1

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE

COMMERCIAL INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE
LEON, MARIA ANGELITA PASCUAL, et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by
ROMEO LIPANA, its President & General Manager, respondents
G.R. No. 97626 March 14, 1997

Facts:

On May 5, 1975 to July 16, 1976, Romeo Lipana claims to have entrusted
RMC funds in the form of cash totaling P304, 979.74 to his secretary, Irene
Yabut, for the purpose of depositing said funds in the current accounts of RMC
with Philippine Bank of Commerce (PBC). They were not credited to RMC's
account but were instead deposited to Yabut's husband, Bienvenido Cotas.
Lipana never checked their monthly statements of account reposing
complete trust and confidence on PBC.

Yabut's modus operandi was to furnish 2 copies of deposit slip upon and
both are always validated and stamped by the teller Azucena Mabayad;
original showed the name of her husband as depositor and his
current account number - retained by the bank; duplicate copy was written
the account number of her husband but the name of the account holder was
left blank; after validation, Yabut would then fill up the name of RMC in the
space left blank in the duplicate copy and change the account
number to RMC's account number. This went on in a span of more than 1 year
without private respondent's knowledge. Upon discovery of the loss of its
funds, RMC demanded from PBC the return of its money.

Issues:

1. Whether applying the last clear chance, PBC's teller is negligent for failing to
avoid the injury by not exercising the proper validation procedure.
2. Whether there was contributory negligence by RMC.

Ruling:

1. Yes. Under the doctrine of "last clear chance" (also referred to, at times
as "supervening negligence" or as "discovered peril"), petitioner bank was
indeed the culpable party. This doctrine, in essence, states that where both
parties are negligent, but the negligent act of one is appreciably later in time
than that of the other, or when it is impossible to determine whose fault or
negligence should be attributed to the incident, the one who had the last
clear opportunity to avoid the impending harm and failed to do so is
chargeable with the consequences thereof. Stated differently, the rule would
also mean that an antecedent negligence of a person does not preclude the
recovery of damages for the supervening negligence of, or bar a defense
against liability sought by another, if the latter, who had the last fair chance,
could have avoided the impending harm by the exercise of due
diligence. Here, assuming that private respondent RMC was negligent in
entrusting cash to a dishonest employee, thus providing the latter with the
opportunity to defraud the company, as advanced by the petitioner, yet it
cannot be denied that the petitioner bank, thru its teller, had the last clear
opportunity to avert the injury incurred by its client, simply by faithfully
observing their self-imposed validation procedure.

2. Yes. While it is true that had private respondent checked the monthly statements of
account sent by the petitioner bank to RMC, the latter would have discovered the loss
 2

early on, such cannot be used by the petitioners to escape liability. This omission on the
part of the private respondent does not change the fact that were it not for the wanton and
reckless negligence of the petitioners' employee in validating the incomplete duplicate
deposit slips presented by Ms. Irene Yabut, the loss would not have occurred.
Considering, however, that the fraud was committed in a span of more than one (1) year
covering various deposits, common human experience dictates that the same would not
have been possible without any form of collusion between Ms. Yabut and bank teller
Mabayad. Ms. Mabayad was negligent in the performance of her duties as bank teller
nonetheless. Thus, the petitioners are entitled to claim reimbursement from her for
whatever they shall be ordered to pay in this case.
 3

PHILIPPINE LONG DISTANCE TELEPHONE CO., INC., petitioner,

vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA
ESTEBAN, respondents
G.R. No. L-57079 September 29, 1989

Facts:

Spouses Esteban were riding their jeep along the inside lane of Lacson
Street where they resided [at 25km/hr as Antonio Esteban claimed; CA
said jeep ran fast; if the jeep braked at that speed, the spouses would not
have been thrown against the windshield]. The jeep abruptly swerved from
the inside lane, then it ran over a mound of earth and fell into an open
trench, an excavation allegedly undertaken by PLDT for the installation of its
underground conduit system. Antonio failed to notice the open trench which
was left uncovered because of the darkness and the lack of any warning light
or signs. The spouses were thrown against the windshield. Gloria Esteban
allegedly sustained injuries on her arms, legs and face, leaving a permanent
scar on her cheek, while Antonio suffered cut lips. The jeeps windshield was
also shattered.

PLDT denies liability, contending that the injuries sustained by the

spouses were due to their own negligence, and that it should be the
independent contractor L.R. Barte and Co. [Barte] who should be held
liable. PLDT filed a third-party complaint against Barte, alleging that under
the terms of their agreement, PLDT should not be answerable for any
accident or injuries arising from the negligence of Barte or its employees.
Barte claimed that it was not aware, nor was it notified of the accident, and
that it complied with its contract with PLDT by installing the necessary and
appropriate signs.

RTC ruled in favor of the spouses. CA reversed RTC and dismissed the
spouses complaint, saying that the spouses were negligent. Later, it set
aside its earlier decision and affirmed in toto RTCs decision.

Issue:

Whether PLDT is liable for the injuries sustained by Spouses Esteban.

Ruling:

No. The negligence of Antonio was not only contributory to his and his
wifes injuries but goes to the very cause of the occurrence of the accident,
as one of its determining factors, and thereby precludes their right to recover
damages. The perils of the road were known to the spouses. By exercising
reasonable care and prudence, Antonio could have avoided the injurious
consequences of his act, even assuming arguendo that there was some
alleged negligence on the part of PLDT.

The omission to perform a duty, such as the placing of warning signs on

the site of the excavation, constitutes the proximate cause only when the
doing of the said omitted act would have prevented the injury. As a resident
of Lacson Street, he passed on that street almost every day and had
knowledge of the presence and location of the excavations there; hence, the
 4

presence of warning signs could not have completely prevented the

accident. Furthermore, Antonio had the last clear chance to avoid the
accident, notwithstanding the negligence he imputes to PLDT.

A person claiming damages for the negligence of another has the burden
of proving the existence of such fault or negligence causative thereof,
otherwise, his action must fail. The facts constitutive of negligence must be
affirmatively established by competent evidence. In this case, there was
insufficient evidence to prove any negligence on the part of PLDT. What were
presented were just the self-serving testimony of Antonio and the unverified
photograph of a portion of the scene of the accident. The absence of a police
report and the non-submission of a medical report from the hospital where
the spouses were allegedly treated have not even been explained.
 5

SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ and

ANGELA FORNILDA, respondents.
[G.R. No. 140420. February 15 , 2001]

Facts:

Amonoy was the counsel of the successors of the deceased Julio Cantolos for the
settlement of the latters estate. On January 1965, the lots were adjudicated to Asuncion
Pasamba and Alfonso Fornilda. On January 20, 1965, Pasamba and Fornilda executed a
deed of real estate mortgage on the said two lots adjudicated to them, in favor of Amonoy
to secure the payment of his attorneys fees. But on August 6, 1969, after the taxes had
been paid, the claims settled and the properties adjudicated, the estate was declared
closed and terminated. When Pasamba and Fornilda passed away, Fornilda was
succeeded by the spouses Gutierrez. On January 21, 1970, Amonoy filed for the closure
of the two lots alleging the non-payment of attorneys fees. The herein respondents
denied the allegation, but judgment was rendered in favor of Amonoy.

Still for failure to pay attorneys fees, the lots were foreclosed. Amonoy was able to
buy the lots by auction where the house of the spouses Gutierrez was situated. On
Amonoys motion of April 24, 1986, orders were implemented for the demolition of
structures in the said lot, including herein respondents house. On September 27, 1985,
David Fornilda petitioned to the Supreme Court for a TRO for the suspension of the
demolition, which was granted, but the houses have already been demolished. A
complaint for damages was filed by respondents, which was denied by RTC but granted
by CA, thus this case.

Issue:

Whether or not the CA erred in ruling that Amonoy was liable for damages to
respondents.

Ruling:

Petitioner invokes that it is well-settled that the maxim of damage resulting from
the legitimate exercise of a persons rights is a loss without injury damnum absque
injuria for which the law gives no remedy, saying he is not liable for damages. The
precept of Damnum Absque Injuria has no application is this case. Petitioner did not heed
the TRO suspending the demolition of structures. Although the acts of petitioner may
have been legally justified at the outset, their continuation after the issuance of the TRO
amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad
faith.

Article 19, known to contain what is commonly referred to as the principle of abuse
of rights, sets certain standards which may be observed not only in the exercise of ones
rights but also in the performance of ones duties. These standards are the following:
to act with justice; to give everyone his due; and to observe honesty and good faith. This
must be observed. Clearly then, the demolition of respondents house by petitioner,
despite his receipt of the TRO, was not only an abuse but also an unlawful exercise of
such right. The petition is denied. The decision of CA is affirmed.
 6

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO

TRUCKING CORPORATION and LAMBERT M. EROLES, respondents.
G.R. No. 141910. August 6, 2002.

Facts:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver units of

refrigerators aboard its truck. While traversing the road, it collided with an unidentified
truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid the value of the
covered cargoes to Concepcion Industries, Inc., (CII). Being subrogee of CIIs rights &
interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the
claim, FGU filed a complaint for damages & breach of contract of carriage against GPS
and the driver with the RTC. In its answer, respondents asserted that GPS was only the
exclusive hauler of CII since 1988, and it was not so engaged in business as a common
carrier. Respondents further claimed that the cause of damage was purely accidental.

GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the
ground that petitioner had failed to prove that it was a common carrier. The RTC granted
the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding
that GPS was not a common carrier defined under the law & existing jurisprudence. The
subsequent motion for reconsideration having been denied, FGU interposed an appeal to
the CA. The CA rejected the FGUs appeal & ruled in favor of GPS. It also denied
petitioners motion for reconsideration. Hence, FGU filed this petition for review on
certiorari.

Issue:

WON the doctrine of Res ipsa loquitur is applicable in the instant case.

Ruling:

Res ipsa loquitur holds a defendant liable where the thing which caused
the injury complained of is shown to be under the latters management and
the accident is such that, in the ordinary course of things, cannot be
expected to happen if those who have its management or control use proper
care. It affords reasonable evidence, in the absence of explanation by the
defendant that the accident arose from want of care. It is not a rule of
substantive law and, as such, it does not create an independent ground of
liability. Instead, it is regarded as a mode of proof or a mere procedural
convenience since it furnishes a substitute for, and relieves the plaintiff of,
the burden of producing specific proof of negligence. The maxim simply
places on the defendant the burden of going forward with the proof. Resort to
the doctrine, however, may be allowed only when (a) the event is of a kind
which does not ordinarily occur in the absence of negligence; (b) other
responsible causes, including the conduct of the plaintiff and third persons,
are sufficiently eliminated by the evidence and (c) the indicated negligence is
 7

within the scope of the defendants duty to the plaintiff. Thus, it is not
applicable when an unexplained accident may be attributable to one of
several causes, for some of which the defendant could not be responsible.
Petition denied.

PHILIPPINE RABBIT BUS LINES, INC. vs. THE HONORABLE

INTERMEDIATE APPELLATE COURT, ET AL.
G.R. Nos. 66102-04 August 30, 1990

Facts:

A jeep was carrying passengers when its right rear wheel became detached, causing it to be
unbalanced. The driver stepped on the brake, which made the jeep turn around, encroaching on the opposite
lane. The passenger jeepney was bumped from behind by a speeding truck with such violence that three of
its passengers died whereas two other passengers suffered injuries. The representatives of the dead and of
the injured passengers filed suits to recover damages against the driver and the owners of the truck and also
against the driver and the owners of the jeepney.

The trial court rendered judgment absolving the driver and the owners of the jeepney but required the
driver and the owners of the truck to compensate the victims. The Plaintiffs appealed insisting that the
driver and the owners of the jeepney should also be made liable. The Intermediate appellate court (now
Court of Appeals), relying primarily on the doctrine of last clear chance, affirmed the trial court's decision.
The plaintiffs then filed a petition for review on certiorari before the Court.

Issue:

WON the doctrine of last clear chance is applicable.

Ruling:

No. Citing the landmark case of Anuran, et al. v. Buo et. al., THE
Supreme Court reiterated that "[t]he principle about "the last clear" chance,
would call for application in a suit between the owners and drivers of the two
colliding vehicles. It does not arise where a passenger demands responsibility
from the carrier to enforce its contractual obligations. For it would be
inequitable to exempt the negligent driver of the jeepney and its owners on
the ground that the other driver was likewise guilty of negligence."

The Intermediate Appellate Court committed an error of law in applying

the doctrine of last clear chance as between the defendants, since the case
at bar is not a suit between the owners and drivers of the colliding vehicles
but a suit brought by the heirs of the deceased passengers against both
owners and drivers of the colliding vehicles.

In view of the foregoing, the Supreme Court modified the questioned decision by making all the
defendants solidarity liable.
 8

ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO MONTEFALCON,

petitioners, vs. GERUNDIO B. CASTAO, and the COURT OF APPEALS,
respondents.
G.R. No. L-34597, November 05, 1982

Facts:

A passenger jeepney driven by petitioner Montefalcon and where private

respondent was a passenger was sideswiped by a cargo truck as both
vehicles were approaching the Sumasap Bridge at Oroquieta, Misamis
Occidental. The jeepney fell into a ditch and private respondent was thrown
off, his right leg crushed by the weight of the jeepney. He sued petitioners. It
was undisputed that the cargo truck blew its horn to overtake the jeepney;
that the jeepney gave way but did not reduce its speed; that for a distance of
20 meters, the truck and the jeepney ran side by side; and that the jeepney
was sideswiped when the truck was in the process of overtaking the said
jeepney. The trial court rendered judgment in favor of private respondent
finding contributory negligence on the part of the jeepney's driver and the
proximate cause of the accident being the negligence of the truck driver. The
decision of the trial court was affirmed on appeal to the Court of Appeals.
Hence, this petition.

Issue:

WON the jeepney driver is guilty of contributory negligence.

Ruling:

There is contributory negligence on the part of jeepney driver appellant

Montefalcon for having raced with the overtaking cargo truck to the bridge
instead of slackening its speed. The fact is, petitioner-driver Montefalcon did
not slacken his speed but instead continued to run the jeep at about forty
(40) kilometers per hour even at the time the overtaking cargo truck was
running side by side for about twenty (20) meters and at which time he even
shouted to the driver of the truck.

Thus, had Montefalcon slackened the speed of the jeep at the time the
truck was overtaking it, instead of running side by side with the cargo truck,
there would have been no contact and accident. He should have foreseen
that at the speed he was running, the vehicles were getting nearer the bridge
and as the road was getting narrower the truck would be too close to the jeep
and would eventually sideswipe it. Otherwise stated, he should have
slackened his jeep when he swerved it to the right to give way to the truck
because the two vehicles could not cross the bridge at the same time.
 9

PHOENIX CONSTRUCTION, INC. and ARMANDO

U.CARBONEL, petitioners, vs. THE INTERMEDIATEAPPELLATE COURT
and LEONARDO DIONISIO, respondents.
G.R. No. L-65295, March 10, 1987

Facts:

Sometime on November 1975, at about 1:30am, private respondent

Leonardo Dionisio was on his way home from a cocktails-and-dinner meeting
with his boss, the general manager of a marketing corporation, where he had
taken "a shot or two" of liquor. He had just crossed an intersection and while
driving down the street, his headlights were turned off. When he switched on
his headlights to bright, he suddenly saw a Ford dump truck some 2
meters away from his Volkswagen car. The dump truck belonged to petitioner
Phoenix, and was parked there by the company driver, co-petitioner
Carbonel. It was parked on the right hand side of the lane that Dionisio was
driving on, but it was parked facing the oncoming traffic. It was parked askew
so it was sticking out onto the street, partly blocking the way of oncoming
traffic. There were no lights nor were there any early warning reflector
devices set anywhere near the truck, front or rear. Phoenix permitted
Carbonel to take home the truck, which was scheduled to be used the next
morning. Dionisio, upon seeing the truck, tried to avoid a collision by
swerving to the left, but it was too late. His car smashed into the truck.
Dionisio suffered physical injuries, including permanent facial scars, a
nervous breakdown and loss of two gold bridge dentures. Dionision filed an
action for damages against Carbonel and Phoenix. Petitioners countered the
claim by imputing the accident to respondents own negligence in driving at a
high speed without curfew pass and headlights, and while intoxicated. It
invoked the Last Clear Chance. Accordingly, Dionisio had the Last Clear
Chance of avoiding the accident and so he, having failed to take the last clear
chance, must bear his own injuries alone.
The trial court and the Court of Appeals ruled in favor of private respondent.

Issue:

Whether the collision was brought by respondents own negligence.

Ruling:

No. Dionisio is guilty of contributory negligence but the legal and

proximate cause of the collision was brought about by the way the truck was
parked. The legal and proximate cause of the accident was the wrongful or
negligent manner in which the dump truck was parked. The collision of
Dionisio's car with the dump truck was a natural and foreseeable
consequence of the truck driver's negligence.

The defendant cannot be relieved from liability by the fact that the risk or
a substantial and important part of the risk, to which the defendant has
subjected the plaintiff has indeed come to pass. Foreseeable intervening
forces are within the scope original risk, and hence of the defendant's
negligence. The courts are quite generally agreed that intervening causes
which fall fairly in this category will not supersede the defendant's
 10

responsibility. Thus, a defendant who blocks the sidewalk and forces the
plaintiff to walk in a street where the plaintiff will be exposed to the risks of
heavy traffic becomes liable when the plaintiff is run down by a car, even
though the car is negligently driven; and one who parks an automobile on the
highway without lights at night is not relieved of responsibility when another
negligently drives into it.

We hold that private respondent Dionisio's negligence was "only

contributory," that the "immediate and proximate cause" of the injury
remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are subject
to mitigation by the courts.

EMMA ADRIANO BUSTAMANTE, in her own behalf as Guardian-Ad-

Litem of minors: ROSSEL, GLORIA, YOLANDA, ERIC SON and EDERIC,
all surnamed BUSTAMANTE, Spouses SALVADOR JOCSON and PATRIA
BONE-JOCSON, Spouses JOSE RAMOS and ENRIQUETA CEBU-RAMOS,
Spouses NARCISO-HIMAYA and ADORACION MARQUEZ-HIMAYA, and
Spouses JOSE BERSAMINA and MA. COMMEMORACION PEREA-
BUSTAMANTE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR AND
EDILBERTO MONTESIANO, respondents.
G.R. No. 89880, February 6, 1991

Facts:

On April 20, 1983 a collision occurred between gravel and sand truck
Driven by defendant Montesiano and owned by Del Pilar and a Mazda
passenger Bus driven by Defendant Susulin, along the national road at
Kalibuyao Tanza, Cavite. The front left side portion of the body of the truck
sideswiped the left sidewall of the passenger bus which resulted to the death
of five individuals. The passenger bus was owned and operated by Magtibay
and Serrado.several passengers of the bus were thrown out and died as a
result of the injuries they sustained. The bus was registered in the name of
Novelo but was owned and/or operated as a passenger bus jointly by
Magtibay and Serrado. Before the collision, the cargo truck and the passenger
bus were approaching each other, coming from the opposite directions of the
highway. While the truck was still about 30 meters away, Susulin, the bus
driver, saw the front wheels of the vehicle wiggling. He also observed that the
truck was heading towards his lane. Not minding this circumstance due to his
belief that the driver of the truck was merely joking, Susulin shifted from
fourth to third gear in order to give more power and speed to the bus, which
was ascending the inclined part of the road, in order to overtake or pass a
Kubota hand tractor being pushed by a person along the shoulder of the
highway.

The Regional Trial Court ruled that the two drivers is liable are solidarily
liable for their negligence.

On appeal, the Court of Appeals decided that the bus driver had the clear
chance to avoid the collision and his reckless negligence in proceeding to
overtake the hand tractor was the proximate cause of the collision. Plaintiffs
-appellees filed a motion for reconsideration, but was denied by the CA.
Hence this petition for review on certiorari seeking the reversal of the
decision o the respondent Court of appeals.

Issue:
 11

Whether or not the Last Clear Chance Apply.

Ruling:

No. Petition is granted. CA reversed. The doctrine of last clear chance

means that even though a person's own acts may have placed him in a
position of peril, and an injury results, the injured person is entitled to
recovery. Further, a person who has the last clear chance or opportunity of
avoiding an accident, notwithstanding the negligent acts of his opponent or
that of a third person imputed to the opponent is considered in law solely
responsible for the consequences of the accident.

In the case at bar, the suit is not between the owners and drivers of the
colliding vehicles but a suit brought by the heirs of the deceased passengers
against both owners and drivers of the colliding vehicles. Therefore, the court
erred in absolving the owner and driver of the cargo truck from liability.

VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA

JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.
G.R. No. 122039 May 31, 2000

Facts:

On the morning of August 23, 1989, private respondent Eliza Jujeurche G.

Sunga, then a college freshman major in Physical Education at the Siliman
University took a passenger jeepney owned and operated by petitioner
Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers,
Sunga was given by the conductor an "extension seat," a wooden stool at the
back of the door at the rear end of the vehicle.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped

to let a passenger off. As she was seated at the rear of the vehicle, Sunga
gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck
driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear
portion of the jeepney. As a result, Sunga was injured.

On October 9, 1989, Sunga filed a complaint for damages against Calalas,

alleging violation of the contract of carriage by the former in failing to
exercise the diligence required of him as a common carrier. Calalas, on the
other hand, filed a third-party complaint against Francisco Salva, the owner of
the Isuzu truck.

The Regional Trial Court of Dumaguete rendered judgment against Salva

holding that the driver of the Isuzu truck was responsible.

The Court of Appeals reversed the RTC, awarding damages instead to

Sunga as plaintiff in an action for breach of contract of carriage since the
cause of action was based on such and not quasi delict. Hence, current
petition for review on certiorari.

Issues:
(1)Whether the decision in the Civil Case No 3490 for quasi-delict
between Calalas on one hand and Salva and Verena on the other, is res
judicata to the issue in this case.

(2) Whether the ruling in Civil Case No 3490 that the negligence of Verena was the
proximate cause of the accident negates Calalas liability.

Ruling:
 12

1. No. There is no basis for the contention that the ruling in Civil Case No 3490,
finding Salva and his driver Verena liable for the damage to Calalas jeepney,
should be binding on Sunga. The latter was never a party to the Civil Case.
Nor are the issues in Civil Case No. 3490 and in the present case the same.
The issue in Civil Case No. 3490 was whether Salva and his driver Verena
were liable for quasi-delict for the damage caused to petitioner's jeepney. On
the other hand, the issue in this case is whether petitioner is liable on his
contract of carriage. The first, quasi-delict, also known as culpa aquiliana or
culpa extra contractual, has as its source the negligence of the tortfeasor.
The second, breach of contract or culpa contractual, is premised upon the
negligence in the performance of a contractual obligation. Consequently, in
quasi-delict, the negligence or fault should be clearly established because it
is the basis of the action, whereas in breach of contract, the action can be
prosecuted merely by proving the existence of the contract and the fact that
the obligor, in this case the common carrier, failed to transport his passenger
safely to his destination.
2. No. It is immaterial that the proximate cause of the collision between the jeepney
and the truck was the negligence of the truck driver. The doctrine of
proximate cause is applicable only in actions for quasi-delict, not in actions
involving breach of contract. The doctrine is a device for imputing liability to
a person where there is no relation between him and another party. In such a
case, the obligation is created by law itself. But, where there is a pre-existing
contractual relation between the parties, it is the parties themselves who
create the obligation, and the function of the law is merely to regulate the
relation thus created. Insofar as contracts of carriage are concerned, some
aspects regulated by the Civil Code are those respecting the diligence
required of common carriers with regard to the safety of passengers as well
as the presumption of negligence in cases of death or injury to passengers.
 13

THE ILOCOS NORTE ELECTRIC COMPANY

vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN JUAN LUIS,
JANE JUAN YABES, VIRGINIA JUAN CID, GLORIA JUAN CARAG, and
PURISIMA JUAN
G.R. No. L-53401 November 6, 1989

Facts:

In the evening of June 28 until the early morning of June 29, 1967, typhoon
"Gening" buffeted the Province of Ilocos Norte, bringing heavy rains and consequent
flooding in its wake. Between 5:30 and 6:00 A.M. on June 29, 1967, after the typhoon
had abated and when the floodwaters were beginning to recede, the deceased Isabel Lao
Juan, fondly called Nana Belen, ventured out of the house of her son-in-law, Antonio
Yabes, on No. 19 Guerrero Street, Laoag City, and proceeded northward towards the
direction of the Five Sisters Emporium, of which she was the owner and proprietress, to
look after the merchandise therein that might have been damaged. Wading in waist-deep
flood on Guerrero, the deceased was followed by Aida Bulong and Linda Alonzo
Estavillo. Aida and Linda walked side by side at a distance of between 5 and 6 meters
behind the deceased. Suddenly, the deceased screamed "Ay" and quickly sank into the
water. The two girls attempted to help, but fear dissuaded them from doing so because on
the spot where the deceased sank they saw an electric wire dangling from a post and
moving in snake-like fashion in the water. Upon their shouts for help, Ernesto dela Cruz
came out of the house of Antonio Yabes. Ernesto tried to go to the deceased, but at four
meters away from her he turned back shouting that the water was grounded. When
Antonio Yabes was informed by Ernesto that his mother-in law had been electrocuted, he
acted immediately. Yabes passed by the City Hall of Laoag to request the police to ask the
people of Ilocos Norte Electric Company or INELCO to cut off the electric current. Then
the party waded to the house on Guerrero Street. The floodwater was receding and the
lights inside the house were out indicating that the electric current had been cut off in
Guerrero. Yabes instructed his boys to fish for the body of the deceased. The body was
recovered about two meters from an electric post.

Meanwhile, on the same day the incident happen, Engr. Antonio Juan of the National
Power Corporation set out on an inspection trip between 6:00 and 6:30 A.M., he saw
 14

grounded and disconnected electric lines owned by such electric company but saw
no INELCO lineman. The INELCO Office at the Life theatre on Rizal Street was still
closed.

An action for damages was instituted by the heirs of the deceased before the CFI of
Ilocos Norte a year after the incident. At the trial, petitioners witnesses testified in a
general way about their duties and the measures which defendant usually adopts to
prevent hazards to life and limb. From these testimonies, the lower court found that the
electric lines and other equipment of the electric company were properly maintained by a
well-trained team of lineman, technicians and engineers working around the clock to
insure that these equipments were in excellent condition at all times. The petitioner then,
prays that the company be exonerated from liability since typhoons and floods are
fortuitous events and that the acts of the private respondents falls within the sphere of the
maxim of "volenti non fit injuria"

Issue:

Can the petitioner-company, in this case, be exonerated from liability on

the contention that typhoons and floods are fortuitous events?

Ruling:

No. While it is true that typhoons and floods are considered Acts of God
for which no person may be held responsible, it was not said eventuality
which directly caused the victim's death. It was through the intervention of
petitioner's negligence that death took place. The finding of the lower court
was based on what the defendant's(petitioner-company) employees were
supposed to do, not on what they actually did or failed to do on the date in
question, and not on the occasion of the emergency situation brought about
by the typhoon.

In times of calamities such as the one which occurred in Laoag City on the
night of June 28 until the early hours of June 29, 1967, extraordinary diligence
requires a supplier of electricity to be in constant vigil to prevent or avoid any
probable incident that might imperil life or limb. The evidence does not show
that defendant-company did that. On the contrary, evidence discloses that
there were no men policing the area, nor even manning its office. Indeed,
under the circumstances of the case, petitioner was negligent in seeing to it
that no harm is done to the general public. Considering that electricity is an
agency, subtle and deadly, the measure of care required of electric
companies must be commensurate with or proportionate to the danger. The
duty of exercising this high degree of diligence and care extends to every
place where persons have a right to be (Astudillo vs. Manila Electric, 55 Phil.
427). The negligence of petitioner having been shown, it may not now
absolve itself from liability by arguing that the victim's death was solely due
to a fortuitous event. When an act of God combines or concurs with the
negligence of the defendant to produce an injury, the defendant is
liable if the injury would not have resulted but for his own negligent
conduct or omission.

Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds
no application in the case at bar. It is imperative to note the surrounding
circumstances which impelled the deceased to leave the comforts of a roof
and brave the subsiding typhoon. As testified by Linda Alonzo Estavillo and
Aida Bulong, the deceased, accompanied by the former two, were on their
way to the latter's grocery store "to see to it that the goods were not
flooded." As such, shall We punish her for exercising her right to protect her
property from the floods by imputing upon her the unfavorable presumption
that she assumed the risk of personal injury? Definitely not. For it has been
held that a person is excused from the force of the rule, that when he
 15

voluntarily assents to a known danger he must abide by the

consequences, if an emergency is found to exist or if the life or
property of another is in peril, or when he seeks to rescue his
endangered property. Clearly, an emergency was at hand as the
deceased's property, a source of her livelihood, was faced with an impending
loss. Furthermore, the deceased, at the time the fatal incident occurred, was
at a place where she had a right to be without regard to petitioner's consent
as she was on her way to protect her merchandise. Hence, private
respondents, as heirs, may not be barred from recovering damages as a
result of the death caused by petitioner's negligence.

AVELINO CASUPANAN and ROBERTO CAPITULO

vs.
MARIA LLAVORE LAROYA
G.R. No. 145391. August 26, 2002

Facts:
Two vehicles, one driven by respondent Mario Llavore Laroya (Laroya for brevity)
and the other owned by petitioner Roberto Capitulo (Capitulo for brevity) and driven by
petitioner Avelino Casupanan (Casupanan for brevity), figured in an accident. As a result,
two cases were filed with the Municipal Circuit Trial Court (MCTC for brevity) of Capas,
Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting
in damage to property, docketed as Criminal Case No. 002-99. On the other hand,
Casupanan and Capitulo filed a civil case against Laroya for quasi-delict, docketed as
Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its preliminary
investigation stage. Laroya, defendant in the civil case, filed a motion to dismiss the civil
case on the ground of forum-shopping considering the pendency of the criminal case. The
MCTC granted the motion in the Order of March 26, 1999 and dismissed the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case
is a separate civil action which can proceed independently of the criminal case. The
MCTC denied the motion for reconsideration in the Order of May 7, 1999. Casupanan
and Capitulo filed a petition for certiorari under Rule 65 before the Regional Trial Court
(Capas RTC for brevity) of Capas, Tarlac, assailing the MCTCs Order of dismissal but
the Capas RTC dismissed the petition for certiorari for lack of merit.
 16

Issue:
Can an accused in a pending criminal case for reckless imprudence can validly file,
simultaneously and independently, a separate civil action for quasi-delict against the
private complainant in the criminal case?
Ruling:
Yes. The criminal case is based on culpa criminal punishable under the Revised
Penal Code while the civil case is based on culpa aquiliana actionable under Articles
2176 and 2177 of the Civil Code. Laroya filed the criminal case for reckless imprudence
resulting in damage to property based on the Revised Penal Code while Casupanan and
Capitulo filed the civil action for damages based on Article 2176 of the Civil Code.
Although these two actions arose from the same act or omission, they have different
causes of action. Article 2176 provides that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the parties, is called
a quasi-delict and is governed by the provisions of this Chapter. Further, Art. 2177 reads
that responsibility for fault or negligence under the preceding article is entirely separate
and distinct from the civil liability arising from negligence under the Penal Code. But the
plaintiff cannot recover damages twice for the same act or omission of the defendant. Any
aggrieved person can invoke these articles provided he proves, by preponderance of
evidence, that he has suffered damage because of the fault or negligence of another.
There is nothing in the law or rules that state only the private complainant in a criminal
case may invoke these articles. Hence, either the private complainant or the accused can
file a separate civil action under these articles.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION v. TRANSPORT

VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., et al.
G.R. No. 150255. April 22, 2005

Facts:

SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board
M/V Alexander Saveliev (a vessel of Russian registry and owned by respondent Black
Sea) 545 hot rolled steel sheets. The vessel arrived at the port of Manila and the
Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at
the Manila South Harbor. Petitioner Schmitz Transport, engaged to secure the requisite
clearances, to receive the cargoes from the shipside, and to deliver them to Little Giant
Steelpipe Corporations warehouse at Cainta, Rizal. It likewise engaged the services of
respondent Transport Venture Inc. (TVI) to send a barge and tugboat at shipside.

The tugboat, after positioning the barge alongside the vessel, left and returned to the
port terminal. Later on, arrastre operator commenced to unload 37 of the 545 coils from
the vessel unto the barge. By noon the next day, during which the weather condition had
become inclement due to an approaching storm, the unloading unto the barge of the 37
coils was accomplished. However, there was no tugboat that pulled the barge back to the
pier. Eventually, because of the strong waves, the crew of the barge abandoned it and
transferred to the vessel. The barge capsized, washing the 37 coils into the sea. Earnest
efforts on the part of both the consignee Little Giant and Industrial Insurance to recover
the lost cargoes proved futile.
 17

Industrial Insurance later filed a complaint against Schmitz Transport, TVI and Black
Sea through its representative Inchcape (the defendants) before the RTC of Manila, for
the recovery of the amount it paid to Little Giant plus adjustment fees, attorneys fees,
and litigation expenses. Industrial Insurance won and the Schmitz et al.s motion for
reconsideration is denied.

In effect, Schmitz now filed charges against TVI et al. It asserts that in chartering the
barge and tugboat of TVI, it was acting for its principal, consignee Little Giant, hence,
the transportation contract was by and between Little Giant and TVI. The Court rendered
a decision holding Schmitz and TVI liable.

Issues:

1. Was the loss of the cargoes due to a fortuitous event, independent of any act of
negligence on the part of petitioner Black Sea and TVI?

2. Assuming that there is negligence, who is/are liable for such loss?

Ruling:

1. No. The failure of TVI to tow the barge back in the pier was the proximate cause
of the loss of the cargoes. Settled is the rule that an act of God doctrine strictly
requires that the act must be occasioned solely by the violence of nature. Human
intervention is to be excluded from creating or entering into the cause of the
mischief. When the effect is found to be in part the result of the participation of
man, whether due to his active intervention or neglect or failure to act, the whole
occurrence is then humanized and removed from the rules applicable to the acts of
God. Had the barge been towed back promptly to the pier, the deteriorating sea
conditions notwithstanding, the loss could have been avoided. But the barge was
left floating in open sea until big waves set in at 5:30 a.m., causing it to sink along
with the cargoes. The loss thus falls outside the act of God doctrine.

2. Schmitz and TVI are solidarily liable for the loss of the cargoes. TVIs failure to
promptly provide a tugboat did not only increase the risk that might have been
reasonably anticipated during the shipside operation, but was the proximate cause
of the loss. A man of ordinary prudence would not leave a heavily loaded barge
floating for a considerable number of hours, at such a precarious time, and in
the open sea, knowing that the barge does not have any power of its own and is
totally defenseless from the ravages of the sea. That it was nighttime and,
therefore, the members of the crew of a tugboat would be charging overtime pay
did not excuse TVI from calling for one such tugboat. As for Schmitz, for it to be
relieved of liability, it should, following Article 1739 of the Civil Code, prove that
it exercised due diligence to prevent or minimize the loss, before, during and after
the occurrence of the storm in order that it may be exempted from liability for the
loss of the goods. While Schmitz sent checkers and a supervisor on board the
vessel to counter-check the operations of TVI, it failed to take all available and
reasonable precautions to avoid the loss. After noting that TVI failed to arrange
for the prompt towage of the barge despite the deteriorating sea conditions, it
should have summoned the same or another tugboat to extend help, but it did not.
As for Black Sea, its duty as a common carrier extended only from the time the
goods were surrendered or unconditionally placed in its possession and received
for transportation until they were delivered actually or constructively to consignee
Little Giant. Since Black Sea had constructively delivered the cargoes to Little
Giant, through Schmitz, it had discharged its duty. In fine, no liability may thus
attach to Black Sea.
 18

Samsung Construction Company Philippines, Inc. vs. Far East Bank

and Trust Company and CA
G.R. No. 129015, August 13, 2004

Facts:

Samsung Construction Company Philippines, Inc. (Samsung Construction)

had a deposit account with Far East Bank and Trust Company (FEBTC). A
certain Robert Gonzaga presented a check for payment before the FEBTC
branch in Makati. The check was payable to Cash and drawn against
Samsung Construction's current account in the amount of P999,500.00. The
bank teller then compared the signature appearing on the check with the
specimen signature of Jong as contained in the specimen signature card with
the bank. The teller was satisfied that it was Jongs signature on the check.
She then asked Gonzaga to submit proof of his identity, which the latter did
through three identification cards. At the same time, she forwarded the check
to branch Senior Assistant Cashier Gemma Velez who counter checked the
signature on the check with the specimen. She then forwarded the check to
Shirley Syfu, another bank branch officer, for approval. Syfu noticed that Jose
Sempio III, the assistant accountant of Samsung Construction, was also in the
bank. Syfu showed the check to Sempio, who verified Jongs signature and
vouched for the identity of Gonzaga. Syfu then authorized the bank's
 19

encashment of the check to Gonzaga. The following day, accountant Kyu

examined the balance of the bank account of Samsung Construction and
discovered that a check worth P999,500 had been encashed. Aware that he
had not prepared such check he reported the matter to Jong, who learned of
the encashment of the check, and realized that his signature had been
forged. Samsung Construction sued FEBTC before the Regional Trial Court
(RTC) for violation of Section 23 of the Negotiable Instruments Law. The RTC
gave more weight to the NBI examiners findings, and found in favor of
Samsung Construction. On appeal, the Court of Appeals (CA) reversed the
RTC decision and absolved FEBTC from any liability. Hence, the present
petition.

