed, the checks now went to the dispatcher for delivery.
Later in the same morning, however, the same caller changed the delivery
instructions; instead of the checks being delivered to her office at Philamlife, she
would herself pick up the checks or send her niece, Rosemarie Fernando, to
pick them up. Eustaquio then told her that if it were her niece who was going to
get the checks, her niece would have to being a written authorization from her to
pick up the checks. This telephone conversation ended with the caller's
statement that "definitely" it would be her niece, Rosemarie Fernando, who
would pick up the checks. Thus, Eustaquio had to hurriedly go to the dispatcher,
Bernardo Laderas, to tell him of the new delivery instructions for the checks; in
fact, he changed the delivery instruction on the purchase order slip, writing
thereon "Rosemarie Fernando release only with authority to pick up.
It was, in fact Rosemarie Fernando who got the two checks from the dispatcher,
as shown by the delivery receipt. Actually, as it turned out, the same
impersonated both Eligia G. Fernando and Rosemarie Fernando. Although the
checks represented the termination proceeds of Eligia G. Fernando's
placement, not just a roll-over of the placement, the dispatcher failed to get or to
require the surrender of the promissory note evidencing the placement. There is
also no showing that Eligia G. Fernando's purported signature on the letter
requesting the pretermination and the latter authorizing Rosemarie Fernando to
pick up the two checks, both of which letters were presumably handed to the
dispatcher by Rosemarie Fernando, was compared or verified with Eligia G.
Fernando's signature in BPI's file. Such purported signature has been
established to be forged although it has a "close similarity" to the real signature
of Eligia G. Fernando (TSN of January 15, 1985, pp. 24 and 26).
The story's scene now shifted when, in the afternoon of October 13, 1981, a
woman who represented herself to be Eligia G. Fernando applied at CBC's
Head Office for the opening of a current account.
She was accompanied and introduced to Emily Sylianco Cuaso, Cash
Supervisor, by Antonio Concepcion whom Cuaso knew to have opened, earlier
that year, an account upon the introduction of Valentin Co, a long-standing
"valued client" of CBC. What Cuaso indicated in the application form, however,
was that the new client was introduced by Valentin Co, and with her initials on
the form signifying her approval, she referred the application to the New
Accounts Section for processing. As finally proceeds, the application form
shows the signature of "Eligia G. Fernando", "her" date of birth, sex, civil status,
nationality, occupation ("business woman"), tax account number, and initial
deposit of P10,000.00. This final approval of the new current account is
indicated on the application form by the initials of Regina G. Dy, Cashier, who
did not interview the new client but affixed her initials on the application form
after reviewing it. The new current account was given the number: 26310-3.

The following day, October 14, 1981, the woman holding herself out as Eligia G.
Fernando deposited the two checks in controversy with Current Account No.
126310-3. Her endorsement on the two checks was found to conform with the
depositor's specimen signature. CBC's guaranty of prior endorsements and/or
lack of endorsement was then stamped on the two checks, which CBC forthwith
sent to clearing and which BPI cleared on the same day.
Two days after, withdrawals began on Current Account No. 26310-3: On
October 16, 1981, by means of Check No. 240005 dated the same day for
P1,000,000.00, payable to "cash", which the woman holding herself out as
Eligia G. Fernando encashed over the counter, and Check No. 240003 dated
October 15, 1981 for P48,500.00, payable to "cash" which was received through
clearing from PNB Pasay Branch; on October 19, 1981, by means of Check No.
240006 dated the same day for P1,000,000.00, payable to "cash," which the
woman identifying herself as Eligia G. Fernando encashed over the counter; on
October 22, 1981, by means of Check No. 240007 dated the same day for
P370,000.00, payable to "cash" which the woman herself also encashed over
the counter; and on November 4, 1981, by means of Check No. 240001 dated
November 3, 1981 for P4,100.00, payable to "cash," which was received
through clearing from Far East Bank.
All these withdrawals were allowed on the basis of the verification of the
drawer's signature with the specimen signature on file and the sufficiency of the
funds in the account. However, the balance shown in the computerized teller
terminal when a withdrawal is serviced at the counter, unlike the ledger or usual
statement prepared at month-end, does not show the account's opening date,
the amounts and dates of deposits and withdrawals. The last withdrawal on
November 4, 1981 left Current Account No. 26310-3 with a balance of only
P571.61.
The day of reckoning came on November 11, 1981, the maturity date of Eligia
G. Fernado's money market placement with BPI, when the real Eligia G.
Fernando went to BPI for the roll-over of her placement. She disclaimed having
preterminated her placement on October 12, 1981. She executed an affidavit
stating that while she was the payee of the two checks in controversy, she never
received nor endorsed them and that her purported signature on the back of the
checks was not hers but forged. With her surrender of the original of the
promissory note (No. 35623 with maturity value of P2,462,243.19) evidencing
the placement which matured that day, BPI issued her a new promissory note
(No. 40314 with maturity date of December 23, 1981 and maturity value of
P2,500.266.77) to evidence a roll-over of the placement.
On November 12, 1981, supported by Eligia G. Fernando's affidavit, BPI
returned the two checks in controversy to CBC for the reason "Payee's
endorsement forged". A ping-pong started when CBC, in turn, returned the
checks for reason "Beyond Clearing Time", and the stoppage of this ping-pong,
as we mentioned at the outset, prompted the filing of this case.
Investigation of the fraud by the Presidential Security Command led to the filing

of criminal actions for "Estafa Thru Falsification of Commercial Documents"

against four employees of BPI, namely Quirino Victorio, Virgilio Gayon,
Bernardo Laderas and Jorge Atayan, and the woman who impersonated Eligia
G. Fernando, Susan Lopez San Juan. Victorio and Gayon were both
bookkeepers in BPI's Money Market Operations Department, Laderas was a
dispatcher in the same department. . . . (Rollo, pp. 74-79)
The Arbitration Committee ruled in favor of petitioner BPI. The dispositive portion of the
decision reads:
WHEREFORE, we adjudge in favor of the Bank of the Philippine Islands and
hereby order China Banking Corporation to pay the former the amount of
P1,206,607.58 with interest thereon at 12% per annum from August 12, 1983, or
the date when PCHC, pursuant to its procedure for compulsory arbitration of the
ping-pong checks under Stockholders' Resolution No. 6-83 was implemented,
up to the date of actual payment.
Costs of suit in the total amount of P7,250.00 are to be assessed the litigant
banks in the following proportion:
a) Plaintiff BPI P1,812.50
b) Defendant China P5,437.50
Total Assessment P7,250.00
conformably with PCHC Resolution Nos. 46-83 dated October 25, 1983 and 485 dated February 25, 1985.
The PCHC is hereby directed to effect the corresponding entries to the litigant
banks' clearing accounts in accordance with the foregoing decision. (Rollo, pp.
97-98)
However, upon motion for reconsideration filed by respondent CBC, the Board of Directors of
the PCHC reversed the Arbitration Committee's decision in its Order, the dispositive portion of
which reads:
WHEREFORE, the Board hereby reconsiders the Decision of the Arbitration
Committee dated March 24, 1986 in Arbicom Case No. 183-029 and in lieu
thereof, one is rendered modifying the decision so that the Complaint of BPI is
dismissed, and on the Counterclaim of CBC, BPI is sentenced to pay CBC the
sum of P1,206,607.58. In view of the facts, no interest nor attorney's fees are
awarded. BPI shall also bear 75% or P5,437.50 and CBC, 25% or P1,812.50 of
the cost of the Arbitration proceedings amounting to P7,250.00.
The PCHC is hereby directed to debit the clearing account of the BPI the sum of
P1,206,607.58 and credit the same to that of CBC. The cost of Arbitration
proceedings are to be debited from the accounts of the parties in the proportion
above stated. (Rollo, pp. 112-113)

