[G.R. No. L-12219. March 15, 1918.

AMADO PICART, plaintiff-appellant, vs. FRANK SMITH,

jr., defendant-appellee.

Alejo Mabanag for appellant.

G. E. Campbell for appellee.

SYLLABUS

1. NEGLIGENCE; CRITERION FOR DETERMINING EXISTENCE OF

NEGLIGENCE. — The test for determining whether a person is negligent in
doing an act whereby injury or damage results to the person or property of
another is this: Would a prudent man, in the position of the person to whom
negligence is attributed, foresee harm to the person injured as a reasonable
consequence of the course about to be pursued. If so, the law imposes a duty
on the actor to refrain from that course or to take precaution against its
mischievous results, and the failure to do so constitutes negligence. Reasonable
foresight of harm, followed by the ignoring of the admonition born of this
prevision, is the constitutive fact in negligence.

2. ID.; CONTRIBUTORY NEGLIGENCE; SUCCESSIVE NEGLIGENT ACTS.

— Where both parties are guilty of negligence, but the negligent act of one
succeeds that of the other by an appreciable interval of time, the one who has
the last reasonable opportunity to avoid the impending harm and fails to do
so is chargeable with the consequences, without reference to the prior
negligence of the other party.

3. ID.; ID.; CASE AT BAR. — The plaintiff was riding a pony on a bridge.
Seeing an automobile ahead he improperly pulled his horse over to the railing
on the right. The driver of the automobile, however, guided his car toward
the plaintiff without diminution of speed until he was only a few feet away.
He then turned to the right but passed so closely to the horse that the latter
 being frightened, jumped around and was killed by the passing car. Held:
That although the plaintiff was guilty of negligence in being on the wrong side
of the bridge, the defendant was nevertheless civilly liable for the legal
damages resulting from the collision, as he had a fair opportunity to avoid
the accident after he realized the situation created by the negligence of the
plaintiff and failed to avail himself of that opportunity; while the plaintiff
could by no means then place himself in a position of greater safety.

D E CI S IO N

STREET, J :p

In this action the plaintiff, Amado Picart, seeks to recover of the

defendant, Frank Smith, jr., the sum of P31,100, as damages alleged to
have been caused by an automobile driven by the defendant. From a
judgment of the Court of First Instance of the Province of La Union absolving
the defendant from liability the plaintiff has appealed.

The occurrence which gave rise to the institution of this action took
place on December 12, 1912, on the Carlatan Bridge, at San Fernando, La
Union. It appears that upon the occasion in question the plaintiff was riding
on his pony over said bridge. Before he had gotten half way across, the
defendant approached from the opposite direction in an automobile, going at
the rate of about ten or twelve miles per hour. As the defendant neared the
bridge he saw a horseman on it and blew his horn to give warning of his
approach. He continued his course and after he had taken the bridge he gave
two more successive blasts, as it appeared to him that the man on horseback
before him was not observing the rule of the road.

The plaintiff, it appears, saw the automobile coming and heard the
warning signals. However, being perturbed by the novelty of the apparition or
the rapidity of the approach, he pulled the pony closely up against the railing
on the right side of the bridge instead of going to the left. He says that the
reason he did this was that he thought he did not have sufficient time to get
over to the other side. The bridge is shown to have a length of about 75
meters and a width of 4.08 meters. As the automobile approached, the
defendant guided it toward his left, that being the proper side of the road for
the machine. In so doing the defendant assumed that the horseman would
move to the other side. The pony had not as yet exhibited fright, and the
rider had made no sign for the automobile to stop. Seeing that the pony was
apparently quiet, the defendant, instead of veering to the right while yet
some distance away or slowing down, continued to approach directly toward
the horse without diminution of speed. When he had gotten quite near, there
being then no possibility of the horse getting across to the other side, the
defendant quickly turned his car sufficiently to the right to escape hitting the
horse alongside of the railing where it was then standing; but in so doing the
automobile passed in such close proximity to the animal that it became
frightened and turned its body across the bridge with its head toward the
railing. In so doing, it was struck on the hock of the left hind leg by the flange
of the car and the limb was broken. The horse fell and its rider was thrown
off with some violence. From the evidence adduced in the case we believe that
when the accident occurred the free space where the pony stood between the
automobile and the railing of the bridge was probably less than one and one
half meters. As a result of its injuries the horse died. The plaintiff received
contusions which caused temporary unconsciousness and required medical
attention for several days.