Issues:

1. Whether or not the bank was negligent when it encashed the forged
check.

Ruling:

Yes, the bank is negligent in encashing the forged check. The Court rules
that while it is true that the bank complied with its internal rules prior to
paying out the questionable check, there are several troubling circumstances
that led the Court to believe that the bank itself was remiss in its duty. The
Supreme Court reiterates that the highest degree of care and diligence is
required of banks. Banks are engaged in a business impressed with public
interest, and it is their duty to protect their many clients and depositors who
transact business with them. They have the obligation to treat their client's
account meticulously and with the highest degree of care, considering the
fiduciary nature of their relationship. The diligence required of banks,
therefore, is more than that of a good father of a family. Given the
circumstances, extraordinary diligence dictates that FEBTC should have
ascertained from Jong personally that the signature in the questionable check
was his.

LIBI VS IAC
G.R. No. 70890. September 18, 1992

Facts:

Julie Ann Gotiong and Wendell Libi, both minors, are sweethearts for more
than two years until Julie (for brevity) broke up her relationship with Wendell
after she found him to be sadistic and irresponsible. Wendell wanted
reconciliation but Julie persisted in her refusal. This prompted the former to
resort to threats against her. One day Julie Ann and Wendell died from a
single gunshot wound each comingfrom the same
Smith and Wesson revolver licensed in the name of petitioner Cresencio Libi,
Wendells father.
 20

As a result of the tragedy, the parents of Julie Ann filed Civil Case against
the parents of Wendell to recover damages arising from the latters vicarious
liability under Article 2180 of the Civil Code. After trial, the court rendered
judgment dismissing plaintiffs complaint for insufficiency of the evidence. CA
set aside the decision of the lower court.

Issue:

1. Whether or not Wendells parents should be held liable for damages.

Ruling:

The civil liability of parents for quasi-delicts of their minor children, is

contemplated in Article 2180 of the Civil Code. Accordingly, such parental
liability is primary and not subsidiary, as the last paragraph of Article 2180
provides that" (t)he responsibility treated of in this article shall cease when
the persons herein mentioned prove that they observed all the diligence of a
good father of a family to prevent damages." In other words, the parents'
liability as being primary and not subsidiary and liability shall ceased if the
parents can prove that they observe all the diligence of a good father to
prevent damage.

However, defendants-appellees utterly failed to exercise all the diligence

of a good father of the family in preventing their minor son from committing
this crime by means of the gun which was freely accessible to Wendell Libi for
they have not regularly checked whether said gun was still under lock, but
learned that it was missing from the safety deposit box only after the crime
had been committed. Wendell could have not gotten hold of the gun if the
key was not left negligently lying around.

Valenzuela vs. CA
253 SCRA 303, February 7, 1996

Facts:

Plaintiff Valenzuela was driving at Marcos highway to her home, at around

2:00 in the morning. She noticed something wrong with her tires; she stopped
at a lighted place where there were people, to verify whether she had a flat
tire and to solicit help if needed. Having been told by the people present that
her rear right tire was flat, she parked along the sidewalk, and about 1-1/2
feet away, put on her emergency lights, alighted from the car, and went to
 21

the rear to open the trunk. She was standing at the left side of the rear of her
car pointing to the tools to a man who will help her fix the tire when she was
suddenly bumped by a car driven by defendant Richard Li and registered in
the name of defendant Alexander Commercial, Inc. Because of the impact
plaintiff was thrown against the windshield of the car of the defendant, which
was destroyed, and then fell to the ground. She was confined in the hospital
for twenty days and was eventually fitted with an artificial leg.

Issues:

1. Whether or not Li was negligent.

2. Whether or not Valenzuela was guilty of contributory negligence.
3. Whether or not Alexander Commercial, Inc. as Li's employer should be
held
liable.

Ruling:

1. Yes. Valenzuela's version of the incident was fully corroborated by an uninterested

witness. As between Li's "self-serving" asseverations and the observations of a witness
who did not even know the accident victim personally and who immediately gave a
statement of the incident similar to his testimony to the investigator immediately after the
incident, the latter's testimony deserves greater weight.

2. No. Under the "emergency rule", an individual who suddenly finds himself in a
situation of danger and is required to act without much time to consider the best means
that may be adopted to avoid the impending danger, is not guilty of negligence if he fails
to undertake what subsequently and upon reflection may appear to be a better solution,
unless the emergency was brought by his own negligence. The emergency which led her
to park her car on a sidewalk was not of her own making, and it was evident that she had
taken all reasonable precautions.

3. Yes. Utilizing the bonus pater familias standard expressed in Article 2180 of the
Civil Code, we are of the opinion that Li's employer, Alexander Commercial, Inc. is
jointly and solidarily liable for the damage caused by the accident. Based on the principle
of pater familias, the liability ultimately falls upon the employer for his failure to
exercise the diligence of a good father of the family in the selection and supervision of
his employees.

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO

vs.HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC
Judge, Branch 20, Vigan, Ilocos Sur; VICTOR BUNDOC; and CLARA
BUNDOC
G.R. No. 85044 June 3, 1992

Facts:
 22

On October 20, 1982, Adelberto Bundoc, then a minor of 10 years of age, shot
Jennifer Tamargo with an air rifle causing injuries which resulted in her death.
Accordingly, a civil complaint for damages was filed with the Regional Trial Court by
petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and
Aurelia Tamargo, Jennifer's natural parents against respondent spouses Victor and Clara
Bundoc, Adelberto's natural parents with whom he was living at the time of the tragic
incident.

Prior to the incident, the spouses Sabas and Felisa Rapisura had filed a petition to
adopt the minor Adelberto Bundoc before the then Court of First Instance of Ilocos Sur.
This petition for adoption was granted after Adelberto had shot and killed Jennifer. In
their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result
of the foregoing petition for adoption, claimed that not they, but rather the adopting
parents, namely the spouses Sabas and Felisa Rapisura, were indispensable parties to the
action since parental authority had shifted to the adopting parents from the moment the
successful petition for adoption was filed. Petitioners in their Reply contended that since
Adelberto Bundoc was then actually living with his natural parents, parental authority
had not ceased nor been relinquished by the mere filing and granting of a petition for
adoption. The trial court dismissed petitioners' complaint, ruling that respondent natural
parents of Adelberto indeed were not indispensable parties to the action.

Issue:

Whether or not the effects of adoption, insofar as parental authority is concerned may
be given retroactive effect so as to make the adopting parents the indispensable parties in
a damage case filed against their adopted child, for acts committed by the latter, when
actual custody was yet lodged with the biological parents?

Ruling:

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

JOSE AMADORA, ET. AL vs. HONORABLE COURT OF APPEALS

G. R. NO. L-47745 April 15, 1988

Facts:
 23

On April 13, 1972, while they were in the auditorium of their school, the Colegio de
San Jose-Recoletos, a classmate, Pablito Daffon, fired a gun that mortally hit and killed
the seventeen years old, Alfredo Amadora. Daffon was convicted of homicide thru
reckless imprudence. Additionally, the herein petitioners, Amadora, as the victim's
parents, filed a civil action for damages under Article 2180 of the Civil Code against the
Colegio de San Jose-Recoletos, its rector the high school principal, the dean of boys, and
the physics teacher, together with Daffon and two other students, through their respective
parents.

The complaint against the students was later dropped. After trial, the Court of First
Instance of Cebu held the remaining defendants liable to the plaintiffs. On appeal to the
respondent court, the school averred that the students were not in the custody of the
school at the time of the incident as the semester had already ended. The petitioners,
contend that their son was in the school to show his physics experiment as a prerequisite
to his graduation; hence, he was then under the custody of the private respondents. The
Court of Appeals ruled in favor of the school. It found that Article 2180 was not
applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades but an
academic institution of learning.

Issue:

Whether Colegio de San Jose-Recoletos, an academic school, is liable under Article

2180 of the Civil Code for the tortuous act of Daffon.

Ruling:

No. Although the Supreme Court ruled that (1) ALL schools, academic or not,
may be held liable under the provision of Article 2180 which provides that: 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 and
that (2) such liability does not cease when the school year ends or when the semester ends
and the responsibility of the school authorities over the student continues so long as it can
be shown that the student is in the school premises in pursuance of a legitimate student
objective, in the exercise of a legitimate student right, and even in the enjoyment of a
legitimate student right, and even in the enjoyment of a legitimate student privilege, the
Colegio de San Jose-Recoletos cannot be held directly liable under the article because
only the teacher or the head of the school of arts and trades is made responsible for the
damage caused by the student or apprentice. Neither can it be held to answer for the tort
committed by any of the other private respondents for none of them has been found to
have been charged with the custody of the offending student or has been remiss in the
discharge of his duties in connection with such custody. In the case at bar, the Physics
teacher in charge was not properly named, and there was no sufficient evidence presented
to make the said teacher-in-charge liable. Thus, absent the direct liability of the teachers
because of the foregoing reason, the school cannot be held subsidiarily liable too.

ST. FRANCIS HIGH SCHOOL vs. THE HONORABLE COURT OF APPEALS

G.R. No. 82465 February 25, 1991
 24

Facts:

Ferdinand Castillo, a freshman student at the St. Francis High School, wanted to join
a school picnic at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents
spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not
allow their son to join but merely allowed him to bring food to the teachers for the picnic,
with the directive that he should go back home after doing so. However, because of
persuasion of the teachers, Ferdinand went on with them to the beach. During the picnic,
one of the female teachers was apparently drowning. Some of the students, including
Ferdinand, came to her rescue, but in the process, it was Ferdinand himself who drowned
and later on died.

Thereupon, respondent spouses filed a complaint in the Regional Trial Court against
the St. Francis High School, and the teachers contending that the death of their son was
due to the failure of the petitioners to exercise the proper diligence of a good father of the
family in preventing their son's drowning. The trial court found the teachers liable but
dismissed the case against the school. The Court of Appeals declared that the teachers
failed to exercise the diligence of a good father of the family to guard against the foreseen
harm. Also, the school and the principal Benjamin Illumin was declared jointly and
solidarily liable with the teachers for the death of Ferdinand Castillo, under Article 2180
of the Civil Code of the Philippines.

Issue:

Whether the school St. Francis High School, principal, teachers were liable
for the death of Ferdinand.

Ruling:

No. Under Article 2180 of the Civil Code, before an employer may be held liable for
the negligence of his employee, the act or omission which caused damage or prejudice
must have occurred while an employee was in the performance of his assigned tasks. In
the case at bar, the teachers/petitioners were not in the actual performance of their
assigned tasks. The incident happened not within the school premises, not on a school
day and most importantly while the teachers and students were holding a purely private
affair, a picnic which had no permit from the school head or its principal, Benjamin
Illumin because this picnic is not a school sanctioned activity neither is it considered as
an extra-curricular activity. Also, mere knowledge by petitioner/principal Illumin of the
planning of the picnic by the students and their teachers does not in any way or in any
manner show acquiescence or consent to the holding of the same. The application
therefore of Article 2180 has no basis in law and neither is it supported by any
jurisprudence.

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

warrant the award of damages to the respondents-spouses. The class adviser
of the section where Ferdinand belonged did her best and exercised diligence
of a good father of a family to prevent any untoward incident or damages to
all the students who joined the picnic.
 25

JARCO MARKETING CORPORATION V. CA

G.R. No. 129792, 21 December 1999

Facts:

On May 9, 1983, Criselda and her 6 year old daughter Zhieneth were at
the second floor of Syvels Department Store, Makati City. While Criselda was
signing her credit card slip at the counter, suddenly she felt a sudden gust of
wind and heard a loud thud. As she looked behind her, she saw Zhieneth's
body pinned by the entire structure of the store's gift-wrapping counter.
Zhieneth was quickly rushed to the Makati Medical Center where she was
operated on.

The following day, Zhieneth lost her speech and can only communicate
through a magic slate. Unfortunately, she died 14 days later because of the
severity of her injuries. After the burial, Crisielda demanded upon Jarco
Marketing the reimbursement of the hospitalization, medical bills and wake
and funeral expenses which they had incurred. But, they refused to pay
hence, Crisielda filed for a complaint for damages.

In Jacos counterclaim, they denied any liability. 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. Further, they contended that 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.

Issue:

Whether Jarco marketing was negligent or it was an accident.

Ruling:

Yes, Jaco Marketing was negligent. What transpired was not an

unforeseen event in which would attach no fault on the part of the defendant.
Jaco Marketing failed to observe for the protection of the interest of another
person and show that degree of care, precaution and vigilance. Under the
circumstances thus described, it is unthinkable for Zhieneth, a child of such
tender age is incapable of contributory negligence. 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.

Further, 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.
 26

PHIL. SCHOOL OF BUSINESS ADMINISTRATION V. CA

G.R. No. 84698, 4 February 1992

Facts:

Carlos Bautista is a third-year commerce student of Philippine School of

Business Administration. He was stabbed to death by assailants who were not
members of the schools academic community while on the second floor
premises of their school.

The parents of Carlos Bautista filed a civil action against the school
authorities alleging that the school is negligent, reckless and with failure to
take security precautions during and after the attack. The case was elevated
in the court of appeals, and the CA favored the claim of the parents of
Baustista.

Issue:

Whether the appellate court was correct in deciding the case based on
Article 2180- in loco parentis

Whether the application of the law on quasi-delicts is proper when there

is a pre-existing contract

Ruling:

The SC did not agree with the premises of the CAs ruling. Article 2180, in
conjunction with Article 2176 of the Civil Code, establishes the rule in in loco
parentis. It had been stressed that the law (Article 2180) plainly provides that
the damage should have been caused or inflicted by pupils or students of the
educational institution sought to be held liable for the acts of its pupils or
students while in custody.

Hoewever, this material situation does not exist in the present case for
the assailants of Carlitos were not students of PSBA, for whose acts the
school could have been made liable.

As to whether PSBA is exculpated for liability, it does not necessarily

follows. It does not necessarily follow. When an academic institution accepts
students for enrollment, there is established a contract between them,
resulting in bilateral obligations which both parties are bound to comply with.

Moreover, there is that built-in obligation to provide students with an

atmosphere that promotes or assists in attaining its primary undertaking of
imparting knowledge. The school must ensure that adequate steps are taken
to maintain the peace and order inside the school. Because of the
circumstances of the present case shows a contractual relation between the
school and Carlitos, the rule on quasi-delict do not really govern but it does
not relieve the school from extra contractual liability to Carlitos. In the
present case, there is no finding that the contract between the school and
 27

Carlitos had been breached thru the schools negligence in providing proper
security measures.

ST. MARYS ACADEMY V. CARPITANOS

G.R. No. 143363, 6 February 2002

Facts:

Herein petitioner, conducted an enrollment drive for the school year

1995-1996 They visited schools from where prospective enrollees were
studying. Sherwin Carpitanos joined the campaign. Along with the other
high school students, they rode a Mitsubishi jeep owned by Vivencio
Villanueva on their way to Larayan Elementary School. Such jeep was driven
by James Daniel II, a 15 year old student of the same school. It was alleged
that he drove the jeep in a reckless manner which resulted for it to turned
turtle. Sherwin died due to this accident.

Issue:

Whether the petitioner should be held liable for the damages.

Ruling:

The petitioner liable for the death of Sherwin under Article 218 and 219 of
the Family Code where it was pointed that they were negligent in allowing a
minor to drive and not having a teacher accompany the minor students in the
jeep. However, for them to be held liable, the act or omission to be
considered negligent must be the proximate cause of the injury caused thus,
negligence needs to have a causal connection to the accident. It must be
direct and natural sequence of events, unbroken by any efficient intervening
causes.

The parents of the victim failed to show such negligence on the part of
the petitioner. The spouses Villanueva admitted that the immediate cause of
the accident was not the reckless driving of James but the detachment of the
steering wheel guide of the jeep. Further, there was no evidence that
petitioner allowed the minor to drive the jeep of Villanueva. The mechanical
defect was an event over which the school has no control hence they may not
be held liable for the death resulting from such accident.

The registered owner of any vehicle, even if not used for public service,
would primarily be responsible to the public or to 3 rd persons for injuries
caused while it is being driven on the road. It is not the school, but the
registered owner of the vehicle who shall be held responsible for damages for
the death of Sherwin. Case was remanded to the trial court for determination
of the liability of the defendants excluding herein petitioner.
 28

Castilex Industrial Corporation v. Vicente Vasquez, Jr.

G.R. No. 132266, December 21, 1999

Facts:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So
Vasquez, was driving a motorcycle around Fuente Osmea Rotunda. He was
traveling counter-clockwise, but without any protective helmet. He was also
only carrying a Student's Permit to Drive at that time. Upon the other hand,
Benjamin Abad, manager of Castilex Industrial Corporation, registered owner
of a pick-up, drove the said company car out of a parking lot. But instead of
going around the Osmea rotunda, he made a shortcut against the flow of
the traffic.

In the process, the motorcycle of Vasquez and the pick-up of Abad

collided with each other causing severe injuries to the former. Abad stopped
his vehicle and brought Vasquez to the Southern Islands Hospital and later to
the Cebu Doctor's Hospital. On September 5, 1988, Vasquez died at the Cebu
Doctor's Hospital. It was there that Abad signed an acknowledgment of
Responsible Party wherein he agreed to pay whatever hospital bills,
professional fees and other incidental charges Vasquez may incur.

After the police authorities had conducted the investigation of the

accident, a Criminal Case was filed against Abad but which was subsequently
dismissed for failure to prosecute. The present action for damages was
commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the
deceased Romeo So Vasquez, against Abad and Castilex Industrial
Corporation. In the same action, Cebu Doctor's Hospital intervened to collect
unpaid balance for the medical expense given to Romeo So Vasquez.

Issue:

WON Castilex Industrial Corporation may be held vicariously liable for the death of
Romeo So Vasquez resulting from the negligent operation by Abad of a company-issued
vehicle.

Ruling:

NO. The mere fact that Abad was using a service vehicle at the time of the injurious
incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the
course or scope of his employment.
 29

In the case at bar, Abad did some overtime work at the petitioner's office.
Thereafter, he went to Goldie's Restaurant which is about seven kilometers
away from petitioner's place of business. At the Goldie's Restaurant, Abad
took some snacks and had a chat with friends. It was when Abad was leaving
the restaurant that the incident in question occurred.

To the mind of the Court, Abad was engaged in affairs of his own or was
carrying out a personal purpose not in line with his duties at the time he
figured in a vehicular accident. It was about 2:00 a.m., way beyond the
normal working hours. Abad's working day had ended; his overtime work had
already been completed. Since there is paucity of evidence that Abad was
acting within the scope of the functions entrusted to him, petitioner Castilex
Industrial Corporation had no duty to show that it exercised the diligence of a
good father of a family in providing Abad with a service vehicle. Thus, justice
and equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of Abad in driving its vehicle.

Petitioner Castilex Industrial Corporation is absolved of any liability for

the damages caused by its employee, Jose Benjamin Abad.
2/2
 30

Philippine Rabbit Bus Lines, Inc., et.al. V. Phil-American Forwarders

et.al.
G.R. No. L-25142, March 25, 1975

Facts:

On November 24, 1962, Fernando Pineda drove recklessly a freight truck, owned by
Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga.
The truck bumped the bus driven by Pangalangan, which was owned by Philippine
Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the
bus was damaged and could not be used for seventy-nine days, thus depriving the
company of earnings amounting to P8,665.51. Balingit was the manager of Phil-
American Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit
was not Pineda's employer. Balingit moved that the complaint against him be dismissed
on the ground that the bus company and the bus driver had no cause of action against
him.

Issue:

Whether the terms "employers", "owners and managers of an establishment or

enterprise" used in Article 2180 of the Civil Code, embrace the manager of a corporation
owning a truck, the reckless operation of which allegedly resulted in the vehicular
accident from which the damage arose.

Ruling:

NO. Those terms do not include the manager of a corporation. Under Article 2180
the term "manager" is used in the sense of "employer" and does not embrace a "manager"
who may himself be regarded as an employee or dependiente of his employer.

Under the allegations of the complaint, no tortious or quasi-delictual liability can be

fastened on Balingit as manager of Phil-American Forwarders, Inc., in connection with
the vehicular accident because he himself may be regarded as an employee of his
employer, Phil-American Forwarders, Inc.
 31

Ernesto Martin v. Hon. Court of Appeals and Manila Electric Company

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

Facts:

The private car of Ernesto Martin was being driven by Nestor Martin when it crashed
into a Meralco electric post. The car was wrecked and the pole severely damaged. Thus,
Meralco demanded reparation from Ernesto Martin, but the demand was rejected. It
thereupon sued him for damages, alleging inter alia that he was liable as the employer of
Nestor Martin. The petitioner's main defense was that Nestor Martin was not his
employee.
The complaint for damages was filed by the private respondent against Ernesto Martin
only as alleged employer of Nestor Martin, the driver of the car at the time of the
accident. Nestor Martin was not impleaded. The action was based on tort under Article
2180 of the Civil Code.

The defendant moved to dismiss the complaint on the ground that no evidence had
been adduced to show that Nestor Martin was his employee. The motion was denied. The
RTC held in favor of the plaintiff. The CA affirmed it in toto.

Issue:

WON Ernesto is liable for the damage caused by Nestor.

Ruling:

NO. Whether or not engaged in any business or industry, the employer under Article
2180 is liable for the torts committed by his employees within the scope of their assigned
task. But it is necessary first to establish the employment relationship.

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

The ownership of the car and the circumstances of the accident, are not enough
bases for the inference that the petitioner is the employer of Nestor Martin.

As the employment relationship between Ernesto Martin and Nestor Martin could not 4/1
be presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had
the burden of proof, or the duty "to present evidence on the fact in issue necessary to
 32

establish his claim" as required by Rule 131, Section 1 of the Revised Rules of Court.
Failure to do this is fatal to its action.

It was enough for the defendant to deny the alleged employment relationship,
without more, for he was not under obligation to prove this negative averment.

It is unnecessary to examine the question of the driver's alleged negligence or the

lack of diligence on the part of the petitioner in the selection and supervision of his
employee. These questions have not arisen because the employment relationship has not
been established.

HEIRS OF DIAZ-LEUS v MELVIDA

G.R. No. 77716-25; February 17, 1988

Facts:

Accused Melvida and Rosas, being then the persons in charge of Plymouth car and a
Victory Liner bus, respectively, did then and there wilfully, unlawfully and feloniously
drive and operate their respective motor vehicles in a negligent, careless and imprudent
manner, without due regard to traffic laws, rules and regulations and the weather
conditions, and without taking the necessary precaution to avoid injuries to persons and
damage to property, causing the said Plymouth car driven by the said accused Melvida to
swerve to its left, cross the island, and move onto the lane for the opposite traffic, and the
said Victory Liner bus to hit and bump the said Plymouth car, thereby inflicting on Diaz-
Leus which directly caused her death. The trial court found the accused Hernani Melvida
guilty beyond reasonable doubt of the offense charged (Reckless Imprudence resulting in
Double Homicide, Serious and Slight Physical Injuries and Damage to Property. For
failure to establish the guilt of accused Rosas beyond reasonable doubt, he is hereby
acquitted of the offense charged. From said decision the legal heirs appealed to the CA
only with respect to the civil aspect.

Issue:

WON accused-appellee Rosas could still be held civilly liable despite his acquittal in
the criminal case.
Ruling:

The findings of the Court of Appeals were a complete exoneration of Rosas. Since
petitioner's appeal on the civil aspect is predicated upon Rosas' alleged negligence which
has been found not to exist, this Court must likewise uphold the Court of Appeals' ruling
that Rosas' acquittal in the criminal case carries with it the extinction of his civil liability
which bars herein petitioners from recovering damages from Rosas. Since Rosas is
absolved from any act of negligence which in effect prevents further recovery of any
damages, the same is likewise true with respect to his employer victory Liner, Inc. which
at most would have been only subsidiarily liable.Nor can the spouses Jesus Gali and
Leonisa Gali as employers of respondent Hernani Melvida be subsidiarily liable. Art. 103
of the Revised Penal Code provides. The subsidiary liability established in the next
preceding article shall also apply to employers, teachers, persons and corporations
engaged in any kind of industry for felonies committed by their servants, pupils,
workmen, apprentices, or employees in the discharge of their duties.In order that
 33

employers may be held liable under the above-quoted provision of law, the following
requisites must exist.
(1) That an employee has committed a mime in the discharge of his duties;
(2) that said employee is insolvent and has not satisfied his civil liability;
and
(3) that the employer is engaged in some kind of industry. 6
The preceding requisites are not present in the case of the Gali spouses. They are not
engaged in any kind of industry. Industry has been defined as any department or branch
of art, occupation or business, especially, one which employs much labor and capital and
is a distinct branch of trade, as the sugar industry. 7
Thus, the Gali spouses cannot be held subsidiarily liable. As We stated in a previous case:
"Where the defendant is admittedly a private person who has no business or industry, and
uses his automobile for private purposes, he is not also subsidiarily liable to the plaintiff
for the damages to the latter's car caused by the reckless imprudence of his insolvent
driver." 8

DUAVIT v COURT OF APPEALS

G.R. No. 82318; May 18, 1989

Facts:

The jeep being driven by defendant Sabiniano collided with another jeep,
which had then two passengers on it. As a result of the collision the
passengers of the other jeep suffered injury and the automobile itself had to
be repaired because of the extensive damage. A case was filed against
Sabiniano as driver and against Duavit as owner of the jeep. Duavit admitted
ownership of the jeep but denied that Sabiniano was his employee. Sabiniano
himself admitted that he took Duavits jeep from the garage without consent
or authority of the owner. He testified further that Duavit even filed charges
against him for theft of the jeep, but which Duavit did not push through as
the parents of Sabiniano apologized to Duavit on his behalf. Trial Court found
Sabiniano negligent in driving the vehicle but absolved Duavit on the ground
that there was no employer-employee relationship between them, and that
former took the vehicle without consent or authority of the latter. CA held the
two of them jointly and severally liable.

Issue:

WON the owner of a private vehicle which figured in an accident can be

held liable under Article 2180 of the CC when the said vehicle was neither
driven by an employee of the owner nor taken with the consent of the latter.

Ruling:

NO. In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle cannot

be held liable for an accident involving a vehicle if the same was driven
without his consent or knowledge and by a person not employed by him. This
ruling is still relevant and applicable, and hence, must be upheld.

CAs reliance on the cases of Erezo v Jepte and Vargas v Langcay is

misplaced and cannot be sustained. In Erezo v Jepte case, defendant Jepte
 34

was held liable for the death of Erezo even if he was not really the owner of
the truck that killed the latter because he represented himself as its owner to
the Motor Vehicles Office and had it registered under his name; he was thus
estopped from later on denying such representation. In Vargas, Vargas sold
her jeepney to a third person, but she did not surrender to the Motor Vehicles
Office the corresponding AC plates. So when the jeepney later on figured in
an accident, she was held liable by the court holding that the operator of
record continues to be the operator of vehicle incontemplation of law, as
regards the public and third persons.

The circumstances of the above cases are entirely different from those in
the present case. Herein petitioner does not deny ownership of vehicle but
denies having employed or authorized the driver Sabiniano. The jeep was
virtually stolen from the petitioners garage.

Decision and resolution annulled and set aside.

BANAL v JUDGE TADEO and CLAUDIO

G.R. No. 78911-25; December 11, 1987

Facts:

Fifteen separate informations for violation of BP 22 were filed against respondent

Claudio before the RTC of Quezon City. On January 1987, the respondent court issued an
order rejecting the appearance of Atty. Nicolito L. Bustos as private prosecutor on the
ground that the charge is for the violation of BP 22 which does not provide for any civil
liability or indemnity and hence, "it is not a crime against property but public order." The
petitioner, through counsel filed a motion for reconsideration of the order. Respondent
Claudio filed her opposition to the motion. In an order, the respondent court denied
petitioner's MR. Hence, this petition questioning the orders of the respondent Court.

Issue:

WON the respondent Court acted with grave abuse of discretion or in excess of its
jurisdiction in rejecting the appearance of a private prosecutor.

Ruling:

Article 20 of the New Civil Code provides:

Every person who, contrary to law, wilfully or negligently causes damage
to another, shall indemnify the latter for the same.
Regardless, therefore, of whether or not a special law so provides, indemnification of the
offended party may be had on account of the damage, loss or injury directly suffered as a
consequence of the wrongful act of another. The indemnity which a person is sentenced
to pay forms an integral part of the penalty imposed by law for the commission of a crime
(Quemel v. Court of Appeals citing Bagtas v. Director of Prison). Every crime gives rise
to a penal or criminal action for the punishment of the guilty party, and also to civil action
 35

for the restitution of the thing, repair of the damage, and indemnification for the losses.
(United States v. Bernardo). Indeed one cannot disregard the private party in the case at
bar who suffered the offenses committed against her. Not only the State but the petitioner
too is entitled to relief as a member of the public which the law seeks to protect. She was
assured that the checks were good when she parted with money, property or services. She
suffered with the State when the checks bounced.

Civil liability to the offended private party cannot thus be denied, The payee of the
check is entitled to receive the payment of money for which the worthless check was
issued. Having been caused the damage, she is entitled to recompense.

The petitioner's intervention in the prosecution of Criminal Cases 40909 to 40913 is

justified not only for the protection of her interests but also in the interest of the speedy
and inexpensive administration of justice mandated by the Constitution (Section 16,
Article III, Bill of Rights, Constitution of 1987).

WHEREFORE the petition is hereby GRANTED. The respondent court is ordered to

permit the intervention of a private prosecutor in behalf of petitioner Charmina B. Banal,
in the prosecution of the civil aspect of the criminal cases.

SPOUSES FRANCISCO M. HERNANDEZ and ANICETA ABEL-

HERNANDEZ and JUAN GONZALES, petitioners, vs. SPOUSES
LORENZO DOLOR and MARGARITA DOLOR, FRED
PANOPIO, JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES
FRANCISCO VALMOCINA and VIRGINIA VALMOCINA,
SPOUSES VICTOR PANOPIO and MARTINA PANOPIO, and
HON. COURT OF APPEALS, respondents.
[G.R. No. 160286 July 30, 2004.]

Facts:

At about 3:00 p.m. of December 19, 1986, Lorenzo Menard "Boyet" Dolor, Jr. was
driving an owner-type jeepney with plate no. DEB 804 owned by her mother, Margarita,
towards Anilao, Batangas. As he was traversing the road at Barangay Anilao East,
Mabini, Batangas, his vehicle collided with a passenger jeepney bearing plate no. DEG
648, driven by petitioner Juan Gonzales and owned by his co-petitioner Francisco
Hernandez, which was travelling towards Batangas City. Boyet Dolor and his passenger,
Oscar Valmocina, died as a result of the collision. Fred Panopio, Rene Castillo and Joseph
Sandoval, who were also on board the owner-type jeep, which was totally wrecked,
suffered physical injuries. The collision also damaged the passenger jeepney of Francisco
Hernandez and caused physical injuries to its passengers.

Consequently, respondents commenced an action for damages against petitioners

before the Regional Trial Court of Batangas City, alleging that driver Juan Gonzales was
guilty of negligence and lack of care and that the Hernandez spouses were guilty of
negligence in the selection and supervision of their employees.
 36

Petitioners countered that the proximate cause of the death and injuries sustained by
the passengers of both vehicles was the recklessness of Boyet Dolor, the driver of the
owner-type jeepney, who was driving in a zigzagging manner under the influence of
alcohol. Petitioners also alleged that Gonzales was not the driver-employee of the
Hernandez spouses as the former only leased the passenger jeepney on a daily basis. The
Hernandez spouses further claimed that even if an employer-employee relationship is
found to exist between them, they cannot be held liable because as employers they
exercised due care in the selection and supervision of their employee.

During the trial of the case, it was established that the drivers of the two vehicles
were duly licensed to drive and that the road where the collision occurred was asphalted
and in fairly good condition. The owner-type jeep was travelling uphill while the
passenger jeepney was going downhill. It was further established that the owner-type jeep
was moderately moving and had just passed a road bend when its passengers, private
respondents Joseph Sandoval and Rene Castillo, saw the passenger jeepney at a distance
of three meters away. The passenger jeepney was traveling fast when it bumped the
owner type jeep. Moreover, the evidence presented by respondents before the trial court
showed that petitioner Juan Gonzales obtained his professional driver's license only on
September 24, 1986, or three months before the accident. Prior to this, he was holder of a
student driver's permit issued on April 10, 1986.

Issue:

WON the Court of Appeals was correct when it pronounced the Hernandez
spouses as solidarily liable with Juan Gonzales, although it is of record that
they were not in the passenger jeepney driven by latter when the accident
occurred

Ruling:

Yes. Court held that an employer-employee relationship exists between the

Hernandez spouses and Julian Gonzales hence making them solidarily liable. The court
was not persuaded when the Hernandez spouses argued that since they were not inside
the jeepney at the time of the collision, the provisions of Article 2180 of the Civil Code,
which does not provide for solidary liability between employers and employees, should
be applied.
 37

ERNESTO SYKI, petitioner, vs. SALVADOR BEGASA, respondent.

[G.R. No. 149149. October 23, 2003]

Facts:

Respondent Salvador Begasa and his three companions flagged down a

passenger jeepney driven by Joaquin Espina and owned by Aurora Pisuena.
While respondent was boarding the passenger jeepney (his right foot already
inside while his left foot still on the boarding step of the passenger jeepney),
a truck driven by Elizalde Sablayan and owned by petitioner Ernesto Syki
bumped the rear end of the passenger jeepney. Respondent fell and fractured
his left thigh bone. Respondent filed a complaint for damages for breach of
common carriers contractual obligations and quasi-delict against Aurora
Pisuena, the owner of the passenger jeepney;, herein petitioner Ernesto Syki,
theowner of the truck;, and Elizalde Sablayan, the driver of the truck. After
hearing, the trial court dismissed the complaint against Aurora Pisuena, the
owner and operator of the passenger jeepney, but ordered petitioner Ernesto
Syki and his truck driver, Elizalde Sablayan, to pay respondent Salvador
Begasa, jointly and severally

Issue:

1. Whether or not petitioner is liable for the act of his employee.

2. Whether he exercised the diligence of a good father of a family.

 38

Ruling:

In the present case, was respondent partly negligent and thus, should not
recover the full amount of the damages awarded by the trial court? We rule in
the negative. In sum, the sole and proximate cause of the accident was the
negligence of petitioners driver who, as found by the lower courts, did not
slow down even when he was already approaching a busy intersection within
the city proper. The passenger jeepney had long stopped to pick up
respondent and his three companions and, in fact, respondent was already
partly inside the jeepney, when petitioners driver bumped the rear end
ofrear-ended it. The impact was so strong such that respondent fell and
fractured his left thigh bone (femur), and suffered severely woundeds in his
left knee and leg. No doubt that respondentpetitioners driver was reckless
speeding.

Since the negligence of petitioners driver was the sole and proximate
cause of the accident, in the present case, petitioner is liable, under Article
2180 of the Civil Code, to pay damages to respondent Begasa for the injuries
sustained by latterhim. Petition denied.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION vs. TRANSPORT

VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK
SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING SERVICES
[G.R. No. 150255. April 22, 2005]

Facts:

On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of
Ilyichevsk, Russia on board M/V Alexander Saveliev 545 hot rolled steel sheets in coil
weighing 6,992,450 metric tons. The cargoes, which were to be discharged at the port of
Manila in favor of the consignee, Little Giant Steel Pipe Corporation (Little Giant), were
insured against all risks with Industrial Insurance Company Ltd. (Industrial Insurance)
under Marine Policy No. M-91-3747-TIS. The vessel arrived at the port of Manila and
the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater
at the Manila South Harbor.

Schmitz Transport, whose services the consignee engaged to secure the requisite
clearances, to receive the cargoes from the shipside, and to deliver them to its (the
consignees) warehouse at Cainta, Rizal, in turn engaged the services of TVI to send a
barge and tugboat at shipside. TVIs tugboat Lailani towed the barge Erika V to
shipside. The tugboat, after positioning the barge alongside the vessel, left and returned
to the port terminal. Arrastre operator Ocean Terminal Services Inc. commenced to
 39

unload 37 of the 545 coils from the vessel unto the barge. By 12:30 a.m. of October 27,
1991 during which the weather condition had become inclement due to an approaching
storm, the unloading unto the barge of the 37 coils was accomplished. No tugboat pulled
the barge back to the pier, however. At around 5:30 a.m. of October 27, 1991, due to
strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge
pitched and rolled with the waves and eventually capsized, washing the 37 coils into the
sea.

Little Giant thus filed a formal claim against Industrial Insurance which paid it the
amount of P5,246,113.11. Little Giant thereupon executed a subrogation receipt in favor
of Industrial Insurance. Industrial Insurance later filed a complaint against Schmitz
Transport, TVI, and Black Sea through its representative Inchcape (the defendants)
before the RTC of Manila, they faulted the defendants for undertaking the unloading of
the cargoes while typhoon signal No. 1 was raised. The RTC held all the defendants
negligent. Defendants Schmitz Transport and TVI filed a joint motion for reconsideration
assailing the finding that they are common carriers. RTC denied the motion for
reconsideration. CA affirmed the RTC decision in toto, finding that all the defendants
were common carriers Black Sea and TVI for engaging in the transport of goods and
cargoes over the seas as a regular business and not as an isolated transaction, and Schmitz
Transport for entering into a contract with Little Giant to transport the cargoes from ship
to port for a fee.
Issue:
If there was negligence, whether liability for the loss may attach to Black Sea,
petitioner and TVI.
Ruling:
This Court holds then that petitioner and TVI are solidarily liable for the loss of the
cargoes. The following pronouncement of the Supreme Court is instructive:

In the discharge of its commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common carrier is not relieved
of its responsibilities under the contract of carriage.

The liability of the common carrier and an independent contractor would be solidary
(Art. 2194). A liability for tort may arise even under a contract, where tort is that which
breaches the contract. Stated differently, when an act which constitutes a breach of
contract would have itself constituted the source of a quasi-delictual liability had no
contract existed between the parties, the contract can be said to have been breached by
tort, thereby allowing the rules on tort to apply.