BPI then filed a petition for review of the abovestated order with the Regional Trial Court of
Makati. The trial court dismissed the petition but modified the order as can be gleaned from
the dispositive portion of its decision quoted earlier.
Not satisfied with the trial court's decision petitioner BPI filed with us a petition for review on
certiorari under Rule 45 of the Rules of Court. The case was docketed as G.R. No. 96376.
However, in a Resolution dated February 6, 1991, we referred the case to the Court of
Appeals for proper determination and disposition. The appellate court affirmed the trial court's
decision.
Hence, this petition.
In a resolution dated May 20, 1992 we gave due course to the petition:
Petitioner BPI now asseverates:
I
THE DECISION AND RESOLUTION OF THE RESPONDENT COURT LEAVES
THE UNDESIRABLE RESULT OF RENDERING NUGATORY THE VERY
PURPOSE FOR THE UNIFORM BANKING PRACTICE OF REQUIRING THE
CLEARING GUARANTEE OF COLLECTING BANKS.
II
CONTRARY TO THE RULING OF THE RESPONDENT COURT, THE
PROXIMATE CAUSE FOR THE LOSS OF THE PROCEEDS OF THE TWO
CHECKS IN QUESTION WAS THE NEGLIGENCE OF THE EMPLOYEES OF
CBC AND NOT BPI; CONSEQUENTLY, EVEN UNDER SECTION 23 OF THE
NEGOTIABLE INSTRUMENTS LAW, BPI WAS NOT PRECLUDED FROM
RAISING THE DEFENSE OF FORGERY.
III
THE RESPONDENT COURT COMMITTED REVERSIBLE ERROR IN FAILING
TO APPRECIATE THE FACT THAT CBC HAD THE "LAST CLEAR CHANCE"
OF AVOIDING THE LOSS OCCASIONED BY THE FRAUDULENT ACTS
INVOLVED IN THE INSTANT CASE. (Rollo, p. 24)
The main issues raised in the assignment of errors are: When a bank (in this case CBC)
presents checks for clearing and payment, what is the extent of the bank's warranty of the
validity of all prior endorsements stamped at the back of the checks? In the event that the
payee's signature is forged, may the drawer/drawee bank (in this case BPI) claim
reimbursement from the collecting bank [CBC] which earlier paid the proceeds of the checks
after the same checks were cleared by petitioner BPI through the PCHC?
Anent the first issue, petitioner BPI contends that respondent CBC's clear warranty that "all
prior endorsements and/or lack of endorsements guaranteed" stamped at the back of the
checks was an unrestrictive clearing guaranty that all prior endorsements in the checks are

genuine. Under this premise petitioner BPI asserts that the presenting or collecting bank,
respondent CBC, had an unquestioned liability when it turned out that the payee's signature
on the checks were forged. With these circumstances, petitioner BPI maintains that
considerations of relative negligence becomes totally irrelevant.
In sum, petitioner BPI theorizes that the Negotiable Instruments Law, specifically Section 23
thereof is not applicable in the light of the absolute liability of the representing or collecting
bank as regards forged endorsements in consonance with the clearing guarantee requirement
imposed upon the presenting or collecting banks "as it is worded today."
Petitioner BPI first returned to CBC the two (2) checks on the ground that "Payee's
endorsement (was) forged" on November 12, 1981. At that time the clearing regulation then in
force under PCHC's Clearing House Rules and Regulations as revised on September 19,
1980 provides:
Items which have been the subject of material alteration or items bearing a
forged endorsement when such endorsement is necessary for negotiation shall
be returned within twenty four (24) hours after discovery of the alteration or the
forgery, but in no event beyond the period prescribed by law for the filing of a
legal action by the returning bank/branch institution or entity against the
bank/branch, institution or entity sending the same. (Section 23)
In the case of Banco de Oro Savings and Mortgage Bank v. Equitable Banking Corporation
(157 SCRA 188 [1988]) the clearing regulation (this is the present clearing regulation) at the
time the parties' dispute occurred was as follows:
Sec. 21. . . . .
Items which have been the subject of material alteration or items bearing forged
endorsement when such endorsement is necessary for negotiation shall be
returned by direct presentation or demand to the Presenting Bank and not
through the regular clearing house facilities within the period prescribed by law
for the filing of a legal action by the returning bank/branch, institution or entity
sending the same.
It is to be noted that the above-cited clearing regulations are substantially the same in that it
allows a return of a check "bearing forged endorsement when such endorsement is
necessary for negotiation" even beyond the next regular clearing although not beyond the
prescriptive period "for the filing of a legal action by the returning bank."
Bearing in mind this similarity in the clearing regulation in force at the time the forged checks
in the present case and the Banco de Oro case were dishonored and returned to the
presenting or collecting banks, we can be guided by the principles enunciated in the Banco
de Oro case on the relevance of negligence of the drawee vis-a-vis the forged checks.
The facts in the Banco de Oro case are as follows: Sometime in March, April, May and August
1983 Equitable Banking Corporation through its Visa Card Department drew six (6) crossed
Manager's check with the total amount of Forty Five Thousand Nine Hundred and Eighty Two
Pesos and Twenty Three Centavos (P45,982.23) and payable to certain member

establishments of Visa Card. Later, the checks were deposited with Banco de Oro to the
credit of its depositor, a certain Aida Trencio. Following normal procedures, and after
stamping at the back of the checks the endorsements: "All prior and/or lack of endorsements
guaranteed" Banco de Oro sent the checks for clearing through the PCHC. Accordingly,
Equitable Banking Corporation paid the checks; its clearing amount was debited for the value
of the checks and Banco de Oro's clearing account was credited for the same amount. When
Equitable Banking Corporation discovered that the endorsements at the back of the checks
and purporting to be that of the payees were forged it presented the checks directly to Banco
de Oro for reimbursement. Banco de Oro refused to reimburse Equitable Banking Corporation
for the value of the checks. Equitable Banking Corporation then filed a complaint with the
Arbitration Committees of the PCHC. The Arbiter, Atty. Ceasar Querubin, ruled in favor of
Equitable Banking Corporation. The Board of Directors of the PCHC affirmed the Arbiter's
decision. A petition for review of the decision filed by Banco de Oro with the Regional Trial
Court of Quezon City was dismissed. The decision of the PCHC was affirmed in toto.
One of the main issues threshed out in this case centered on the effect of Banco de Oro's
(representing or collecting bank) guarantee of "all prior endorsements and/or lack of
endorsements" at the back of the checks. A corollary issue was the effect of the forged
endorsements of the payees which were late discovered by the Equitable Banking
Corporation (drawee bank) resulting in the latter's claim for reimbursement of the value of
checks after it paid the proceeds of the checks.
We agreed with the following disquisition of the Regional Trial Court, to wit:
Anent petitioner's liability on said instruments, this court is in full accord with the
ruling of the PCHC Board of Directors that:
In presenting the checks for clearing and for payment, the defendant made an
express guarantee on the validity of "all prior endorsements." Thus, stamped at
the back of the checks are the defendant's clear warranty: ALL PRIOR
ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED.
Without such warranty, plaintiff would not have paid on the checks.
No amount of legal jargon can reverse the clear meaning of defendant's
warranty. As the warranty has proven to be false and inaccurate, the defendant
is liable for any damage arising out of the falsity of its representation.
The principle of estoppel, effectively prevents the defendant from denying
liability for any damage sustained by the plaintiff which, relying upon an action
or declaration of the defendant, paid on the checks. The same principle of
estoppel effectively prevents the defendant from denying the existence of the
checks. (pp. 10-11, Decision, pp. 43-44, Rollo) (at pp. 194-195)
We also ruled:
Apropos the matter of forgery in endorsements, this Court has presently
succintly emphasized that the collecting bank or last endorser generally suffers
the loss because it has the duty to ascertain the genuineness of all prior
endorsements considering that the act of presenting the check for payment to