The question presented for decision is whether or not the defendant in

maneuvering his car in the manner above described was guilty of negligence
such as gives rise to a civil obligation to repair the damage done; and we are
of the opinion that he is so liable. As the defendant started across the bridge,
he had the right to assume that the horse and rider would pass over to the
proper side; but as he moved toward the center of the bridge it was
demonstrated to his eyes that this would not be done; and he must in a
moment have perceived that it was too late for the horse to cross with safety
in front of the moving vehicle. In the nature of things this change of situation
occurred while the automobile was yet some distance away; and from this
moment it was not longer within the power of the plaintiff to escape being
run down by going to a place of greater safety. The control of the situation
had then passed entirely to the defendant; and it was his duty either to bring
his car to an immediate stop or, seeing that there were no other persons on
the bridge, to take the other side and pass sufficiently far away from the
horse to avoid the danger of collision. Instead of doing this, the defendant ran
straight on until he was almost upon the horse. He was, we think, deceived
into doing this by the fact that the horse had not yet exhibited fright. But in
view of the known nature of horses, there was an appreciable risk that, if the
animal in question was unacquainted with automobiles, he might get excited
and jump under the conditions which here confronted him. When the
defendant exposed the horse and rider to this danger he was, in our opinion,
negligent in the eye of the law.

The test by which to determine the existence of negligence in a

particular case may be stated as follows: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an
ordinarily prudent person would have used in the same situation? If not, then
he is guilty of negligence. The law here in effect adopts the standard supposed
to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the situation before him.
The law considers what would be reckless, blameworthy, or negligent in the
man of ordinary intelligence and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man

in a given situation must of course be always determined in the light of
human experience and in view of the facts involved in the particular case.
Abstract speculation cannot here be of much value but his much can be
profitably said: Reasonable men govern their conduct by the circumstances
which are before them or known to them. They are not, and are not
supposed to be, omniscient of the future. Hence they can be expected to take
care only when there is something before them to suggest or warn of danger.
Could a prudent man, in the case under consideration, foresee harm as a
result of the course actually pursued? If so, it was the duty of the actor to
take precautions to guard against that harm. Reasonable foresight of harm,
followed by the ignoring of the suggestion born of this prevision, is always
necessary before negligence can be held to exist. Stated in these terms, the
proper criterion for determining the existence of negligence in a given case is
this: Conduct is said to be negligent when a prudent man in the position of
the tortfeasor would have foreseen that an effect harmful to another was
sufficiently probable to warrant his foregoing the conduct or guarding against
its consequences.

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

It goes without saying that the plaintiff himself was not free from fault,
for he was guilty of antecedent negligence in planting himself on the wrong
side of the road. But as we have already stated, the defendant was also
negligent; and in such case the problem always is to discover which agent is
immediately and directly responsible. It will be noted that the negligent acts
of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval.
Under these circumstances the law is that the person who has the last fair
chance to avoid the impending harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of the other party.