As for Black Sea, its duty as a common carrier extended only from the time the
goods were surrendered or unconditionally placed in its possession and received for
transportation until they were delivered actually or constructively to consignee Little
Giant.
 40

SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC., Petitioner,

vs. FAR EAST BANK AND TRUST COMPANY AND COURT OF APPEALS,
Respondents.
2004-08-13 | G.R. No. 129015
Facts:

Samsung Construction maintained a current account with defendant Far

East Bank and Trust Company(FEBTC). The sole signatory to Samsung
Construction's account was Jong Kyu Lee , its Project Manager, while the
checks remained in the custody of the company's accountant, Kyu Yong Lee.

A certain Roberto Gonzaga presented to FEBTC a check payable to cash

and drawn against Samsung current account amounting to P999,500.00. The
bank teller Cleofe Justiani checked the balance and ascertained that there
were enough funds to cover the check. After ascertaining the authenticity of
 41

the signature of Jong she then asked Gonzaga to submit proof of his identity
and the latter presented 3 ID cards.

It was bank policy that two bank branch officers approve checks
exceeding P100,000.00 thus it was checked by Senior Assistant Cashier
Gemma Velez and Shirley Syfu.
Syfu then noticed that Jose Sempio III, the assistant accountant of Samsung
Construction, was also in the bank. Sempio was well-known to Syfu and the
other bank officers, he being the assistant accountant of Samsung
Construction. Syfu showed the check to Sempio, who vouched that Jongs
signature is genuine. Sempio said that the check was for the purchase of
equipment for Samsung Construction. Satisfied, Syfu authorized the bank's
encashment of the check to Gonzaga.

The next day, Kyu, Samsungs Accountant examined the balance of the
bank account and discovered that an amount of P999,500.00 had been
encashed. Kyu perused the checkbook and found out that the last page was
missing. Kyu reported to Jong who proceeded to the bank and found out that
his signature was forged. He then filed a criminal case against Sempio for
qualified theft.

Samsung demanded that FEBTC credit said amount, it responded that it

was still conducting an investigation. During trial, both sides presented their
respected expert witness to testify that Jongs signature was forged. Samsung
presented Senior NBI Roda B. Flores and testified that it was forged, FEBTC
presented PNP Crime Lab document examiner Rosario Perez and showed that
it was genuine.

The RTC held that Jongs signature was forged and directed FEBTC to pay
back Samsung said amount. On appeal, CA revered and absolved FEBTC of
liability, concluding there was no forgery and Samsung negligent.

Issue:

Whether or not FEBTC is negligent in ascertaining the genuineness of

Jongs signature in the check.

Ruling:

The court ruled that FEBTC is negligent. Even assuming that FEBTC had a
standing habit of dealing with Sempio, acting in behalf of Samsung
Construction, the irregular circumstances attending the presentment of the
forged check should have put the bank on the highest degree of alert. The
Court emphasized the highest degree of care and diligence is required of
banks.

Banks are engaged in a business impressed with public interest, and it

is their duty to protect in return their many clients and depositors who
transact business with them. They have the obligation to treat their client's
account meticulously and with the highest degree of care, considering the
fiduciary nature of their relationship. The diligence required of banks,
therefore, is more than that of a good father of a family.

Given the circumstances, extraordinary diligence dictates that FEBTC

should have ascertained from Jong personally that the signature in the
questionable check was his.
 42

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and

MARIA CRISTINA SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS
OF PACIFICO C. MABASA and REGIONAL TRIAL COURT OF PASIG,
METRO MANILA, BRANCH 181, respondents.
1996-02-09 | G.R. No. 116100

Facts:

Original plaintiff Pacifico Mabasa died during the pendency of this case
and was substituted by Ofelia Mabasa, his surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment erected

thereon situated at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila.
 43

Said property may be described to be surrounded by other immovables

pertaining to defendants herein. Taking P. Burgos Street as the point of
reference, on the left side, going to plaintiff's property, the row of houses will
be as follows: That of defendants Custodio, then that of Lito and Maria
Cristina Santos and then that of Ofelia Mabasa. On the right side (is) that of
defendant Rosalina Morato and then a Septic Tank. As an access to P. Burgos
Street from plaintiff's property, there are two possible passageways. The first
passageway is approximately one meter wide and is about 20 meters distant
from Mabasa's residence to P. Burgos Street. Such path is passing in between
the previously mentioned row of houses. The second passageway is about 3
meters in width and length from plaintiff Mabasa's residence to P. Burgos
Street; it is about 26 meters. In passing thru said passageway, a less than a
meter wide path through the septic tank and with 5-6 meters in length, has to
be traversed.

Defendant Santoses constructed an adobe fence along their property

which is also along the first passageway making it narrower. Defendant
Morato constructed her adobe fence and even extended said fence in such a
way that the entire passageway was enclosed. Tenants of said apartment
vacated the area. Defendant Ma. Cristina Santos testified that she
constructed said fence because there was an incident when her daughter was
dragged by a bicycle pedalled by a son of one of the tenants in said
apartment along the first passageway. She also mentioned some other
inconveniences of having at the front of her house a pathway such as when
some of the tenants were drunk and would bang their doors and windows.
Some of their footwear were even lost.

The trial court ordered the defendants to give plaintiff permanent egress
and ingress to the public street and ordered plaintiff to pay defendants
P8,000.00 as indemnity for the permanent uses of the streets.

Not satisfied, plaintiffs heirs, herein respondents, appealed and raised

that the trial court erred in not awarding damages in their favor. The CA
affirmed the decision with modifications ordering defendants-appellees to pay
plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual
Damages, Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten
Thousand (P10,000) Pesos as Exemplary Damages. The rest of the appealed
decision is affirmed to all respects

Issue:

Whether or not the award of damages by the CA is in order.

Ruling:

The CA erred in awarding damages in favor of private respondents. The

award of damages has no substantial legal basis. The CAs award of damages
was based solely on the fact that the original plaintiff, Pacifico Mabasa,
incurred losses in the form of unrealized rentals.

Injury is the illegal invasion of a legal right; damage is the loss, hurt, or
harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result
of a violation of a legal duty. These situations are often called damnum
absque injuria.

In the case at bar, although there was damage, there was no legal injury.
Contrary to the claim of private respondents, petitioners could not be said to
have violated the principle of abuse of right. In order that the principle of
abuse of right provided in Article 21 of the Civil Code can be applied, it is
 44

essential that the following requisites concur: (1) The defendant should have
acted in a manner that is contrary to morals, good customs or public policy;
(2) The acts should be willful; and (3) There was damage or injury to the
plaintiff.

The act of petitioners in constructing a fence within their lot is a valid

exercise of their right as owners, hence not contrary to morals, good customs
or public policy. The law recognizes in the owner the right to enjoy and
dispose of a thing, without other limitations than those established by law. It
is within the right of petitioners, as owners, to enclose and fence their
property.

MARITER MENDOZA, Petitioner, vs. ADRIANO CASUMPANG, JENNIFER

ADRIANE and JOHN ANDRE, all surnamed CASUMPANG, Respondents.
2012-03-19 | G.R. No. 197987

Facts:

Josephine Casumpang underwent hysterectomy and myomectomy that

Dr. Mendoza performed on her at the Iloilo Doctors Hospital. After her
 45

operation, Josephine experienced recurring fever, nausea, and vomiting.

Three months after the operation, she noticed while taking a bath something
protruding from her genital. She tried calling Dr. Mendoza to report it but the
latter was unavailable. Josephine instead went to see another physician, Dr.
Edna Jamandre-Gumban, who extracted a foul smelling, partially expelled
rolled gauze from her cervix.

This prompted Josephine to file a damage suit against Dr. Mendoza before
the RTC of Iloilo. She died before the trial could end thus her husband Adriano
and their children Jennifer Adriane and John Andre, substituted her in the
case. She was a housewife and 40 years old when she died.

The RTC found Dr. Mendoza guilty of neglect that caused Josephines
illness and eventual death and order to pay the plaintiffs heirs actual
damage of P50,000.00, moral damages of P200,000.00, and attorneys fees
P20,000.00 plus cost of suit.

The RTC reversed itself upon motion for reconsideration and dismissed
the complaint. The CA reinstated the RTCs original decision and held that Dr.
Mendoza committed a breach of her duty as a physician when a gauze
remained in the body of her patient after surgery. The CA denied her motion
for reconsideration.

Issue:

Whether or not Dr. Mendoza is negligent and committed breach of her

duty as a physician.

Ruling:

The court ruled that she is negligent. Dr. Mendoza claims that no gauze or
surgical material was left in Josephines body as evidenced by the surgical
sponge count in the hospital record. The court pointed out that Josephine did
not undergo any other surgical operation and it is unlikely for her to inject a
roll of gauze into her cervix. The court held in Professional Services, Inc. vs.
Agana:

An operation requiring the placing of sponges in the incision is not

complete until the sponges are properly removed, and it is settled that the
leaving of sponges or other foreign substances in the wound after the incision
has been closed is at least prima facie negligence by the operating surgeon.
To put it simply, such act is considered so inconsistent with due care as to
raise an inference of negligence. There are even legions of authorities to the
effect that such act is negligence per se.

A surgical operation is the responsibility of the surgeon performing it. He

must personally ascertain that the counts of instruments and materials used
before the surgery and prior to sewing the patient up have been correctly
done.

To provide an example to the medical profession and to stress the need

for constant vigilance in attending to a patients health, the award of
exemplary damages in this case is in order. In view of Josephines death
resulting from petitioners negligence, civil indemnity under Article 2206 of
the Civil Code should be given to respondents as heirs. The amount of
P50,000.00 is fixed by prevailing jurisprudence for this kind.

The Court also deems it just and equitable under Article 2208 of the Civil
Code to increase the award of attorneys fees from P20,000.00 to P50,000.00.
 46

ACHEVARA VS. RAMOS

G.R. No. 175172, September 29, 2009

Facts:
 47

In their Complaint, respondents alleged that Benigno Valdez was driving a passenger
jeep heading north on the national highway in a reckless, careless, and negligent manner.
He tried to overtake a motorcycle, causing the passenger jeep to encroach on the opposite
lane and bump the oncoming vehicle driven by Arnulfo Ramos. The injuries sustained by
Arnulfo Ramos caused his death, notwithstanding prompt medical assistance.
Respondents alleged that Crescencia Achevara failed to exercise due diligence in the
selection and supervision of Benigno Valdez as driver of the passenger jeep. Respondents
sought to recover actual damages for medical expenses and funeral expenses, as well as
moral and exemplary damages, lost earnings, attorney's fees and litigation expenses.
Alfredo Achevara was impleaded as the husband of the operator and as the administrator
of the conjugal partnership properties of the Spouses Achevara. In their Answer,
petitioners denied respondents allegation that Benigno Valdez overtook a motorcycle and
bumped the vehicle driven by Arnulfo Ramos. They alleged that Benigno Valdez was
driving southward at a moderate speed when he saw an owner-type jeep coming from the
south and heading north, running in a zigzag manner, and encroaching on the west lane of
the road. To avoid a collision, Valdez drove the passenger jeep towards the shoulder of
the road, west of his lane, but the owner-type jeep continued to move toward the western
lane and bumped the left side of the passenger jeep. Petitioners alleged that it was
Arnulfo Ramos who was careless and negligent in driving a motor vehicle, which he very
well knew had a mechanical defect. Hence, respondents had no cause of action against
petitioners.
The RTC ruled in favor of the petitioners applying the doctrine of last clear chance which
was then affirmed by the CA with modifications.
.
Issue:

Whether or not petitioners are liable to respondents for damages incurred as a result
of the vehicular accident.

Ruling:

No. Foreseeability is the fundamental test of negligence. To be negligent, a defendant

must have acted or failed to act in such a way that an ordinary reasonable man would
have realized that certain interests of certain persons were unreasonably subjected to a
general but definite class of risks. The acts of negligence of Arnulfo Ramos and Benigno
Valdez were contemporaneous when Ramos continued to drive a wiggling vehicle on the
highway despite knowledge of its mechanical defect, while Valdez did not immediately
veer to the rightmost side of the road upon seeing the wiggling vehicle of Ramos
perhaps because it still kept to its lane and Valdez did not know the extent of its
mechanical defect. However, when the owner-type jeep encroached on the lane of the
passenger jeep, Valdez realized the peril at hand and steered the passenger jeep toward
the western shoulder of the road to avoid a collision. It was at this point that it was
perceivable that Ramos must have lost control of his vehicle, and that it was Valdez who
had the last opportunity to avoid the collision by swerving the passenger jeep towards the
right shoulder of the road. The doctrine of last clear chance applies to a situation where
the plaintiff was guilty of prior or antecedent negligence, but the defendant who had the
last fair chance to avoid the impending harm and failed to do so is made liable for all
the consequences of the accident, notwithstanding the prior negligence of the plaintiff.
However, the doctrine does not apply where the party charged is required to act
instantaneously, and the injury cannot be avoided by the application of all means at hand
after the peril is or should have been discovered. The doctrine of last clear chance does
not apply to this case, because even if it can be said that it was Benigno Valdez who had
the last chance to avoid the mishap when the owner-type jeep encroached on the western
lane of the passenger jeep, Valdez no longer had the opportunity to avoid the collision. In
this case, both Arnulfo Ramos and Benigno Valdez failed to exercise reasonable care and
 48

caution that an ordinarily prudent man would have taken to prevent the vehicular
accident.
 49

FLORES VS. PINEDA,

G.R. No. 158996, November 14, 2008

Facts:

Teresita Pineda consulted her town mate Dr. Fredelicto Flores regarding her medical
condition, complaining about general body weakness, loss of appetite, frequent urination
and thirst, and on-and-off vaginal bleeding. After interviewing Teresita, Dr. Fredelicto
advised her to go to United Doctors Medical Center (UDMC) in Quezon City for a
general check-up the following week but the former did not. As for her other symptoms,
he suspected that Teresita might be suffering from diabetes and told her to continue her
medications. When her conditions persisted, she went to UDMC where Dr. Fredelictor
check-up her and ordered her admission and further indicate on call Dilation and
Curettage (D&C) operation to be performed by his wife, Dra. Felicisima Flores, an Ob-
Gyne. Laboratory tests were done on Teresita including internal vaginal examination,
however, only the blood sugar and CBC results came out prior to operation which
indicated of diabetes. D&C operations were still done and thereafter, Dra. Felicisima
advised her that she can go home and continue to rest at home but Teresita opted
otherwise. Two days after the operation, her condition worsened prompting further test to
be done which resulted that Teresita have diabetes melitus type II. Insulin was
administered but it might have arrived late, she died.

Issue:

Whether or not spouses petitioners are liable for medical negligence.

Ruling:

Yes. A medical negligence case is a type of claim to redress a wrong committed by a

medical professional, that caused a bodily harm to or the death of a patient. There are
four elements involved in a medical negligence case, namely: duty, breach, injury, and
proximate cause. Duty refers to the standard of behavior which imposes restrictions on
ones conduct. The standard in turn refers to the amount of competence associated with
the proper discharge of the profession. A physician is expected to use at least the same
level of case that any other reasonably competent doctor would use under the same
circumstances. Breach of duty occurs when the physician fails to comply with those
professional standards. If injury results to the patient as a result of this breach, the
physician is answerable for negligence.
If a patient suffers from some disability that increases the magnitude of risk to him, that
disability must be taken into account as long as it is or should have been known to the
physician. Stress, whether physical or emotional, is a factor that can aggravate diabetes; a
D&C operation is a form of physical stress. Dr. Mendoza explained how surgical stress
can aggravate the patients hyperglycemia: when stress occurs, the diabetics body,
especially the autonomic system, reacts by secreting hormones which are counter-
regulatory; she can have prolonged hyperglycemia which, if unchecked, could lead to
death. Medical lecture further explains that if the blood sugar has become very high, the
patient becomes comatose (diabetic coma). When this happens over several days, the
body uses its own fats to produce energy, and the result is high level of waste products in
the blood and urine. These findings lead us to the conclusion that the decision to proceed
with the D&C operation notwithstanding Teresitas hyperglycemia and without
adequately preparing her for the procedure, was contrary to the standards observed by the
medical profession. Deviation from this standard amounted to a breach of duty which
resulted in the patients death. Due to this negligent conduct, liability must attach to the
petitioner spouses.
 50

BANK OF AMERICA VS. PHILIPPINE RACING CLUB

G.R. No. 150228, July 30, 2009

Facts:

Defendant PRC is a domestic corporation which maintains a current

account with petitioner Bank of America. Its authorized signatories are the
company President and Vice-President. By virtue of a travel abroad for these
officers, they pre-signed checks to accommodate any expenses that may
come up while they were abroad for a business trip. The said pre-signed
checks were left for safekeeping by PRCs accounting officer. Unfortunately,
the two (2) of said checks came into the hands of one of its employees who
managed to encash it with petitioner bank. The said check was filled in with
the use of a check-writer, wherein in the blank for the 'Payee', the amount in
words was written, with the word 'Cash' written above it. Clearly there was an
irregularity with the filling up of the blank checks as both showed similar
infirmities and irregularities and yet, the petitioner bank did not try to verify
with the corporation and proceeded to encash the checks. PRC filed an action
for damages against the bank. The lower court awarded actual and
exemplary damages. On appeal, the CA affirmed the lower court's decision
and held that the bank was negligent. Hence this appeal. Petitioner contends
that it was merely doing its obligation under the law and contract in
encashing the checks, since the signatures in the checks are genuine.

Issue:

Whether or not the petitioner can be held liable for negligence and thus
should pay damages to PRC.

Ruling:

Both parties are held to be at fault but the bank has the last clear chance
to prevent the fraudulent encashment hence it is the one foremost liable.
There was no dispute that the signatures in the checks are genuine but the
presence of irregularities on the face of the check should have alerted the
bank to exercise caution before encashing them. It is well-settled that banks
are in the business impressed with public interest that they are duty bound to
protect their clients and their deposits at all times. They must treat the
accounts of these clients with meticulousness and a highest degree of care
considering the fiduciary nature of their relationship. The diligence required
of banks are more than that of a good father of a family.

In the case at bar, petitioner cannot evade responsibility for the loss by
attributing negligence on the part of respondent because, even if we concur
that the latter was indeed negligent in pre-signing blank checks, the former
had the last clear chance to avoid the loss. To reiterate, petitioners own
operations manager admitted that they could have called up the client for
verification or confirmation before honoring the dubious checks. Verily,
petitioner had the final opportunity to avert the injury that befell the
respondent. Failing to make the necessary verification due to the volume of
banking transactions on that particular day is a flimsy and unacceptable
excuse, considering that the banking business is so impressed with public
interest where the trust and confidence of the public in general is of
paramount importance such that the appropriate standard of diligence must
be a high degree of diligence, if not the utmost diligence. Petitioners
 51

negligence has been undoubtedly established and, thus, pursuant to Art.

1170 of the NCC, it must suffer the consequence of said negligence.

CORINTHIAN GARDENS ASSOCIATION, INC V. TANJANGCO

G.R. No 160795, 27 June 2008

Facts:

Spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) own Lots
68 and 69 covered by Transfer Certificates of Title (TCT) No. 2422454 and
2829615 respectively, located at Corinthian Gardens Subdivision, Quezon
City, which is managed by petitioner Corinthian Gardens Association, Inc.
(Corinthian). On the other hand, respondents-spouses Frank and Teresita
Cuaso (the Cuasos) own Lot 65 which is adjacent to the Tanjangcos lots.

Before the Cuasos constructed their house, it was surveyed by De Dios

Realty the surveyor as per recommendation of the petitioner association.
Later on, Corinthian Gardens Association approved the plans made by the
builder CB Paras Construction.

Corinthian conducted periodic ocular inspections in order to determine

compliance with the approved plans pursuant to the Manual of Rules and
Regulations of Corinthian (MRRC). Unfortunately, after construction, the
perimeter fence of the Cuasos encroached upon Tanjancos lot.

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.

Issue:

Whether Corinthian was negligent under the circumstances and, if so,

other such negligence contributed to the injury suffered by the Tanjangcos.

Ruling:

Corinthian is negligent. Its approval of the plan is tainted with negligence.

Petitioner is found negligent. The MRRC provides that no new constructions
can be started without the approval of the petitioner association. Thus, 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.
 52

Corinthians failure to prevent the encroachment of the Cuasos perimeter

wall into Tanjancos property-despite the inspection conducted-constituted
negligence and, at the very least, contributed to the injury suffered by the
Tanjangcos.

LIGHT RAIL TRANSIT V. NAVIDAD

G.R. No. 145804. February 6, 2003

Facts:

Navidad was drunk when he entered the boarding platform of the LRT. He
got into an altercation with the SG Escartin. They had a fistfight and Navidad
fell onto the tracks and was killed when a train came and ran over him.

The Heirs of Navidad filed a complaint for damages against Escartin, the
train driver who is Rodolfo Roman, the LRTA, the Metro Transit Organization
and Prudent Security Agency (Prudent). The trial court found Prudent and
Escartin jointly and severally liable for damages to the heirs. The CA
exonerated Prudent and instead held the LRTA and the train driver Romero
jointly and severally liable as well as removing the award for compensatory
damages and replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already existed

between Navidad and LRTA by virtue of his having purchased train tickets and
the liability was caused by the mere fact of Navidad's death after being hit by
the train being managed by the LRTA and operated by Roman. The CA also
blamed LRTA for not having presented expert evidence showing that the
emergency brakes could not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory
damages.

Ruling:

(1) Yes. The foundation of LRTA's liability is the contract of carriage and its
obligation to indemnify the victim arising from the breach of that contract by
reason of its failure to exercise the high diligence required of a common
carrier.

(2) Fault was not established. Liability will be based on Tort under Art. 2176
of the New Civil Code.

(3) No. It is an established rule that nominal damages cannot co-exist with
compensatory damages.
 53

A common carrier is required by these above statutory provisions to use

utmost diligence in carrying passengers with due regard for all
circumstances. This obligation exists not only during the course of the trip but
for so long as the passengers are within its premises where they ought to be
in pursuance to then contract of carriage.

Art. 1763 of the Civil Code, renders a common carrier liable for death of
or injury to passengers (a) through the negligence or willful acts of its
employees or (b) on account of willful acts or negligence of other passengers
or of strangers if the common carriers employees through the exercise of
due diligence could have prevented or stopped the act or omission.

If Prudent is to be held liable, it would be for a tort under Art. 2176 in

conjunction with Art. 2180. Once the fault of the employee Escartin is
established, the employer, Prudent, would be held liable on the presumption
that it did not exercise the diligence of a good father of the family in the
selection and supervision of its employees.

The award of nominal damages in addition to actual damages is

untenable. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him. It is an established rule that nominal damages
cannot co-exist with compensatory damages. The award was deleted.
 54

OSCAR DEL CARMEN JR. V GERONIMO BACOY

GR No. 17738770 April 25, 2012

Facts:

Spouses Monsalud and their daughter died from being run over by a
jeepney driven by a certain Allan Maglasang. The jeepney was owned by
Oscar del Carmen Jr. Allan was declared guilty beyond reasonable doubt in a
criminal case while the father of the late Mrs. Monsalud, Geronimo Bacoy,
filed an independent civil action againt the former in behalf of the minor
children left by the Monsalud spouses.

Del Carmen Jr. claimed he was a victim as well as Allan stole the jeep and
was not hired as a driver by the former; he was a conductor and had been
released from employment lately and it was the brother of Allan, Rodrigo who
was hired as a driver. Del Carmen Jr. filed a carnapping case against Allan but
was dismissed by the court for insufficient evidence.

RTC held Del Carmen Jr. subsidiary liable and held the doctrine of res ipsa
loquitur. The CA adjudged Oscar Jr. liable to the heirs of the victims based on
the principle that the registered owner of a vehicle is directly and primarily
responsible for the injuries or death of third parties caused by the operation
of such vehicle. It disbelieved Oscar Jr.s defense that the jeep was stolen not
only because the carnapping case filed against Allan and his companions was
dismissed but also because, given the circumstances, Oscar Jr. is deemed to
have given Allan the implied permission to use the subject vehicle because
the brothers were assigned to said jeep. After a days work, the jeepney
would be parked beside the brothers house and not returned to Del Carmens
residence; the jeep could easily be started even without the use of an ignition
key; the said parking area was not fenced or secured to prevent the
unauthorized use of the vehicle which can be started even without the
ignition key

Issue:

W/N owner of vehicle is directly and primarily liable for injuries caused by
the operation of such

Ruling:

Del Carmen Jr. was held to be primarily liable and not merely subsidiary
liable.
 55

Del Carmen Jr.s own evidence cast doubt that Allan stole the jeepney. Given
the dismissal of the carnapping case filed by del Carmen Jr. against Allan, the
former also admitted to such dismissal in the SC. Under the doctrine of res
ipsa loquitur , where the thing that caused the injury complained of is
shown to be under the management of the defendant or his servants; and the
accident, in the ordinary course of things, would not happen if those who had
management or control used proper care, it affords reasonable evidence in
the absence of a sufficient, reasonable and logical explanation by defendant
that the accident arose from or was caused by the defendants want of
care. All three are present in the case at bar.

SPS. Alfredo Bontilao and Sherlina Bontilao Vs. Dr. Carlos Gerona
GR No. 176675 September 15, 2010

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic

surgeon at the Vicente Gullas Memorial Hospital, treated petitioners son, 8
y/o Allen Roy Bontilao, for a fractured right wrist. Respondent administered a
U-spint and immobilized Allens wrist with a cast, then sent Allen home. On
June 4, 1992, Alen re-fractured the same wrist and was brought back to the
hospital. The x-ray examination showed a complete fractured and
displacement bone, with the fragments overlapping each other. Respondent
performed a closed reduction procedure, with Dr. Vicente Jabagat as the
anesthesiologist. Then he placed Allens arm in a plaster cast to immobilize it.
He allowed Allen to go home after the post reduction x-ray showed that the
bones were properly aligned, but advised Allens mother, petitioner Sherlina
Bontilao, to bring Allen back for re-tightening of the cast not later than June
15, 1992. Allen was however, only brought back after the said date. By then,
because the cast had not be re-tightened, a rotational deformity had
developed in Allens arm. The x-ray examination showed that the deformity
was caused by a re-displacement of the bone fragments, so it was agreed
that an open reduction surgery will be conducted on June 24, 1992 by the
respondent, again with Dr. Jabagat as the anesthesiologist. On the said date,
Sherlina was allowed to observe the operation behind a glass panel. Dr.
Jabagat failed to intubate the patient after 5 attempts so anesthesia was
administered through a gas mask. Respondent asked Dr. Jabagat if the
operation should be postponed given the failure to intubate, but Dr. Jabagat
said that it was alright to proceed. Respondent verified that Allen was
breathing properly before proceeding with the surgery. As respondent was
about to finish the suturing, Sherlina decided to go out of the operating room
to make a telephone call and wait for her son. Later, she was informed that
her son died on the operating table. The cause of death was asphyxia due to
the congestion and edema of the epiglottis. Hence, a criminal, administrative
and civil case was filed by the parents of Allen against the doctors for the
negligence that caused Allens death.

Issue:
 56

Whether or not respondent is liable for medical negligence due to the

death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin
liability on respondent for Allens death. Res ipsa liquitor is a rebuttable
presumption or influence that the defendant was negligent. The presumption
only arises upon proof that the instrumentality causing injury was in the
defendants exclusive control, and that the accident was one which ordinarily
does not happen in the absence of negligence. It is a rule of evidence
whereby negligence of the alleged wrong does may be inferred from the mere
fact that the accident happened, provided that the character of the accident
and circumstances attending it lead reasonably to the belief that in the
absence of negligence it would not have occurred and that the thing which
caused injury is shown to have been under the management and control of
the alleged wrong doer.
Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used but
a rule to be cautiously applied defending upon the circumstances of each
case. In malpractice case, the doctrine is generally restricted to situations
where a layman is able to say, as a matter of common knowledge and
observation, that the consequence of professional care were not as such as
would ordinarily have followed if due care had been exercised.

Benjamin Salvosa and Baguio College Foundation Vs. The

Intermediate Appellate Court, Eduardo B. Castro, Diomedes B.
Castro, Virgina Castro and Rodolfo Castro
G.R. No. 70458 October 5, 1988

Facts:

Baguio Colleges Foundation (BCF) is an academic institution. However, it is also an

institution of arts and trade because BCF has a full-fledged technical-vocational
department offering Communication, Broadcast and Teletype Technician courses as well
as Electronics Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit. The Baguio Colleges Foundation
ROTC Unit had Jimmy B. Abon as its duly appointed armorer. As armorer of the ROTC
Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of
the BCF, he also received his salary from the AFP, as well as orders from Captain
Roberto C. Ungos. Jimmy B. Abon was also a commerce student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon
shot Napoleon Castro a student of the University of Baguio with an unlicensed firearm
which the former took from the armory of the ROTC Unit of the BCF. As a result,
Napoleon Castro died and Jimmy B. Abon was prosecuted for, and convicted of the crime
of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B.
Abon and the BCF .

Issue:
 57

Whether or not petitioners can be held solidarity hable with Jimmy B. Abon for
damages under Article 2180 of the Civil Code, as a consequence of the tortious act of
Jimmy B. Abon

Ruling:

Under the paragraph of Art. 2180 of the Civil Code, teachers or heads of
establishments of arts and trades are liable for damages caused by their pupils and
students or apprentices, so long as they remain in their custody. The rationale of such
liability is that so long as the student remains in the custody of a teacher, the latter
stands, to a certain extent, in loco parentis as to the student and is called upon to
exercise reasonable supervision over the conduct of the student. Likewise, the phrase
used in [Art. 2180 so long as (the students) remain in their custody means the
protective and supervisory custody that the school and its heads and teachers exercise
over the pupils and students for as long as they are at attendancein the school, including
recess time. Jimmy B. Abon cannot be considered to have been at attendance in the
school, or in the custody of BCF, when he shot Napoleon Castro. Logically, therefore,
petitioners cannot under Art. 2180 of the Civil Code be held solidarity liable with Jimmy
B. Abon for damages resulting from his acts.

Joseph Saludaga Vs. FEU and Edilberto C. De Jesus

G.R. No. 179337, April 30, 2008

Facts :

Petitioner Joseph Saludaga was a sophomore law student of (FEU) when

he was shot by Alejandro Rosete, one of the security guards on duty at the
school premises on August 18, 1996. Petitioner was rushed to FEU Hospital
due to the wound he sustained. Meanwhile, Rosete was brought to the police
station where he explained that the shooting was accidental. He was
eventually released considering that no formal complaint was filed against
him.
Saludaga thereafter filed with RTC Manila a complaint for damages
against respondents on the ground that they breached their obligation to
provide students with a safe and secure environment and an atmosphere
conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against Galaxy Dvpt

and Mgt Corp. (Galaxy), the agency contracted by FEU to provide security
services within its premises and Mariano D. Imperial (Imperial), Galaxy's
President, to indemnify them for whatever would be adjudged in favor of
petitioner, if any; and to pay attorney's fees and cost of the suit. On the other
hand, Galaxy and Imperial filed a Fourth-Party Complaint against AFP General
Insurance.

On Nov.10, 2004, the trial court ruled in favor of Saludaga .Respondents

then appealed to the CA which ruled in its favor, reversing the RTC decision,
dismissing the complaint, and also denying Saludagas subsequent Motion for
reconsideration. Hence, the instant petition.
 58

Issue:

Whether or not respondent is liable under article 2180 of the Civil Code?

Ruling:

Incidentally, although the main cause of action in the instant case is the
breach of the school-student contract, petitioner, in the alternative, also holds
respondents vicariously liable under Article 2180 of the Civil Code. However,
respondents cannot be held liable for damages under Art. 2180 of the Civil
Code because respondents are not the employers of Rosete. The latter was
employed by Galaxy. The instructions issued by respondents' Security
Consultant to Galaxy and its security guards are ordinarily no more than
requests commonly envisaged in the contract for services entered into by a
principal and a security agency.

HEIRS OF REPENDOR COMPLETO AND ELPIDIO ABIAD VS. SGT.

AMANDO C. ALBAYDA
G.R. NO. 172200, JULY 6, 2010. J. NACHURA

Facts:

On August 27, 1997, Respondent Albayda was on his way to the office to
report for duty as Master Sergeant of the Philippine Air Force, riding a bicycle
along the streets. The taxi driver Completo, the petitioner, bumped and side
swiped him, causing respondent Albayda suffered from serious physical
injuries. Albayda was brought to the hospital and was confined twice therein
from August 27, 1997 to February 11, 1998 and February 23, 1998 until
March 22, 1998, respectively, due to fracture in his left knee which
necessitated his stay in the hospital for several months. Then after, he
underwent medical physiotherapy for more than a year. A barangay
conciliation was effected between the parties, but failed. Thus, this prompted
Albayda to file a complaint for physical injuries through reckless imprudence
against Completo. On the other hand, Completo filed a counter-charge of
damage to property through reckless imprudence against Albayda. Albayda
manifested his reservation to file a separate civil action for damages against
petitioners Completo and taxi owner/operator Abiad in the MTC. The RTC
rendered judgment in favor of Albayda and against the driver and taxi
 59

owner/operator. They are ordered to pay actual damages, moral damages

and Attorneys fee. Completo and Abiad filed an appeal, however, CA affirmed
the MTCs decision with modification on the award of damages.

Issue:

(1) Whether or not petitioner driver Completo liable for negligence

against Albayda.
(2)Whether or not taxi owner/operator Abiad is solidarily liable with driver
Completo for quasi-delict.
(3)Whether or not award of moral and temperate damages and attorneys
fee had basis.

Ruling:

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. Further, considering the fact that usually more diligence 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. 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.

As to the liability of taxi owner/operator Abiad, the court declared that

when an 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. However, in this case, 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. He failed to prove the due diligence required by law
as employer, thus he is also primarily and directly liable with the driver
Completo against the respondent.

The CA deleted the award for actual damages because respondent

Albayda failed to present documentary evidence to establish with certainty
the amount he incurred during his hospitalization and treatment. The court
finds temperate damages reasonable to award since pecuniary loss is
apparently suffered however the amount cannot be ascertained. Attorneys
fee is hereby deleted for failure to prove that petitioner acted in bad faith in
refusing to satisfy respondents just and valid claim.
 60

FILAMER CHRISTIAN INSTITUTE VS. HONORABLE COURT OF APPEALS

G.R. NO. 75112, OCTOBER 16, 1990. J. FERNAN

Facts:

In the evening of October 20, 1977, private respondent Potenciano

Kapunan Sr., an octogenarian retired school teacher was struck by the Pinoy
jeep owned by petitioner Filamer and driven by Daniel Funtecha, a working
student of Filamer Christian Institute. As a consequence, Kapunan suffered
multiple injuries and was hospitalized for 20 days. Funtecha, who only had a
student drivers permit at that time, was with Allan Masa, the authorized
driver of the said vehicle. Kapunan instituted a criminal case against
Funtecha alone for serious physical injuries through reckless imprudence. And
manifested his right to file an independent civil action against Funtecha. The
court found Funtecha guilty as charged and on appeal, his conviction was
 61

affirmed by the appellate court. Pursuant to his reservation, Kapunan, filed a

case for damages against Filamer and Funtecha, including Dr. Agustin Masa,
the director and president of Filamer; as well as Zenith Insurance Corporation
(Zenith for brevity) as third party- defendant. However, Allan Masa, was not
impleaded as co-defendant of the case. The court found all of them guilty and
hereby ordered jointly and severally to pay the cost of the suit. Filamer and
Zenith appealed the decision of the lower court, but, the judgment of the
lower court was affirmed by the CA.

Issue:

Whether or not Filamer is liable to pay the damages for the tortious act of
Funtecha.

Ruling:

Accordingly, Filamer is directly and primarily answerable to the injured

party under Article 2180 of the Civil Code would have prospered had if they
proceeded against Allan Masa, the authorized driver of the Pinoy jeep and
undisputably an employee of petitioner. Under the present set of
circumstances, even if the trial court did find Allan guilty of negligence, such
conclusion would not be binding on Allan. It must be recalled that Allan was
never impleaded in the complaint for damages and should be considered as a
stranger as far as the trial court's judgment is concerned. It is axiomatic that
no man shall be affected by a proceeding to which he is a stranger.

In addition, Funtecha, being a working student of the said school, belongs

to a special category wherein he cannot be considered as Filamers
employee. He was employed as a janitor, but at the time of the wrongdoing,
Funtecha was not acting within the scope of his supposed job. Therefore,
Funtecha should bear the full drunt of his tortious negligence. Petitioner
Filamer cannot be made liable for the damages he had caused.

SPOUSES BENJAMIN AND SONIA MAMARIL VS. THE BOY SCOUT OF

THE PHILIPPINES, ET AL.
G.R. NO. 179382, JANUARY 14, 2013. J. PERLAS- BERNABE.

Facts:
Spouses Mamaril are jeepney operators since 1971. They park their 6
passenger jeepneys every night at the Boy Scout (BSP) compound for a fee of
P300.00 per month for each unit. The AIB Security Agency, Inc (AIB) was the
contracting agency responsible for the security and protection of the
compound and its properties. On May 26, 1995 in the evening, all jeepneys
were parked inside th BSP compound. The following morning, one vehicle was
missing and was never recovered. The security guards namely, Gaddi and
 62

Pea, of AIB who were incharged when the embezzlement was committed
said that a male person who looked familiar to them took the vehicle out of
the compound. The spouses filed a complaint for damages before the RTC
against BSP, AIB and security guards Pea and Gaddi for gross negligence.
The court rendered judgment in favor of the spouses Mamaril and defendants
were ordered to pay jointly and severally the cost of the vehicle including the
damages. On June 11, 2002, the RTC modified its decision reducing the cost
of the stolen vehicle. Only BSP appealed before the CA. The CA affirmed the
findings of the lower court, but, absolving BSP from any liability. It also
deleted the award of moral and exemplary damages as well as the amount of
the accessories of the lost jeepney. Spouses filed a motion for reconsideration
thereof, however, the motion was denied.