the drawee is an assertion that the party making the presentment has done its
duty to ascertain the genuineness of the endorsements. This is laid down in the
case of PNB v. National City Bank. (63 Phil. 1711) In another case, this court
held that if the drawee-bank discovers that the signature of the payee was
forged after it has paid the amount of the check to the holder thereof, it can
recover the amount paid from the collecting bank.
xxx xxx xxx
The point that comes uppermost is whether the drawee bank was negligent in
failing to discover the alteration or the forgery. (Emphasis supplied)
xxx xxx xxx
The court reproduces with approval the following disquisition of the PCHC in its
decision.
xxx xxx xxx
III. Having Violated Its Warranty On Validity Of All Endorsements, Collecting
Bank Cannot Deny Liability To Those Who Relied On Its Warranty.
xxx xxx xxx
The damage that will result if judgment is not rendered for the plaintiff is
irreparable. The collecting bank has privity with the depositor who is the
principal culprit in this case. The defendant knows the depositor; her address
and her history. Depositor is defendant's client. It has taken a risk on its
depositor when it allowed her to collect on the crossed-checks.
Having accepted the crossed checks from persons other than the payees, the
defendant is guilty of negligence; the risk of wrongful payment has to be
assumed by the defendant. (Emphasis supplied, at pp. 198-202)
As can be gleaned from the decision, one of the main considerations in affirming the PCHC's
decision was the finding that as between the drawee bank (Equitable Bank) and the
representing or collecting bank (Banco de Oro) the latter was negligent and thus responsible
for undue payment.
Parenthetically, petitioner BPI's theory that the present clearing guarantee requirement
imposed on the representing or collecting bank under the PCHC rules and regulations is
independent of the Negotiable Instruments Law is not in order.
Another reason why the petitioner's theory is uncalled for is the fact that the Negotiable
Instruments Law (Act No. 2031) applied to negotiable instruments as defined under section
one thereof. Undeniably, the present case involves checks as defined by and under the
coverage of the Negotiable Instruments Law. To affirm the theory of the petitioner would,
therefore, violate the rule that rules and regulations implementing the law should conform to
the law, otherwise the rules and regulations are null and void. Thus, we held Shell Philippines,

Inc. v. Central Bank of the Philippines (162 SCRA 628 [1988]):

. . . while it is true that under the same law the Central Bank was given the
authority to promulgate rules and regulations to implement the statutory
provision in question, we reiterate the principle that this authority is limited only
to carrying into effect what the law being implemented provides.
In People v. Maceren (79 SCRA 450, 458 and 460), this Court ruled that:
Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should be for
the sole purpose of carrying into effect its general provisions. By such
regulations, of course, the law itself cannot be extended. (U.S. v. Tupasi Molina,
supra). An administrative agency cannot amend an act of Congress (Santos v.
Estenzo, 109 Phil. 419, 422; Teoxon v. Members of the Board of Administrators,
L-25619, June 30, 1970, 33 SCRA 585; Manuel v. General Auditing Office, L28952, December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August
29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it has been enacted. The power cannot
be extended to amending or expanding the statutory requirements or to
embrace matters not covered by the statute. Rules that subvert the statute
cannot be sanctioned. (University of Santo Tomas v. Board of Tax Appeals, 93
Phil. 376, 382, citing 12 C.J. 845-46. as to invalid regulations, see Collector of
Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78 Phil. 655, 676;
Del Mar v. Phil. Veterans Administration, L-27299, June 27, 1973, 51 SCRA 340,
349).
xxx xxx xxx
. . . The rule or regulation should be within the scope of the statutory authority
granted by the legislature to the administrative agency. (Davis, Administrative
Law, p. 194, 197, cited in Victorias Milling Co., Inc. v. Social Security
Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to
implement said law the basic law prevails because said rule or regulation cannot
go beyond the terms and provisions of the basic law (People v. Lim 108 Phil.
1091). (at pp. 633-634)
Section 23 of the Negotiable Instruments Law states:
When signature is forged or made without the authority of the person whose
signature it purports to be, it is wholly inoperative and no right to retain the
instrument, or to give discharge therefore, or to enforce payment thereof,
against any party thereto, can be acquired through or under such forged
signature, unless the party against whom it is sought to enforce such right is
precluded from setting up the forgery or want of authority.

There are two (2) parts of the provision. The first part states the general rule while the second
part states the exception to the general rule. The general rule is to the effect that a forged
signature is "wholly inoperative", and payment made "through or under such signature" is
ineffectual or does not discharge the instrument. The exception to this rule is when the party
relying in the forgery is "precluded from setting up the forgery or want of authority. In this
jurisdiction we recognize negligence of the party invoking forgery as an exception to the
general rule. (See Banco de Oro Savings and Mortgage Bank v. Equitable Banking
Corporation supra; Philippine National Bank v. Quimpo, 158 SCRA 582 [1988]; Philippine
National Bank v. Court of Appeals, 25 SCRA 693 [1968]; Republic v. Equitable Banking
Corporation, 10 SCRA 8 [1964]; National Bank v. National City Bank of New York, 63 Phil. 711
[1936]; San Carlos Milling Co. v. Bank of P.I., 59 Phil. 59 [1933]). In these cases we
determined the rights and liabilities of the parties under a forged endorsement by looking at
the legal effects of the relative negligence of the parties thereto.
In the present petition the payee's names in the two (2) subject checks were forged. Following
the general rule, the checks are "wholly inoperative" and of no effect. However, the underlying
circumstances of the case show that the general rule on forgery is not applicable. The issue
as to who between the parties should bear the loss in the payment of the forged checks
necessities the determination of the rights and liabilities of the parties involved in the
controversy in relation to the forged checks.
The records show that petitioner BPI as drawee bank and respondent CBC as representing or
collecting bank were both negligent resulting in the encashment of the forged checks.
The Arbitration Committee in its decision analyzed the negligence of the employees of
petitioner BPI involved in the processing of the pre-termination of Eligia G. Fernando's money
market placement and in the issuance and delivery of the subject checks in this wise:
a) The impostor could have been readily unmasked by a mere telephone call,
which nobody in BPI bothered to make to Eligia G. Fernando, a vice-president
of Philamlife (Annex C, p. 13).
b) It is rather curious, too, that the officer who used to handle Eligia G.
Fernando's account did not do anything about the account's pre-termination
(Ibid, p. 13).
c) Again no verification appears to have been made by (sic) Eligia G.
Fernando's purported signature on the letter requesting the pre-termination and
the letter authorizing her niece to pick-up the checks, yet, her signature was in
BPI's file (Ibid., p. 13).
d) Another step that could have foiled the fraud, but which BPI neglected to
take, was requiring before the two checks in controversy were delivered, the
surrender of the promissory note evidencing the money market placement that
was supposedly pre-terminated. (Rollo, p. 13).
The Arbitration Committee, however, belittled petitioner BPI's negligence compared to that of
respondent CBC which it declared as graver and the proximate cause of the loss of the
subject checks to the impostor who impersonated Eligia G. Fernando. Petitioner BPI now