The decision in the case of Rakes vs. Atlantic, Gulf and Pacific Co.(7 Phil.
Rep., 359) should perhaps be mentioned in this connection. This Court there
held that while contributory negligence on the part of the person injured did
not constitute a bar to recover, it could be received in evidence to reduce the
damages which would otherwise have been assessed wholly against the other
party. The defendant company had there employed the plaintiff, a laborer,
to assist in transporting iron rails from a barge in Manila harbor to the
company's yards located not far away. The rails were conveyed upon cars
which were hauled along a narrow track. At a certain spot near the water's
edge the track gave way by reason of the combined effect of the weight of the
car and the insecurity of the road bed. The car was in consequence upset; the
rails slid off; and the plaintiff's leg was caught and broken. It appeared in
evidence that the accident was due to the effects of a typhoon which had
dislodged one of the supports of the track. The court found that the
defendant company was negligent in having failed to repair the bed of the
track and also that the plaintiff was, at the moment of the accident, guilty of
contributory negligence in walking at the side of the car instead of being in
front or behind. It was held that while the defendant was liable to the
plaintiff by reason of its negligence in having failed to keep the track in
proper repair, nevertheless the amount of the damages should be reduced on
account of the contributory negligence of the plaintiff. As will be seen the
defendant's negligence in that case consisted in an omission only. The liability
of the company arose from its responsibility for the dangerous condition of its
track. In a case like the one now before us, where the defendant was actually
present and operating the automobile which caused the damage, we do not
feel constrained to attempt to weigh the negligence of the respective parties
in order to apportion the damage according to the degree of their relative
fault. It is enough to say that the negligence of the defendant was in this case
the immediate and determining cause of the accident and that the
antecedent negligence of the plaintiff was a more remote factor in the case.

A point of minor importance in the case is indicated in the special

defense pleaded in the defendant's answer, to the effect that the subject
matter of the action had been previously adjudicated in the court of a justice
of the peace. In this connection it appears that soon after the accident in
question occurred, the plaintiff caused criminal proceedings to be instituted
before a justice of the peace charging the defendant with the infliction of
serious injuries (lesiones graves). At the preliminary investigation the
defendant was discharged by the magistrate and the proceedings were
dismissed. Conceding that the acquittal of the defendant at a trial upon the
merits in a criminal prosecution for the offense mentioned would be res
adjudicata upon the question of his civil liability arising from negligence — a
point upon which it is unnecessary to express an opinion — the action of the
justice of the peace in dismissing the criminal proceeding upon the
preliminary hearing can have no such effect. (See U.S. vs. Banzuela and
Banzuela, 31 Phil. Rep., 564.)

From what has been said it results that the judgment of the lower court
must be reversed, and judgment is here rendered that the plaintiff recover of
the defendant the sum of two hundred pesos (P200), with costs of both
instances. The sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage occasioned to
articles of his apparel, and lawful interest on the whole to the date of this
recovery. The other damages claimed by the plaintiff are remote or otherwise
of such characters as not to be recoverable. So ordered.

Arellano, C.J., Torres, Carson, Araullo, Avanceña, and Fisher,

JJ., concur.

Johnson, J., reserves his vote.

 Separate Opinions

MALCOLM, J., concurring:

After mature deliberation, I have finally decided to concur with the

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

||| (Picart v. Smith, Jr., G.R. No. L-12219, [March 15, 1918], 37 PHIL
809-816)

G.R. No. 89880. February 6, 1991.]

EMMA ADRIANO BUSTAMANTE, in her own behalf as

Guardian-Ad-Litem of minors: ROSSEL, GLORIA, YOLANDA,
ERICSON 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.

Dolorfino and Dominguez Law Offices for petitioners.

J .C . Baldoz & Associates for private respondents.

D E CI S IO N

MEDIALDEA, J : p

This is a petition for review on certiorari seeking the reversal of the decision of
the respondent Court of Appeals dated February 15, 1989 which reversed and
set aside the decision of the Regional Trial Court of Cavite, Branch XV ordering
the defendants to pay jointly and severally the plaintiffs indemnity for death
and damages; and in further dismissing the complaint insofar as
defendants-appellants Federico del Pilar and Edilberto Montesiano are
concerned; and its resolution dated August 17, 1989 denying the motion for
reconsideration for lack of merit.