Issue:
Whether or not the BSP is jointly and severally liable for gross negligence
along with AIB and security guards Pea and Gaddi.

Ruling:
No. Article 1311 of the Civil Code states that contracts take effect only
between the parties, their assigns and heirs, except in case where the rights
and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law. It is undisputed that Sps.
Mamaril are not parties to the Guard Service Contract between the BSP and
AIB. Neither did the subject agreement contain any stipulation pour autrui
that a third party may demand fulfillment of the either parties obligation,
provided that the requisites are complied with. However, in this case no
stipulations pour autrui was provided. Thus, under the principle of relativity of
contracts, they cannot validly claim any rights or favor under the said
agreement.

The court also declared that what was between BSP and spouses Mamaril
is a contract of lease. Article 1643 of the Civil Code held that the act of
parking a vehicle in a garage, upon payment of a fixed amount, is a lease. As
a lessor, Article 1664 of the same Code states that "the lessor is not obliged
to answer for a mere act of trespass which a third person may cause on the
use of the thing leased; but the lessee shall have a direct action against the
intruder." Here, BSP was not remiss in its obligation to provide Sps. Mamaril a
suitable parking space for their jeepneys as it even hired security guards to
secure the premises; hence, it should not be held liable for the loss suffered
by Sps. Mamaril. As to the contract of lease and its management, the parking
fee of P300.00 per month or P10.00 a day for each unit is too minimal an
amount to even create an inference that BSP undertook to be an insurer of
the safety of plaintiffs vehicles. The awards of moral and exemplary
damages and attorney's fees were properly disallowed by the CA for lack of
factual and legal bases.

Professional Services Inc., Petitioner, vs. NATIVIDAD and ENRIQUE AGANA, Respondents.
G.R. No. 127590
February 2, 2010

Facts:
 63

Enrique Agana told his wife Natividad Agana to look for their neighbour, Dr. Ampil, a surgeon staff
member of Medical City General Hospital, a prominent and known hospital, owned and operated by
Professional Services Incorporated (PSI). Natividad Agana underwent medical surgery in said Hospital.
The attendant doctors were Dr. Ampil and Dr. Fuentes. Natividad suffered from injury due to two (2)
gauzes left inside her body during the operation. Despite the report of the (2) two missing gauzes, PSI did
not initiate an investigation.

This case consolidated three (3) other cases previously decided and became final and executory.
Hence, this case is limited only to the second motion for reconsideration filed by the PSI in an attempt
absolve itself from liability.

Issue:

Whether or not PSI is liable for tort?

Ruling:

Yes. PSI is liable. Firstly, under the principle of Ostensible Agency, according to the Court, ample
evidence that the hospital held out to the patient that the doctor was its agent. Present are the two factors
that determine apparent authority: first, the hospital's implied manifestation to the patient which led the
latter to conclude that the doctor was the hospital's agent; and second, the patients reliance upon the
conduct of the hospital and the doctor, consistent with ordinary care and prudence the decision made by
Enrique for [his wife] Natividad to consult Dr. Ampil was significantly influenced by the impression that
Dr. Ampil was a staff member of Medical City General Hospital, and that said hospital was well known and
prominent. Enrique looked upon Dr. Ampil not as independent of but as integrally related to Medical City.
The Supreme Court also held that the hospitals consent for hospital care - required to be signed
prior to the surgery - affirmed that the surgeon was of the hospital.

Secondly, under the principle of Corporate Negligence, which was self-imposed liability because of
the statements made by the PSI which constituted judicial admission in its Motion for Reconsideration. Its
statements revealed that it had the power to review or cause the review of what may have irregularly
transpired within its walls strictly for the purpose of determining whether some form of negligence may
have attended any procedure done inside its premises, with the ultimate end of protecting its patients.

The Court also noted the hospital admitted the standards of its corporate conduct under the
circumstances of this case, specifically: (a) that it had a corporate duty to Natividad even after her operation
to ensure her safety as a patient; (b) that its corporate duty was not limited to having its nursing staff note or
record the two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it,
bringing the matter to his attention, and correcting his negligence. The Court held that the case is not
intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of
negligence of their doctors-consultants under any and all circumstances.

ROGELIO NOGALES V. CAPITOL MEDICAL CENTER

G.R. No. 142625, 19 December 2006

Facts:

Pregnant with her fourth child, Corazon Nogales (Corazon), who was then
37 years old, was under the exclusive prenatal care of Dr. Oscar Estrada (Dr.
Estrada) beginning on her fourth month of pregnancy or as early as
December 1975. Around midnight of 25 May 1976, Corazon started to
experience mild labor pains prompting Corazon and Rogelio Nogales (Spouses
Nogales) to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada
advised her immediate admission to the Capitol Medical Center (CMC). t 6:13
a.m., Corazon started to experience convulsionsAt 6:22 a.m., Dr. Estrada,
assisted by Dr. Villaflor, applied low forceps to extract Corazon's baby. In the
process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn.At 6:27
a.m., Corazon began to manifest moderate vaginal bleeding which rapidly
became profuse. Corazon died at 9:15 a.m. The cause of death was
uhemorrhage, post partum.
 64

Issue:

Whether or not CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Private hospitals, hire, fire and exercise real control over their attending
and visiting uconsultantu staff. The basis for holding an employer solidarily
responsible for the negligence of its employee is found in Article 2180 of the
Civil Code which considers a person accountable not only for his own acts but
also for those of others based on the former's responsibility under a
relationship of patria potestas.

In general, a hospital is not liable for the negligence of an independent

contractor-physician. There is, however, an exception to this principle. The
hospital may be liable if the physician is the uostensibleu agent of the
hospital. This exception is also known as the udoctrine of apparent
authorityu.

For a hospital to be liable under the doctrine of apparent authority, a

plaintiff must show that:

1. the hospital, or its agent, acted in a manner that would lead a

reasonable person to conclude that the individual who was alleged to be
negligent was an employee or agent of the hospital;
2. where the acts of the agent create the appearance of authority, the
plaintiff must also prove that the hospital had knowledge of and acquiesced
in them; and
3. the plaintiff acted in reliance upon the conduct of the hospital or its
agent, consistent with ordinary care and prudence. In the instant case, CMC
impliedly held out Dr. Estrada as a member of its medical staff. Through
CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading
the Spouses Nogales to believe that Dr. Estrada was an employee or agent of
CMC.

FILCAR TRANSPORT SERVICES V. ESPINAS

GR. No. 174156, 20 June 2012

Facts:

Espinas, while driving, was hit by another car. The other car escaped from
the scene of the incident, but Espinas was able to get its plate number.

After verifying with the Land Transportation Office, Espinas learned that
the owner of the other car, with plate number UCF-545 is Filcar.

After sending several letters to Filcar and to its President and General
Manager Carmen Flor,demanding payment for the damages sustained by his
car without response, Espinas filed a complaint for damages against Filcar
 65

and Carmen Flor demanding the amount of P97,910.00, representing actual

damages sustained by his car. Filcar argued that while it is the registered
owner of the car that hit and bumped Espinas car, the car was assigned to its
Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar
furtherstated that when the incident happened, the car was being driven by
Atty. Flors personal driver,Timoteo Floresca.Filcar denied any liability to
Espinas and claimed that the incident was not due to its fault or negligence
since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen
Flor.

Issue:

Whether Filcar, as registered owner of the motor vehicle which figured in

an accident, may be held liable for the damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the driver,

Floresca, and is thus vicariouslyliable under Article 2 -3 in relation with
Article 24/ ofthe Civil Code As a general rule, one is only responsible for his
own act or omission.Thus, a person will generally beheld liable only for the
torts committed by himselfand not by another. The law, however, provides
fore5ceptions that an employer is made vicariously liable for the tort
committed by his employee. Article24/ ofthe Civil Code states6Article 2 4/.
The obligation imposed by Article 2-3 is demandable not only for one0s own
acts oromissions, but also for those ofpersons for whom one is responsible.
Employers shall be liable for the damages caused by their employees and
household helpers actingwithin the scope oftheir assigned tas7s, even though
the former are not engaged in any business orindustry.

Under Article 2176, in relation with Article 2180, ofthe Civil Code, an
action predicated on an employees act or omission may be instituted against
the employer who is held liable for the negligentact or omission committed
by his employee.It is well settled that in case ofmotor vehicle mishaps, the
registered owner ofthe motor vehicle isconsidered as the employer ofthe
tortfeasor'driver, and is made primarily liable for the tort committedby the
latter under Article 2176, in relation with Article 2180, ofthe Civil Code.Filcar
is not be permitted to evade its liability for damages by conveniently passing
on the blame toanother party8 in this case, its Corporate Secretary, Atty. Flor
and his alleged driver, Floresca. WHEREFORE, the petition is DENIED. The
decision the Court of Appeals are AFFIRMED. Costsagainst petitioner Filcar
Transport Services.

CZARINA T. MALVAR VS. KRAFT FOODS PHILS., INC. AND/OR

BIENVENIDO BAUTISTA, KRAFT FOODS INTERNATIONAL
G.R. No. 183952. September 9, 2013

Facts:

In 1988, Kraft Foods Phils., (KRAFT) hired Czarina Malvar as its Corporate
Planning Manager. She rose in the ranks and became the Vice President for
Finance in the Southeast Asia region of Kraft Foods International, KFPIs
mother company. In 1999, the chairman of the board of KFPI and concurrently
 66

the VP and Area Director for SEA, sent Malvar a memo directing her to explain
why no administrative sanctions should be imposed on her for possible
breach of trust and confidence and for willful violation of company rules and
regulations. She was places under preventive suspension and ultimately she
was served a notice of termination. Malvar, aggrieved, filed a complaint for
illegal suspension and illegal dismissal against KFPI and Bautista in the NLRC.
The Labor Arbiter found and declared her suspension and dismissal illegal
and ordered her reinstatement. The judegment became final and executory
however Malvars award was reduced. Both parties appealed the computation
of the NLRC. While pending appeal, Malvar and the respondents entered into
a compromise agreement wherein Malvar would be paid 40 million pesos.
Malvar moved to withdraw the case in view of the compromise agreement .
But before the court could act on the motion to dismiss/withdraw, a motion
for intervention to protect the Attorney's rights was filed. It appears that, to
the intervenors surprise, Malvar unceremoniously and without any justifiable
reason terminated its legal service and required it to withdraw from the case.
The intervenor indicated that Malvars precipitate action had baffled, shocked
and even embarrassed the intervenor, because it had done everything legally
possible to serve and protect her interest. It added that it could not recall any
instance of conflict or misunderstanding with her, for on the contrary, she
had even commended it for its dedication and devotion to her case.

Issue:

Whether or not KRAFT is jointly and severally liable to pay the intervenor
Law firm?

Ruling:

The respondents would be liable if they were shown to have connived

with Malvar in the execution of the compromise agreement, with the intention
of depriving the intervenor of its attorneys fees. Therefore they would be
solidarily liable with her for the attorneys fees as stipulated in the written
agreement under the theory that they unfairly and unjustly interfered with
the intervenors professional relationship with Malvar.

The respondents were complicit in Malvar's move to deprive the

Intervenor of its duly earned contingent fees. At this juncture, the Court notes
that the compromise agreement would have Malvar waive even the
substantial stock options already awarded by the NLRC's decision, which
ordered the respondents to pay to her, among others, the value of the stock
options and all other bonuses she was entitled to or would have been entitled
to had she not been illegally dismissed from her employment. This ruling was
affirmed by the CA. But the waiver could not negate the Intervenor's right to
10% of the value of the stock options she was legally entitled to under the
decisions of the NLRC and the CA, for that right was expressly stated in the
written agreement between her and the Intervenor. Thus, the Intervenor
should be declared entitled to recover full compensation in accordance with
the written agreement because it did not assent to the waiver of the stock
options, and did not waive its right to that part of its compensation.

The circumstances show that Malvar and the respondents needed an

escape from greater liability towards the intervenor, and from the possible
obstacle to their plan to settle to pay. Thereby, she and the respondents
became joint tort-feasors who acted adversely against the interests of the
Intervenor. Under Article 2194 of the Civil Code, joint tort-feasors are
solidarily liable for the resulting damage.

NATIONAL POWER CORPORATION V. COURT OF APPEALS

G.R. No. 119121. August 14, 1998.

Facts:
 67

A convoy of four (4) dump trucks owned by the National Power

Corporation (NPC) left Marawi city bound for Iligan city. Unfortunately,
enroute to its destination, one of the trucks with plate no. RFT-9-6-673 driven
by a certain Gavino Ilumba figured in a head-on-collision with a Toyota
Tamaraw. The incident resulted in the death of 3 persons riding in the Toyota
Tamaraw, as well as physical injuries to 17 other passengers. The heirs of the
victims then filed a complaint for damages against National Power
Corporation (NPC) and PHESCO Incorporated (PHESCO) before the then Court
of First Instance of Lanao del Norte, Marawi City. When defendant PHESCO
filed its answer to the complaint it contended that it was not the owner of the
dump truck which collided with the Toyota Tamaraw but NPC. Moreover, it
asserted that it was merely a contractor of NPC with the main duty of
supplying workers and technicians for the latters projects. On the other hand,
NPC denied any liability and countered that the driver of the dump truck was
the employee of PHESCO. Trial court absolved NPC and ordered PHESCO, Inc.
and Gavino Ilumba to pay jointly and severally the plaintiffs thru the
Dansalan College the sum of P954,154.55 representing the actual or
compensatory damages incurred by the plaintiffs; and P50,000.00
representing Attorneys fees. Dissatisfied, PHESCO appealed. CA reversed the
trial courts judgment. Chagrined by the sudden turnaround, NPC filed a
motion for reconsideration of said decision which was, however, denied on
February 9, 1995. Hence, this petition.

Issue:
Whether or not NPC is liable for the tort of driver Gavino Ilumba?
Ruling:
YES. In the case at bar, there is no doubt that PHESCO was engaged in labor-only
contracting vis-a-vis NPC and as such, it is considered merely an agent of the latter. So,
even if PHESCO hired driver Gavino Ilumba, as PHESCO is admittedly a labor only
contractor of NPC, the statute itself establishes an employer-employee relationship
between the employer NPC and the employee (driver Ilumba) of the labor only contractor
(PHESCO).

Consequently, we hold PHESCO not liable for the tort of driver Ilumba, as there was
no employment relationship between PHESCO and driver Ilumba. Under Article 2180 of
the Civil Code, to hold the employer liable for torts committed by his employees within
the scope of their assigned task, there must exist an employer-employee relationship.

Also, the position of NPC that even assuming that a labor only contract exists
between it and PHESCO, its liability will not extend to third persons who are injured due
to the tortious acts of the employee of the labor-only contractor, stated otherwise, its
liability shall only be limited to violations of the Labor Code and not quasi-delicts is
misplaced. It bears stressing that the action was premised on the recovery of damages as a
result of quasi-delict against both NPC and PHESCO, hence, it is the Civil Code and not
the Labor Code which is the applicable law in resolving this case.

An implementing rule on labor cannot be used by an employer as a shield to avoid

liability under the substantive provisions of the Civil Code.

In this regard, NPC's liability is direct, primary and solidary with PHESCO and the
driver. Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse
against PHESCO and the driver who committed the negligence which gave rise to the
action.
 68

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs. MARJORIE

NAVIDAD, HEIRS OF THE LATE NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY. G.R. No. 145804. February 6, 2003.

Facts:

Navidad was drunk when he entered the boarding platform of the LRT. He
got into an altercation with the Security Guard Junelito Escartin. They had a
fistfight and Navidad fell onto the tracks and was killed instantaneously upon
being hit by a moving train operated by Rodolfo Roman. The Heirs of Navidad
filed a complaint for damages against Escartin, the train driver (Roman), the
LRTA, the Metro Transit Organization and Prudent Security Agency (agency of
security guards) for the death of her husband. The trial court found Prudent
and Escartin jointly and severally liable for damages to the heirs. The Court of
Appeals however reversed the decision of the RTC by exonerating Prudent
and instead held the LRTA and the train driver Romero jointly and severally
liable as well as removing the award for compensatory damages and
replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already existed

between Navidad and LRTA by virtue of his having purchased train tickets and
the liability was caused by the mere fact of Navidad's death after being hit by
the train being managed by the LRTA and operated by Roman. The CA also
blamed LRTA for not having presented expert evidence showing that the
emergency brakes could not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.

(2) Whether or not Escartin and/or Prudent are liable.

(3) Whether or not nominal damages may coexist with compensatory

damages.

Ruling:

(1) Yes. The foundation of LRTA's liability is the contract of carriage and its
obligation to indemnify the victim arising from the breach of that contract by
reason of its failure to exercise the high diligence required of a common
carrier.

(2) Fault was not established. If Prudent is to be held liable, it would be for
a tort under Art. 2176 in conjunction with Art. 2180. Once the fault of the
employee Escartin is established, the employer, Prudent, would be held liable
on the presumption that it did not exercise the diligence of a good father of
the family in the selection and supervision of its employees.

(3) No. It is an established rule that nominal damages cannot co-exist with
compensatory damages. The award of nominal damages in addition to actual
damages is untenable. Nominal damages are adjudicated in order that a right
of the plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him. It is an established rule that nominal damages
cannot co-exist with compensatory damages. The award was deleted.
 69

PHILIPPINE NATIONAL RAILWAYS CORPORATION vs

PURIFICACION VIZCARA
G.R. No. 190022, February 15, 2012

Facts:

On May 14, 2004, at about three oclock in the morning, Reynaldo Vizcara
was driving a passenger jeepney headed towards Bicol to deliver onion crops,
with companions, namely, Cresencio, Crispin, Samuel, Dominador and Joel.
While crossing the railroad track in Tiaong, Quezon, a Philippine National
Railways (PNR) train, then being operated by respondent Japhet Estranas
(Estranas), suddenly turned up and rammed the passenger jeepney. The
collision resulted to the instantaneous death of Reynaldo, Cresencio, Crispin,
and Samuel. On the other hand, Dominador and Joel, sustained serious
physical injuries. The survivors of the mishap, Joel and Dominador, together
with the heirs of the deceased victims, filed an action for damages against
PNR, and the alternate driver of the train. The petitioners claimed that they
exercised due diligence in operating the train and monitoring its
roadworthiness. They asseverate that right before the collision, Estranas was
driving the train at a moderate speed. The Trial Court ruled in favor of the
private respondents. Unyielding, the petitioners appealed the RTC decision to
the CA. The CA affirmed the RTC decision with modification. Thus this petition.

Issues:

(1)Whether or not the proximate cause of the accident was the

negligence of the petitioners.
(2)Whether or not the doctrine of last clear chance finds no application in
the instant
case
(3)Whether or not there was contributory negligence on the part of the
respondents.

Ruling:

Yes, the petitioners negligence was the proximate cause of the accident.
Both courts ruled that the petitioners fell short of the diligence expected of it,
taking into consideration the nature of its business, to forestall any untoward
incident. In particular, the petitioners failed to install safety railroad bars to
prevent motorists from crossing the tracks in order to give way to an
approaching train. Aside from the absence of a crossing bar, the Stop, Look
and Listen signage installed in the area was poorly maintained, hence,
inadequate to alert the public of the impending danger. A reliable signaling
device in good condition, not just a dilapidated Stop, Look and Listen signage,
is needed to give notice to the public. It is the responsibility of the railroad
company to use reasonable care to keep the signal devices in working order.
Failure to do so would be an indication of negligence. Having established the
fact of negligence on the part of the petitioners, they were rightfully held
liable for damages.

The doctrine of last clear chance is not applicable. The doctrine of last
clear chance provides that where both parties are negligent but the negligent
act of one is appreciably later in point of time than that of the other, or where
it is impossible to determine whose fault or negligence brought about the
occurrence of the incident, the one who had the last clear opportunity to
avoid the impending harm but failed to do so, is chargeable with the
consequences arising therefrom. Stated differently, the rule is that the
antecedent negligence of a person does not preclude recovery of damages
 70

caused by the supervening negligence of the latter, who had the last fair
chance to prevent the impending harm by the exercise of due diligence. To
reiterate, the proximate cause of the collision was the petitioners negligence
in ensuring that motorists and pedestrians alike may safely cross the railroad
track. The unsuspecting driver and passengers of the jeepney did not have
any participation in the occurrence of the unfortunate incident which befell
them. Likewise, they did not exhibit any overt act manifesting disregard for
their own safety. Thus, absent preceding negligence on the part of the
respondents, the doctrine of last clear chance cannot be applied.
There was no contributory negligence on the part of the respondents.
Contributory negligence is a conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below
the standard which he is required to conform for his own protection. It is an
act or omission amounting to want of ordinary care on the part of the person
injured which, concurring with the defendants negligence, is the proximate
cause of the injury. Hence, we cannot see how the respondents could have
contributed to their injury when they were not even aware of the forthcoming
danger.
 71

BANK OF THE PHILIPPINE ISLANDS vs

LIFETIME MARKETING CORPORATION
G.R. No. 176434, June 25, 2008

Facts:

Lifetime Marketing opened a current account with the BPI. In this account,
the sales agents of LMC would have to deposit their collections or payments
to the latter. As a result, LMC and BPI, made a special arrangement that the
formers agents will accomplish three (3) copies of the deposit slips, the third
copy to be retained and held by the teller until LMCs authorized
representatives, shall retrieve them on the following banking day. Sometime
in 1986, LMC availed of the BPIs inter-branch banking network services,
whereby the formers agents could make deposit to any BPI branch in Metro
Manila under the same account. Under this system, BPIs bank tellers were no
longer obliged to retain the extra copy of the deposit slips instead, they will
rely on the machine-validated deposit slip, to be submitted by LMCs agents.
For its part, BPI would send to LMC a monthly bank statement relating to the
subject account. This practice was observed and complied with by the
parties. As a business practice, the registered sales agents or the Lifetime
Educational Consultants of LMC, can get the books from the latter on
consignment basis, then they would go directly to their clients to sell. These
agents or Lifetime Educational Consultants would then pay to LMC, seven (7)
days after they pick up all the books to be sold. Since LMC have several
agents around the Philippines, it required to remit their payments through
BPI, where LMC maintained its current account. It has been LMCs practice to
require its agents to present a validated deposit slip and, on that basis, LMC
would issue to the latter an acknowledgement receipt. Alice Laurel, is one of
LMCs Educational Consultants or agents, made check deposits with the BPI
branches and, after the check deposit slips were machine-validated,
requested the teller to reverse the transactions. Based on general banking
practices, however, the cancellation of deposit or payment transactions upon
request by any depositor or payor, requires that all copies of the deposit slips
must be retrieved or surrendered to the bank. This practice, in effect, cancels
the deposit or payment transaction, thus, it leaves no evidence for any
subsequent claim or misrepresentation made by any innocent third person.
Notwithstanding this, the verbal requests of Alice Laurel and her husband to
reverse the deposits even after the deposit slips were already received and
consummated were accommodated by BPI tellers. Upon discovery of this
fraud, LMC made queries from the BPI branches involved. In reply to said
queries, BPI branch managers formally admitted that they cancelled, without
the permission of or due notice to LMC, the deposit transactions made by
Alice and her husband, and based only upon the latters verbal request or
representation.

Issues:

Whether or not BPI was negligent in handling LMCs account.

Ruling:
 72

Yes, because the reversal of the transactions in question was unilaterally

undertaken by BPIs tellers without following normal banking procedure which
requires them to ensure that all copies of the deposit slips are surrendered by
the depositor. The machine-validated deposit slips do not show that the
transactions have been cancelled, leading LMC to rely on these slips and to
consider Alice Laurels account as already paid.

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. Negligence in this case lies in the tellers
disregard of the validation procedures in place and BPIs utter failure to
supervise its employees. Notably, BPIs managers admitted in several
correspondences with LMC that the deposit transactions were cancelled
without LMCs knowledge and consent and based only upon the request of
Alice Laurel and her husband. It is well to reiterate that the degree of
diligence required of banks is more than that of a reasonable man or a good
father of a family. In view of the fiduciary nature of their relationship with
their depositors, banks are duty-bound to treat the accounts of their clients
with the highest degree of care. BPI cannot escape liability because of LMCs
failure to scrutinize the monthly statements sent to it by the bank. This
omission does not change the fact that were it not for the wanton and
reckless negligence of BPIs tellers in failing to require the surrender of the
machine-validated deposit slips before reversing the deposit transactions, the
loss would not have occurred. BPIs negligence is undoubtedly the proximate
cause of the loss. Proximate cause is that cause which, in a natural and
continuous sequence, unbroken by any efficient intervening cause, produces
the injury, and without which the result would not have occurred.
 73

CRISTINA PENULLAR vs PHILIPPINE NATIONAL BANK

G.R. No. L-32762, January 27, 1983

Facts:

There was a land registration case between Cristina Penullar and

Florencio Felix for the declaration of absolute nullity of judicial proceedings in
a land registration case. Genoveva Miguel filed a civil case against Praxedes
Moya et al., predecessors of herein plaintiff Cristina Penullar, for declaration
of ownership over three (3) portions of agricultural land. While the case was
pending, the land was mortgaged to PNB for a loan by the defendants of the
case for declaration of nullity of judicial proceedings. The CA in that case
declared the judicial proceedings void and all Certificates of Title flowing from
the proceedings null and void, but at the same time declared the mortgage of
PNB valid on the basis of being a mortgagor in good faith. Penullar claimed
that PNB was negligent in allowing the void title to be mortgaged.

Issues:

Whether or not PNB was negligent in accepting the security of Torrens

Title wherein trial court annulled the titles issued pursuant to the decision of
the Land Registration Court.

Ruling:

No, there is no showing, that the Bank was made specifically aware of the
fact that the very property already covered by the free patents were only
adjudicated to and Torrens Titles issued in the name of the heirs of Miguel,
who were the parties that afterwards had secured the mortgages from the
Bank, not only this, the declaration of nullity of the titles of the heirs of
Genoveva Miguel due to the fact that there had already been free patents
issued in the name of plaintiff's predecessors Moya and Sison came in only
much later and in fact as of the time when these mortgages were accepted
by the Bank, there was as yet no decision declaring the titles of the
mortgagors null and void; stated otherwise there can be no denying the fact
that the Bank was made to rely and had the right to rely upon regular
certificates of title first presented to it by the mortgagors.

The Philippine National Bank relied on the torrens titles of the mortgagors
which had been regularly issued. The torrens titles were the result of regular
land registration proceedings duly registered with the Register of Deeds.
There was nothing in the torrens titles which would excite suspicion that the
same were fraudulently processed by the mortgagors. Applying, therefore,
the principles enunciated in the aforecited cases, the respondent Bank was
 74

not duty bound to further investigate the validity and or invalidity of the
torrens title.

The court might as well invoke the principle that where one of two
innocent parties must have to suffer due to the act of a third person, he
whose negligence had caused the damage should be made to bear the loss;
in the present case if the heirs of Genoveva Miguel, that is to say herein
plaintiff had only been diligent, and had appealed from the decision in the
registration case, no certificate of Title would have been issued just like that
in the name of the heirs of Genoveva Miguel and no mortgage could have
been constituted by them in favor of Bank but as it is, said successors of
Praxedes Moya and Josefa Sison failed to do that; instead they let the
decision in the registration case gain the status of finality; allowed without
prior protest, the certificate of title to be issued; did not even as early as
possible, annotate an adverse claim on the titles; and they filed this case only
several months afterwards, it was their negligence that permitted said
adjudicatees in the said registration case to apply for and secure mortgages
from the Bank.

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner, vs. COURT

OF APPEALS, ASIAN SAVINGS BANK, MAXIMO C. CONTRERAS and
VICENTE MAOSCA, respondents.
[G.R. No. 112160. February 28, 2000]

Facts:

Canlas and Maosca agreed to invest together in a business. Canlas sold

parcels of land to Moasca for P 850thousand pesos, P500 thousand payable
within a week, whilst the balance of P 350thousand pesos shall be Canlas
investment in the business. Maosca issued two (2) post-dated checks for the
P500thousand: one for P40 thousand and one for P460 thousand. But the
check for the larger amount was insufficiently funded. More so, Maosca was
able to mortgage the entire parcels of land to Asian Development Bank with
the aid of two impostors who pretended to be Mr and Mrs Canlas. The
mortgage being unpaid, ASB extrajudicially foreclosed the lands mortgaged.
Canlas wrote a letter to the bank informing them of the fraud. ASB still
proceeded with the foreclosure. Consequently, on February 3, 1983 the
herein petitioners instituted the present case for annulment of deed of real
estate mortgage with prayer for the issuance of a writ of preliminary
injunction; and on May 23, 1983, the trial court issued an Order restraining
the respondent sheriff from issuing the corresponding Certificate of Sheriffs
Sale.[8]For failure to file his answer, despite several motions for extension of
time for the filing thereof, Vicente Maosca was declared in default. [9]On June
1, 1989, the lower court a quo (RTC) came out with a decision annulling
subject deed of mortgage and disposing/ Maosca to pay ASBs cross-claim for
P350k. From this decision, ASB appealed to CA. CA reversed RTC. Canlas
elevated the case to the SC by Rule 45 (Petition for review on Certiorari)

Issue:

Whether Asian Development Bank is guilty of negligence in not verifying

the identity of the impostors who pretended to be the spouses Canlas?

Ruling:

Yes. Petition is meritorious.The degree of diligence required of banks is

more than that of a good father of a family; [12] in keeping with their
 75

responsibility to exercise the necessary care and prudence in dealing even on

a register or titled property. The business of a bank is affected with public
interest, holding in trust the money of the depositors, which bank deposits
the bank should guard against loss due to negligence or bad faith, by reason
of which the bank would be denied the protective mantle of the land
registration law, accorded only to purchases or mortgagees for value and in
good faith.[13]In the case under consideration, from the evidence on hand it
can be gleaned unerringly that respondent bank did not observe the requisite
diligence in ascertaining or verifying the real identity of the couple who
introduced themselves as the spouses Osmundo Canlas and Angelina Canlas.
It is worthy to note that not even a single identification card was exhibited by
the said impostors to show their true identity and yet, the bank acted on their
representations simply on the basis of the residence certificates bearing
signatures which tended to match the signatures affixed on a previous deed
of mortgage to a certain Atty. Magno, covering the same parcels of land in
question.

HEDY GAN y YU, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, respondents.
G.R. No. L-44264 September 19, 1988

Facts:

Gan was driving her car one day, when, in order to avoid two incoming
vehicle encroaching her side of the road, one trying to overtake the other,
she swerved her car to the right, pinning an old man trying to cross the
street, pinning his body to a jeep, causing the jeep to move forward and
causing damage to other vehicles. Gan was found guilty by the RTC of
homicide thru reckless imprudence. On appeal, the CA found her guilty with
homicide thru simple imprudence, and pursuant to paragraph 2, Article 365
of the Revised Penal Code, she was sentenced to the indeterminate penalty
of 3 months and 11 days of arresto mayor and to indemnify the heirs of Isidro
Casino in the sum of P12,000 without any subsidiary imprisonment in case of
insolvency, and to pay the costs.

Issue:

Was Gan negligent?

SC Ruling:

No. A corollary rule is what is known in the law as the emergency rule.
"Under that rule, one who suddenly finds himself in a place of danger, and is
required to act without time to consider the best means that may be adopted
to avoid the impending danger, is not guilty of negligence, if he fails to adopt
what subsequently and upon reflection may appear to have been a better
method, unless the emergency in which he finds himself is brought about by
his own negligence." 6
 76

The course of action suggested by the appellate court (that Gan should
have stopped her vehicle) would seem reasonable were it not for the fact that
such suggestion did not take into account the amount of time afforded
petitioner to react to the situation she was in. For it is undeniable that the
suggested course of action presupposes sufficient time for appellant to
analyze the situation confronting her and to ponder on which of the different
courses of action would result in the least possible harm to herself and to
others.

Also, the respondent court itself pronounced that the petitioner was
driving her car within the legal limits. We therefore rule that the "emergency
rule" enunciated above applies with full force to the case at bar and
consequently absolve petitioner from any criminal negligence in connection
with the incident under consideration.

We further set aside the award of damages to the heirs of the victim, who
by executing a release of the claim due them, had effectively and clearly
waived their right thereto.

WHEREFORE, judgment is hereby rendered acquitting petitioner HEDY

GAN y YU of the crime of Homicide thru Simple Imprudence. She is no longer
liable for the P12,000.00 civil indemnity awarded by the appellate court to
the heirs of the victim.

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
G.R. No. L-68103 July 16, 1992
CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI
KOH MCKEE, ANTONIO KOH and ELIZABETH KOH TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
G.R. No. L-68102 July 16, 1992

Facts:

The car driven by the relatives of the petitioner were crossing a bridge,
when some kids tried to dart to cross the road, unsure whether to cross or
not. The car blew its horn, swerved to the left side of the road, switched on its
head light to try to warn the driver of the truck and tried to return to its lane.
But the truck did not slow down. As a result, before the car could return to its
side, it got hit by the truck, leading to the death of the driver, his daughter
and the baby sitter [in the front passenger seat], and injury to the rest of the
passengers. Witnesses saw the truck stopped only after colliding with the car.
There were skid marks under the truck, but there were no skid marks behind
the truck.) RTC found Galang liable. CA affirmed RTC. Galang went to the SC
via Appeal by Certiorari under Rule 45.

Issue:

Was Galang negligent?

 77

SC Ruling:

Yes. Galang was negligent. If ever the car driver was guilty of some
negligence, it was excused by Emergency Rule and the doctrine of the
Last clear chance. Galang was driving at 40miles per hour (38 kilometers
per hour) when the allowable speed limit when crossing a bridge is only 30
kilometers per hour. Galang alleged that there was mistake in interpretation,
but regularity of performance of duty by the officers getting his testimony is
presumed.

Galangs employer is also liable under Article 2180 in relation to Article

2176 of the Civil Code. The employer could have raised the defense of good
father of the family in due selection and supervision of employees, but they
did not offer this defense.

For the inattentiveness or reckless imprudence of Galang, the law

presumes negligence on the part of the defendants in the selection of their
driver or in the supervision over him. Appellees did not allege such defense of
having exercised the duties of a good father of a family in the selection and
supervision of their employees in their answers. They did not even adduce
evidence that they did in fact have methods of selection and programs of
supervision. The inattentiveness or negligence of Galang was the proximate
cause of the mishap. If Galang's attention was on the highway, he would have
sighted the car earlier or at a very safe distance than (sic) 10 meters. He
proceeded to cross the bridge, and tried to stop when a collision was already
inevitable, because at the time that he entered the bridge his attention was
not riveted to the road in front of him.

ORIX METRO LEASING AND FINANCE CORPORATION vs. MANGALINAO

G.R. No. 174089. JANUARY 25, 2012

Facts:

This is a case of multiple-vehicle collision in North Luzon Expressway

(NLEX) resulting in the death of all the passengers in one vehicle, including
the Mangalinao spouses and a sibling of the surviving orphaned minor heirs.

An action for damages based on quasi delict was filed by the minor
children of the Mangalinao spouses through their legal guardian against the
registered owners and drivers of the two 10-wheeler trucks that collided with
their parents Nissan Pathfinder. The children imputed recklessness,
negligence, and imprudence on the truck drivers for the deaths of their sister
and parents; while they hold Sonny and Orix equally liable for failing to
exercise the diligence of a good father of a family in the selection and
supervision of their respective drivers.

Issue:

Whether or not the defendants are jointly and severally liable.

Ruling:

The finding of negligence of petitioners as found by the lower courts is

binding. Negligence and proximate cause are factual issues. Settled is the
rule that this Court is not a trier of facts, and the concurrence of the findings
of fact of the courts below are conclusive.
 78

Orix as the operator on record of the Fuso Truck is liable to the heirs of
the victims of the mishap. Orix cannot point fingers at the alleged real owner
to exculpate itself from vicarious liability under Article 2180 of the Civil Code.
Regardless of whoever Orix claims to be the actual owner of the Fuso by
reason of a contract of sale, it is nevertheless primarily liable for the damages
or injury the truck registered under it have caused. Besides, the registered
owners have a right to be indemnified by the real or actual owner of the
amount that they may be required to pay as damage for the injury caused to
the plaintiff, which Orix rightfully acknowledged by filing a third-party
complaint against the owner of the Fuso, Manuel. Moral damages, it must be
stressed, are not intended to enrich plaintiff at the expense of the defendant.
They are awarded to enable the injured party to obtain means, diversions, or
amusements that will serve to alleviate the moral suffering he/she had
undergone due to the other partys culpable action and must, perforce, be
proportional to the suffering inflicted.

SANITARY STEAM LAUNDRY, INC., vs. THE COURT OF APPEALS

G.R. No. 119092. DECEMBER 10, 1998
Facts:

This case involves a collision between a Mercedes Benz panel truck of

petitioner Sanitary Steam Laundry and a Cimarron which caused the death of
three persons and the injuries of several others. The accident took place at
the Aguinaldo Highway in Imus, Cavite on August 31, 1980. The passengers
of the Cimarron were mostly employees of the Project Management
Consultants, Inc. (PMCI). The Cimarron was owned by Salvador Salenga.
Driving the vehicle was Rolando Hernandez. It appears that at about 8:00
p.m., as it was traveling along Aguinaldo Highway in Imus, Cavite on its way
back to Manila, the Cimarron was hit on its front portion by petitioners panel
truck which was traveling in the opposite direction. The driver, Herman
Hernandez, claimed that a jeepney in front of him suddenly stopped. He said
he stepped on the brakes to avoid hitting the jeepney and that this caused
his vehicle to swerve to the left and encroach on a portion of the opposite
lane. As a result, his panel truck collided with the Cimarron on the north-
bound lane. The driver of the Cimarron, Rolando Hernandez, and two of his
passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of
the other passengers of the Cimarron were injured and taken to various
hospitals.