insists on the adoption of the Arbitration Committee's evaluation of the negligence of both
parties, to wit:
a) But what about the lapses of BPI's employees who processed the
pretermination of Eligia G. Fernando's placement and issued the checks? We
do not think it was a serious lapse not to confirm the telephone request for
pretermination purportedly made by Eligia G. Fernando, considering that it is
common knowledge that business in the money market is done mostly by
telephone. Then, too, the initial request of the caller was for the two checks
representing the pretermination proceeds to be delivered to "her" office,
meaning Eligia G. Fernando's office at Philamlife, this clever ruse must have put
off guard the employee preparing the "purchase order slip", enough at least for
him to do away with having to call Eligia G. Fernando at her office. (Annex C at
p. 17).
b) We also do not think it unusual that Penelope Bulan, who used to handle
Eligia G. Fernando's account, should do nothing about the request for
pretermination and leave it to Eustaquio to process the pretermination. In a bank
the of BPI, it would be quite normal for an officer to take over from another the
handling of an account. (Ibid. p. 17)
c) The failure to verify or compare Eligia G. Fernando's purported signature on
the letter requesting the pretermination and the letter authorizing the pick-up of
the checks in controversy with her signature in BPI's file showed lack of care
and prudence required by the circumstances, although it is doubtful that such
comparison would have disclosed the deception considering the "close
similarity" between her purported signature and her signature in BPI's file. (Ibid.,
p. 17).
d) A significant lapse was, however, committed when the two checks in
controversy were delivered without requiring the surrender of the promissory
note evidencing the placement that was supposedly preterminated. Although, as
we already said, it is hard to determine whether the failure to require the
surrender of the promissory note was a deliberate act of Laderas, the
dispatcher, or simply because the "purchase order slip" note, (sic) the fact
remains that such failure contributed to the consummation of the fraud. (Ibid., p.
17-18)
The Arbitration Committee Decision's conclusion was expressed thus
Except for Laderas, not one of the BPI personnel tasked with the
pretermination of Eligia G. Fernando's placement and the issuance
of the pretermination checks colluded in the fraud, although there
may have been lapses of negligence on their part which we shall
discuss later. The secreting out of BPI of Fernando's specimen
signature, which, as admitted by the impostor herself (Exhibit E-2,
page 5), helped her in forging Fernando's signature was no doubt
an "inside job" but done by any of the four employees colluding in
the fraud, not by the personnel directly charged with the custody of

Fernando's records. (Annex C, p. 15)

With respect to the negligence of the CBC employees in the payment of the two
(2) BPI cashier's checks involved in this case, the Arbitration Committee's
Decision made incontrovertible findings undisputed in the statement of facts
found in the Court of Appeals' decision of 8 August 1991, the Regional Trial
Court decision of 28 November 1990 and the PCHC Board of Directors' Order
of 26 August 1986 (Annexes A, E, D, respectively). These findings point to
negligence of the CBC employees which led to: (a) the opening of the impostor's
current account in the name of Eligia G. Fernando; (b) the deposit of said
account of the two (2) checks in controversy and (c) the withdrawal of their
proceeds from said account.
The Arbitration Committee found that
1. Since the impostor presented only her tax account number as a
means of identification, we feel that Emily Sylianco Cuaso, Cash
Supervisor, approved the opening of her current account in the
name of Eligia G. Fernando on the strength of the introduction of
Antonio Concepcion who had himself opened an account earlier
that year. That Mrs. Cuaso was not comfortable with the
introduction of the new depositor by Concepcion is betrayed by the
fact that she made it appear in the application form that the new
depositor was introduced by Valentin Co a long-standing valued
client of CBC who had introduced Concepcion when he opened
his account. We find this misrepresentation significant because
when she reviewed the application form she assumed that the new
client was introduced by Valentin Co as indicated in the application
form (tsn of March 19, 1985, page 13). Thus we find that the
impostor was able to open with CBC's current account in the name
of Eligia G. Fernando due to the negligence, if not
misrepresentation, of its Cash Supervisor, (Annex C, p. 18).
2. Even with negligence attending the impostor's opening of a
current account, her encashment of the two checks in controversy
could still have been prevented if only the care and diligence
demanded by the circumstances were exercised. On October 14,
1981, just a day after she opened her account, the impostor
deposited the two checks which had an aggregate value of
P2,413,215.16, which was grossly disproportionate to her initial
deposit of P10,000. The very date of both checks, October 12,
1981, should have tipped off the real purpose of the opening of the
account on October 13, 1981. But what surely can be
characterized only as abandonment of caution was allowing the
withdrawal of the checks' proceeds which started on October 16,
1981 only two days after the two checks were deposited; by
October 22, 1981, the account had been emptied of the checks'
proceeds. (Annex C, p. 19).

3. We cannot accept CBC's contention that "big withdrawals" are

"usual business" with it. Huge withdrawals might be a matter of
course with an established account but not for a newly opened
account, especially since the supposed check proceeds being
withdrawn were grossly disproportionate to the initial cash deposit.
(Annex C, p. 19).
As intimated earlier, the foregoing findings of fact were not materially disputed
either by the respondent PCHC Board of Directors or by the respondent courts
(compare statement of facts of respondent court as reproduced in pp. 9-11 of
this petition).
Having seen the negligence of the employees of both Banks, the relevant
question is: which negligence was graver. The Arbitration Committee's Decision
found and concluded thus
Since there were lapses by both BPI and CBC, the question is:
whose negligence was the graver and which was the proximate
cause of the loss? Even viewing BPI's lapses in the worst light, it
can be said that while its negligence may have introduced the two
checks in controversy into the commercial stream. CBC's lack of
care in approving the opening with it of the impostor's current
account, and its allowing the withdrawal's of the checks' proceeds,
the aggregate value of which was grossly disproportionate to the
initial cash deposit, so soon after such checks were deposited,
caused the "payment" of the checks. Being closest to the vent of
loss, therefore, CBC's negligence must be held to be proximate
cause of the loss. (Annex C, pp. 19-20) (Rollo, pp. 38-41)
While it is true that the PCHC Board of Directors, and the lower courts did not dispute the
findings of facts of the Arbitration Committee, the PCHC Board of Directors evaluated the
negligence of the parties, to wit:
The Board finds the ruling that the negligence of the employees of CBC is
graver than that of the BPI not warranted by the facts because:
1. The acts and omissions of which BPI employees are guilty are not only
negligent but criminal as found by the decision.
2. The act of BPI's dealer-trainee Eustaquio of disclosing information about the
money market placement of its client over the telephone is a violation, if not of
Republic Act 1405, of Sec. 87 (a) of the General Banking Act which penalizes
any officer-employee or agent of any banking institution who discloses to any
unauthorized person any information relative to the funds or properties in the
custody of the bank belonging to private individual, corporations, or any other
entity; and the bland excuse given by the decision that "business in the money
market is done mostly by the telephone" cannot be accepted nor tolerated for it
is an elementary rule of law that no custom or usage of business can override
what a law specifically provides. (Ang Tek v. CA, 87 Phil. 383).