The facts giving rise to the controversy at bar are recounted by the trial court as
follows:

"At about 6:30 in the morning of April 20, 1983, a collision occurred
between a gravel and sand truck, with Plate No. DAP 717, and a Mazda
passenger bus with Motor No. Y2231 and Plate No. DVT 259 along the
national road at Calibuyo, Tanza, Cavite. The front left side portion
(barandilla) of the body of the truck sideswiped the left side wall of the
passenger bus, ripping off the said wall from the driver's seat to the last
rear seat.
 "Due to the impact, several passengers of the bus were thrown out and
died as a result of the injuries they sustained, Among those killed were
the following:

"1. Rogelio Bustamante, 40, husband of plaintiff Emma Adriano

Bustamante and father of plaintiffs Rossel, Gloria, Yolanda, Ericson, and
Ederic, all surnamed Bustamante;

"2. Maria Corazon Jocson, 16, daughter of plaintiffs spouses Salvador

and Patria Jocson;

"3. Jolet C. Ramos, 16, daughter of plaintiffs spouses Jose and Enriqueta
Ramos;

"4. Enrico Himaya, 18, son of plaintiffs spouses Narciso and Adoracion
Himaya; and

"5. Noel Bersamina, 17, son of plaintiffs spouses Jose and Ma.
Commemoracion Bersamina." (Rollo, p. 48)

During the incident, the cargo truck was driven by defendant Montesiano and
owned by defendant Del Pilar; while the passenger bus was driven by defendant
Susulin. The vehicle was registered in the name of defendant Novelo but was
owned and or operated as a passenger bus jointly by defendants Magtibay and
Serrado, under a franchise, with a line from Naic, Cavite, to Baclaran,
Parañaque, Metro Manila, and vice versa, which Novelo sold to Magtibay on
November 8, 1981, and which the latter transferred to Serrado (Cerrado) on
January 18, 1983. LLjur

Immediately 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. While the bus was
in the process of overtaking or passing the hand tractor and the truck was
approaching the bus, the two vehicles sideswiped each other at each other's left
side. After the impact, the truck skidded towards the other side of the road and
landed on a nearby residential lot, hitting a coconut tree and felling it." (Rollo,
pp. 48-50)

After a careful perusal of the circumstances of the case, the trial court reached
the conclusion "that the negligent acts of both drivers contributed to or
combined with each other in directly causing the accident which led to the
death of the aforementioned persons. It could not be determined from the
evidence that it was only the negligent act of one of them which was the
proximate cause of the collision. In view of this, the liability of the two drivers for
their negligence must be solidary. (Rollo, pp. 50-51) Accordingly, the trial court
rendered a decision on March 7, 1986, the dispositive portion is hereunder
quoted as follows:

"WHEREFORE, defendants Valeriano Magtibay, Simplicio Serrado,

Ricardo Susulin, Efren Novelo, Federico del Pilar and Edilberto
Montesiano are hereby ordered to pay jointly and severally to the
plaintiffs, as follows:

"1. To plaintiffs Emma Adriano Bustamante and her minor children, the
sum of P30,000.00 as indemnity for the death of Rogelio Bustamante;
U.S. $127,680.00 as indemnity for the loss of the earning capacity of the
said deceased, at its prevailing rate in pesos at the time this decision shall
have become final and executory; P10,000.00 as moral damages; and
P5,000.00 as exemplary damages;

"2. To plaintiffs Salvador and Patria Jocson, the sum of P30,000.00 as

indemnity for the death of their daughter, Maria Corazon Jocson;
P10,000.00 as moral damages; and P5,000.00 as exemplary damages;
 "3. To plaintiffs Jose and Enriqueta Ramos, the sum of P30,000.00 as
indemnity for the death of their daughter, Jolet Ramos; P10,000.00 as
moral damages; and P5,000.00 as exemplary damages; and

"4. To plaintiffs Narciso and Adoracion Himaya, the amount of

P30,000.00 as indemnity for the death of their son, Enrico Himaya,
P10,000.00 as moral damages; and P5,000.00 as exemplary damages;
and

"5. To plaintiffs Jose and Ma. Commemoracion Bersamina, the sum of

P30,000.00 as indemnity for the death of their son, Noel Bersamina,
P10,000.00 as moral damages; and P5,000.00 as exemplary damages.

"The defendants are also required to pay the plaintiffs the sum of
P10,000.00 as attorney's fees and to pay the costs of the suit.

"The cross-claim of defendant Novelo is hereby allowed, and defendants

Magtibay and Serrado, the actual owners and or operators of the
passenger bus concerned, are hereby ordered to indemnify Novelo in such
amount as he may be required to pay as damages to the plaintiffs.