Issue:
 79

Whether the driver of the Cimarron was guilty of contributory

negligence and, therefore, the liability of the petitioner should be mitigated, if
not totally extinguished.

Ruling:

No. It has not been shown how the alleged negligence of the Cimarron
driver contributed to the collision between the vehicles. Indeed, petitioner
has the burden of showing a causal connection between the injury received
and the violation of the Land Transportation and Traffic Code. He must show
that the violation of the statute was the proximate or legal cause of the injury
or that it substantially contributed thereto. Negligence, consisting in whole or
in part, of violation of law, like any other negligence, is without legal
consequence unless it is a contributing cause of the injury. Petitioner says
that driving an overloaded vehicle with only one functioning headlight
during nighttime certainly increases the risk of accident, that because the
Cimarron had only one headlight, there was decreased visibility, and that
the fact that the vehicle was overloaded and its front seat overcrowded
decreased [its] maneuverability. However, mere allegations such as these
are not sufficient to discharge its burden of proving clearly that such alleged
negligence was the contributing cause of the injury.

AMADOR CORPUZ AND ROMEO GONZALES vs. EDISON LUGUE AND

CATHERINE BALUYOT
G.R. No. 137772. JULY 29, 2005

Facts:

On 14 September 1984, at around 7:15 in the morning, while an

Isuzu KC-20 passenger jeep (KC-20), then being driven by Jimmy Basilio,
was traversing the right side of the Roman Highway in Barangay Pias,
Orion, Bataan, it collided with a tanker truck driven by Gerardo Lim, which
was then moving from the right shoulder of the highway. As a
consequence of the accident, passengers of the KC-20, including
respondent Lugue, suffered physical injuries. Respondent Lugue then filed
an action for damages arising from the vehicular incident before the
Balanga, Bataan RTC, Branch 2, against herein petitioners Amador Corpuz
and Romeo Gonzales, owner and driver of the minibus, respectively, and
Oscar Jaring and Gerardo Lim, owner and driver of the tanker truck,
respectively. Therein defendants filed a third-party complaint against
Ricardo Santiago and Jimmy Basilio, owner/operator and driver of the KC-
20, respectively.
 80

Issue:

Whether or not the appellate court erred in holding them liable for
damages based on the findings of facts adduced by the trial court.

Ruling:

It is clear that the proximate cause of the injuries suffered by

respondent Lugue was the collision between the KC-20 and the tanker
truck. As correctly pointed out by the lower court, proximate legal cause is
that acting first and producing the injury either immediately or by setting
other events in motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury
as a natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an
ordinarily prudent and intelligent person, have reasonable ground to
expect at the moment of his act or default that an injury to some person
might probably result therefrom. Certainly, even assuming that petitioner
Gonzales had a few seconds before actual collision, he no longer had any
opportunity to avoid it. Petitioner Gonzales cannot be deemed negligent
for failing to prevent the collision even after applying all means available
to him within the few instants when he had discovered the impending
peril.

LAMBERT S. RAMOS VS C.O.L REALTY

CORPORATION
G. R. No. 184905

Facts:

Petitioner Ramos is the employer of Rodel Ilustrisimo. While Rodel was

driving the Ford Expedition of petitioner an accident ensued, wherein it
bumped with a Corrolla Altis driven by Aquilino Larin and owned by
Respondent COL Realty. Due to the impact of the vehicular mishap, the
passenger of the sedan was injured.

A case was filed against Ramos making him solidarily liable with his
driver. Ramos in his opposition argued that he cannot be held solidarily liable
since it is Aquilnio's negligence that is the proximate cause of the accident.
He further argued that when the accident happened, Aquilino violated an
 81

MMDA order, i.e. prohibiting the crossing is the place where the accident
happened.

Issue:

Whether Ramos may be held liable since the proximate cause of the
accident is his employee's negligence.

Ruling:

No. Aquinos violation of the MMDA prohibition against crossing

Katipunan Avenue Rajah Matanda Street was the proximate cause of the
accident. Proximate cause is defined as that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces
the injury, and without which the result would not have occurred.

If Aquilino heeded the MMDA prohibition against crossing Katipunan

Avenue from Rajah Matanda, the accident would not have happened. This
specific untoward event is exactly what the MMDA prohibition was intended
for. Thus, a prudent and intelligent person who resides within the vicinity
where the accident occurred, Aquilino had reasonable ground to expect that
the accident would be a natural and probable result if he crossed Katipunan
Avenue since such crossing is considered dangerous on account of the busy
nature of the thoroughfare and the ongoing construction of the Katipunan-
Boni Avenue underpass. It was manifest error for the Court of Appeals to
have overlooked the principle embodied in Article 2179 of the Civil Code, that
when the plaintiffs own negligence was the immediate and proximate cause
of his injury, he cannot recover damages.

As to the alleged Rodel's contributory negligence, the court finds it

unnecessary to delve into it, since it cannot overcome or defeat Aquilinos
recklessness which is the immediate and proximate cause of the accident.
Rodels contributory negligence has relevance only in the event that Ramos
seeks to recover from respondent whatever damages or injuries he may have
suffered as a result; it will have the effect of mitigating the award of damages
in his favor.

ELIAS S. CIPRIANO and/or E.S CIPRIANO ENTERPRISES VS THE

COURT OF APPEALS and MACLIN ENTERPRISES
G.R. NO. 107968

Facts:

E.S. Cipriano Enterprises, owned by petitioner Cipriano, is engaged in the

rustproofing of vehicles, under the style Motobilkote. The private respondent, through an
employee brought his car to the petitioners shop. However, a fire broke out at the
Lambat restaurant,t which the petitioner also owned, adjoining his Mobilkote
rustproofing shop. The fire destroyed both the shop and the restaurant, including private
respondents car.
 82

MACLIN sent a letter to petitioner, demanding reimbursement for the value of the
car. In reply, petitioner denied liability on the ground that the fire was a fortuitous event
(Art. 1174 and 1262, NCC), prompting private respondent to bring this suit for the value
of its vehicle and for damages. Private respondent argued that petitioner was liable for the
loss of the car even if it was caused by a fortuitous event. It contended that the nature of
petitioners business required him to assume the risk because under P.D. No. 1572,
petitioner was required to insure his property as well as those of his customers.

RTC ruled in favor of MACLIN stating that the failure of defendant to comply
with P.D. No. 1572 is in effect a manifest act of negligence which renders defendant
liable for the loss of the car even if the same was caused by fire, and that rustproffing is
definitely covered by P.D. No. 1572. Since petitioner did not register his business and
insure it, he must bear the cost of loss of his customers. CA affirmed the RTCs decision.

Issue:

Whether petitioners failure to abide by PD 1572 constitutes negligence

Ruling:

Yes. The Court held that a violation of a statutory duty is negligence per se. It ruled
that where the very injury which was intended to be prevented by the ordinance has
happened, non-compliance with the ordinance was not only a negligent act but also the
proximate cause.

Indeed, the existence of a contract between petitioner and private respondent does
not bar a finding of negligence under the principles of quasi-delict. Petitioners
negligence is the source of his obligation. He is not being held liable for breach of his
contractual obligation due to negligence but for his negligence in not complying with a
duty imposed on him by law. It is therefore immaterial that the loss occasioned to private
respondent was due to a fortuitous event, since it was petitioners negligence in not
insuring against the risk which was the proximate cause of the loss.

PHILIPPINE NATIONAL BANK VS SPS CHEAH CHEE CHONG and

OFELIA CAMACHO CHEAH G.R NO. 170865;
SPS CHEAH CHEE CHONG VS PNB G.R NO 17092

Facts:

Adelina Guarins friend, Filipina Tuazon, approached her to ask if she

could have her check cleared and encashed for a service fee of 2.5%. In turn,
Adelina approached Ofelia Cheah and agreed to accommodate Filipinas
request since she has a joint dollar savings account with her husband, Cheah
Chee Chong with PNB Buendia Branch.
The parties went to PNB Loans Department wherein they met Garin,
PNBs Division Chief, who informed about the 15- day clearing period. On Nov.
4, 1992 Ofelia deposited the said check. PNB sent the check for clearing
 83

through Philadelphia National Banck which had temporarily credited the same
to PNBs account as of Nov.6, 1992. On the same day, Garin, PNBs Division
Chief, informed Ofelia that the check has already been cleared and the same
was credited to the account of Sps Cheah. He further allowed the withdrawal
of the amount on Nov 17-18, 1992. Filipina Tuazon, thereafter, received the
proceeds.
However, the Cable Division of PNB Head Office received a message
from Philadelphia informing PNB for the return of the check for insufficiency of
funds. Upon demand by PNB Buendia to return the money withrdrawn, Ofelia
contacted Filipina to get the money back but the same has been given to
several people who asked for the checks encashment.
PNB filed a complaint against the spouses and froze their peso and
dollar deposits. RTC ruled in favor of the PNB and held the spouses Cheah
guilty of contributory negligence. The CA declared both parties equally
negligent and should suffer and shoulder the loss.

Issue:

Whether both parties are equally negligent, hence, should suffer the
loss.

Ruling:

Yes. PNBs act of releasing the proceeds of the check prior to the lapse
of the 15-day clearing was the proximate cause. The disregard of its own
banking policy amounts to gross negligence. It bears stressing that the
diligence required is more than that of a good father of a family. The highest
degree of diligence is expected. PNB failed to do its duty in exercising
extraordinary diligence and reasonable business practice.

The Spouses Cheah is guilty of contributory negligence and hence

should suffer the loss. Contributory negligence is conduct on the part of the
injured party; contributing as a legal cause to the harm he has suffered which
falls below the standard to which he is required to conform for its protection.
The fact that the check was cleared only eight banking days, contrary to what
Garin had informed them, they should have verified the hastiness of the
transaction considering that they are the ones would be put at risk and not
the accommodated party.
Hence, the Court concurs with the findings of the CA that PNB and
spouses Cheah are equally negligent and should suffer the loss.

PHILTRANCO SERVICE ENTERPRISES, INC. VS FELIX PARAS AND

INLANDTRAILWAYS, INC., AND HON. COURT OF APPEALS
G.R. No. 161909, April 25, 2012

Facts:

Respondent Felix Paras is one of the passengers injured from an

accident met by the bus operated by Inland Trail ways and a bus operated by
 84

petitioner Philtranco Service. Felix went through number operations and was
unable to obtain sufficient financial assistance from Inland for the costs of his
operations, hospitalization, doctors fees and other miscellaneous expenses,
thus, on 31 July 1989; Paras filed a complaint for damages based on breach of
contract of carriage against Inland. On 02 March 1990, upon leave of court,
Inland filed a third-party complaint against Philtranco and Apolinar Miralles. In
this third-party complaint, inland, sought for exoneration of its liabilities to
Paras, asserting that the latters cause of action should be directed against
Philtranco considering that the accident was caused by Miralles lack of care,
negligence and reckless imprudence. The RTC then rendered a decision
declaring Philtranco and Apolinar liable for moral and actual damages. The
said award of damages was also affirmed by the CA. Ultimately, Philtranco
questions the validity of awarding moral damages on the ground that the
basis of such award is based on a breach of contract of carriage, which is not
one of the enumeration provided by the Civil Code.

Issue:

Whether or not the award of damages is proper.

Ruling:

Yes. Section 16, Rule 6 of the Revised Rules of Court defines a third party
complaint as a claim that a defending party may, with leave of court, file
against a person not a party to the action, called the third party defendant,
for contribution, indemnification, subrogation, or any other relief, in respect of
his opponents claim.

Under this Rule, a person not a party to an action may be impleaded by

the defendant either (a) on an allegation of liability to the latter; (b) on the
ground of direct liability to the plaintiff-; or, (c) both (a) and (b). The situation
in (a) is covered by the phrase "for contribution, indemnity or subrogation;"
while (b) and (c) are subsumed under the catch all "or any other relief, in
respect of his opponents claim."

The case at bar is one in which the third party defendants are brought
into the action as directly liable to the plaintiffs upon the allegation that the
primary and immediate cause as shown by the police investigation of said
vehicular collision between the above-mentioned three vehicles was the
recklessness and negligence and lack of imprudence of the third-party
defendant Virgilio Esguerra y Ledesma then driver of the passenger bus. The
effects are that "plaintiff and third party are at issue as to their rights
respecting the claim and the third party is bound by the adjudication as
between him and plaintiff. It is not indispensable in the premises that the
defendant be first adjudged liable to plaintiff before the third-party defendant
may be held liable to the plaintiff, as precisely, the theory of defendant is that
it is the third party defendant, and not he, who is directly liable to plaintiff.
The situation contemplated by appellants would properly pertain to situation
(a) above wherein the third party defendant is being sued for contribution,
indemnity or subrogation, or simply stated, for a defendant's "remedy over".

MERCURY DRUG CORPORATION VS SEBASTIAN M. BAKING

G.R. No. 156037 May 28, 2007
 85

Facts:
Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for
a medical check-up. On the following day, after undergoing an ECG, blood,
and hematology examinations and urinalysis, Dr. Sy found that respondents
blood sugar and triglyceride were above normal levels. Dr. Sy then gave
respondent two medical prescriptions, Diamicron for his blood sugar and
Benalize tablets for his triglyceride. Respondent then proceeded to petitioner
Mercury Drug Corporation (Alabang Branch) to buy the prescribed medicines.
However, the saleslady misread the prescription for Diamicron as a
prescription for Dormicum. Thus, what was sold to respondent was
Dormicum, a potent sleeping tablet. Unaware that what was given to him was
the wrong medicine, respondent took one pill of Dormicum on three
consecutive days.
On November 8 or on the third day he took the medicine, respondent
figured in a vehicular accident. The car he was driving collided with the car of
one Josie Peralta. Respondent fell asleep while driving. He could not
remember anything about the collision nor felt its impact. Suspecting that the
tablet he took may have a bearing on his physical and mental state at the
time of the collision, respondent returned to Dr. Sys clinic. Upon being shown
the medicine, Dr. Sy was shocked to find that what was sold to respondent
was Dormicum, instead of the prescribed Diamicron. Thus, on April 14, 1994,
respondent filed with the Regional Trial Court (RTC) a complaint for damages
against petitioner. After hearing, the trial court rendered its Decision dated
March 18, 1997 in favor of respondent. On appeal, the Court of Appeals, in its
Decision, affirmed in toto the RTC judgment. Petitioner filed a motion for
reconsideration but it was denied, hence, this petition.

Issues:

Whether petitioner was negligent, and if so, whether such negligence

was the proximate cause of respondents accident.

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

There is no dispute that respondent suffered damages. It is generally

recognized that the drugstore business is imbued with public interest.
Inasmuch as the matter of negligence is a question of fact, we defer to the
findings of the trial court affirmed by the Court of Appeals. Obviously,
petitioners employee was grossly negligent in selling to respondent
Dormicum, instead of the prescribed Diamicron. Considering that a fatal
mistake could be a matter of life and death for a buying patient, the said
employee should have been very cautious in dispensing medicines. She
should have verified whether the medicine she gave respondent was indeed
the one prescribed by his physician. The care required must be
commensurate with the danger involved, and the skill employed must
 86

correspond with the superior knowledge of the business which the law
demands. Petitioner contends that the proximate cause of the accident was
respondents negligence in driving his car.

NATIONAL POWER CORPORATION VS HEIRS OF NOBLE CASIONAN

G.R. No. 165969 November 27, 2008

Facts:

In the 1970s, NPC installed high-tension electrical transmission lines of

69 kilovolts traversing the trail leading to Sangilo, Itogon. Eventually, some
lines sagged, thereby reducing their distance from the ground to only about
8-10 ft. This posed as a threat to passersby who were exposed to the danger
of electrocution. Nineteen-year-old Noble Casionan worked as a pocket miner.
In 1995, Noble and his co-pocket miner Melchor Jimenez were at Dalicno.
Noble walked ahead as they passed through the trail underneath the NPC
high-tension lines on their way to their work place. As Noble was going uphill
and turning left on a curve, the tip of the bamboo pole that he was carrying
touched one of the dangling high-tension wires. Melchor narrated that he
heard a buzzing sound for only about a second or two, then he saw Noble fall
to the ground. Melchor rushed to him and shook him, but Noble was already
dead.

A post-mortem examination by the municipal health officer determined

the cause of death to be cardiac arrest, secondary to ventricular fibulation,
secondary to electrocution. Nobles parents filed a claim for damages against
NPC. NPC denied being negligent in maintaining the safety of the lines,
averring that signs were installed but they were stolen by children, and that
excavations were made to increase the clearance from the ground but some
poles sank due to pocket mining in the area. NPC witnesses testified that the
cause of death could not have been electrocution since Noble did not suffer
extensive burns. NPC argued that if Noble did die by electrocution, it was due
to his own negligence.

RTC decided in favor of Nobles parents. RTC observed that NPC witnesses
were biased because all but one were employees of NPC, and they were not
actually present at the time of the accident. RTC found NPC negligent since
the company has not acted upon the requests and demands made by the
community leaders since 1991. CA affirmed RTC with modificationaward of
moral damages was reduced from 100k to 50k, and award of attorney fees
was disallowed since the reason for the award was not expressly stated in the
decision.

Issue:

WON there was contributory negligence on the part of Noble.

Ruling:

NO; hence, NPC is not entitled to a mitigation of its liability. Negligence

is the failure to observe, for the protection of the interest of another, that
degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury. Contributory negligence is
conduct on the part of the injured party, contributing as a legal cause to the
harm he has suffered, which falls below the standard which he is required to
conform for his own protection. There is contributory negligence when the
 87

partys act showed lack of ordinary care and foresight that such act could
cause him harm or put his life in danger. It is an act or omission amounting to
want of ordinary care on the part of the person injured which, concurring with
the defendants negligence, is the proximate cause of the injury.

The underlying precept is that a plaintiff who is partly responsible for

his own injury should not be entitled to recover damages in full but must bear
the consequences of his own negligence. NCC 2179 provides that liability will
be mitigated in consideration of the injured partys contributory negligence.
Damages awarded to Nobles unearned income of 720k; exemplary damages
of 50k, since there is gross negligence and moral damages of 50k.

Allied Banking Corporation v. Bank of the Philippine Islands

G.R. No. 188363, February 27, 2013

Facts:

On October 10, 2002, a check in the amount of P1,000,000.00 payable

to "Mateo Mgt. Group International" (MMGI) was presented for deposit and
accepted at petitioner's (Allied Bank) Kawit Branch. The check, post-dated
"Oct. 9, 2003", was drawn against the account of Marciano Silva, Jr. (Silva)
with respondent BPI Bel-Air Branch. Upon receipt, petitioner sent the check
for clearing to respondent through the Philippine Clearing House Corporation
(PCHC). The check was cleared by respondent and petitioner credited the
account of MMGI with P1,000,000.00. On October 22, 2002, MMGIs account
was closed and all the funds therein were withdrawn. A month later, Silva
discovered the debit of P1,000,000.00 from his account. In response to Silvas
complaint, respondent credited his account with the aforesaid sum. Petitioner
filed a complaint before the Arbitration Committee, asserting that respondent
should solely bear the entire face value of the check due to its negligence in
failing to return the check to petitioner within the 24-hour reglamentary
period as provided in Section 20.1of the Clearing House Rules and
Regulations (CHRR) 2000. In its Answer with Counterclaims, respondent
charged petitioner with gross negligence for accepting the post-dated check
in the first place. It contended that petitioners admitted negligence was the
sole and proximate cause of the loss.

Issue:

Does the Doctrine of Last Clear Chance apply in this case?

Ruling:

YES. In this case, the evidence clearly shows that the proximate cause
of the unwarranted encashment of the subject check was the negligence of
respondent who cleared a post-dated check sent to it thru the PCHC clearing
facility without observing its own verification procedure. As correctly found by
the PCHC and upheld by the RTC, if only respondent exercised ordinary care
in the clearing process, it could have easily noticed the glaring defect upon
seeing the date written on the face of the check "Oct. 9, 2003". Respondent
could have then promptly returned the check and with the check thus
dishonored, petitioner would have not credited the amount thereof to the
payees account. Thus, notwithstanding the antecedent negligence of the
petitioner in accepting the post-dated check for deposit, it can seek
reimbursement from respondent the amount credited to the payees account
covering the check.
 88

PNR v. Ethel Bunty

G.R. No. 169891, November 2, 2006

Facts:

Ethel Bruntys late daughter, Rhonda Brunty, an American citizen,

visited Philippines sometime in January 1980 and prior to her departure, she
and her Filipino host Juan Manuel M.Garcia, traveled to Baguio City aboard a
Mercedes Benz sedan with plate number FU 799,driven by Rodolfo L.
Mercelita. It was about 12:00 midnight, January 25, 1980. By then, PNR Train
No. T-71, driven by Alfonso Reyes, was on its way to Tutuban, Metro Manila4
as it had left the La Union station at 11:00 p.m., January 24, 1980.By 2:00
a.m., Rhonda, Garcia and Mercelita were already approaching the railroad
crossing at Barangay Rizal, Moncada, Tarlac. Mercelita, driving at
approximately 70 km/hr, drove past a vehicle, unaware of the railroad track
up ahead and that they were about to collide with PNR Train No. T-71.
Mercelita was instantly killed when the Mercedes Benz smashed into the
train; the two other passengers suffered serious physical injuries. A James
Harrow brought Rhonda to the Central Luzon Doctors Hospital in Tarlac,
where she was pronounced dead after ten minutes from arrival. Garcia, who
had suffered severe head injuries, was brought via ambulance to the same
hospital. He was transferred to the Manila Doctors Hospital, and later to the
Makati Medical Center for further treatment.

Ethel Brunty sent a demand letter to PNR to ask indemnity for the
death of her daughter, but PNR did not respond. As a result, she and Garcia
filed a complaint in the RTC Manila (later tried by Br. 20, Manila RTC). They
alleged that it was PNRs failure to provide necessary equipment at the
railroad crossing in Brgy. Rizal, Moncada. Tarlac which was proximate and
direct cause of Garcias injuries and the death of Rhonda.
Meanwhile, contrary to Brunty and Garcias allegations, PNR stated that
it was not negligent in selection and supervision of its employees(using the
diligence of a good father doctrine) and it was Mercelitas negligence which
was the immediate and proximate of the accident. It also stated that it had
the right of way, and has no legal duty to put a bar or red light signal at the
crossing. Moreover, it had adequate, visible, and clear warning signs
strategically posted on the sides of the road before the railroad crossing.
 89

The RTC ruled in favor of Brunty and was affirmed by the Court of
Appeals. Hence, PNR appealed to the Supreme Court.

Issue:

Who was guilty of negligence between the parties involved

which resulted in the unfortunate accident?

Ruling:

PNR was guilty of negligence. The Supreme Court affirmed with

modifications the findings of the Manila RTC and Court of Appeals. It held that
PNR was indeed negligent by not providing adequate, visible, clear warnings
and safety equipment: (1) absence of flagbars or safety railroad bars; (2)
inadequacy of the installed warning signals; and (3) lack of proper lighting
within the area. Actual damages were however not awarded to respondents
Brunty and Garcia, as they failed to produce evidence for such.

Marcelo Macalinao, Et Al., v. Eddie Medecielo Ong

G.R. No. 146635 December 14, 2005

Facts:

Sometime in April 1992, Sebastian instructed Macalinao, Ong and 2

other truck helpers to deliver a heavy piece of machinery to Sebastians
manufacturing plant in Angat, Bulacan. While delivering, the Genetrons Isuzu
Elf truck driven by Ong bumped the front portion of a private jeepney. Both
vehicles incurred severe damages while the passengers sustained physical
injuries as a consequence of the collision. Macalinao was brought to Sta.
Maria District Hospital for first aid treatment then to Philippine Orthopedic
Center then to Capitol Medical Center and lastly, to Philippine General
Hospital due to financial considerations. His body was paralyzed and
immobilized from the neck down. He filed against Ong and Sebastian. A
criminal case for reckless imprudence resulting to serious physical injuries
was instituted but was not ensued. In November 7 1992: Macalinao died and
was substituted by his parents. The RTC ruled that Ong was negligent and
Sebastian failed to exercise the diligence of a good father of a family in the
selection and supervision of Ong thus ordering them jointly liable to pay
actual, moral, and exemplary damages as well as civil indemnity for
Macalinaos death. On appeal, the CA however reversed the RTCs decision
for lack of evidence.

Issue:

Whether Ong may be held liable under the doctrine of Res Ipsa
Loquitur

Ruling:

YES. The photographs clearly shows that the road where the mishap
occurred is marked by a line at the center separating the right from the left
 90

lane. Since respondents failed to refute the contents of the police blotter, the
statement therein that the Isuzu truck hit the private jeepney and not the
other way around is deemed established. While not constituting direct proof
of Ongs negligence, the foregoing pieces of evidence justify the application
of res ipsa loquitur, a Latin phrase which literally means the thing or the
transaction speaks for itself.

Res ipsa loquitur recognizes that parties may establish prima facie
negligence without direct proof, thus, it allows the principle to substitute for
specific proof of negligence permits the plaintiff to present along with proof of
the accident, enough of the attending circumstances to invoke the doctrine,
create an inference or presumption of negligence and thereby place on the
defendant the burden of proving that there was no negligence on his part
based on the theory that defendant in charge of the instrumentality which
causes the injury either knows the cause of the accident or has the best
opportunity of ascertaining it while the plaintiff has no such knowledge, and
is therefore compelled to allege negligence in general terms and rely upon
the proof of the happening of the accident in order to establish negligence
can be invoked only when under the circumstances, direct evidence is absent
and not readily available grounded upon the fact that the chief evidence of
the true cause, whether culpable or innocent, is practically accessible to the
defendant but inaccessible to the injured person.

RAMOS VS CA 321 SCRA 584

Facts:

Erlinda Ramos underwent a surgical procedure to remove stone from her

gall bladder (cholecystectomy). They hired Dr. Hosaka, a surgeon, to conduct
the surgery at the De Los Santos Medical Center (DLSMC). Hosaka assured
them that he would find a good anesthesiologist. But the operation did not go
as planned, Dr. Hosaka arrived 3 hours late for the operation, Dra. Gutierrez,
the anesthesiologist botched the administration of the anesthesia causing
Erlinda to go into a coma and suffer brain damage. The botched operation
was witnessed by Herminda Cruz, sister in law of Erlinda and Dean of College
of Nursing of Capitol Medical Center.

The family of Ramos (petitioners) sued the hospital, the surgeon and the
anesthesiologist for damages. The petitioners showed expert testimony
showing that Erlinda's condition was caused by the anesthesiologist in not
exercising reasonable care in intubating Erlinda. Eyewitnesses heard the
anesthesiologist saying Ang hirap ma-intubate nito, mali yata ang
pagkakapasok. O lumalaki ang tiyan.

Diagnostic tests prior to surgery showed that Erlinda was robust and fit to
undergo surgery.

The RTC held that the anesthesiologist ommitted to exercise due care in
intubating the patient, the surgeon was remiss in his obligation to provide a
good anesthesiologist and for arriving 3 hours late and the hospital is liable
for the negligence of the doctors and for not cancelling the operation after
the surgeon failed to arrive on time. The surgeon, anesthesiologist and the
 91

DLSMC were all held jointly and severally liable for damages to petitioners.
The CA reversed the decision of the Trial Court.

Issues:

Whether or not the private respondents were negligent and thereby

caused the comatose condition of Ramos.

Ruling:

Yes, private respondents were all negligent and are solidarily liable for the
damages. Private respondents were not able to disprove the presumption of
negligence on their part in the care of Erlinda and their negligence was the
proximate cause of her condition. One need not be an anesthesiologist in
order to tell whether or not the intubation was a success. The Supreme Court
also found that the anesthesiologist only saw Erlinda for the first time on the
day of the operation which indicates unfamiliarity with the patient and which
is an act of negligence and irresponsibility.

The head surgeon, Dr. Hosaka was also negligent. He failed to exercise
the proper authority as the captain of the ship in determining if the
anesthesiologist observed the proper protocols. Also, because he was late, he
did not have time to confer with the anesthesiologist regarding the
anesthesia delivery.

The hospital failed to adduce evidence showing that it exercised the

diligence of a good father of the family in hiring and supervision of its doctors
(Art. 2180). The hospital was negligent since they are the one in control of
the hiring and firing of their consultants. While these consultants are not
employees, hospitals still exert significant controls on the selection and
termination of doctors who work there which is one of the hallmarks of an
employer-employee reationship. Thus, the hospital was allocated a share in
the liability.

JARCIA JR VS PEOPLE 666 SCRA 336

Facts:

Private complainant Belinda Santiago lodged a complaint with the

National Bureau of Investigation against the petitioners, Dr. Emmanuel Jarcia,
Jr. and Dr. Marilou Bastan, for their alleged neglect of professional duty which
caused her son, Roy Alfonso Santiago, to suffer serious physical injuries.

Upon investigation, the NBI found that Roy Jr. was hit by a taxicab; that he
was rushed to the Manila Doctors Hospital for an emergency medical
treatment; that an X-ray of the victims ankle was ordered; that the X-ray
result showed no fracture as read by Dr. Jarcia; that Dr. Bastan entered the
emergency room and, after conducting her own examination of the victim,
informed Mrs. Santiago that since it was only the ankle that was hit, there
was no need to examine the upper leg. despite Mrs. Santiago's protest the
doctors did not examine the upper portion of the leg of Roy. that eleven (11)
days later, Roy Jr. developed fever, swelling of the right leg and misalignment
of the right foot; that Mrs. Santiago brought him back to the hospital; and
that the X-ray revealed a right mid-tibial fracture and a linear hairline fracture
in the shaft of the bone.
 92

After trial and applying the doctrine of res ipsa loquitor the RTC found
petitioners to be guilty of simple negligence. The decision was affirmed in
toto by the CA.

Issues:

Whether of not the petitioner physicians are negligent, hence liable for
damages.

Ruling:

Petitioners were negligent in their obligation. It was proven that a

thorough examination was not performed on Roy Jr since as residents on duty
at the emergency room, Dr. Jarcia and Dr. Bastan were expected to know the
medical protocol in treating leg fractures and in attending to victims of car
accidents.

Thus, simple negligence is resent if: that there is lack of precaution on the
part of the offender, and that the damage impending to be caused is not
immediate or the danger is not clearly manifest.

Dr. Jarcia and Dr. Bastan, explained the court, cannot pass on the liability
to the taxi driver who hit the victim. It may be true that the actual, direct,
immediate, and proximate cause of the injury of Roy Jr. was the vehicular
accident when he was hit by a taxi. The petitioners, however, cannot simply
invoke such fact alone to excuse themselves from any liability. If this would
be so, doctors would have a ready defense should they fail to do their job in
attending to victims of hit-and-run, maltreatment, and other crimes of
violence in which the actual, direct, immediate, and proximate cause of the
injury is indubitably the act of the perpetrator/s.

In failing to perform an extensive medical examination to determine the

extent of Roy Jr.s injuries, Dr. Jarcia and Dr. Bastan were remiss of their duties
as members of the medical profession. Assuming for the sake of argument
that they did not have the capacity to make such thorough evaluation at that
stage, they should have referred the patient to another doctor with sufficient
training and experience instead of assuring him and his mother that
everything was all right.

Petitioners were absolved in the criminal charge for the reason that a
reasonable doubt existed but the are liable for damages. There is no direct
evidence proving that it was their negligence that caused the suffering of Roy.

BONTILAO VS GERONA 630 SCRA 561

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic

surgeon at the Vicente Gullas Memorial Hospital, treated petitioners son, 8
y/o Allen Roy Bontilao, for a fractured right wrist. Respondent administered a
U-spint and immobilized Allens wrist with a cast, then sent Allen home. On
June 4, 1992, Alen re-fractured the same wrist and was brought back to the
hospital. The x-ray examination showed a complete fractured and
displacement bone, with the fragments overlapping each other. Respondent
performed a closed reduction procedure, with Dr. Vicente Jabagat as the
anesthesiologist. Then he placed Allens arm in a plaster cast to immobilize it.
He allowed Allen to go home after the post reduction x-ray showed that the
bones were properly aligned, but advised Allens mother, petitioner Sherlina
Bontilao, to bring Allen back for re-tightening of the cast not later than June
15, 1992. Allen was however, only brought back after the said date. By then,
because the cast had not be re-tightened, a rotational deformity had
 93

developed in Allens arm. The x-ray examination showed that the deformity
was caused by a re-displacement of the bone fragments, so it was agreed
that an open reduction surgery will be conducted on June 24, 1992 by the
respondent, again with Dr. Jabagat as the anesthesiologist. On the said date,
Sherlina was allowed to observe the operation behind a glass panel. Dr.
Jabagat failed to intubate the patient after 5 attempts so anesthesia was
administered through a gas mask. Respondent asked Dr. Jabagat if the
operation should be postponed given the failure to intubate, but Dr. Jabagat
said that it was alright to proceed. Respondent verified that Allen was
breathing properly before proceeding with the surgery. As respondent was
about to finish the suturing, Sherlina decided to go out of the operating room
to make a telephone call and wait for her son. Later, she was informed that
her son died on the operating table. The cause of death was asphyxia due to
the congestion and edema of the epiglottis. Hence, a criminal, administrative
and civil case was filed by the parents of Allen against the doctors for the
negligence that caused Allens death.

Issue:

Whether or not respondent is liable for medical negligence due to the

death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin
liability on respondent for Allens death. Res ipsa liquitor is a rebuttable
presumption or influence that the defendant was negligent. The presumption
only arises upon proof that the instrumentality causing injury was in the
defendants exclusive control, and that the accident was one which ordinarily
does not happen in the absence of negligence. It is a rule of evidence
whereby negligence of the alleged wrong does may be inferred from the mere
fact that the accident happened, provided that the character of the accident
and circumstances attending it lead reasonably to the belief that in the
absence of negligence it would not have occurred and that the thing which
caused injury is shown to have been under the management and control of
the alleged wrong doer.

Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used

but a rule to be cautiously applied defending upon the circumstances of each
case. In malpractice case, the doctrine is generally restricted to situations
where a layman is able to say, as a matter of common knowledge and
observation, that the consequence of professional care were not as such as
would ordinarily have followed if due care had been exercised.

Moreover, we note that in the instant case, the instrument which caused
the injury or damage was not even within respondents exclusive control and
management as Dr. Jabagat was exclusively in control and management of
the anesthesia and endotracheal tube. The doctrine of res ipsa liquitor allows
the mere existence of an injury to justify a presumption of negligence or the
part of the person who controls the instrument causing the injury, provided
that the following requisites concur:

The accident is of a kind which ordinarily does not occur in the absence of
someones negligence;

It is caused by an instrumentality within the exclusive control of the

defendant or co-defendants;

The possibility of contributing conduct which would make the plaintiff

responsible is eliminated.
 94

OSCAR DEL CARMEN, JR.,petitioner, - versus - Present: GERONIMO

BACOY, Guardian and representing the children, namely: MARY
MARJORIE B. MONSALUD,ERIC B. MONSALUD, METZIE ANN DEL
CASTILLO, and B. MONSALUD, KAREEN B. ,Respondents.
G.R. No. 173870,April 25, 2012

Facts:

Spouses Monsalud and their daughter died from being run over by a
jeepney driven by a certain Allan Maglasang. The jeepney was owned by
Oscar del Carmen Jr. Allan was declared guilty beyond reasonable doubt in a
 95

criminal case while the father of the late Mrs. Monsalud, Geronimo Bacou
filed an independent civil action againt the former in behalf of the minor
children left by the Monsalud spouses. Del Carmen Jr. claimed he was a victim
as well as Allan stole the jeep and was not hired as a driver by the former; he
was a conductor (and had been released from employment lately) and it was
the brother of Allan, Rodrigo who was hired as a driver. Del Carmen Jr. filed a
carnapping case against Allan but was dismissed by the court for insufficient
evidence. RTC held del Carmen Jr. subsidiary liable and held the doctrine of
res ipsa loquitur. The CA adjudged Oscar Jr. liable to the heirs of the victims based
on the principle that the registered owner of a vehicle is directly and primarily
responsible for the injuries or death of third parties caused by the operation of such
vehicle. It disbelieved Oscar Jr.s defense that the jeep was stolen not only
because the carnapping case filed against Allan and his companions was dismissed
but also because, given the circumstances, Oscar Jr. is deemed to have given Allan
the implied permission to use the subject vehicle because the brothers were
assigned to said jeep. After a days work, the jeepney would be parked beside the
brothers house and not returned to del Carmens residence; the jeep could easily
be started even without the use of an ignition key; the said parking area was not
fenced or secured to prevent the unauthorized use of the vehicle which can be
started even without the ignition key.

Issue:

W/N owner of vehicle is directly and primarily liable for injuries caused by
the operation of such

Ruling:

Del Carmen Jr. was held to be primarily liable and not merely subsidiary
liable. Del Carmen Jr.s own evidence cast doubt that Allan stole the jeepney.
Given the dismissal of the carnapping case filed by del Carmen Jr. against
Allan, the former also admitted to such dismissal in the SC. Under the doctrine
of res ipsa loquitur, where the thing that caused the injury complained of is shown
to be under the management of the defendant or his servants; and the accident, in
the ordinary course of things, would not happen if those who had management or
control used proper care, it affords reasonable evidence in the absence of a
sufficient, reasonable and logical explanation by defendant that the accident
arose from or was caused by the defendants want of care. All three are present in
the case at bar.