3. The failure of BPI employees to verify or compare Eligia G. Fernando's

purported signature on the letter requesting for pre-termination and the letter
authorizing the pick-up of the checks in controversy with the signatures on file is
not even justified but admitted in the decision as showing lack of care and
prudence required by the circumstances. The conjectural excuse made in the
decision that "it is doubtful that such comparison would have disclosed the
deception" does not give an excuse for the omission by BPI employees of the
act of verifying the signature, a duty which is the basic requirement of all acts in
the bank. From the very first time an employee enters the services of a bank up
to the time he becomes the highest officer thereof, the cautionary rule is drilled
on him to always be sure that when he acts on the basis of any signature
presented before him, the signature is to be verified as genuine and that if the
bank acts on the basis of a forgery of such signature, the bank will be held
liable. There can be no excuse therefore for such an omission on the part of BPI
employees.
4. The decision admits that:
A significant lapse was, however, committed when the two checks
in controversy were delivered without requiring the surrender of
the promissory note evidencing the placement that was
supposedly preterminated.
This omission of the BPI to require the surrender of the promissory notes
evidencing the placement is justified by the decision by saying that Sec. 74 of
the Negotiable Instrument Law is not violated by this omission of the BPI
employees because said provision is intended for the benefit of the person
paying (in this case the BPI) so that since the omission to surrender having
been waived by BPI, so the non-surrender does not invalidate the payment. The
fallacy of this argument is that the in this case is: whether or not such nonsurrender is a necessary ingredient in the cause of the success of the fraud and
not whether or not the payment was valid. This excuse may perhaps be
acceptable if the omission did not cause damage to any other person. In this
case, however, it did cause tremendous damage. Moreover, this statement
obviously overlooks the provision in Art. 1240 of the Civil Code requiring the
payor (which in this case is the BPI) to be sure he pays to the right person and
as Art. 1242 states, he can claim good faith in paying to the right person only if
he pays to the person possession of the credit (which in this case is the
promissory note evidencing the money market placement). Clearly therefore,
the excuse given in the decision for the non-surrender of this promissory note
evidencing the money market placement cannot be accepted.
xxx xxx xxx
The decision, however, discusses in detail the negligent acts of the CBC in its
lapses or certain requirements in the opening of the account and in allowing
withdrawals against the deposited checks soon after the deposit thereof. As
stated by the decision however, in computerized banks the history of the
account is not shown in the computer terminal whenever a withdrawal is made.

The Board therefore believes that these withdrawals, without any further
showing that the CBC employees "had actual knowledge of the infirmity or
defect, or knowledge of such facts" (Sec. 56, Negotiable Instruments Law) that
their action in accepting their checks for deposit and allowing the withdrawals
against the same "amounted to bad faith" cannot be considered as basis for
holding CBC liable. (Rollo, pp. 107-111)
Banks handle daily transactions involving millions of pesos. By the very nature of their work
the degree of responsibility, care and trustworthiness expected of their employees and
officials is far greater than those of ordinary clerks and employees. For obvious reasons, the
banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.
In the present case, there is no question that the banks were negligent in the selection and
supervision of their employees. The Arbitration Committee, the PCHC Board of Directors and
the lower court, however disagree in the evaluation of the degree of negligence of the banks.
While the Arbitration Committee declared the negligence of respondent CBC graver, the
PCHC Board of Directors and the lower courts declared that petitioner BPI's negligence was
graver. To the extent that the degree of negligence is equated to the proximate cause of the
loss, we rule that the issue as to whose negligence is graver is relevant. No matter how many
justifications both banks present to avoid responsibility, they cannot erase the fact that they
were both guilty in not exercising extraordinary diligence in the selection and supervision of
their employees. The next issue hinges on whose negligence was the proximate cause of the
payment of the forged checks by an impostor.
Petitioner BPI accuses the Court of Appeals of inconsistency when it affirmed the PCHC's
Board of Directors' Order but in the same breath declared that the negligent acts of the CBC
employees occurred immediately before the actual loss.
In this regard petitioner BPI insists that the doctrine of last clear chance enunciated in the
case of Picart v. Smith (37 Phil. 809 [1918]) should have been applied considering the
circumstances of the case.
In the Picart case, Amado Picart was then riding on his pony over the Carlatan Bridge at San
Fernando, La Union when Frank Smith approached from the opposite direction in a car. As
Smith neared the bridge he saw Picart and blew his horn to give warning of his approach.
When he was already on the bridge Picart gave two more successive blasts as it appeared to
him that Picart was not observing the rule of the road. Picart saw the car coming and heard
the warning signals. An accident then ensued resulting in the death of the horse and physical
injuries suffered by Picart which caused him temporary unconsciousness and required
medical attention for several days. Thereafter, Picart sued Smith for damages.
We ruled:
The question presented for decision is whether or not the defendant in
maneuvering his car in the manner above described was guilty of negligence
such as gives rise to a civil obligation to repair the damage done; and we are of
the opinion that he is so liable. As the defendant started across the bridge, he
had the right to assume that the horse and rider would pass over to the proper

side; but as he moved toward the center of the bridge it was demonstrated to his
eyes that this would not be done; and he must in a moment have perceived that
it was too late for the horse to cross with safety in front of the moving vehicle. In
the nature of things this change of situation occurred while the automobile was
yet some distance away; and from this moment it was no longer within the
power of the plaintiff to escape being run down by going to a place of greater
safety. The control of the situation had then passed entirely to the defendant;
and it was his duty to either to bring his car to an immediate stop or, seeing that
there were no other persons on the bridge, to take the other side and pass
sufficiently far away from the horse to avoid the danger of collision. Instead of
doing this, the defendant ran starlight on until he was almost upon the horse. He
was, we think, deceived into doing this by the fact that the horse had not yet
exhibited fright. But in view of the known nature of horses, there was an
appreciable risk that, if the animal in question was unacquainted with
automobiles, he might get excited and jump under the conditions which here
confronted him. When the defendant exposed the horse and rider to this danger
he was, in our opinion, negligent in the eyes of the law.
The test by which by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in doing the alleged
negligent act use that reasonable care and caution which an ordinarily prudent
person would have used in the same situation? If not, then he is guilty of
negligence.
xxx xxx xxx
It goes without saying that the plaintiff himself was not free from fault, for he was
guilty of antecedent negligence in planting himself on the wrong side of the
road. But as we have already stated, the defendant was also negligent; and in
such case the problem always is to discover which agent is immediately and
directly responsible. It will be noted that the negligent acts of the two parties
were not contemporaneous, since the negligence of the defendant succeeded
the negligence of the plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance to avoid
the impending harm and fails to do so is chargeable with the consequences,
without reference to the prior negligence of the other party."
Applying these principles, petitioner BPI's reliance on the doctrine of last clear chance to clear
it from liability is not well-taken. CBC had no prior notice of the fraud perpetrated by BPI's
employees on the pretermination of Eligia G. Fernando's money market placement. Moreover,
Fernando is not a depositor of CBC. Hence, a comparison of the signature of Eligia G.
Fernando with that of the impostor Eligia G. Fernando, which respondent CBC did, could not
have resulted in the discovery of the fraud. Hence, unlike in the Picart case herein the
defendant, had he used reasonable care and caution, would have recognized the risk he was
taking and would have foreseen harm to the horse and the plaintiff but did not, respondent
CBC had no way to discover the fraud at all. In fact the records fail to show that respondent
CBC had knowledge, actual or implied, of the fraud perpetrated by the impostor and the
employees of BPI.

However, petitioner BPI insists that even if the doctrine of proximate cause is applied, still,
respondent CBC should be held responsible for the payment to the impostor of the two (2)
checks. It argues that the acts and omissions of respondent CBC are the cause "that set into
motion the actual and continuous sequence of events that produced the injury and without
which the result would not have occurred." On the other hand, it assets that its acts and
omissions did not end in a loss. Petitioner BPI anchors its argument on its stance that there
was "a gap, a hiatus, an interval between the issuance and delivery of said checks by
petitioner BPI to the impostor and their actual payment of CBC to the impostor. Petitioner BPI
points out that the gap of one (1) day that elapsed from its issuance and delivery of the
checks to the impostor is material on the issue of proximate cause. At this stage, according to
petitioner BPI, there was yet no loss and the impostor could have decided to desist from
completing the same plan and could have held to the checks without negotiating them.
We are not persuaded.
In the case of Vda. de Bataclan, et al, v. Medina (102 Phil. 181 [1957]), we had occasion to
discuss the doctrine of proximate cause.
Briefly, the facts of this case are as follows:
At about 2:00 o'clock in the morning of September 13, 1952 a bus carrying about eighteen
(18) passengers on its way to Amandeo, Cavite figured in an accident. While the bus was
running, one of the front tires burst and the bus began to zigzag until it fell into a canal on the
right side of the road and turned turtle. Some passengers managed to get out from the
overturned bus except for four (4) passengers, among them, Bataclan. The passengers who
got out heard shouts for help from Bataclan and another passenger Lara who said they could
not get out from the bus. After half an hour, about ten men came, one of them carrying a
lighted torch made of bamboo with a wick on one end fueled with petroleum. These men
approached the overturned bus, and almost immediately, a fierce fire started burning and all
but consuming the bus including the four (4) passengers trapped inside. It turned out that as
the bus overturned, gasoline began to leak and escape from the gasoline tank on the side of
the chassis spreading over and permeating the body of the bus and the ground under and
around it. The lighted torch brought by one of the men who answered the call for help set it on
fire. On the same day, the charred bodies of the trapped passengers were removed and
identified. By reason of his death, Juan Bataclan's wife and her children filed a suit for
damages against Maximo Medina, the operator and owner of the bus in the then Court of First
Instance of Cavite. The trial court ruled in favor of the defendant. However, we reversed and
set aside the trial court's decision and said:
There is no question that under the circumstances, the defendant carrier is
liable. The only question is to what degree. The trial court was of the opinion
that the proximate cause of the death of Bataclan was not the overturning of the
bus, but rather the fire that burned the bus, including himself and his copassengers who were unable to leave it; that at the time the fire started,
Bataclan, though the must have suffered, physical injuries, perhaps serious,
was still alive and so damages were awarded, not for his death, but for the
physical satisfactory definition of promote cause is found in Volume 38, pages
695-696 of American Jurisprudence, cited by plaintiffs-appellants in their brief. It
is as follows:

. . . that cause, which, in natural and continuous sequence,

unbroken by any efficient intervening cause, produces the injury,
and without which the result would not have occurred. And more
comprehensively, the proximate legal cause in that acting first and
producing the injury, either immediately or by setting other events
in motion, all constituting a natural and continuous chain of events,
each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the
injury as natural and probable result of the cause which first acted,
under such circumstances that the person responsible for the first
event should, as an ordinarily prudent and intelligent person, have
reasonable ground to expect at the moment of his act or default
that an injury to some person might probably result therefrom.
It may be that ordinarily, when a passenger bus overturns, and pins down a
passenger, merely causing him physical injuries, if through some event,
unexpected and extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle sets it on fire, and the
passenger is burned to death, on might still contend that the proximate cause of
his death was the fire and not the overturning of the vehicle. But in the present
case and under the circumstances obtaining in the same, we do not hesitate to
hold that the proximate cause of the death of Bataclan was the overturning of
the bus, this for the reason that when the vehicle turned not only on its side but
completely on its back, the leaking of the gasoline from the tank was not
unnatural or unexpected; that the coming of the men with a lighted torch was in
response to the call for help, made not only by the passengers, but most
probably, by the driver and the conductor themselves, and that because it was
very dark (about 2:30 in the morning), the rescuers had to carry a light with
them; and coming as they did from a rural area where lanterns and flashlights
were not available, they had to use a torch, the most handy and available; and
what was more natural than that said rescuers should innocently approach the
overturned vehicle to extend the aid and effect the rescue requested from them.
In other words, the coming of the men with the torch was to be expected and
was natural sequence of the overturning of the bus, the trapping of some of its
passengers and the call for outside help. (Emphasis Supplied, at pp. 185-187)
Again, applying the doctrine of proximate cause, petitioner BPI's contention that CBC alone
should bear the loss must fail. The gap of one (1) day between the issuance and delivery of
the checks bearing the impostor's name as payee and the impostor's negotiating the said
forged checks by opening an account and depositing the same with respondent CBC is not
controlling. It is not unnatural or unexpected that after taking the risk of impersonating Eligia
G. Fernando with the connivance of BPI's employees, the impostor would complete her
deception by encashing the forged checks. There is therefore, greater reason to rule that the
proximate cause of the payment of the forged checks by an impostor was due to the
negligence of petitioner BPI. This finding, notwithstanding, we are not inclined to rule that
petitioner BPI must solely bear the loss of P2,413,215.16, the total amount of the two (2)
forged checks. Due care on the part of CBC could have prevented any loss.
The Court cannot ignore the fact that the CBC employees closed their eyes to the suspicious

circumstances of huge over-the-counter withdrawals made immediately after the account was
opened. The opening of the account itself was accompanied by inexplicable acts clearly
showing negligence. And while we do not apply the last clear chance doctrine as controlling in
this case, still the CBC employees had ample opportunity to avoid the harm which befell both
CBC and BPI. They let the opportunity slip by when the ordinary prudence expected of bank
employees would have sufficed to seize it.
Both banks were negligent in the selection and supervision of their employees resulting in the
encashment of the forged checks by an impostor. Both banks were not able to overcome the
presumption of negligence in the selection and supervision of their employees. It was the
gross negligence of the employees of both banks which resulted in the fraud and the
subsequent loss. While it is true that petitioner BPI's negligence may have been the
proximate cause of the loss, respondent CBC's negligence contributed equally to the success
of the impostor in encashing the proceeds of the forged checks. Under these circumstances,
we apply Article 2179 of the Civil Code to the effect that while respondent CBC may recover
its losses, such losses are subject to mitigation by the courts. (See Phoenix Construction Inc.
v. Intermediate Appellate Courts, 148 SCRA 353 [1987]).
Considering the comparative negligence of the two (2) banks, we rule that the demands of
substantial justice are satisfied by allocating the loss of P2,413,215.16 and the costs of the
arbitration proceeding in the amount of P7,250.00 and the cost of litigation on a 60-40 ratio.
Conformably with this ruling, no interests and attorney's fees can be awarded to either of the
parties.
WHEREFORE, the questioned DECISION and RESOLUTION of the Court of Appeals are
MODIFIED as outlined above. Petitioner Bank of the Philippine Islands shall be responsible
for sixty percent (60%) while respondent China Banking Corporation shall share forty percent
(40%) of the loss of TWO MILLION FOUR HUNDRED THIRTEEN THOUSAND, TWO
HUNDRED FIFTEEN PESOS and SIXTEEN CENTAVOS (2,413,215.16) and the arbitration
costs of SEVEN THOUSAND, TWO HUNDRED FIFTY PESOS (7,250.00). The Philippine
Clearing House Corporation is hereby directed to effect the corresponding entries to the
banks' clearing accounts in accordance with this decision. Costs in the same proportion
against the Bank of the Philippine Islands and the China Banking Corporation.
SO ORDERED

G.R. No. L-7760

October 1, 1914

E. M. WRIGHT, plaintiff-appellant,
vs.
MANILA ELECTRIC R.R. & LIGHT CO., defendant-appellant.
W. A. Kincaid, Thomas L. Hartigan, and
Bruce, Lawrence, Ross & Block for defendant.

Jose

Robles

Lahesa

for

plaintiff.