JOAQUINITA P. CAPILI, Petitioner,

vs.
SPS. DOMINADOR CARDAA and ROSALITA CARDAA, Respondents
G.R. No. 157906, November 2, 2006
 96

Facts:
February 1, 1993: Jasmin Cardaa was walking along the San Roque
Elementary School when a branch of a caimito tree located within the school
premises fell on her, causing her instantaneous death. Her parents Dominador and
Rosalita Cardaa filed a case for damages against the school principal Joaquinita
Capili knowing that the tree was dead and rotting did not dispose of it
RTC: dismissed for failing to show negligence on the part of Capili
CA: reversed. Awarded P50,000 as indemnity for the death of Jasmin and P15,010
as reimbursement of her burial expenses, moral damages P50,000 and attorney's
fees and litigation P10,000

Issue:
W/N Capili can be held liable for damages under Res ipsa loquitur.
Ruling:
YES. Negligent act, inadvertent(unintentional) act 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 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.
The probability that the branches of a dead and rotting tree could fall and harm
someone is clearly a danger that is foreseeable. As school principal, she was
tasked to see to the maintenance of the school grounds and safety of the children
within the school and its premises. Moreover, even if petitioner had assigned
disposal of the tree to another teacher, she exercises supervision over her assignee
Jasmin, died as a result of the dead and rotting tree within the school's premises
shows that the tree was indeed an obvious danger to anyone passing by and calls
for application of the principle of res ipsa loquitur.. Once respondents made out a
prima facie case of all requisites, the burden shifts to petitioner to explain. The
presumption or inference may be rebutted or overcome by other evidence and,
under appropriate circumstances a disputable presumption, such as that of due
care or innocence, may outweigh the inference. Under the circumstances, we have
to concede that petitioner was not motivated by bad faith or ill motive vis--vis
respondents' daughter's death.. The award of moral damages is therefore not
proper.
 97

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD

and KRISTINE, all surnamed REYES, represented by their mother, LEAH
ALESNA REYES, petitioners, vs. SISTERS OF MERCY HOSPITAL,
SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR. MARLYN
RICO, respondents.
[G.R. No. 130547. October 3, 2000]

Facts:
Jorge Reyes has been suffering from recurring fever with chills for around days.
Home medication afforded him no relief so he went to Mercy Community Clinic. He
was then attended by Dr. Marlyn Rico. Since typhoid fever was common at that
time, the Widal test was performed and he was found positive for typhoid.
Thereafter, Dr. Marlyn Rico indorse Jorge Reyes to Dr. Marvie Blanes. Suspecting
that that Jorge had typhoid fever, Dr. Marvie Blanes ordered that Jorge be tested for
compatibility with chloromycetin, an antibiotic. Such test was conducted by Nurse
Pagente. As there was no adverse reaction, Dr. Blanes administered 500 mg of the
antibiotic. Another dose was given 3 hours later. Subsequently, Jorge Reyes
developed high fever and experienced vomiting and convulsions. He then turned
blue due to deficiency in oxygen cyanosis and died. The cause of death was
stated to be ventricular arrhythmia secondary to hyperpyrexia and typhoid fever.
The heirs of Reyes filed with the RTC a complaint for damages against Sisters of
Mercy, Sister Rose Palacio, Dr. Blanes, Dr. Rico and Mercy Community Clinic
contending that the death of Jorge was due to the wrongful administration of
chloromycetin. (NOTE: Petitioners action is for medical malpractice.)
RTC ruled in favor of the respondents. The CA affirmed in toto the RTC decision.
Hence, this appeal.
Petitioners contend that: Dr. Marlyn Rico hastily and erroneously relied upon the
Widal test, diagnosed Jorges illness as typhoid fever, and immediately prescribed
the administration of the antibiotic chloromycetin, Dr. Marvie Blanes erred in
ordering the administration of the second dose of 500 milligrams of chloromycetin
barely 3 hours after the first was given. Testimony presented: That of Dr. Apolinar
Vacalares, (Chief Pathologist of the Northern Mindanao Training Hospital) who
performed an autopsy on the body Dr. Vacalares testified that Reyes did not die of
typhoid fever but of shock undetermined, which could be due to allergic reaction or
chloromycetin overdose.
Issue:
WON there was medical malpractice.
Ruling:
NO. Dr. Apolinar Vacalares is not a specialist of typhoid fever and he is thus not
qualified to prove that Dr. Marlyn Rico erred in her diagnosis. While petitioners
presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so
as he is not a specialist on infectious diseases like typhoid fever. Furthermore,
although he may have had extensive experience in performing autopsies, he
 98

admitted that he had yet to do one on the body of a typhoid victim at the time he
conducted the postmortem on Jorge Reyes. It is also plain from his testimony that
he has treated only about three cases of typhoid fever.
The two doctors presented by respondents clearly were experts on the subject
They vouched for the correctness of Dr. Marlyn Ricos diagnosis. Dr. Peter Gotiong,
a diplomate whose specialization is infectious diseases and microbiology and an
associate professor at the Southwestern University College of Medicine and the
Gullas College of Medicine, testified that he has already treated over a thousand
cases of typhoid fever.
 99

NATIONAL POWER CORPORATION,

Petitioner, vs. HEIRS OF MACABANGKIT SANGKAY, namely: CEBU,
BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI , MONGKOY*,
and AMIR, all surnamed MACABANGKIT, Respondents.
G.R. No. 165828 August 24, 2011

Facts:

NPC undertook the Agus River Hydroelectric Power Plant Project in the
1970s to generate electricity for Mindanao. The project included the
construction of several underground tunnels to be used in diverting the water
flow from the Agus River to the hydroelectric plants.

The respondents Heirs of Macabangkit, as the owners of land with an

area of 221,573 square meters situated in Ditucalan, Iligan City, sued NPC in
the RTC for the recovery of damages and of the property, with the alternative
prayer for the payment of just compensation. They alleged that the
underground tunnel had been constructed without their knowledge and
consent.

In its answer with counterclaim, NPC countered that the Heirs of

Macabangkit had no right to compensation under section 3(f) of Republic Act
No. 6395, under which a mere legal easement on their land was established;
that their cause of action, should they be entitled to compensation, already
prescribed due to the tunnel having been constructed in 1979.

Issue:

Whether the Heirs of Macabangkits right to claim just compensation

had prescribed under section 3(i) of Republic Act No. 6395, or, alternatively,
under Article 620 and Article 646 of the Civil Code.

Ruling:

No. Five-year prescriptive period under Section 3(i) of Republic Act No.
6395 does not apply to claims for just compensation.

The court ruled that the prescriptive period provided under Section 3(i)
of Republic Act No. 6395 is applicable only to an action for damages, and
does not extend to an action to recover just compensation like this case.
Consequently, NPC cannot thereby bar the right of the Heirs of Macabangkit
to recover just compensation for their land.

The action to recover just compensation from the State or its

expropriating agency differs from the action for damages. The former, also
known as inverse condemnation, has the objective to recover the value of
property taken in fact by the governmental defendant, even though no formal
exercise of the power of eminent domain has been attempted by the taking
agency. Just compensation is the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the takers gain, but
the owners loss. The word just is used to intensify the meaning of the
word compensation in order to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, and
ample. On the other hand, the latter action seeks to vindicate a legal wrong
through damages, which may be actual, moral, nominal, temperate,
 100

liquidated, or exemplary. When a right is exercised in a manner not

conformable with the norms enshrined in Article 19 and like provisions on
human relations in the Civil Code, and the exercise results to the damage of
another, a legal wrong is committed and the wrongdoer is held responsible.

SOLID HOMES, INC., petitioner, vs. SPOUSES ANCHETA K. TAN and

CORAZON DE JESUS TAN, respondents.
G.R. Nos. 145156-57 July 29, 2005

Facts:
Petitioner Solid Homes, Inc., sold to the spouses Joe Uy and Myrna Uy a
subdivision lot which thereafter was registered in the name of the Uys. The spouses Uy
sold the same lot to herein respondents. From then on, respondents visited their property
a number of times, only to find out the sad state of development thereat. In short, there
has been no development at all.
The respondents, in a letter dated December 18, 1995, demanded petitioner to
provide the needed utility systems and clear the area of squatters and other obstructions
and to enable them to start the construction of their house thereon and to allow other lot
owners in the area a full access to and peaceful possession of their respective lots.
Having received no reply from petitioner, respondents filed with the Field Office
of the Housing and Land Use Regulatory Board (HLURB), NCR a complaint for specific
performance and damages which the Housing and Land Use Arbiter, in a decision
rendered judgment in favor of the respondents by directing petitioner to perform its
obligation to provide subdivision facilities in the subject premises and to rid the premises
of squatters and to pay complainants.
Dissatisfied, petitioner went on appeal to the HLURB Board of Commissioners,
which, in a decision affirmed that of the Arbiter. The petitioner then elevated the case to
the Office of the President (O.P.), which also affirmed with modification the appealed
decision of the HLURB Board of Commissioners.
Respondents filed a motion for partial reconsideration of the aforementioned
decision, praying for the deletion of that portion thereof giving petitioner the option of
merely paying them the purchase price with interest. Respondents argued that it would
be more in accord with equity and fair play if they will be paid the fair market value of
the lot in question and not merely its purchase price.
Issue:
Whether or not in the event respondents opt to rescind the contract, should
petitioner pay them merely the price they paid for the lot plus interest or the current
market value thereof.
Ruling:
No. The court held that a literal application of any part of a statute is to be
rejected if it will operate unjustly, lead to absurd results, or contradict the evident
meaning of the statute taken as a whole. Statutes should receive a sensible
construction, such as will give effect to the legislative intention and so as to avoid an
unjust or an absurd conclusion.
Indeed, there would be unjust enrichment if respondents Solid Homes, Inc. &
Purita Soliven are made to pay only the purchase price plus interest. It is definite that the
value of the subject property already escalated after almost two decades from the time the
petitioner paid for it. Equity and justice dictate that the injured party should be paid the
market value of the lot, otherwise, respondents Solid Homes, Inc. & Purita Soliven would
enrich themselves at the expense of herein lot owners when they sell the same lot at the
present market value. Surely, such a situation should not be countenanced for to do so
 101

would be contrary to reason and therefore, unconscionable. Over time, courts have
recognized with almost pedantic adherence that what is inconvenient or contrary to
reason is not allowed in law.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK, vs. THE HON.

COURT OF APPEALS, and CALVIN & ELSA ARCILLA,
G.R. No. 129227. May 30, 2000

Facts:

Elsa Arcilla and her husband, Calvin Arcilla secured on three occasions,
loans from the Banco Filipino Savings and Mortgage bank in the amount of
Php.107,946.00 as evidenced by the Promissory Note executed by the
spouses in favor of the said bank. To secure payment of said loans, the
spouses executed Real Estate Mortgages in favor of the appellants (Banco
Filipino) over their parcels of land. The appellee spouses failed to pay their
monthly amortization to appellant. On September 2, 1985 the appellees filed
a complaint for Annulment of the Loan Contracts, Foreclosure Sale with
Prohibitory and Injunction which was granted by the RTC. Petitioners
appealed to the Court of Appeals, but the CA affirmed the decision of the RTC.

Issue:

Whether or not the CA erred when it held that the cause of action of
the private respondents accrued on October 30, 1978 and the filing of their
complaint for annulment of their contracts in 1085 was not yet barred by the
prescription

Ruling:

The court held that the petition is unmeritorious. Petitioners claim that
the action of the private respondents have prescribed is bereft of merit.
Under Article 1150 of the Civil Code, the time for prescription of all kinds of
action where there is no special provision which ordains otherwise shall be
counted from the day they may be brought. Thus the period of prescription of
any cause of action is reckoned only from the date of the cause of action
accrued. The period should not be made to retroact to the date of the
execution of the contract, but from the date they received the statement of
account showing the increased rate of interest, for it was only from the
moment that they discovered the petitioners unilateral increase thereof.
 102

LAFARGE CEMENT PHILIPPINES, INC vs CONTINENTAL CEMENT

CORPORATION (CCC)
G.R. No. 155173, November 23, 2004

Facts:

On August 11, 1998, a letter of intent was executed by both parties,

Lafarge and CCC. Lafarge agreed to purchase the cement business of CCC.
On October 21, 1998, they entered into a Sale and Purchase Agreement
(SPA). The petitioners, at the time of such transactions were aware of the
pending case of CCC with the Supreme Court entitled Asset Privatization Trust
(APT) v. Court of Appeals and Continental Cement Corporation. In anticipation
of the liability that the High Tribunal might adjudge against CCC, the parties,
under Clause 2 (c) of the SPA, allegedly agreed to retain from the purchase
price a portion of the contract price in the amount of P117,020,846.84 -- the
equivalent of US$2,799,140. This amount was to be deposited in an interest-
bearing account in the First National City Bank of New York (Citibank) for
payment to APT. However, petitioners allegedly refused to apply the sum to
the payment to APT, after the finality of the judgment in the case of CCC.
Fearful that nonpayment to APT would result in the foreclosure, of several
properties, CCC filed before the RTC a Complaint with Application for
Preliminary Attachment" against petitioners. The Complaint prayed, that
petitioners be directed to pay the "APT Retained Amount" referred to in
Clause 2 (c) of the SPA. Petitioners moved to dismiss the Complaint on the
ground that it violated the prohibition on forum-shopping. Respondent CCC
had allegedly made the same claim it was raising in another action, which
involved the same parties and which was filed earlier before the International
Chamber of Commerce. After the trial court denied the Motion to Dismiss in
its November 14, 2000 Order, petitioners elevated the matter before the
Court of Appeals.

In the meantime, to avoid being in default and without prejudice to the

outcome of their appeal, petitioners filed their Answer and Compulsory
Counterclaims ad Cautelam before the trial court. In their Answer, they
denied the allegations in the Complaint. They prayed -- by way of compulsory
counterclaims against Respondent CCC, its majority stockholder and
president Gregory T. Lim, and its corporate secretary Anthony A. Mariano --
for the sums of (a) P2,700,000 each as actual damages, (b) P100,000,000
each as exemplary damages, (c) P100,000,000 each as moral damages, and
(d) P5,000,000 each as attorney's fees plus costs of suit.

Petitioners alleged that CCC, through Lim and Mariano, had filed the
"baseless" Complaint and procured the Writ of Attachment in bad faith.
Relying on this Court's pronouncement in Sapugayv. CA, petitioners prayed
that both Lim and Mariano be held "jointly and solidarily" liable with
Respondent CCC. On behalf of Lim and Mariano who had yet to file any
responsive pleading, CCC moved to dismiss petitioners' compulsory
counterclaims on grounds that essentially constituted the very issues for
resolution in the instant Petition.

RTC ruled that the counterclaims of the petitioners against Lim and
Mariano were not compulsory, that the ruling in Sapugay was not applicable
and that the petitioners answer with counterclaims violated the procedural
rules on joinder of actions.
 103

Issue:

Whether or not the petitioners answer with counterclaims violated the

procedural rules on joinder of actions.

Ruling:

The procedural rules on joinder of actions were not violated. In joining

Lim and Mariano in the compulsory counterclaim, petitioners are being
consistent with the solidary nature of the liability alleged therein. The
procedural rules are founded on practicality and convenience.They are meant
to discourage duplicity and multiplicity of suits.
JOSEPH SALUDAGA vs. FEU and EDILBERTO C. DE JESUS (President of
FEU)
G.R. No. 179337, April 30, 2008

Facts:

Joseph Saludaga was a sophomore law student of (FEU) when he was shot
by Alejandro Rosete, one of the security guards on duty at the school
premises on August 18, 1996. Saludaga was rushed to FEU Hospital due to
the wound he sustained. Meanwhile, Rosete was brought to the police station
where he explained that the shooting was accidental and eventually released
for no formal complaint was filed against him.

Saludaga thereafter filed with RTC Manila a complaint for damages

against respondents on the ground that they breached their obligation to
provide students with a safe and secure environment and an atmosphere
conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against Galaxy

Development and Management Corp. (Galaxy), the agency contracted by FEU
to provide security services within its premises and Mariano D. Imperial
(Imperial), Galaxy's President, to indemnify them for whatever would be
adjudged in favor of petitioner, if any; and to pay attorney's fees and cost of
the suit

Issue:

Whether Respondents can be vicariously liable under Article 2180 of the

Civil Code.

Ruling:

The Court agree with the findings of the Court of Appeals that
respondents cannot be held liable for damages under Art. 2180 of the Civil
Code because respondents are not the employers of Rosete. The latter was
employed by Galaxy. The instructions issued by respondents' Security
Consultant to Galaxy and its security guards are ordinarily no more than
requests commonly envisaged in the contract for services entered into by a
principal and a security agency. They cannot be construed as the element of
control as to treat respondents as the employers of Rosete. It is settled in our
jurisdiction that where the security agency, as here, recruits, hires and
assigns the work of its watchmen or security guards, the agency is the
employer of such guards or watchmen. Liability for illegal or harmful acts
committed by the security guards attaches to the employer agency, and not
 104

to the clients or customers of such agency. As a general rule, a client or

customer of a security agency has no hand in selecting who among the pool
of security guards or watchmen employed by the agency shall be assigned to
it; the duty to observe the diligence of a good father of a family in the
selection of the guards cannot, in the ordinary course of events, be
demanded from the client whose premises or property are protected by the
security guards.The fact that a client company may give instructions or
directions to the security guards assigned to it, does not, by itself, render the
client responsible as an employer of the security guards concerned and liable
for their wrongful acts or omissions.

KHRISTINE REGINO, petitioner, vs. Pangasinan College of Science and Technology, Respondent
G.R. No. 156109
November 18, 2004

Facts:

Petitioner Khristine Regino, an enrolled student at respondent PCST, was disallowed to take from
taking tests or examinations by her teachers Rachelle A. Gamut and Elissa Baladlad, because the former did
not pay for two tickets at the price of P100 each as required by PCST. The payment was for fund raising
campaign dubbed as the Rave Party and Dance Revolution. Petitioner did not pay because of financial
difficulties and prohibited by her religion from attending dance parties and celebrations. Petitioner then
filed a complaint for damages against PCST, Gamurot, and Baladlad.
Respondents filed a motion to dismiss on the ground of failure to exhaust administrative remedies which
the RTC upheld and resulted to the dismissal of the case on the ground of lack of cause of action.

Issues:

Whether or not the principle of exhaustion of administrative remedies applies in a civil action
exclusively for damages based on violation of human relations provisions of the Civil Code, filed by a
student against here former school, thus concluding that CHED has exclusive original jurisdiction over
actions for damages based upon violation of the Civilc Code provisions and that a prior declaration of
invalidity of a certain school administrative policy is need for the action to prosper.

Ruling:

No. First, the doctrine of exhaustion of administrative remedies has no bearing on the present case.
Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it to allow her to
take her final examinations; she was already enrolled in another educational institution. A reversal of the
acts complained of would not adequately redress her grievances; under the circumstances, the
consequences of respondents acts could no longer be undone or rectified.

Second, exhaustion of administrative remedies is applicable when there is competence on the part of
the administrative body to act upon the matter complained of. Administrative agencies are not courts; they
are neither part of the judicial system, nor are they deemed judicial tribunals. Specifically, the CHED does
not have the power to award damages. Hence, petitioner could not have commenced her case before the
Commission.

Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is purely legal
and well within the jurisdiction of the trial court. Petitioners action for damages inevitably calls for the
application and the interpretation of the Civil Code, a function that falls within the jurisdiction of the
courts.
 105

St. Marys Academy vs. Carpetanos

GR No. 143363
February 6, 2002

Facts:

Herein petitioner, conducted an enrollment drive for the school year 1995-1996 They visited schools
from where prospective enrollees were studying. Sherwin Carpitanos joined the campaign. Along with the
other high school students, they rode a Mitsubishi jeep owned by Vivencio Villanueva on their way to
Larayan Elementary School. Such jeep was driven by James Daniel II, a 15 year old student of the same
school. It was alleged that he drove the jeep in a reckless manner which resulted for it to turned turtle.
Sherwin died due to this accident.

Issue:

WON petitioner should be held liable for the damages.

Ruling:

CA held petitioner liable for the death of Sherwin under Article 218 and 219 of the Family Code
where it was pointed that they were negligent in allowing a minor to drive and not having a teacher
accompany the minor students in the jeep. However, for them to be held liable, the act or omission to be
considered negligent must be the proximate cause of the injury caused thus, negligence needs to have a
causal connection to the accident. It must be direct and natural sequence of events, unbroken by any
efficient intervening causes. The parents of the victim failed to show such negligence on the part of the
petitioner. The spouses Villanueva admitted that the immediate cause of the accident was not the reckless
driving of James but the detachment of the steering wheel guide of the jeep. Futhermore, there was no
evidence that petitioner allowed the minor to drive the jeep of Villanueva. The mechanical defect was an
event over which the school has no control hence they may not be held liable for the death resulting from
such accident.

The registered owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to 3rd persons for injuries caused while it is being driven on the road. It is not
the school, but the registered owner of the vehicle who shall be held responsible for damages for the death
of Sherwin. Case was remanded to the trial court for determination of the liability of the defendants
excluding herein petitioner.

CHILD LEARNING CENTER VS. TAGORIO

G.R. NO. 150920 NOVEMBER 25, 2005

Facts:
 106

The complaint alleged that during the school year 1990-1991, Timothy
was a Grade IV student at Marymount School, an academic institution
operated and maintained by Child Learning Center, Inc. (CLC). In the
afternoon of March 5, 1991, between 1 and 2 p.m., Timothy entered the boys
comfort room at the third floor of the Marymount building to answer the call
of nature. He, however, found himself locked inside and unable to get out.
Timothy started to panic and so he banged and kicked the door and yelled
several times for help. When no help arrived he decided to open the window
to call for help. In the process of opening the window, Timothy went right
through and fell down three stories. Timothy was hospitalized and given
medical treatment for serious multiple physical injuries.

An action under Article 2176 of the Civil Code was filed by respondents
against the CLC, the members of its Board of Directors, namely Spouses
Edgardo and Sylvia Limon, Alfonso Cruz, Carmelo Narciso and Luningning
Salvador, and the Administrative Officer of Marymount School, Ricardo Pilao.
In its defense, CLC maintained that there was nothing defective about the
locking mechanism of the door and that the fall of Timothy was not due to its
fault or negligence. CLC further maintained that it had exercised the due care
and diligence of a good father of a family to ensure the safety, well-being and
convenience of its students.

Issue:

Whether or not Child Learning Center is liable for torts and consequently,
of damages?

Ruling:

Yes. In this tort case, respondents contend that CLC failed to provide
precautionary measures to avoid harm and injury to its students in two
instances: (1) failure to fix a defective door knob despite having been notified
of the problem; and (2) failure to install safety grills on the window where
Timothy fell from. The trial court found that the lock was defective on March
5, 1991. The door knob was defective. After the incident of March 5, 1991,
said door knob was taken off the door of the toilet where Timothy was in. The
architect who testified during the trial declared that although there were
standard specifications for door knobs for comfort room[s], and he designed
them according to that requirement, he did not investigate whether the door
knob specified in his plans during the construction [was] actually put in place.
This is so because he did not verify whether the door knob he specified w[as]
actually put in place at the particular comfort room where Timothy was
barred from getting outside.

The fact, however, that Timothy fell out through the window shows that
the door could not be opened from the inside. That sufficiently points to the
fact that something was wrong with the door, if not the door knob, under the
principle of res ipsa loquitor. The doctrine of res ipsa loquitor applies where
(1) the accident was of such character as to warrant an inference that it
would not have happened except for the defendants negligence; (2) the
accident must have been caused by an agency or instrumentality within the
exclusive management or control of the person charged with the negligence
complained of; and (3) the accident must not have been due to any voluntary
action or contribution on the part of the person injured. Petitioners are clearly
answerable for failure to see to it that the doors of their school toilets are at
 107

all times in working condition. The fact that a student had to go through the
window, instead of the door, shows that something was wrong with the door.

Petitioners argument that CLC exercised the due diligence of a good

father of a family in the selection and supervision of its employees is not
decisive. Due diligence in the selection and supervision of employees is
applicable where the employer is being held responsible for the acts or
omissions of others under Article 2180 of the Civil Code. In this case, CLCs
liability is under Article 2176 of the Civil Code, premised on the fact of its own
negligence in not ensuring that all its doors are properly maintained.
 108

HEIRS OF REDENTOR COMPLETO VS. ALBAYDA JR. 6

24 SCRA 97

Facts:

Albayda is a Master Sergeant of the PH Air Force, and Completo was the
taxi driver of a Toyota Corolla which was owned by Abiad. Albayda was riding
a bike on his way to the office, when Completos taxi bumped and sideswept
him, causing serious physical injuries. He [Albayda] was brought to the PH Air
Force General Hospital, but he was transferred to the AFP Medical Center
because he sustained a fracture and there was no orthopedic doctor available
in the first hospital. He was confined from 27 Aug 1997 to 11 Feb 1998, and
again in 23 Feb to 22 Mar 1998 [approx. 7 months].

Conciliation before the barangay failed, so Albayda filed a complaint for

physical injuries through reckless imprudence against Completo before the
Office of the City Prosecutor of Pasay. Completo filed a counter-charge of
damage to property through reckless imprudence against Albayda. The Office
of the City Prosecutor recommended the filing of an information for Albaydas
complaint, and Completos complaint [against Albayda] was dismissed.
Albayda manifested his reservation to file a separate civil action for damages
against Completo and Abiad. Albayda alleged that Completos negligence is
the proximate cause of the incident. He demanded the following damages
and their respective amounts: Actual damages 276,550; Moral damages
600,000; Exemplary damages 200,000; Attorneys fees 25,000 + 1,000
per court appearance.

On the other hand, Completo alleged that he was carefully driving the
taxicab when he heard a strange sound from the taxicabs rear right side. He
found Albayda lying on the road, holding his left leg, so he brought Albayda to
PH Air Force General Hospital. Completo asserted that he was an experienced
driver, and that he already reduced his speed to 20km even before reaching
the intersection. In contrast, Albayda rode his bicycle at high speed, causing
him to lose control of the bicycle. Completo said that Albayda had no cause of
action.

Several people testified for each side, but here are some notes on the
testimony of the owner of the taxi driver, Abiad. Abiad said that aside from
being a soldier, he also held franchises of taxicabs and passenger jeepneys,
and being a taxicab operator, he would wake up early to personally check the
taxicabs. When Completo applied as a taxicab driver, Abiad required him to
show his bio-data, NBI clearance, and drivers license. Completo never
figured in a vehicular accident since he was employed and according to
Abiad, he [Completo] was a good driver and good man.

RTC rendered judgment in favor of Albayda, and the defendants are

ordered to pay actual [46k] and moral [400k] damages, and attorneys fees
[25k]. Upon appeal at the CA, the court affirmed RTCs decision with
modifications [no more actual damages; awarded temperate damages [40k];
moral damages only 200k; Completo and Abiad are solidarily liable to pay
Albayda; added legal interest].

Issues:
 109

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
Ruling:

1. No. 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. 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 8 th 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.

2. Yes. 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. 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
drive.
 110

ALLIED BANKING CORP. VS. LIM SIO WAN

G.R. No. 133179 MARCH 27, 2008

Facts:

On November 14, 1983, respondent Lim Sio Wan deposited with

petitioner Allied Banking Corporation (Allied) at its Quintin Paredes Branch in
Manila a money market placement of PhP 1,152,597.35 for a term of 31 days
to mature on December 15, 1983.

On December 5, 1983, a person claiming to be Lim Sio Wan called up

Cristina So, an officer of Allied, and instructed the latter to pre-terminate Lim
Sio Wans money market placement, to issue a managers check representing
the proceeds of the placement, and to give the check to one Deborah Dee
Santos who would pick up the check. Later, Santos arrived at the bank and
signed the application form for a managers check to be issued.

The bank issued Managers Check No. 035669 for PhP 1,158,648.49,
representing the proceeds of Lim Sio Wans money market placement in the
name of Lim Sio Wan, as payee. The managers check was deposited in the
account of Filipinas Cement Corporation (FCC) at respondent Metropolitan
Bank and Trust Co. (Metrobank), with the forged signature of Lim Sio Wan as
indorser. To clear the check and in compliance with the requirements of the
Philippine Clearing House Corporation (PCHC) Rules and Regulations,
Metrobank stamped a guaranty on the check.

The check was sent to Allied through the PCHC. Upon the presentment of
the check, Allied funded the check even without checking the authenticity of
Lim Sio Wans purported indorsement. Thus, the amount on the face of the
check was credited to the account of FCC.

Lim Sio Wan deposited with Allied a second money market placement,
upon the maturity date of the first money market placement, Lim Sio Wan
went to Allied to withdraw it. She was then informed that the placement had
been pre-terminated upon her instructions. Allied refused to pay Lim Sio Wan,
claiming that the latter had authorized the pre-termination of the placement
and its subsequent release to Santos.

Issue:

Whether or not Allied negligence was the proximate cause of the loss of
Lim Sio Wans money market placement.

Ruling:

The court ruled that Allied is liable to Lim Sio Wan. Fundamental and
familiar is the doctrine that the relationship between a bank and a client is
one of debtor-creditor. Since there was no effective payment of Lim Sio Wans
 111

money market placement, the bank still has an obligation to pay her at six
percent (6%) interest from March 16, 1984 until the payment thereof.

We cannot, however, say outright that Allied is solely liable to Lim Sio
Wan. Allied avers that even if it had not issued the check payment, the
money represented by the check would still be lost because of Metrobanks
negligence in indorsing the check without verifying the genuineness of the
indorsement thereon. The trial court correctly found Allied negligent in
issuing the managers check and in transmitting it to Santos without even a
written authorization. In fact, Allied did not even ask for the certificate
evidencing the money market placement or call up Lim Sio Wan at her
residence or office to confirm her instructions. Both actions could have
prevented the whole fraudulent transaction from unfolding. Allieds
negligence must be considered as the proximate cause of the resulting loss.

Santos could be the architect of the entire controversy. Unfortunately,

since summons had not been served on Santos, the courts have not acquired
jurisdiction over her.

SPS. BUENAVENTURA VS. APOSTOL

G.R. No. 163609 NOVEMBER 27, 2008

Facts:

On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the
Isuzu pick-up truck driven by Fidel Lozano, an employee of the Municipality of
Koronadal. The pick-up truck was registered under the name of Rodrigo Apostol, but it
was then in the possession of Ernesto Simbulan. Lozano borrowed the pick-up truck from
Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila
flight. The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then
crossing the National Highway in South Cotabato. The intensity of the collision sent
Marvin some 50 meters away from the point of impact, a clear indication that Lozano
was driving at a very high speed at the time of the accident. Marvin sustained severe head
injuries. Despite medical attention, Marvin expired six (6) days after the accident.

Issues:

1. May a municipal mayor be held solidarily liable for the negligent acts of the driver
assigned to him

2. May an LGU be held liable for the tortuous act of a government employee.

Ruling:

1. It is uncontested that Lozano was employed as a driver by the municipality. That

he was subsequently assigned to Mayor Miguel during the time of the accident is of no
moment. The Municipality of Koronadal remains to be Lozanos employer
notwithstanding Lozanos assignment to Mayor Miguel. Even assuming arguendo that
Mayor Miguel had authority to give instructions or directions to Lozano, he still cannot
be held liable. In Benson v. Sorrell, the New England Supreme Court ruled that mere
giving of directions to the driver does not establish that the passenger has control over the
vehicle. Neither does it render one the employer of the driver. Mayor Miguel was neither
Lozanos employer nor the vehicles registered owner. There existed no causal
relationship between him and Lozano or the vehicle used that will make him accountable
for Marvins death. Mayor Miguel was a mere passenger at the time of the accident.
 112

2. The municipality may not be sued because it is an agency of the State engaged in
governmental functions and, hence, immune from suit. This immunity is illustrated in
Municipality of San Fernando, La Union v. Firme, where the Court held that municipal
corporations are suable because their charters grant them the competence to sue and be
sued. Nevertheless, they are generally not liable for torts committed by them in the
discharge of governmental functions and can only be held answerable only if it can be
shown that they were acting in proprietary capacity. In permitting such entities to be sued,
the State merely gives the claimant the right to show that the defendant was not acting in
governmental capacity when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot recover.
Liability attaches to the registered owner, the negligent driver and his direct employer.
Settled is the rule that the registered owner of a vehicle is jointly and severally liable with
the driver for damages incurred by passengers and third persons as a consequence of
injuries or death sustained in the operation of said vehicles. Regardless of who the actual
owner of the vehicle is, the operator of record continues to be the operator of the vehicle
as regards the public and third persons, and as such is directly and primarily responsible
for the consequences incident to its operation.

ALMIREZ VS. INFINITE LOOP TECHNOLOGY CORPORATION

G.R. No. 162401 JANUARY 31, 2006

Facts:

Petitioner Corazon Almirez was hired by respondent Infinite Loop

Technology Corporation (Infinite Loop) to be a Refinery Senior Process Design
Engineer for a specific project starting October 18, 1999 with a guaranty of
12 continuous months of service or until a mutually agreed date. However,
Almirez was later on suspended. Hence, she filed an action before the
National Labor Relations Commission (NLRC) against Infinite Loop and its
General Manager/President/co-petitioner Edwin R. Rabino on the ground of
breach of contract of employment.

Both the Labor Arbiter and the NLRC ruled that there is an existing
employer-employee relationship between Almirez and Infinite Loop since the
latter exercises control over the means and methods used by Almirez in the
performance of her duties.

The Court of Appeals ruled that there was no existing employer-employee

relationship between the parties since Almirez was hired to render her
professional service only for a specific project.

Issue:

Whether or not there is employee-employer relationship between Almirez

and Infinite Loop.

Ruling:

To ascertain the existence of an employer-employee relationship,

jurisprudence has invariably applied the four-fold test, to wit: (1) the manner
of selection and engagement; (2) the payment of wages; (3) the presence or
absence of the power of dismissal; and (4) the presence or absence of the
power of control. Of these four, the last one, the so called "control test" is
commonly regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship.
 113

Under the control test, an employer-employee relationship exists where

the person for whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to be used in
reaching that end.

From the earlier-quoted scope of Almirez professional services, there is

no showing of a power of control over petitioner. The services to be
performed by her specified what she needed to achieve but not on how she
was to go about it.

Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, the
"Scope of [Almirez] Professional Services" does not "show that the
companys management team exercises control over the means and methods
in the performance of her duties as Refinery Process Design Engineer."
Having hired Almirez professional services on account of her "expertise and
qualifications" as Almirez herself proffers in her Position Paper, the company
naturally expected to be updated regularly of her "work progress," if any, on
the project for which she was specifically hired.

As for the designation of the payments to Almirez as "salaries," it is not

determinative of the existence of an employer-employee relationship.
"Salary" is a general term defined as "a remuneration for services given." It is
the above-quoted contract of engagement of services-letter dated September
30, 1999, together with its attachments, which is the law between the
parties. Even Almirez concedes rendering service "based on the contract,"
which, as reflected earlier, is bereft of a showing of power of control, the most
crucial and determinative indicator of the presence of an employer-employee
relationship.

ARNULFO C. ACEVEDO, Petitioner, vs. ADVANSTAR COMPANY INC.

(ACI)
and/or FELIPE LOI, TONY JALAPADAN, Respondents
November 11, 2005 G.R. No. 157656

Facts:

ACI was engaged in the distribution and sale of various brands of liquor
and alcoholic spirits. Felipe Loi was employed as its manager and Jalapadan
was one of the ACIs hired salesmen. Under the Agreement for the Sale of
Merchandise between Jalapadan and ACI, among others, the former shall be
provided with a 6-wheeler truck to facilitate the sale and delivery of products
to customers and outlets and was authorized to employ and discharge a
driver and other assistants as he deemed necessary, who would be
considered his employees, and that he alone would be liable for their
compensation and actual expenses, including meals while on duty. On August
5, 1997, Jalapadan hired Arnulfo Acebedo as driver.

In the course of business, Jalapadan and Acebedo had several

misunderstandings until in October 10, 1998 Acebedo signed a letter, using
his thumb mark, informing Jalapadan that he is resigning effective that date.
On October 26, 1998, Acevedo filed a complaint against Jalapadan, ACI and
its general manager, Felipe Loi, for illegal dismissal and for the recovery of
back wages and other monetary benefits.

Issue:

Whether or not Jalapadan, and not ACI and Loi, was the employer of
Acebedo.
 114

Ruling:

No, because there has been an employer-employee relationship between

respondent ACI and complainant Arnulfo Acevedo, with respondent Tony
Jalapadan as agent of the respondent corporation arising from their
relationship of labor-only contracting. The agreement between the
respondents cannot prevail over Articles 106 and 107 of the Labor Code of
the Philippines.

The principal employer becomes solidarily liable with the labor-only

contractor for all the rightful claims of the employees. The labor-only
contractor is considered merely as an agent of the employer, the employer
having been made, by law, responsible to the employees of the labor-only
contractor as if such employees had been directly employed by it.

CAYAO-LASAM, petitioners vs SPOUSES RAMOLETE, respondents

GR No. 159132 December 18, 2002

Facts:

On July 28, 1994, respondent Editha Ramolete, who was 3 months

pregnant, was brought to Lorma Medical Center (LMC) in San Fernando, La
Union due to vaginal bleeding. Upon advise of petitioner related via
telephone, Editha was admitted to the LMC on the same day.

A pelvic sonogram was then conducted on Editha revealing the fetus

weak cardiac pulsation. The following day, the pelvic sonogram showed that
aside from the fetus weak cardiac pulsation, no fetal movement was also
appreciated. Due to persistent and profuse vaginal bleeding, petitioner
advised her to undergo a D&C procedure. She was discharged the following
day.