MORELAND, J.:
This is an action brought to recover damages for injuries sustained in an accident which
occurred in Caloocan on the night of August 8, 1909.
The defendant is a corporation engaged in operating an electric street railway in the city
of Manila and its suburbs, including the municipality of Caloocan. The plaintiff's residence in
Caloocan fronts on the street along which defendant's tracks run, so that to enter his
premises from the street plaintiff is obliged to cross defendant's tracks. On the night
mentioned plaintiff drove home in a calesa and in crossing the tracks to enter his premises
the horse stumbled, leaped forward, and fell, causing the vehicle with the rails, resulting in a
sudden stop, threw plaintiff from the vehicle and caused the injuries complained of.
It is undisputed that at the point where plaintiff crossed the tracks on the night in
question not only the rails were above-ground, but that the ties upon which the rails rested
projected from one-third to one-half of their depth out of the ground, thus making the tops of
the rails some 5 or 6 inches or more above the level of the street.
It is admitted that the defendant was negligent in maintaining its tracks as described,
but it is contended that the plaintiff was also negligent in that he was intoxicated to such an
extent at the time of the accident that he was unable to take care of himself properly and that
such intoxication was the primary cause of the accident.
The trial court held that both parties were negligent, but that the plaintiff's negligence
was not as great as defendant's and under the authority of the case of Rakes vs. A. G. & P.
Co. (7 Phil. Rep., 359) apportioned the damages and awarded plaintiff a judgment of P1,000.
The question before us is stated by the defendant thus: "Accepting the findings of the
trial court that both plaintiff and defendant were guilty of negligence, the only question to be
considered is whether the negligence of plaintiff contributed t the 'principal occurrence' or
'only to his own injury.' If the former, he cannot recover; if the latter, the trial court was correct
in apportioning the damages."
The questioned as stated by plaintiff is as follows: "The main question at issue is
whether or not the plaintiff was negligent, and, if so, to what extent. If the negligence of the
plaintiff was the primary cause of the accident then, of course, he cannot recover; if his
negligence had nothing to do with the accident but contributed to his injury, then the court was
right in apportioning the damages, but if there was no negligence on the part of the plaintiff,
then he should be awarded damages adequates to the injury sustained."

In support of the defendant's contention counsel says: "Defendant's negligence was its
failure properly to maintain the track; plaintiff's negligence was his intoxication; the 'principal
occurrence' was plaintiff's fall from his calesa. It seems clear that plaintiff's intoxication
contributed to the fall; if he had been sober, it can hardly be doubted that he would have
crossed the track safely, as he had done a hundred times before."
While both parties appealed from the decision, the defendant on the ground that it was
not liable and the plaintiff on the ground that the damages were insufficient according to the
evidence, and while the plaintiff made a motion for a new trial upon the statutory grounds and
took proper exception to the denial thereof, thus conferring upon this court jurisdiction to
determine the question of fact, nevertheless, not all of the testimony taken on the trial, so far
as can be gathered from the record, has been brought to this court. There seems to have
been two hearings, one on the 31st of August and the other on the 28th of September. The
evidence taken on the first hearing is here; that taken on the second is not. Not all the
evidence taken on the hearings being before the court, we must refuse, under our rules, to
consider even that evidence which is here; and, in the decision of this case, we are, therefore,
relegated to the facts stated in the opinion of the court and the pleadings filed.
A careful reading of the decision of the trial court leads us to the conclusion that there is
nothing in the opinion which sustains the conclusion of the court that the plaintiff was
negligent with reference to the accident which is the basis of this action. Mere intoxication
establish a want of ordinary care. It is but a circumstance to be considered with the other
evidence tending to prove negligence. It is the general rule that it is immaterial whether a man
is drunk or sober if no want of ordinary care or prudence can be imputed to him, and no
greater degree of care is required than by a sober one. If one's conduct is characterized by a
proper degree of care and prudence, it is immaterial whether he is drunk or sober. (Ward vs.
Chicago etc., R. R. Co., 85 Wis., 601; H & T. C. R. Co. vs. Reason, 61 Tex., 613; Alger vs.
Lowell, 3 Allen, Mass., 402; Central R. R. Co. vs. Phinazee, 93 Ga., 488; Maguire vs.
Middlesex R. R. Co., 115 Mass., 239; Meyer vs. Pacific R. R. Co., 40 Mo., 151., Chicago & N.
W. R. R. Co. vs. Drake, 33 Ill. App., 114.)
If intoxication is not in itself negligence, what are the facts found by the trial court and
stated in its opinion upon which may be predicated the finding that the plaintiff did not use
ordinary care and prudence and that the intoxication contributed to the injury complained of?
After showing clearly and forcibly the negligence of the defendant in leaving its tracks in the
condition in which they were on the night of the injury, the court has the following to say, and it
is all that can be found in its opinion, with reference to the negligence of the plaintiff: "With
respect to the condition in which Mr. Wright was on returning to his house on the night in
question, the testimony of Doctor Kneedler, who was the physician who attended him an hour
after the accident, demonstrates that he was intoxicated. . . . .
If the defendant or its employees were negligent by reason of having left the rails
and a part of the ties uncovered in a street where there is a large amount of travel, the
plaintiff was no less negligent, he not having abstained from his custom of taking more
wine than he could carry without disturbing his judgment and his self-control, he
knowing that he had to drive a horse and wagon and to cross railroad tracks which
were to a certain extent dangerous by reason of the rails being elevated above the
level of the street.

If the plaintiff had been prudent on the night in question and had not attempted
to drive his conveyance while in a drunken condition, he would certainly have avoided
the damages which he received, although the company, on its part, was negligent in
maintaining its tracks in a bad condition for travel.
Both parties, therefore, were negligent and both contributed to the damages
resulting to the plaintiff, although the plaintiff, in the judgment of the court, contributed
in greater proportion to the damages that did the defendant.
As is clear from reading the opinion, no facts are stated therein which warrant the
conclusion that the plaintiff was negligent. The conclusion that if he had been sober he would
not have been injured is not warranted by the facts as found. It is impossible to say that a
sober man would not have fallen from the vehicle under the conditions described. A horse
crossing the railroad tracks with not only the rails but a portion of the ties themselves
aboveground, stumbling by reason of the unsure footing and falling, the vehicle crashing
against the rails with such force as to break a wheel, this might be sufficient to throw a person
from the vehicle no matter what his condition; and to conclude that, under such
circumstances, a sober man would not have fallen while a drunken man did, is to draw a
conclusion which enters the realm of speculation and guesswork.
It having been found that the plaintiff was not negligent, it is unnecessary to discuss the
question presented by the appellant company with reference to the applicability of the case of
Rakes vs. A. G. & P. Co., above; and we do not find facts in the opinion of the court below
which justify a larger verdict than the one found.
Arellano, C.J., Torres and Araullo, JJ., concur.
Separate Opinions
CARSON, J., dissenting:
I dissent. I think, in the first place, that before pronouncing judgment the parties should
have an opportunity, if they so desire, to correct the manifestly accidental omission from the
record of a part of the transcript of the record. It is very clear that when the case was
submitted, and the brief filed, both parties were under the mistaken impression that all the
evidence was in the record.
I think, furthermore, that if the case is to be decided on the findings of fact by the trial
judge, these findings sufficiently establish the negligence of the plaintiff.1awphil.net
The trail judge expressly found that
If the plaintiff had been prudent on the night in question and had not attempted
to drive his conveyance while in a drunken condition, he would certainly have avoided
the damages which he received, although the company, on its part was negligent in
maintaining its tracks in a bad condition for travel.
This is a finding of fact the fact of negligence and I know of no rule which requires
the trial court to set forth not only the ultimate facts found by it, but also all the evidentiary

facts on which such conclusions are based. The finding is not in conflict with the other facts
found by the trial judge, and though it is not fully sustained thereby, we must assume, if we
decline to examine the record, that there were evidentiary facts disclosed at the trial which
were sufficient to sustain the finding if negligence. "The statement of facts must contain only
those facts which are essential to a clear understanding of the issues presented and the facts
involved." (Act No. 190, sec. 133.)
The facts required to be found are the ultimate facts forming the issues
presented by the pleadings, and which constitute the fundation for a judgment, and not
those that are merely evidentiary facts, or to set forth and explain the means or
processes by which he arrived at such findings. Neither evidence, argument, nor
comment has any legitimate place in findings of facts. (Conlan vs. Grace, 36 Minn.,
276, 282.)