On September 16, 1994, Editha was once gain brought at the LMC, as she
was suffering from vomiting and severe abdominal pains. Editha was
attended by Drs. Dela Cruz, Mayo and Komiya. Dr. Mayo allegedly informed
Editha that there was a dead fetus in the latters womb, after Editha went
laparectomy, she was found to have massive intra abdominal hemorrhage
and ruptured uterus. Thus, she had to go hysterectomy and as a result no
more chance to bear a child.
 115

Issue:

Whether or not petitioner is liable for medical malpractice.

Ruling:

No. Medical malpractice is a particular form of negligence which consists

in the failure of a physician or a surgeon to apply in his practice of medicine
that degree of care and skill which is ordinarily employed by the profession
generally under similar conditions and in like surrounding circumstances. In
order to successfully pursue such a claim, a patient must either prove that
the physician or surgeon failed to do something which a reasonably prudent
physician or surgeon would have done, or that the physician or surgeon
performed something which a reasonably prudent physician or surgeon would
not have done, and that such failure or action caused injury to the patient.

There are four elements involved in medical negligence cases: duty,

breach, injury, and proximate cause.

The breach of the professional duties of skill and care, or their improper
performance by a physician surgeon, whereby the patient is injured in body
or in health, constitutes actionable malpractice. Further, in as much 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 suspect the conclusion as to causation.

However, in this case, it was undisputedly established that Editha did not
return for follow-up evaluation, in defiance of the petitioners advice. This is,
as found out, is the proximate cause of the injury she sustained.

DR. PEDRO DENNIS CERENO, and DR. SANTOS ZAFE, Petitioners,

vs. COURT OF APPEALS, SPOUSES DIOGENES S. OLAVERE and FE R.
SERRANO, Respondents
G.R. No. 167366, September 26, 2012

Facts:

At 9:15 in the evening, Raymond S. Olavere, a victim of a stabbing incident was

rushed to the Bicol Regional Medical Center. The emergency room resident physician,
recommended that the patient undergo "emergency exploratory laparotomy." During that
time, the hospital surgeons, were busy operating on gunshot victim Maluly-on with the
only anaesthesiologist Dr. Tatad on duty assisting them. Just before the operation on
Maluluy-on was finished, another emergency case involving Lilia Aguila, a woman who
was giving birth to triplets, was brought to the operating room. Because they were
heavily occupied, the doctors decided to defer the operation on Raymond. They however
examined Raymond and they found that the latters blood pressure was normal and
"nothing in him was significant."

At 12:15 am, the operation on Raymong started. But while the operation was on-
going, Raymond suffered a cardiac arrest and he was pronounced dead at 2:30 A.M with
his death certificate indicating "hypovolemic shock" as the immediate cause of death.

Issue:
 116

Whether Dr. Cereno and Dr. Zafe are guilty of gross negligence in the performance
of their duties.

Ruling:

No, the petitioners are not guilty of gross negligence.The type of lawsuit which has
been called medical malpractice or medical negligence, is that type of claim which the
complainant must prove: (1) that the health care provider, either by his act or omission,
had been negligent, and (2) that such act or omission proximately caused the injury
complained of. The best approach to prove these is through the opinions of expert
witnesses belonging in the same general line of practice as defendant surgeon. The
deference of courts to the expert opinion of qualified physicians stems from the formers
realization that the latter possess unusual technical skills which laymen in most instances
are incapable of intelligently evaluating, hence, the indispensability of expert testimonies.

In the case at bar, there were no expert witnesses presented to testify norwas there
any testimony offered, except that of Dr. Tatads, on which it may be inferred that
petitioners failed to exercise the standard of care, diligence, learning and skill expected
from practitioners of their profession. Dr. Tatad is not an expert witness in this case as her
expertise is in the administration of anesthesia and not in the determination of whether
surgery ought or not ought to be performed.

In medical negligence cases, it is established that the complainant has the burden of
establishing breach of duty on the part of the doctors or surgeons. It must be proven that
such breach of duty has a causal connection to the death of the patient.Aside from their
failure to prove negligence on the part of the petitioners, they also failed to prove that it
was petitioners fault that caused the injury.

NOGALES vs. CAPITOL MEDICAL CENTER

G.R. No. 142625/December 19, 2006
511 SCRA 204

Facts:

Corazon Nogales (Corazon) was pregnant with her fourth child. She was
under the exclusive prenatal care of Dr. Oscar Estrada. On her last trimester
of pregnancy, she had leg edema and an increase in blood pressure. Her
condition was a dangerous complication of pregnancy. When she experienced
mild labor pains, Dr. Estrada advised her immediate admission to Capitol
Medical Center (CMC). Upon Corazon's admission at the CMC, Rogelio Nogales
("Rogelio") executed and signed the "Consent on Admission and Agreement"
and "Admission Agreement." Corazon was then brought to the labor room of
the CMC. She had incidents of medical complication and was given treatment
by the doctors in CMC. Despite several measures administered, Corazon died.
The cause of death was hemorrhage, post partum.

Petitioners filed a complaint for damages against CMC, Dr. Estrada, and
the rest of CMC medical staff for the death of Corazon. In their defense, CMC
pointed out that Dr. Estrada was a consultant to be considered as an
 117

independent-contractor, and that no employer-employee relationship existed

between the former and the latter.

After more than 11 years of trial, the court rendered judgment finding Dr.
Estrada solely liable for damages. Petitioners appealed the trial courts
decision. Petitioners claimed that aside from Dr. Estrada, the remaining
respondents should be held equally liable for negligence. Petitioners stressed
that the subject matter of the petition was the liability of CMC for the
negligence of Dr. Estrada.

Issue:

Whether CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Yes. In general, a hospital is not liable for the negligence of an

independent contractor-physician. There is, however an exception to this
principle. The hospital may be liable if the physician is the ostensible agent of
the hospital. This exception is also known as the doctrine of apparent
authority. For a hospital to be liable under the doctrine of apparent authority,
a plaintiff must show that 1.) the hospital, or its agent, acted in a manner that
would lead a reasonable person to conclude that the individual who was
alleged to be negligent was an employee or agent of the hospital; 2.) Where
the acts of the agent create the appearance of authority, the plaintiff must
also prove that the hospital had knowledge of and acquired in them; and 3.)
the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence. In the instant case, CMC
impliedly held out Dr. Estrada as a member of its medical staff. Through
CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading
the Spouses Nogales to believe that Dr. Estrada was an employee or agent of
CMC.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126297, 31 January 2007

Facts:

On April 1984, Natividad Agana was rushed to the Medical City General
Hospital (Medical City Hospital) because of difficulty of bowel movement and
bloody anal discharge. Dr. Miguel Ampil diagnosed her to be suffering from
"cancer of the sigmoid". The doctor performed an anterior resection surgery
on Natividad and found that the malignancy in her sigmoid area had spread
on her left ovary, necessitating the removal of certain portions of it. Dr. Ampil
obtained the consent of Natividads husband, Enrique Agana, to permit Dr.
Juan Fuentes, to perform hysterectomy on her. Dr. Fuentes had completed
the hysterectomy and thenafter left after he presented to Dr. Ampil his work
being done. Dr. Ampil took over and completed the operation and closed the
incision. The attending nurses had "announced to Dr. Ampil that two (2)
"sponge count lacking but he continued the closure. The attending nurses
entered the incident in the Record of Operations.
 118

Natividad was released with a hospital bill amounted to P60,000.00

inclusive of the doctors fee. A few days late, Natividad complained of
excruciating pain in her anal region and consulted both Dr. Ampil and Dr.
Fuentes. Both doctors told her that the pain was the natural consequence of
the surgery. Dr. Ampil then recommended that she consult an oncologist to
examine the cancerous nodes which were not removed during the operation.

Natividad and her husband, went to the United States to seek further
treatment and was told she was free of cancer after four (4) months. She was
advised to return to the Philippines.

In August 31, 1984, Natividad flew back to the Philippines, still suffering
from pains. Two weeks thereafter, her daughter found a piece of gauze
protruding from her vagina. Dr. Ampil was informed about it and he
preceded to her house where he managed to extract by hand a piece of
gauze measuring 1.5 inches in width. He then assured her that the pains
would soon vanish. She suffered intense pains hence prompted her admission
to the Polymedic General Hospital.

Dr. Ramon Gutierrez detected the presence of another foreign object

in her vagina -- a foul-smelling gauze measuring 1.5 inches in width
which badly infected her vaginal vault and forced the stool to excrete through
the vagina. In October 1984, Natividad underwent another surgery to remedy
the damage.

On Nov. 12, 1984, Natividad and her husband filed with the RTC, Branch
96, Quezon City a complaint for damages against the Professional Services,
Inc. (PSI), owner of the Medical City Hospital, Dr. Ampil, and Dr. Fuentes,
docketed as Civil Case No. Q-43322. They alleged that the latter are liable for
negligence for leaving two pieces of gauze inside Natividads body and
malpractice for concealing their acts of negligence.

On February 16, 1986 Natividad died.

On March 1993, the RTC rendered its Decision in favor of the Aganas,
finding PSI, Dr. Ampil and Dr. Fuentes liable for negligence and malpractice.
The defendants PSI, Dr. Miguel Ampil and Dr. Juan Fuentes to pay to the
plaintiffs, jointly and severally for actual damages (US $ 19,900 at the rate of
P21.60-US$1.00, as reimbursement of actual expenses incurred in the United
States of America); travel taxes; cost of hospitalization at Polymedic Hospital
(P45,802.50); ) moral damages (P2,000,000.00); attorneys fees
(P250,000.00); legal interest and the cost of suits. Dr. Ampil and Dr. Fuentes
are liable for exemplary damages and the interest thereon (P300,000.00).

Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the
Court of Appeals.

Issue:

Whether the CA erred in holding Dr. Ampil liable for negligence and
malpractice.

Ruling:

YES.The glaring truth is that all the major circumstances, taken together,
directly point to Dr. Ampil as the negligent party: (1) it is not disputed that
the surgeons used gauzes as sponges to control the bleeding of the patient
during the surgical operation. (2) immediately after the operation, the nurses
who assisted in the surgery noted in their report that two sponge count was
lacking; that such anomaly was announced to surgeon and that a search
 119

was done but to no avail prompting Dr. Ampil to continue for closure. (3)
after the operation, two gauzes were extracted from the same spot of the
body of Mrs. Agana where the surgery was performed.

Dr. Ampil did not inform Natividad about the missing two pieces of gauze.
Worse, he even misled her that the pain she was experiencing was the
ordinary consequence of her operation. Had he been more candid, Natividad
could have taken the immediate and appropriate medical remedy to remove
the gauzes from her body. What was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical

negligence. The elements are duty, breach, injury and proximate
causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign
objects, such as gauzes, from Natividads body before closure of the incision.
When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad, necessitating
her further examination by American doctors and another surgery. That Dr.
Ampils negligence is the proximate cause of Natividads injury could be
traced from his act of closing the incision despite the information given by
the attending nurses that two pieces of gauze were still missing. That they
were later on extracted from Natividads vagina established the causal link
between Dr. Ampils negligence and the injury. And what further aggravated
such injury was his deliberate concealment of the missing gauzes from the
knowledge of Natividad and her family.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126467, 11 February 2008

Facts:

The case emanated on April 1984, when Natividad Agana was

hospitalized and operated by Dr. Ampil and Dr. Fuentes at the Medical City
General Hospital for her "cancer of the sigmoid". After the operations,
circumstances pointed out two (2) sponge count lacking. Insurmountable
 120

cost of hospital bills were incurred and intense pains still felt even when the
two sponges were later removed from the vagina of Natividad.

The Aganas filed a complaint for damages against PSI, Dr. Migule Ampil
and Dr. Fuentes at the RTC, Branch 96, Quezon City. The RTC ruled in favor
of the Aganas and ordered the defendants to pay jointly and severally the
plaintiff. The defendants interposed an appeal to the Court of Appeal (CA).
On April 1993, the Aganas filed with the RTC a motion for a Partial Execution
of its Decision. The Court granted the motion. The sheriff levied upon certain
properties of Dr. Ampil and sold them for P451,275.00 and delivered the
amount to the Aganas.

Following their receipt of the money, the Aganas entered into an

agreement with PSI and Dr. Fuentes to indefinitely suspend any further
execution of the RTC Decision. However, not long thereafter, the Aganas
again filed a motion for an alias writ of execution against the properties of PSI
and Dr. Fuentes.

On September 21, 1993, the RTC granted the motion and issued the
corresponding writ. Dr. Fuentes filed with the Court of Appeals a petition for
certiorari and prohibition, with prayer for preliminary injunction, docketed as
CA-G.R. SP No. 32198. On Oct. 29, 1993, the CA issued a Resolution granting
Dr. Fuentes prayer for injunctive relief.

On September 6, 1996, the Court of Appeals rendered its Decision jointly

disposing of CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198. The case
against defendant-appellant Dr. Juan Fuentes was DISMISSED.

The Aganas maintained that the Court of Appeals erred in finding that Dr.
Fuentes is not guilty of negligence or medical malpractice, invoking the
doctrine of res ipsa loquitur. They contend that the pieces of gauze are prima
facie proofs that the operating surgeons have been negligent.

Issue:

Whether the CA erred in absolving Dr. Fuentes of any liability.

Ruling:

NO. Literally, res ipsa loquitur means "the thing speaks for itself." The
requisites for the applicability of the doctrine of res ipsa loquitur are: (1)
the occurrence of an injury; (2) the thing which caused the injury was under
the control and management of the defendant; (3) the occurrence was such
that in the ordinary course of things, would not have happened if those who
had control or management used proper care; and (4) the absence of
explanation by the defendant.

The element of "control and management of the thing which caused the
injury" to be wanting. It was duly established that Dr. Ampil was the lead
surgeon during the operation of Natividad. He requested the assistance of Dr.
Fuentes only to perform hysterectomy when he (Dr. Ampil) found that the
malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes
performed the surgery and thereafter reported and showed his work to Dr.
Ampil. The latter examined it and finding everything to be in order, allowed
Dr. Fuentes to leave the operating room. Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending nurses
informed him that two pieces of gauze were missing. A "diligent search" was
conducted, but the misplaced gauzes were not found. Dr. Ampil then directed
that the incision be closed. During this entire period, Dr. Fuentes was no
longer in the operating room and had, in fact, left the hospital.
 121

Under the "Captain of the Ship" rule, the operating surgeon is the person
in complete charge of the surgery room and all personnel connected with the
operation. Their duty is to obey his orders. Dr. Ampil was the lead surgeon
thus he was the "Captain of the Ship." It was this act of ordering the closure
of the incision notwithstanding that two pieces of gauze remained
unaccounted for, that caused injury to Natividads body. Clearly, the control
and management of the thing which caused the injury was in the hands of Dr.
Ampil, not Dr. Fuentes.

Res ipsa loquitur is not a rule of substantive law, hence, does not per se
create or constitute an independent or separate ground of liability, being a
mere evidentiary rule.c In other words, mere invocation and application of the
doctrine does not dispense with the requirement of proof of negligence. Here,
the negligence was proven to have been committed by Dr. Ampil and not by
Dr. Fuentes.

DR. RUBU LI vs. SPS. SOLIMAN

G.R. No. 165279/ June 7, 2011
651 SCRA 32
 122

Facts:

Angelica Soliman, the daughter of Sps. Soliman underwent a biopsy of the

mass located in her lower extremity at the St. Lukes Medical Center
(SLMC).Results showed that Angelica was suffering from a highly malignant
cancer of the bone. Angelicas right leg was amputated in order to remove
the tumor. To eliminate any remaining cancer cells, chemotherapy was
administered by herein petitioner Dr. Rubi Li, a medical oncologist.

Angelica was admitted to SLMC. However, she died 11 days after the
administration of the first cycle of the chemotherapy regimen. Respondents
filed a damage suit against Dr. Li and other doctors and against SLMC,
charging them with negligence and disregard of Angelicas safety, health and
welfare by their careless administration of the chemotherapy drugs, their
failure to observe the essential precautions in detecting early the symptoms
of fatal blood platelet decrease and stopping early on the chemotherapy,
which bleeding led to hypovolemic shock that caused Angelicas untimely
demise.

Petitioner denied having been negligent in administering the

chemotherapy drugs to Angelica and asserted that she had fully explained to
respondents the effects of chemotherapy. On her supposed non-disclosure of
all possible side effects of chemotherapy, including death, petitioner argues
that it was foolhardy to imagine her to be all-knowing. While the theoretical
side effects of chemotherapy were explained by her to the respondents, as
these should be known to a competent doctor, petitioner cannot possibly
predict how a particular patients body constitution would respond to the
treatment. These are obviously dependent on too many known, unknown and
immeasurable variables, thus requiring that Angelica be closely monitored
during the treatment. Petitioner asserts that she did everything within her
professional competence to attend to the medical needs of Angelica.

Issue:

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

Ruling:

No. There are four essential elements a plaintiff must prove in a

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

In this case, there was adequate disclosure of material risks inherent in

the chemotherapy procedure performed with the consent of Angelicas
parents. On the other hand, the suing parents failed to establish the
existence of the risks or side-effects Dr. Li should have disclosed to them in
the use of chemotherapy in the treatment of osteosarcoma. The doctor
presented as witness does not qualify as expert testimony to establish the
standard of care in obtaining consent for chemotherapy treatment. In the
absence of expert testimony in this regard, the Court felt hesitant in defining
the scope of mandatory disclosure in cases of malpractice based on lack of
 123

informed consent. Thus, the Court has no factual basis to declare that the
chemotherapy administered by the petitioner proximately caused Angelicas
death.

DR. EDUARDO AQUINO VS HEIRS OF RAYMUNDA CALAYAG

G.R. No. 158461

Facts:

When his wife Raymunda wento into labor pains and began bleeding,
respondent Rodrigo Calayag brought her to St. Michaelss Clinic. After initial
examination, the doctor told Rodrigo that Raymunda had to have caesarean
section for her baby but this had to be done at the beteer-equipped Sacred
Heart Hospital (SHH), owned and operated by petitioner Dr. Alberto Reyes (Dr.
Reyes). SHH admitted on the same day. To prepare her, the attending
anesthesiologist, petitioner Dr. Eduardo Aquino injected with a preliminary
Hipnotic and he administered an anesthesia on her spine. A few minutes
later, Dr. Unite delivered a stillborn eight-month-old baby. A few minutes later
the operating team noticed that Raymunda had become cyanotic and her
blood darkened for lack of oxygen and suddenly her vital signs gone.
Fortunately, she was restored. It was found out that suffered a cardiac arrest
during the operation which explained her comatose states and was advised
to move her to a better-equipped hospital. Raymunda was moved to Medical
Center Manila where Dr. Libarnes, a neurologist, found her in a vegetative
state having suffered from an anoxic injury due to cardio-respiratory arrest.
Her condition worsen and she never regained consciousness, prompting her
MCM doctors to advise Rodrigo to take her home since they could do no more
to improve her condition. MCM discharged her and she died 15 days later.
Rodrigo filed, together with his seven children, a complaint damages for Dr.
Unite, Dr. Aquino and Dr. Reyes claiming that Dr. Unite and Dr. Aquino failed
to exercise the diligence required for operating Raymunda while Dr. Reyes, as
Rodrigo averred, was negligent in supervising the work of the two doctors.

Issues:
Whether or not Dr. Unite (the surgeon) and Dr. Aquino (the
anesthesiologist) acted negligently in handling Raymundas operation,
resulting in her death; and
Whether or not Dr. Reyes is liable, as hospital owner, for the negligence
of Dr. Unite and Dr. Aquino.

Rulings:

Yes, Dr. Unite and Dr. Aquino are liable. The cause of action against the
doctors in these cases is commonly known as medical malpractice and to
successfully mount a medical malpractice action, the plaintiff should establish
four basic things: (1) duty; (2) breach; (3) injury; and (4) proximate causation.
The evidence should show that the physician or surgeon, either failed to do
something which a reasonably prudent physician or surgeon would have
done, or that he or she did something that a reasonably prudent physician or
surgeon would not have done; and that the failure or action caused injury to
the patient. To prove the doctors negligence, Rodrigo presented Dr. Libarnes
who explained that it was the lack of oxygen in the brain that caused
Raymundas vegetative state and it could be traced to the anesthetic
accident that resulted when Dr. Aquino placed her under anesthesia.
Furthermore, Dr. Libarnes blamed the doctors who operated on Raymunda for
not properly keeping track of her vital sign during the caesarean procedure
resulting in their failure to promptly address the cyanosis when it set in. The
damage coud have been averted had the attending doctors promptly
detected the situation and resuscitated her on time.
 124

No, Dr. Reyes is not liable as a hospital owner. The doctrine of apparent
authority would not apply to make Dr. Reyes liable. Two factors must be
present under this doctrine: 1) the hospital acted in a manner which would
lead a reasonable person to believe that the person claimed to be negligent
was its agent or employee; and 2) the patient relied on such belief. In this
case, there is no evidence that the hospital acted in a way that made
Raymunda and her husband believe that the two doctors were in the
hospitals employ. There appears no concrete proof to show that Dr. Unite and
Dr. Aquino were under the hospitals payroll. Indeed, Dr. Aquino appeared to
be a government physician connected with the Integrated Provincial Health
Office of Bulacan while Dr. Unite appeared to be a self-employed doctor. No
evidence has been presented that Raymunda suffered her fate because of
defective hospital facilities or poor staff support to the surgeons.
 125

PETER PAUL PATRICK LUCAS VS DR. PROSPERO MA. C . TUANO

G.R. NO. 178763

Facts:

Herein petitioner, Peter Lucas, first consulted respondent, Dr. Tuao, on a

complaint of soreness and redness on his right eye. The respondent, after a
series of examinations, found that the former was suffering from
conjunctivitis or sore eyes and prescribed the use of the Spersacet-C.
However, after the petitioners condition seemed to have worsened, he
sought for the respondents second finding wherein the latter said that his
condition had progressed to Epidemic Kerato Conjunctivitis (EKC), a viral
infection. The respondent then prescribed the use of Maxitrol, a steroid-
based eye drop. The petitioners condition worsened overtime, yet he
obediently complied with all the prescriptions and orders of the respondent.

Four months later and after the petitioner suffered from significant
swelling of his right eyeball, headaches, nausea and blindness on this right
eye, he sought for the opinion of another doctor, Dr. Aquino. Dr. Aquino found
that the petitioner had been suffering from glaucoma and needed to undergo
laser surgery, lest he might suffer from total blindness. After reading the
literature on the use of the medicine Maxitrol, Fatima, one of the petitioners
herein and Peter Lucas wife, read that one of the adverse effects of
prolonged use of steroid-based eye drops could possibly be
glaucoma. Claiming to have steroid-induced glaucoma and blaming Dr. Tuano
for the same, Peter, Fatima, and their two children instituted a civil case for
damages against herein respondent for medical malpractice.

Issue:

Whether or not Dr. Tuano failed to exercise due diligence in the

performance of his duty and may be held liable.

Ruling:

No, petitioers failed to prove by preponderance of evidence that Dr. Tuano

was negligent in his treatment of Peters condition. In medical negligence
cases, also called medical malpractice suits, there exist a physician-patient
relationship between the doctor and the victim. But just like any other
proceeding for damages, four essential (4) elements i.e., (1) duty; (2) breach;
(3) injury; and (4) proximate causation, must be established by the plaintiff/s.
All the four (4) elements must co-exist in order to find the physician
negligent and, thus, liable for damages.

As the physician has the duty to use at least the same level of care as
that of any other reasonably competent physician would use in the treatment
of his patient, said standard level of care, skill and diligence must likewise be
proven by expert medical testimony, because the standard of care in a
medical malpractice case is a matter peculiarly within the knowledge of
experts in the field. The same is outside the ken of the average layperson.
There is breach of duty of care, skill and diligence, or the improper
performance of such duty, by the attending physician when the patient is
 126

injured in body or in health [and this] constitutes the actionable malpractice.

Hence, proof of breach of duty on the part of the attending physician is
insufficient. Rather, the negligence of the physician must be the proximate
cause of the injury.

FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS

G.R. NO. 174156

Facts:

On November 22, 1998, respondent Espinas was driving his car in Manila
when another car suddnenly and bumped his car. The other car escaped from
the scene of the incident, but Espinas was able to get its plate number. After
verifying with the LTO, Espinas learned that the owner of the other car is
Filcar. Espenias sent several letters to Filcar and to its President and General
Manager. On May 31, 2001, Espinas filed a complaint for damages against
Filcar and Carmen Flor before the Metropolitan Trial Court of Manila and
demand that they pay actual damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and
bumped Espinas car, the car was assigned to its Corporate Secretary and
further stated that when the incident happened, the car was being driven by
Atty. Flors personal driver, Timoteo Floresca. Filcar denied any liability to
Espinas and claimed that the incident was not due to its fault or negligence
since Floresca was not its employee but that of Atty. Flor. Filcar and Flor both
said that they always exercised the due diligence required of a good father of
a family in leasing and assigning their vehicles to third parties.

Issue:

Whether or not Filcar, a registered owner of the motor vehicle, may be

held liable for the damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the driver

Floresca, and is thus vicariously liable under Article 2176 in relation with
Article 2180 of the Civil Code which provides that an action predicated on an
employees act or omission may be instituted against the employer who is
held liable for the negligent act or omission committed by his employee. It is
well settled that in case of motor vehicle mishaps, the registered owner of the
motor vehicle is considered as the employer of the tortfeasor-driver, and is
made primarily liable for the tort committed by the latter. In Equitable
Leasing Corp vs Suyom the registered owner of the motor vehicle is the
employer of the negligent driver and the actual employer is considered
merely as an agent of such owner.

Thus, it is clear that for the purpose of holding the registered owner of the
motor vehicle primarily and directly liable for damages under Article 2176, in
relation with Article 2180 of the Civil Code, the existence of an employer-
employee relationship is not required. It is sufficient to establish that Filcar is
the registered owner of the motor vehicle causing damage in order that it
may be held vicariously liable under Article 2180 of the Civil Code. The main
 127

aim of motor vehicle registration is to identify the owner so that if any

accident happens, or that any damage or injury is caused by the vehicle on
the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner.

PCIB v CA PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly

INSULAR BANK OF ASIA AND AMERICA), petitioner, vs. COURT OF
APPEALS and FORD PHILIPPINES, INC. and CITIBANK, N.A.,
respondents.
G.R. No. 121413. January 29, 2001

Facts:
Ford Philippines drew and issued Citibank Check. No. SN 04867 on
October 19, 1977, Citibank Check No. SN 10597 on July 19, 1978 and Citibank
Check No. SN-16508 on April 20, 1979, all in favor of the Commissioner of
Internal Revenue (CIR) for payment of its percentage taxes. The checks were
crossed and deposited with the IBAA, now PCIB, BIR's authorized collecting
bank. The first check was cleared containing an indorsement that "all prior
indorsements and/or lack of indorsements guaranteed." The same, however,
was replaced with two (2) IBAA's managers' checks based on a call and letter
request made by Godofredo Rivera, Ford's General Ledger Accountant, on an
alleged error in the computation of the tax due without IBAA verifying the
authority of Rivera. These manager's checks were later deposited in another
bank and misappropriated by the syndicate. The last two checks were cleared
by the Citibank but failed to discover that the clearing stamps do not bear
any initials. The proceeds of the checks were also illegally diverted or
switched by officers of PCIB members of the syndicate, who eventually
encashed them. Ford, which was compelled to pay anew the percentage
taxes, sued in two actions for collection against the two banks on January 20,
1983, barely six years from the date the first check was returned to the
drawer. The direct perpetrators of the crime are now fugitives from justice.
The decision of the lower courts are the following:

1st case:
(1) Trial Court: Citibank and IBAA were jointly and severally liable for the
checks (2) CA: only IBAA (PCIB) solely liable for the amount of the first check
2nd case:
(1) Trial Court: absolved PCIB from liability and held that only the Citibank is
liable for the checks issued by Ford
(2) Court of Appeals: held both banks liable for negligence in the selection
and supervision of their employees resulting in the erroneous encashment of
the checks.

Issue:
1. Whether the petitioner Ford had the right to recover from the collecting
 128

bank (PCIBank) and the drawee bank (Citibank) the value of the checks
intended as payment to the Commissioner of Internal Revenue?

2. Whether Ford has cause of action already prescribed?

Ruling:
A. Citibank Check No. SN-04867
FORD
Ford, is guilty of the "imputed contributory negligence" that would defeat its
claim for reimbursement, bearing in mind that its employees, Godofredo
Rivera and Alexis Marindo, were among the members of the syndicate.
although the employees of Ford initiated the transactions attributable to an
organized syndicate, in our view, their actions were not the proximate cause
of encashing the checks payable to the CIR. The degree of Ford's negligence,
if any, could not be characterized as the proximate cause of the injury to the
parties.

IBAA/PCIB
As agent of the BIR (the payee of the check), defendant IBAA should
receive instructions only from its principal BIR and not from any other person
especially so when that person is not known to the defendant. It is very
imprudent on the part of the defendant IBAA to just rely on the alleged
telephone call of one (Godofredo Rivera and in his signature to the
authenticity of such signature considering that the plaintiff is not a client of
the defendant IBAA." The crossing of the check with the phrase "Payee's
Account Only," is a warning that the check should be deposited only in the
account of the CIR. Thus, it is the duty of the collecting bank PCIBank to
ascertain that the check be deposited in payee's account only. Therefore, it is
the collecting bank (PCIBank) which is bound to scrutinize the check and to
know its depositors before it could make the clearing indorsement "all prior
indorsements and/or lack of indorsement guaranteed". PCIBank is liable in
the amount corresponding to the proceeds of Citibank Check No. SN-04867.

Citibank
None
B. Citibank Check Numbers SN-10597 and 16508

PCIBank
Section 5 31 of Central Bank Circular No. 580, Series of 1977 provides
that any theft affecting items in transit for clearing, shall be for the account
of sending bank, which in this case is PCIBank.

Citibank
Citibank is negligent in the performance of its duties. Citibank failed to
establish that its payment of Ford's checks were made in due course and
legally in order. In its defense, Citibank claims the genuineness and due
execution of said checks, considering that Citibank (1) has no knowledge of
any infirmity in the issuance of the checks in question (2) coupled by the fact
that said checks were sufficiently funded and (3) the endorsement of the
Payee or lack thereof was guaranteed by PCIBank (formerly IBAA), thus, it has
the obligation to honor and pay the same. As the drawee bank breached its
contractual obligation with Ford and such degree of culpability contributed to
 129

the damage caused to the latter. It failed to perform what was incumbent
upon it, which is to ensure that the amount of the checks should be paid only
to its designated payee.
Invoking the doctrine of comparative negligence, we are of the view that
both PCIBank and Citibank failed in their respective obligations and both were
negligent in the selection and supervision of their employees resulting in the
encashment of Citibank Check Nos. SN 10597 and 16508. Thus, we are
constrained to hold them equally liable for the loss of the proceeds of said
checks issued by Ford in favor of the CIR. Time and again, we have stressed
that banking business is so impressed with public interest where the trust and
confidence of the public in general is of paramount importance such that the
appropriate standard of diligence must be very high, if not the highest,
degree of diligence. A bank's liability as obligor is not merely vicarious but
primary, wherein the defense of exercise of due diligence in the selection and
supervision of its employees is of no moment. 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. Banks are expected to exercise the highest degree of diligence in
the selection and supervision of their employees.
The relationship between a holder of a commercial paper and the bank to
which it is sent for collection is that of a principal and an agent and the
diversion of the amount of the check is justified only by proof of authority
from the drawer; that in crossed checks, the collecting bank is bound to
scrutinize the check and know its depositors before clearing indorsement;
that as a general rule, banks are liable for wrongful or tortuous acts of its
agents within the scope and in the course of their employment; that failure of
the drawee bank to seasonably discover irregularity in the checks constitutes
negligence and renders the bank liable for loss of proceeds of the checks;
that an action upon a check prescribes in ten (10) years; and that the
contributory negligence of the drawer shall reduce the damages he may
recover against the collecting bank.
Since a master may be held for his servant's wrongful act, the law
imputes to the master the act of the servant, and if that act is negligent or
wrongful and proximately results in injury to a third person, the negligence or
wrongful conduct is the negligence or wrongful conduct of the master, for
which he is liable. The general rule is that if the master is injured by the
negligence of a third person and by the concurring contributory negligence of
his own servant or agent, the latter's negligence is imputed to his superior
and will defeat the superior's action against the third person, assuming, of
course that the contributory negligence was the proximate cause of the injury
of which complaint is made.
As a general rule, however, a banking corporation is liable for the
wrongful or tortuous acts and declarations of its officers or agents within the
course and scope of their employment. A bank will be held liable for the
negligence of its officers or agents when acting within the course and scope
of their employment. It may be liable for the tortuous acts of its officers even
as regards that species of tort of which malice is an essential element. A bank
holding out its officers and agents as worthy of confidence will not be
permitted to profit by the frauds these officers or agents were enabled to
perpetrate in the apparent course of their employment; nor will it be
permitted to shirk its responsibility for such frauds, even though no benefit
may accrue to the bank therefrom. For the general rule is that a bank is liable
for the fraudulent acts or representations of an officer or agent acting within
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the course and apparent scope of his employment or authority. And if an

officer or employee of a bank, in his official capacity, receives money to
satisfy an evidence of indebtedness lodged with his bank for collection, the
bank is liable for his misappropriation of such sum.

CONTRIBUTORY NEGLIGENCE OF PLAINTIFF SHALL REDUCE DAMAGES HE MAY

RECOVER.

The court also find that Ford is not completely blameless in its failure
to detect the fraud. Failure on the part of the depositor to examine its
passbook, statements of account, and cancelled checks and to give notice
within a reasonable time (or as required by statute) of any discrepancy which
it may in the exercise of due care and diligence find therein, serves to
mitigate the banks' liability by reducing the award of interest from twelve
percent (12%) to six percent (6%) per annum. As provided in Article 1172 of
the Civil Code of the Philippines, responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but such liability
may be regulated by the courts, according to the circumstances. In quasi-
delicts, the contributory negligence of the plaintiff shall reduce the damages
that he may recover.

MANILA ELECTRIC COMPANY (MERALCO) vs.

ATTY. PABLITO M. CASTILLO, doing business under the trade name and style of
PERMANENT LIGHT MANUFACTURING ENTERPRISES and GUIA S.
CASTILLO,
G.R. No. 182976 January 14, 2013

Facts:
Respondents Pablito M. Castillo and Guia S. Castillo are spouses engaged a business
under the name and style of Permanent Light Manufacturing Enterprises (Permanent
Light).
After conducting an inspection of Permanent Lights electric meter, the petitioner
Manila Electric Company (Meralco) concluded that the meter was tampered with and
electric supply to Permanent Light was immediately disconnected, without notice to
respondents, for one day. However, respondents used generators soon after the power
went out to keep the operations of Permanent Light on track. Subsequently, Meralco
assured respondents in a letter that Permanent Lights meter has been tested and was
found to be in order. In the same letter, petitioner informed respondents that said meter
was replaced anew after it sustained a crack during testing. However, respondents
requested for a replacement meter. According to them, the meters installed by Meralco
ran faster than the one it confiscated following the disconnection. Subsequently, Meralco
installed a new electric meter at the premises of Permanent Light.

Issues:
1. Whether or not the respondents are entitled to claim damages for petitioners act of
disconnecting electricity to Permanent Light.
 131

2. Whether or not the respondents are entitled to actual damages for the supposed
overbilling by petitioner Meralco of their electric consumption from the time the new
electric meter was installed.

Ruling:
First Issue:
In Quisumbing v. Manila Electric Company, the Court treated the immediate
disconnection of electricity without notice as a form of deprivation of property without
due process of law, which entitles the subscriber aggrieved to moral damages. In addition
to moral damages, exemplary damages are imposed by way of example or correction for
the public good. In this case, to serve as an example - that before disconnection of electric
supply can be effected by a public utility, the requisites of law must be complied with the
Court sustained the award of exemplary damages to respondents.

Second Issue:
Actual or compensatory damages cannot be presumed, but must be duly proved with
a reasonable degree of certainty. The award is dependent upon competent proof of the
damage suffered and the actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly not on flimsy,
remote, speculative and unsubstantial proof. Nonetheless, in the absence of competent
proof on the amount of actual damages suffered, a party is entitled to temperate damages.
Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot, from the nature of the case, be proved with
certainty. The amount thereof is usually left to the discretion of the courts but the same
should be reasonable.

In this case, the Court is convinced that respondents sustained damages from the
abnormal increase in Permanent Lights electric bills after petitioner replaced the latters
meter. However, respondents failed to establish the exact amount thereof by competent
evidence. Thus, temperate damages is awarded.
Petition is DENIED. The decision of CA is affirmed

UNIVERSAL AQUARIUS, INC. and CONCHITA TAN versus Q.C. HUMAN

RESOURCES MANAGEMENT CORPORATION
G.R. NO. 155990, September 12, 2007

Facts:

Universal Aquarius, Inc. (Universal) is engaged in the manufacture and

distribution of chemical products in Metro Manila.While Q.C. Human
Resources Management Corporation (Resources) is engaged in supplying
manpower to various establishments. It supplied Universal with about
seventy-four (74) temporary workers to assist Universal in the operation of its
chemical plant in Antipolo City. The national president of the labor
organization called Obrero Pilipino (Universal Aquarius Chapter) sent a Notice
of Strike to Universal. Resources informed the Regional Office of the
Department of Labor and Employment that the officers and members of
Obrero Pilipino are its employees and not employees of Universal. Capocyon
and 36 other union officers and members of Obrero Pilipino, picketed,
barricaded and obstructed the entry and exit of Universal's Antipolo City
chemical plant and intercepted Universal's delivery trucks thereby disrupting
its business operations.Universal then filed a Complaint against the strikers
 132

and Resources for breach of contract and damages suffered due to the
disruption of their respective business operations. Universal forged an
Agreement with Obrero Pilipino. Thus, the strike which affected the business
operations of Universal and Marman ended. Universal and Tan then filed a
Notice of Dismissal as against the strikers Resources filed a Motion to
Dismiss. But the RTC denied the Motion to Dismiss. Latter then filed a Motion
for Reconsideration but it was still denied by the RTC.And later filed a petition
for certiorari and prohibition with the CA. The CA rendered a Decision which
set aside the Orders of the RTC and dismissed the complaint for lack of cause
of action.The petitioner filed a Motion for Reconsideration but it was denied
by the CA in its Resolution.