September 1, 1911
G.R. No. 6659
THE UNITED STATES, plaintiff-appellee,
vs.
BAGGAY, JR., defendant-appellant.
Roman Lacson, for appellant.
Acting Attorney-General Harvey, for appellee.
Torres, J.:
This is an appeal by the defendant from the judgment rendered on April 28, 1910, whereby he
was declared exempt from criminal liability but was obliged to indemnify the heirs if the
murdered woman, Bil-liingan, in the sum of P1,000, to pay the costs in the case and to be
confined in an institution for the insane until further order of the court.
About the 4th of October, 1909, several persons were assembled in the defendants house in
the township of Penarrubia, Abra, Province of Ilocos Sur, for the purpose of holding a song
service called buni according to the Tinguian custom, when he, the non-Christian Baggay,
without provocation suddenly attacked the woman Bil-liingan with a bolo, inflicting a serious
wound on her head from which she expired immediately; and with the same bolo he likewise
inflicted various wounds on the women named Calabayan, Agueng, Quisamay, Calapini, and
on his own mother, named Dioalan.
For this reason the provincial fiscal filed a complaint in the court of Ilocos Sur, dated February
15, charging the non-Christian Baggay, jr., with murder, because of the violent death of the
woman Bil-liingan. This cause was instituted separately from the other, No. 1109, for lesiones.
After trial and proof that the defendant was suffering from mental aberration, the judge on
April 28 rendered the judgment cited above, whereupon the defendants counsel appealed to
this court.
By another writing of June 27, the same counsel asked for immediate suspension of
execution of the judgment, because it had been appealed and had not become final. He also
requested annulment of the sale at public auction of the property attached by the sheriff or his
deputy under order of the court, for making indemnification with the defendants property in
accordance with said judgment, as the attachment had been executed upon the property of
the non-Christian woman named Dioalan and of other persons, and not upon that of the
defendant.
In opposition thereto, the provincial fiscal on the 30th of the same month requested in writing
that the appeal from this judgment filed by the counsel for the defense be not admitted or
carried forward, representing that it was out of order as having been submitted beyond the
limit; for the very day said judgment was rendered, April 28, 1910, the accuseds counsel,
Sotero Serrano, was verbally notified thereof, and it is therefore untrue that he was notified
only on June 17 of said year, on which date he read and examined the case and without the
clerks knowledge signed the same, making it appear that he was notified on that date, June
17, what he had known since April 28 of the judgment, of which the judge had verbally

informed him, although the latter did not then have him sign it.
In reply to this motion of the provincial fiscal, the defense requested that the appeal filed be
admitted and carried for ward, representing that, when the court verbally announced his
decision to defendants counsel, the judgment had not yet been entered, and therefore neither
the defendant nor his counsel could be notified thereof in legal form until said date, June 17.
Passing upon this motion on August 2, 1910, the court declared said appeal out of order and
dismissed it; and, furthermore, denied the petition for suspension of judgment, as said
judgment had become final.
Thereupon, counsel for the defendant resorted to this court with a petition praying that a writ
be issued directing said judge, Chanco, to admit the appeal and forward it, at the same time
annulling all action taken for execution of the judgments rendered in the causes for murder
and for lesiones. After consideration thereof, the Attorney-General, on behalf of said judge
and of the provincial fiscal, requested that this remedy be declared out of order, as the
issuance of such writ against the judge of the Court of First Instance of Ilocos Sur, and much
more against the provincial fiscal, was not in accordance with law; but this court by order of
November 15 saw fit to declare said remedy of mandamus to be in order and issued a written
order directing the judge of the Court of First Instance to immediately admit the appeal filed in
these two causes and to forward all the records to this higher court. At the same time he was
instructed to refrain absolutely from executing said judgments or causing them to be executed
while said appeals were pending, a prohibition that was extended to the provincial sheriff, his
agents and representatives, until further order from this court. Upon notification of the
foregoing and in compliance therewith, the judge by order of November 22 admitted the
appeal filed by counsel for the defense both in the cause for murder and in that for lesiones.
The question raised on the appeal filed in this case by counsel for the insane defendant,
Baggay, Jr., is solely whether he, notwithstanding that he was held exempt from criminal
liability, has nevertheless incurred civil liability, with obligation to indemnify the heirs of the
murdered woman and to pay the costs.
Article 17 of the Penal Code states:
Every person criminally liable for a crime or misdemeanor is also civilly liable.
Article 18 of the same code says:
The exemption from criminal liability declared in Nos. 1, 2, 3, 7, and 10 of article 8 does not
include exemption from civil liability, which shall be enforced, subject to the following:
(1) In cases 1, 2, and 3, the persons who are civilly liable for acts committed by a lunatic or
imbecile, or a person under 9 years of age, or over this age and under 15, who has not acted
with the exercise of judgment, are those who have them under their authority, legal
guardianship or power, unless they prove that there was no blame or negligence on their part.
Should there be no person having them under his authority, legal guardian, or power, if such
person be insolvent, the said lunatics, imbeciles, or minors shall answer with their own
property, excepting that part which is exempted for their support in accordance with the civil

law.
True it is that civil liability accompanies criminal liability, because every person liable criminally
for a crime or misdemeanor is also liable for reparation of damage and for indemnification of
the harm done, but there may be civil liability because of acts ordinarily punishable, although
the law has declared their perpetrators exempt from criminal liability. Such is the case of a
lunatic or insane person who, in spite of his irresponsibility on account of the deplorable
condition of his deranged mind, is still reasonably and justly liable with his property for the
consequences of his acts, even though they be performed unwittingly, for the reason that his
fellows ought not to suffer for the disastrous results of his harmful acts more than is
necessary, in spite of his unfortunate condition. Law and society are under obligation to
protect him during his illness and so when he is declared to be liable with his property for
reparation and indemnification, he is still entitled to the benefit of what is necessary for his
decent maintenance, but this protection does not exclude liability for damage caused to those
who may have the misfortune to suffer the consequences of his acts.
According to the law, the persons in the first place liable. are those who have the insane party
under their care or guardianship, unless they prove that there was no blame or negligence on
their part; but if the demented person or imbecile lack a guardian or some person charged
with his care, if the latter be insolvent, then his own property must meet the civil liability of
indemnifying or repairing the damage done, and for this reason judges and courts in
rendering judgment in a criminal cause prosecuted against an insane or demented person,
even when they hold the accused exempt from criminal liability, must fix the civil liability of the
persons charged with watching over and caring for him or the liability of the demented person
him self with his property for reparation of the damage and indemnification for the harm done,
unless the offended party or the heirs of the person murdered expressly renounce such
reparation or indemnification.
Therefore, the judgment appealed from being in accordance with law, affirmation thereof is
proper, and it is hereby affirmed, with costs against the appellant.