Issue:

Whether the Universal can claimed damages for breach of contract?

Ruling:

Court is convinced that the Complaint sufficiently states a cause of action

against Resources. The Complaint alleged that Universal had a contract of
employment of temporary workers with Resources; and that Resources
violated said contract by supplying it with unfit, maladjusted individuals who
staged a strike and disrupted its business operations. Given these
hypothetically admitted facts, the RTC, in the exercise of its original and
exclusive jurisdiction, could have rendered judgment over the dispute.

Keppel Cebu Shipyard vs. Pioneer Insurance

601 SCRA 96; 681 SCRA 44

Facts:

WG & A JEBSENS SHIPMANAGEMENT, Owner/Operator of M/V "SUPERFERRY

3" and KEPPEL CEBUSHIPYARD, INC. (KCSI) entered into an agreement that the
Dry docking and Repair of the above-named vessel ordered by the Owners
Authorized Representative shall be carried out under the Keppel Cebu Shipyard
Standard. Conditions of Contract for Ship repair, guidelines and regulations
on safety and security issued by Keppel Cebu Shipyard. In the course of its
repair, M/V " Superferry 3"was gutted by fire claiming that the extent of the damage
was pervasive, WG&A declared the vessel damage as a "total constructive
loss" and, hence, filed an insurance claim with Pioneer. Pioneer paid the
insurance claim of WG&A, which in turn, executed a Loss and Subrogation
Receipt in favor of Pioneer. Pioneer tried to collect from KCSI, but the latter
denied any responsibility for the loss of the subject vessel. As KCSI
continuously refused to pay despite repeated demands, Pioneer, filed a
 133

Request for Arbitration before the Construction Industry Arbitration

Commission CIAC seeking for payment of U.S.$ 8,472,581.78 plus interest, among
others. The CIAC rendered its decision declaring both WG&A and KCSI guilty
of negligence, the CIAC ordered KCSI to pay Pioneer the amount of P25,000,000.00,
with interest at 6% per annum. Both Keppel and Pioneer appealed to the CA. The
cases were consolidated in the CA. the CA rendered a decision dismissing
petitioners claims in its entirety. Keppel was declared as equally negligent.

Issue:

To whom may negligence over the fire that broke out on board M/V
"Superferry 3" be imputed?

Ruling:

As to the issue of negligence, undeniably, the immediate cause of the

fire was the hot work done by Angelino Sevillejo on the accommodation area
of the vessel, specifically on Deck A. As established before the CIAC. Pioneer
contends that KCSI should be held liable because Sevillejo was its employee
who, at the time the fire broke out, was doing his assigned task, and that
KCSI was solely responsible for all the hot works done on board the vessel.
Court ruled in favor of Pioneer. At the time of the fire, Sevillejo was an employee of
KCSI and was subject to the latters direct control and supervision. There was a lapse
in KCSIs supervision of Sevillejos work at the time the fire broke out. KCSI
failed to exercise the necessary degree of caution and foresight called for by
the circumstances.

SERRA VS MUMAR 668 SCRA 335

Facts:

At around 6:30 in the evening of 3 April 2000, there was a vehicular

accident along the National Highway in Barangay Apopong, General Santos
City, which resulted in the death of Armando Mumar (Mumar), husband of
respondent Nelfa T. Mumar (respondent).

Based on the evidence presented before the Regional Trial Court (RTC) of
General Santos City, one Armando Tenerife (Tenerife) was driving his Toyota Corolla
sedan on the National Highway heading in the direction of Polomolok, South Cotabato.
Tenerife noticed the van owned by petitioner Paulita Edith Serra (petitioner) coming from
the opposite direction, which was trying to overtake a passenger jeep, and in the process
 134

encroached on his lane. The left side of the sedan was hit by the van, causing the sedan to
swerve to the left and end up on the other side of the road. The van collided head on with
the motorcycle, which was about 12 meters behind the sedan on the outer lane, causing
injuries to Mumar, which eventually led to his death.

On the other hand, petitioner denied that her van was overtaking the jeepney at
the time of the incident. She claimed that the left tire of Tenerifes sedan burst, causing it
to sideswipe her van. Consequently, the left front tire of the van also burst and the vans
driver, Marciano de Castro (de Castro), lost control of the vehicle. The van swerved to the
left towards Mumars motorcycle. The impact resulted in the death of Mumar.

Subsequently, respondent filed a complaint against petitioner for Damages by

Reason of Reckless Imprudence resulting to Homicide and Attachment before the
General Santos City RTC. RTC ruled against Serra finding her liable for damages by
reason of reckless imprudence, and she is hereby ordered to pay for damages. CA denied
the appeal and affirmed with modification the RTCs ruling.

Issue:

Whether or not both the lower court and the Court of Appeals
committed reversible error in holding Editha Serra as liable for damages and
in not appreciating that she was not negligent in the selection and
supervision of the driver of the van, Marciano de Castro

Ruling:

Under Article 2180 of the Civil Code, employers are liable for the
damages caused by their employees acting within the scope of their assigned
tasks. Whenever an employees negligence causes damage or injury to
another, there instantly arises a presumption that the employer failed to
exercise the due diligence of a good father of the family in the selection or
supervision of its employees. The liability of the employer is direct or
immediate. It is not conditioned upon prior recourse against the negligent
employee and a prior showing of insolvency of such employee. Moreover,
under Article 2184 of the Civil Code, if the causative factor was the drivers
negligence, the owner of the vehicle who was present is likewise held liable if
he could have prevented the mishap by the exercise of due
diligence.Petitioner failed to show that she exercised the level of diligence
required in supervising her driver in order to prevent the accident. She
admitted that de Castro had only been her driver for one year and she had no
knowledge of his driving experience or record of previous accidents. She also
admitted that it was de Castro who maintained the vehicle and would even
remind her to pay the installment of the car. Petitioner also admitted that, at
the time of the accident, she did not know what was happening and only
knew they bumped into another vehicle when the driver shouted. She then
closed her eyes and a moment later felt something heavy fall on the roof of
the car. When the vehicle stopped, petitioner left the scene purportedly to
ask help from her brother, leaving the other passengers to come to the aid of
her injured driver.
 135

PLEYTO VS LUMBOY 432 SCRA 329

Facts:

On May 16, 1995, Pleyto tried to overtake Esguerras tricycle but hit it instead.
Pleyto then swerved into the left opposite lane. Coming down the lane, a car driven by
Arnulfo Asuncion with his passengers, Rhino, Ricardo Lomboy and her
daughter Carmela Lomboy. The bus driven by Pleyto smashed head-on the car driven by
Asuncion, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but
only Carmela required hospitalization. On November 29, 1995, Maria and Carmela
Lomboy filed an action for damages against PRBL and its driver, Pleyto, with the RTC of
 136

Dagupan City. The Lomboys prayed that they be indemnified for the untimely death of
Ricardo Lomboy, his lost earnings, the medical and hospitalization expenses of Carmela,
and moral damages. RTC rendered in favor of the plaintiffs and against the defendants
ordering the defendants to pay solidarily Maria and Carmela. The RTC also found Pleyto
negligent and lacking in precaution. The CA affirmed the decision of the trial court, with
modification in award for actual damages from P59,000.00 to P39,550.00 for funeral and
religious services and for medical expenses of Carmela Lomboy from P52,000.00 to
P27,000.00; and the award for loss of earning capacity is accordingly corrected from
P1,642,521.00 to P1,152,000.00
Issue:

Whether or not the CA erred in pegging the monthly living expenses at

50% of gross earnings; and Whether or not documentary evidence is
indispensable to a claim for loss of earning capacity

Ruling:

In considering the earning capacity of the victim as an element of

damages, the net earnings, which is computed by deducting necessary
expenses from the gross earnings, and not the gross earnings, is to be
utilized in the computation. Note that in the present case, both the Court of
Appeals and the trial court used net earnings, not gross earnings in
computing loss of earning capacity. The amount of net earnings was arrived
at after deducting the necessary expenses (pegged at 50% of gross income)
from the gross annual income. This computation is in accord with settled
jurisprudence, including the Villa Rey case. Petitioners claim that no
substantial proof was presented to prove Ricardo Lomboys gross income
lacks merit. Failure to present documentary evidence to support a claim for
loss of earning capacity of the deceased need not be fatal to its cause.
Testimonial evidence suffices to establish a basis for which the court can
make a fair and reasonable estimate of the loss of earning capacity. Hence,
the testimony of respondent Maria Lomboy, Ricardos widow, that her
husband was earning a monthly income of P8,000 is sufficient to establish a
basis for an estimate of damages for loss of earning capacity .It is well-settled
in jurisprudence that the factors that should be taken into account in
determining the compensable amount of lost earnings are: (1) the number of
years for which the victim would otherwise have lived; and (2) the rate of loss
sustained by the heirs of the deceased. No reversible error may be attributed
to the court a quo in fixing the loss of earning capacity at said amount .Court
likewise sustain the reduction of the award of actual damages from P59,550
for funeral and burial expenses of Ricardo and P52,000 for medical expenses
of Carmela Lomboy to P39,550 and P27,000, respectively, as only these latter
amounts were duly supported by receipts. To justify an award of actual
damages, there must be competent proof of the actual amount of loss,
credence can be given only to claims which are duly supported by receipts.

However, while the award of P50,000 as moral damages to Carmela

Lomboy is sustained, the award for moral damages of P500,000 to the heirs
of Ricardo Lomboy should be reduced for being excessive. Under Article 2206
of the Civil Code, the spouse, legitimate children and illegitimate descendants
and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased. However, we must stress
that moral damages, though incapable of pecuniary estimation, are in the
category of an award designed to compensate the claimant for actual injury
and are not meant to enrich complainant at the expense of defendant. Moral
 137

damages are awarded to enable the injured party to obtain means, diversions
or amusements that will serve to alleviate the moral suffering he/she has
undergone, by reason of the defendants culpable action. Its award is aimed
at restoration, as much as possible, of the spiritual status quo ante; thus it
must be proportionate to the suffering inflicted. Under the circumstances of
this case, an award of P100,000 to the heirs of Ricardo Lomboy would be
justified and in keeping with the purpose of the law and jurisprudence in
allowing moral damages. The indemnification award of P50,000 is
also sustained.

FLORDELIZA MENDOZA, Petitioner, vs. MUTYA SORIANO et. al., Respondents.

G.R. No. 164012, June 8, 2007

Facts:
 138

Sonny Soriano, while crossing Commonwealth Avenue near Luzon Avenue in Quezon City, was hit by
a speeding Tamaraw FX driven by Lomer Macasasa. Soriano was thrown five meters away, while the
vehicle only stopped some 25 meters from the point of impact. Gerard Villaspin, one of Sorianos
companions, asked Macasasa to bring Soriano to the hospital, but after checking out the scene of the
incident, Macasasa returned to the FX, only to flee. A school bus brought Soriano to East Avenue Medical
Center where he later died. Subsequently, the Quezon City Prosecutor recommended the filing of a criminal
case for reckless imprudence resulting to homicide against Macasasa. RTC ruled in favour of the petitioner,
while CA reversed the findings of the RTC.

Issues:

Whether or not RTC has jurisdiction over the case, if so, was there sufficient legal basis to award
damages?

Ruling:

Yes, the Supreme Court held that the Regional Trial Court of Caloocan City possessed and properly
exercised jurisdiction over the case. Section 19(8) of Batas Pambansa Blg. 129,as amended by Republic Act
No. 7691, read together with Administrative Circular No. 09-94 is the authority for this ruling. Applicable
provision is read as follows: The exclusion of the term damages of whatever kind in determining the
jurisdictional amount under Section 19(8) and Section 33(1) of BP Blg. 129, as amended by RA No. 7691,
applies to cases where the damages are merely incidental to or a consequence of the main cause of action.
However, in cases where the claim for damages is the main cause of action, or one of the causes of action,
the amount of such claim shall be considered in determining the jurisdiction of the court.

Petitioner was presumed negligent in selecting and supervising the driver. The records show that
Macasasa violated two traffic rules under the Land Transportation and Traffic Code. First, he failed to
maintain a safe speed to avoid endangering lives. Both the trial and the appellate courts found Macasasa
overspeeding. The records show also that Soriano was thrown five meters away after he was hit. Moreover,
the vehicle stopped only some 25 meters from the point of impact. Second, Macasasa, the vehicle driver,
did not aid Soriano, the accident victim, in violation of Section 55, Article V of the Land Transportation and
Traffic Code. While Macasasa at first agreed to bring Soriano to the hospital, he fled the scene in a hurry.
Contrary to petitioners claim, there is no showing of any factual basis that Macasasa fled for fear of the
peoples wrath. What remains undisputed is that he did not report the accident to a police officer, nor did he
summon a doctor. Under Article 2185 of the Civil Code, a person driving a motor vehicle is presumed
negligent if at the time of the mishap, he was violating traffic regulations. However, respondent is also
guilty of contributory negligence.

Simon Q. Aonuevo, Jr. and Vicente N. Estrella, petitioners, vs. The

Honorable Court Of Appeals, Rodrigo B. Almazan, Giovanni G.
Gumalo, Office Of The Ombudsman & Customs Commissioner Titus
Villanueva, respondents
[G.R. No. 152998. September 23, 2003]

Facts:

Sgt. Rodrigo Almazan and Giovanni Gumalo, both of the Office of the
Resident Ombudsman for Manila International Airport Authority-Ninoy Aquino
International Airport/Duty Free Phils., Inc. filed a complaint against Simon
Aonuevo, Jr., Acting Examiner, Vicente Estrella, Customs Operations Officer I,
Nora Linda Cosme, Customs Operations Officer V, and Ricardo Concha, Acting
Principal Customs Appraiser, all of the Bureau of Customs, NAIA, Pasay City
for violation of Section 7(d) of Republic Act No. 6713.

The respondents alleged that the petitioners while assigned at the NAIA
customs lanes numbers 9 and 10, received money handed directly or inserted
 139

in the passport of arriving passengers of the Northwest Airlines flight from

Detroit, USA, and the Canadian Airlines flight. They further alleged that
Cosme and Concha received their share of the money collected by the
petitioners. The Resident Ombudsman Team was able to record on video a
segment of the incident using the surveillance camera of the Emergency
Operations Center of the NAIA.

The Ombudsman placed the four officials under preventive suspension for
six (6) months without pay, [2] considering that the evidence against them
was strong.

Cosme pointed out that there was nothing in the video footage which
would implicate her for any act of solicitation or acceptance of any money,
whether directly or indirectly, while in the course of the performance of her
duties. In the same way, Concha asserted that it was grossly malicious for the
complainants to infer that, just because he was caught by the camera
passing by the place where petitioners were standing, he received money
from them.

The Ombudsman held that respondents Aonuevo, Jr. and Estrella were
guilty as charged and Cosme as not guilty.

Petitioners then filed a special civil action for certiorari before the Court of
Appeals ascribing grave abuse of discretion to the Ombudsman in rendering
the assailed Decision. However, the Court of Appeals dismissed the case for
failure to comply with the requirements of the Rules of Civil Procedure.

Issues:

WON the CA correctly dismissed the petition on mere technical grounds.

Ruling:

When technicality deserts its function of being an aid to justice, the

courts are justified in exempting from its operations a particular case.
Procedural rules are intended to insure the orderly conduct of litigation,
because of the higher objective they seek, which is to protect the parties
substantive rights.

In the case at bar, although the petition filed before the Court of Appeals
was not accompanied by an affidavit of service, petitioners were able to
confirm that indeed copies of the petition were served on the respondents as
shown in the registry receipts attached opposite their names. They attached
the certified true copies of the Decision and Order of the Ombudsman when
they filed their Motion for Reconsideration of the Resolution dismissing their
petition.

However, petitioners availed of a wrong mode of appeal when they filed a

special civil action for certiorari under Rule 65 of the Rules on Civil Procedure.
Appeals from decisions of the Office of the Ombudsman in administrative
disciplinary cases should be taken to the Court of Appeals under Rule 43 of
the 1997 Rules of Civil Procedure. Neither did the petitioners sufficiently
establish the existence of any fact or reason to justify its resort to the
extraordinary remedy of certiorari.

This notwithstanding, we now resolve the substantive issue.

 140

This Court is not a trier of facts. Findings of fact by the Office of the
Ombudsman when supported by substantial evidence are conclusive, as in
the case at bar. Substantial evidence, which is more than a mere scintilla but
is such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, suffices to hold one administratively liable. The
substantial evidence rule in administrative proceedings merely requires
such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.

Clearly, therefore, petitioners are guilty of violation of Section 7(d) of

Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical
Standards for Public officials and Employees.

Alfredo Mallari, Sr. and Alfredo Mallari, Jr., petitioners vs. Court of
Appeals and Bulletin Publishing Corporation, respondents
[G.R. No. 128607. January 31, 2000]

Facts:

At about 5:00 o'clock in the morning, the passenger jeepney driven by

petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr.
collided with the delivery van of respondent Bulletin Publishing Corp.
(BULLETIN, for brevity) along the National Highway in Barangay San Pablo,
Dinalupihan, Bataan. Petitioner Mallari Jr. testified that he went to the left
lane of the highway and overtook a Fiera which had stopped on the right
 141

lane. Before he passed by the Fiera, he saw the van of respondent BULLETIN
coming from the opposite direction. It was driven by one Felix Angeles. The
sketch of the accident showed that the collision occurred after Mallari Jr.
overtook the Fiera while negotiating a curve in the highway. The points of
collision were the left rear portion of the passenger jeepney and the left front
side of the delivery van of BULLETIN. The two (2) right wheels of the delivery
van were on the right shoulder of the road and pieces of debris from the
accident were found scattered along the shoulder of the road up to a certain
portion of the lane travelled by the passenger jeepney. The impact caused
the jeepney to turn around and fall on its left side resulting in injuries to its
passengers one of whom was Israel Reyes who eventually died due to the
gravity of his injuries.

Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for

damages with the Regional Trial Court of Olongapo City against Alfredo
Mallari Sr. and Alfredo Mallari Jr., and also against BULLETIN, its driver Felix
Angeles, and the N.V. Netherlands Insurance Company. The complaint alleged
that the collision which resulted in the death of Israel Reyes was caused by
the fault and negligence of both drivers of the passenger jeepney and the
Bulletin Isuzu delivery van. The complaint also prayed that the defendants be
ordered jointly and severally to pay the plaintiff.

The trial court found that the proximate cause of the collision was the
negligence of Felix Angeles, driver of the Bulletin delivery van, considering
the fact that the left front portion of the delivery truck driven by Felix Angeles
hit and bumped the left rear portion of the passenger jeepney driven by
Alfredo Mallari Jr. Hence, the trial court ordered BULLETIN and Felix Angeles to
pay jointly and severally Claudia G. Reyes, widow of the deceased victim.

On appeal the Court of Appeals modified the decision of the trial court
and found no negligence on the part of Angeles and consequently of his
employer, respondent BULLETIN. Instead, the appellate court ruled that the
collision was caused by the sole negligence of petitioner Alfredo Mallari Jr.
who admitted that immediately before the collision and after he rounded a
curve on the highway, he overtook a Fiera which had stopped on his lane and
that he had seen the van driven by Angeles before overtaking the Fiera. The
Court of Appeals ordered petitioners Mallari Jr. and Mallari Sr. to compensate
Claudia G. Reyes.

Issue:

WON petitioners are correctly held jointly and severally liable to Claudia
G. Reyes.

Ruling:

The Court of Appeals correctly found, based on the sketch and spots
report of the police authorities which were not disputed by petitioners, that
the collision occurred immediately after petitioner Mallari Jr. overtook a
vehicle in front of it while traversing a curve on the highway. This act of
overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136 as
amended, otherwise known as The Land Transportation and Traffic Code.

The rule is settled that a driver abandoning his proper lane for the
purpose of overtaking another vehicle in an ordinary situation has the duty to
see to it that the road is clear and not to proceed if he cannot do so in safety.
 142

When a motor vehicle is approaching or rounding a curve, there is special

necessity for keeping to the right side of the road and the driver does not
have the right to drive on the left hand side relying upon having time to turn
to the right if a car approaching from the opposite direction comes into view.

In the instant case, by his own admission, petitioner Mallari Jr. already
saw that the BULLETIN delivery van was coming from the opposite direction
and failing to consider the speed thereof since it was still dark at 5:00 o'clock
in the morning mindlessly occupied the left lane and overtook two (2)
vehicles in front of it at a curve in the highway. Clearly, the proximate cause
of the collision resulting in the death of Israel Reyes, a passenger of the
jeepney, was the sole negligence of the driver of the passenger jeepney,
petitioner Alfredo Mallari Jr., who recklessly operated and drove his jeepney in
a lane where overtaking was not allowed by traffic rules. Under Art. 2185 of
the Civil Code, unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the
mishap he was violating a traffic regulation. As found by the appellate court,
petitioners failed to present satisfactory evidence to overcome this legal
presumption.

The negligence and recklessness of the driver of the passenger jeepney is

binding against petitioner Mallari Sr., who admittedly was the owner of the
passenger jeepney engaged as a common carrier, considering the fact that in
an action based on contract of carriage, the court need not make an express
finding of fault or negligence on the part of the carrier in order to hold it
responsible for the payment of damages sought by the passenger. Under Art.
1755 of the Civil Code, a common carrier is bound to carry the passengers
safely as far as human care and foresight can provide using the utmost
diligence of very cautious persons with due regard for all the circumstances.

ALFREDO P. PACIS and CLEOPATRA D. PACIS vs. JEROME JOVANNE

MORALES,
[G.R. No. 169467. February 25, 2010]
 143

Facts:

Petitioners filed with the trial court a civil case for damages against
respondent Morales. Petitioners are the parents of Alfred Pacis, a 17-year old
student who died in a shooting incident inside the Top Gun Firearms and
Ammunitions Store in Baguio City. Morales is the owner of the gun store.

On the fateful day, Alfred was in the gun store, with Matibag and Herbolario as
sales agents and caretakers of the store while owner Morales was in Manila. The
gun which killed Alfred is a gun owned by a store customer which was left with
Morales for repairs, which he placed inside a drawer. Since Morales would be
going to Manila, he left the keys to the store with the caretakers. It appears that the
caretakers took the gun from the drawer and placed it on top of a table. Attracted by
the sight of the gun, the young Alfred got hold of the same. Matibag asked Alfred 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. Matibag, however,
was acquitted of the charge against him because of the exempting circumstance of
accident under Art. 12, par. 4 of the RPC.

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.

he trial court rendered its decision in favor of petitioners, ordering the

defendant to pay plaintiffs indemnity for the death of Alfred, actual damages for the
hospitalization and burial, expenses incurred by the plaintiffs, compensatory
damages, and moral damages. Respondent appealed to the CA, which reversed the
trial courts Decision and absolved respondent from civil liability under Article
2180 of the Civil Code. Motion of reconsideration is denied, hence this petition.

Issue:

Whether or not Morales is civilly liable?

Ruling:

Yes. Morales is civilly liable. Clearly, Morales did not exercise the
degree of care and diligence required of a good father of a family, much
less the bullet which killed Alfred was fired from a gun brought in by a
customer of the gun store for repair.

This case for damages arouse out of the accidental shooting of Alfred.
Under Article 1161 of the Civil Code petitioners may enforce their claim
for damages based on the civil liability arising from the crime under
Article 100 of the RPC 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.

He was clearly negligent when he accepted the gun for repair and
placed it inside the drawer without ensuring first that it was not loaded.
For failing to insure that the gun was not loaded, Morales himself was
negligent.
 144

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 cancelled.

As a gun store owner, Morales 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. Morales 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.

In the first place, the defective gun should have been stored in a
vault. Before accepting the defective gun for repair, Morales should have
made sure that it was not loaded to prevent any untoward accident.
Indeed, Morales 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.
 145

Jose V. Lagon, petitioner vs. Honorable Court of Appeals and

Menandro V. Lapuz, respondents
[G.R. No. 119107. March 18, 2005]

Facts:

Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi,
through an intestate court, two parcels of land located at Tacurong, Sultan
Kudarat. A few months after the sale, private respondent Menandro Lapuz
filed a complaint for torts and damages against petitioner before the Regional
Trial Court (RTC) of Sultan Kudarat.

In the complaint, private respondent, as then plaintiff, claimed that he

entered into a contract of lease with the late Bai Tonina Sepi Mengelen
Guiabar over three parcels of land in Sultan Kudarat, Maguindanao beginning
1964. One of the provisions agreed upon was for private respondent to put up
commercial buildings which would, in turn, be leased to new tenants. The
rentals to be paid by those tenants would answer for the rent private
respondent was obligated to pay Bai Tonina Sepi for the lease of the land. In
1974, the lease contract ended but since the construction of the commercial
buildings had yet to be completed, the lease contract was allegedly renewed.

When Bai Tonina Sepi died, private respondent started remitting his rent
to the court-appointed administrator of her estate. But when the
administrator advised him to stop collecting rentals from the tenants of the
buildings he constructed, he discovered that petitioner, representing himself
as the new owner of the property, had been collecting rentals from the
tenants. He thus filed a complaint against the latter, accusing petitioner of
inducing the heirs of Bai Tonina Sepi to sell the property to him, thereby
violating his leasehold rights over it.

In his answer to the complaint, petitioner denied that he induced the heirs
of Bai Tonina to sell the property to him, contending that the heirs were in
dire need of money to pay off the obligations of the deceased. He also denied
interfering with private respondents leasehold rights as there was no lease
contract covering the property when he purchased it; that his personal
investigation and inquiry revealed no claims or encumbrances on the subject
lots.

Petitioner claimed that before he bought the property, he went to Atty.

Benjamin Fajardo, the lawyer who allegedly notarized the lease contract
between private respondent and Bai Tonina Sepi, to verify if the parties
indeed renewed the lease contract after it expired in 1974. Petitioner averred
that Atty. Fajardo showed him four copies of the lease renewal but these were
all unsigned. To refute the existence of a lease contract, petitioner presented
in court a certification from the Office of the Clerk of Court confirming that no
record of any lease contract notarized by Atty. Fajardo had been entered into
their files. Petitioner added that he only learned of the alleged lease contract
when he was informed that private respondent was collecting rent from the
tenants of the building.

Finding the complaint for tortuous interference to be unwarranted,

petitioner filed his counterclaim and prayed for the payment of actual and
moral damages.

Accordingly, judgment is hereby rendered in favor of the plaintiff.

 146

The petitioner then filed a petition for review before the Supreme Court.

Issue:

WON the purchase by petitioner of the subject property, during the

supposed existence of private respondents lease contract with the late Bai
Tonina Sepi, constituted tortuous interference for which petitioner should be
held liable for damages.

Ruling:

The Court, in the case of So Ping Bun vs. Court of Appeals , laid down the
elements of tortuous interference with contractual relations: (a) existence of
a valid contract; (b) knowledge on the part of the third person of the
existence of the contract and (c) interference of the third person without legal
justification or excuse.

As regards the first element, the existence of a valid contract must be

duly established. To prove this, private respondent presented in court a
notarized copy of the purported lease renewal.While the contract appeared as
duly notarized, the notarization thereof, however, only proved its due
execution and delivery but not the veracity of its contents. Nonetheless, after
undergoing the rigid scrutiny of petitioners counsel and after the trial court
declared it to be valid and subsisting, the notarized copy of the lease contract
presented in court appeared to be incontestable proof that private
respondent and the late Bai Tonina Sepi actually renewed their lease
contract. Settled is the rule that until overcome by clear, strong and
convincing evidence, a notarized document continues to be prima facie
evidence of the facts that gave rise to its execution and delivery.

The second element, on the other hand, requires that there be knowledge
on the part of the interferer that the contract exists. Knowledge of the
subsistence of the contract is an essential element to state a cause of action
for tortuous interference. A defendant in such a case cannot be made liable
for interfering with a contract he is unaware of. While it is not necessary to
prove actual knowledge, he must nonetheless be aware of the facts which, if
followed by a reasonable inquiry, will lead to a complete disclosure of the
contractual relations and rights of the parties in the contract. In this case,
petitioner claims that he had no knowledge of the lease contract. His sellers
(the heirs of Bai Tonina Sepi) likewise allegedly did not inform him of any
existing lease contract.

After a careful perusal of the records, we find the contention of petitioner

meritorious. He conducted his own personal investigation and inquiry, and
unearthed no suspicious circumstance that would have made a cautious man
probe deeper and watch out for any conflicting claim over the property. An
examination of the entire propertys title bore no indication of the leasehold
interest of private respondent. Even the registry of property had no record of
the same.

In sum, we rule that, inasmuch as not all three elements to hold petitioner
liable for tortuous interference are present, petitioner cannot be made to
answer for private respondents losses. This case is one of damnun absque
 147

injuria or damage without injury. Injury is the legal invasion of a legal right
while damage is the hurt, loss or harm which results from the injury.

PROFESSIONAL SERVICES INC. V. AGANA

G.R. No. 126297, 31 January 2007

Facts:

As presented previously.

Issue:

Whether or not PSI is liable for the negligence of Dr. Ampil.

Ruling:

YES.The hospital vicarious liability is anchored upon the theories of

respondeat superior, apparent authority, ostensible authority, or
agency by estoppel. The statute governing liability for negligent acts is
Article 2176 of the Civil Code, which reads: 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.

A derivative of this provision is Article 2180, the rule governing vicarious

liability under the doctrine of respondeat superior, thus: ART. 2180. The
obligation imposed by Article 2176 is demandable not only for ones own acts
or omissions, but also for those of persons for whom one is responsible.

Apparent authority, or what is sometimes referred to as the "holding

out" theory, or doctrine of ostensible agency or agency by estoppel,
imposes liability, not as the result of the reality of a contractual relationship,
but rather because of the actions of a principal or an employer in somehow
misleading the public into believing that the relationship or the authority
exists. The concept is essentially one of an agency by implication or
estoppel of Article 1869 of the Civil Code which reads: ART. 1869. Agency
may be express, or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.

By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their
qualifications in the hospital directory, the hospital created the impression
that they were its agents, authorized to perform medical or surgical services
for its patients. As expected, these patients, Natividad being one of them,
accepted the services on the reasonable belief that such were being rendered
by the hospital or its employees, agents, or servants.

PSI has the duty to exercise reasonable care to protect from harm all
patients admitted into its facility for medical treatment. It is liable for the
 148

negligent acts of health practitioners, absent facts to support tfyhe

application of respondeat superior or apparent authority

PSI is directly liable for such breach of duty doctrine of corporate

negligence or corporate responsibility. Not only did PSI breach its duties
to oversee or supervise all persons who practice medicine within its walls, it
also failed to take an active step in fixing the negligence committed. This
renders PSI, not only vicariously liable for the negligence of Dr. Ampil
under Article 2180 of the Civil Code, but also directly liable for its
own negligence under Article 2176.

The Court CONFIRMED the rulings of the Court of Appeals that a hospital
has the duty of supervising the competence of the doctors on its
staff. No reason to exempt hospitals from the universal rule of respondeat
superior.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 127590, February 2, 2010

Facts:

Previous facts presented.

PSI was impleaded by Enrique Agana and Natividad Agana (later
substituted by her heirs), in a complaint for damages as owner, operator and
manager of the hospital. On petition for review, this Court, in its January 31,
2007 decision, affirmed the CA decision. PSI filed a motion for reconsideration
but the Court denied it in a resolution dated February 11, 2008.

The PSI filed a second motion for reconsideration urging referral thereof
to the Court en banc and seeking modification of the decision dated January
31, 2007 and resolution dated February 11, 2008 which affirmed its vicarious
and direct liability for damages to respondents Enrique Agana and the heirs
of Natividad Agana (Aganas).

Issue:

Whether or not PSI may be held liable for the negligence of physicians-
consultants allowed to practice in its premises.

Ruling:

YES. The Court holds that PSI is liable to the Aganas, not under the
principle of respondeat superior for lack of evidence of an employment
relationship with Dr. Ampil but under the principle of ostensible
agency for the negligence of Dr. Ampil and, pro hac vice, under the
principle of corporate negligence for its failure to perform its duties as a
hospital.

To determine the existence of an employer-employee relationship

between hospital and doctor, the Court employs the "control test". PSI
exercised control over respondents based on the undisputed fact that in the
emergency room, the operating room, or any department or ward for that
matter, respondents' work is monitored through its nursing supervisors,
charge nurses and orderlies. Without the approval or consent of PSI or its
medical director, no operations can be undertaken in those areas. For
 149

control test to apply, it is not essential for the employer to actually

supervise the performance of duties of the employee, it being enough that it
has the right to wield the power. Thus PSI is vicariously liable under Article
2176 in relation to Article 1431 and Article 1869 of the Civil Code or the
principle of apparent authority.

PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible
agent. It assumed a duty to "tread on" the "captain of the ship" role of any
doctor rendering services within its premises for purpose of ensuring the
safety of the patients availing themselves of its services and facilities. Thus,
PSI could not simply wave off the problem and nonchalantly delegate to Dr.
Ampil the duty to review what transpired during the operation.

The wretchedness in this case could have been avoided had PSI simply
done what was logical: heed the report of a guaze count discrepancy, initiate
a review of what went wrong and take corrective measures to ensure the
safety of Nativad. PSI committed corporate negligence by its inaction. As
hospital corporation, it gave rise to a direct liability to the Aganas distinct
from that of Dr. Ampil.

PSIs hospital liability based on ostensible agency and corporate

negligence applies only to this case, pro hac vice (for or on this occasion
only) liable for every form of negligence of their doctors-consultants under
any and all circumstances.

The Court DENIED the motion of reconsideration. It ORDERED pro hac

vice to pay Natividad s heirs the total amount of P15 million, subject to 12%
p.a. interest from the finality of this resolution to full satisfaction. No further
pleadings by any party shall be entertained in this case.
 150

MAMARIL VS. BOYS SCOUTS OF THE PHILIPPINES (BSP), et. Al.

688 SCRA 437

Facts:

PUJ operators Sps. Mamaril would park their 6 passenger jeepneys

every night at BSPs compound in Malate, Manila for a fee of P300.00 per
month for each unit. One day, one of the vehicles was missing and was never
recovered. According to the security guards Pea and Gaddi of AIB Security
Agency with whom BSP had contracted for its security and protection, a male
person who looked familiar to them took the subject vehicle out of the
compound. Sps. Mamaril prayed that Pea and Gaddi, together with AIB and
BSP, be held liable for: (a) the value of the subject vehicle; (b) amount
representing daily loss of income/boundary reckoned from the day the vehicle
was lost; (c) exemplary damages; (d) moral damages; (e) attorney's fees; and
(f) cost of suit.

BSP denied any liability contending that not only did Sps. Mamaril
directly deal with AIB with respect to the manner by which the parked
vehicles would be handled, but the parking ticket itself expressly stated that
the "Management shall not be responsible for loss of vehicle or any of its
accessories or article left therein." It also claimed that Sps. Mamaril
erroneously relied on the Guard Service Contract. Apart from not being
parties thereto, its provisions cover only the protection of BSP's properties, its
officers, and employees.

Issue:

Whether BSP should be held liable for the loss of their vehicle based on
the Guard Service Contract and the parking ticket it issued.

Ruling:
 151

No. The petition is without merit. In this case, it is undisputed that the
proximate cause of the loss of Sps. Mamarils vehicle was the negligent act of
security guards Pea and Gaddi in allowing an unidentified person to drive
out the subject vehicle. Proximate cause has been defined as that cause,
which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury or loss, and without which the result
would not have occurred. Moreover, Pea and Gaddi failed to refute Sps.
Mamarils contention that they readily admitted being at fault during the
investigation that ensued. On the other hand, the records are bereft of any
finding of negligence on the part of BSP. Hence, no reversible error was
committed by the CA in absolving it from any liability for the loss of the
subject vehicle based on fault or negligence.

Neither will the vicarious liability of an employer under Article 2180 of

the Civil Code apply in this case. It is uncontested that Pea and Gaddi were
assigned as security guards by AIB to BSP pursuant to the Guard Service
Contract. Clearly, therefore, no employer-employee relationship existed
between BSP and the security guards assigned in its premises. Consequently,
the latters negligence cannot be imputed against BSP but should be
attributed to AIB, the true employer of Pea and Gaddi.

In the case of Soliman, Jr. v. Tuazon, the Court enunciated thus:

It is settled that where the security agency, as here, recruits,

hires and assigns the work of its watchmen or security guards,
the agency is the employer of such guards and watchmen.
Liability for illegal or harmful acts committed by the security
guards attaches to the employer agency, and not to the clients
or customers of such agency. As a general rule, a client or
customer of a security agency has no hand in selecting who
among the pool of security guards or watchmen employed by
the agency shall be assigned to it; the duty to observe the
diligence of a good father of a family in the selection of the
guards cannot, in the ordinary course of events, be demanded
from the client whose premises or property are protected by the
security guards. The fact that a client company may give
instructions or directions to the security guards assigned to it,
does not, by itself, render the client responsible as an employer
of the security guards concerned and liable for their wrongful
acts or omissions. Those instructions or directions are ordinarily
no more than requests commonly envisaged in the contract for
services entered into with the security agency.