"The cross-claims and counter-claims of the other defendants are hereby

dismissed for lack of merit. prLL

"SO ORDERED." (pp. 55-57, Rollo)

From said decision, only defendants Federico del Mar and Edilberto Montesiano,
owner and driver, respectively, of the sand and gravel truck have interposed an
appeal before the respondent Court of Appeals. The Court of Appeals decided
the appeal on a different light. It rendered judgment on February 15, 1989, to
wit:

"WHEREFORE, the appealed judgment is hereby REVERSED and SET

ASIDE and the complaint dismissed insofar as defendants-appellants
Federico del Pilar and Edilberto Montesiano are concerned. No costs in
this instance."

"SO ORDERED." (p. 96, Rollo)

On March 9, 1989, the plaintiffs-appellees filed a motion for reconsideration of
the aforementioned Court of Appeals' decision. However, respondent Court of
Appeals in a resolution dated August 17, 1989 denied the motion for lack of
merit. Hence, this petition.

Petitioners raised the following questions of law, namely:

"First. Whether the respondent Court can legally and validly absolve
defendants-appellants from liability despite its own finding, as well as
that of the trial court that defendant-appellant Edilberto Montesiano,
the cargo truck driver, was driving an old vehicle very fast, with its
wheels already wiggling, such that he had no more control of his truck.

"Second. Whether the respondent court can validly and legally disregard
the findings of fact made by the trial court which was in a better position
to observe the conduct and demeanor of the witnesses, particularly
appellant Edilberto Montesiano, cargo truck driver, and which
conclusively found appellant Montesiano as jointly and severally negligent
in driving his truck very fast and had lost control of his truck.

"Third. Whether the respondent court has properly and legally applied
the doctrine of 'last clear chance' in the present case despite its own
finding that appellant cargo truck driver Edilberto Montesiano was
admittedly negligent in driving his cargo truck very fast on a descending
road and in the presence of the bus driver coming from the opposite
direction.

"Fourth. Whether the respondent court has applied the correct law and
the correct doctrine so as to reverse and set aside the judgment with
respect to defendants-appellants." (Rollo, pp. 133-134)

As a rule, findings of fact of the Court of Appeals are final and conclusive and
cannot be reviewed on appeal, provided, they are borne out by the record or are
based on substantial evidence. However, this rule admits of certain exceptions,
as when the findings of facts are conclusions without citation of specific evidence
on which they are based; or the appellate court's findings are contrary to those
of the trial court. (Sese v. Intermediate Appellate Court, G.R. 66168, 31 July
1987, 152 SCRA 585).

Furthermore, only questions of law may be raised in a petition for review on

certiorari under Rule 45 of the Revised Rules of Court. The jurisdiction of the
Supreme Court in cases brought to it from the Court of Appeals is limited to
reviewing and revising the errors of law imputed to it, its findings of fact being
conclusive. It is not the function of the Supreme Court to analyze or weigh such
evidence all over again, its jurisdiction being limited to reviewing errors of law
that might have been committed. Barring, therefore, a showing that the
findings complained of are totally devoid of support in the records, or that they
are so glaringly erroneous as to constitute serious abuse of discretion, such
findings must stand for the Supreme Court is not expected or required to
examine or contrast the oral and documentary evidence submitted by the
parties. (Andres v. Manufacturers Hanover and Trust Corp., G.R. 82670, 15
September 1989, 177 SCRA 618).

Bearing in mind these basic principles, We have opted to re-examine the

findings of fact mainly because the appellate court's findings are contrary to
those of the trial court. cdphil

The trial court, in declaring that the negligent acts of both drivers directly
caused the accident which led to the death of the aforementioned persons,
considered the following:

"It was negligent on the part of driver Montesiano to have driven his
truck fast, considering that it was an old vehicle, being a 1947 model as
admitted by its owner, defendant Del Pilar; that its front wheels were
wiggling; that the road was descending; and that there was a passenger
bus approaching it. Likewise, driver Susulin was also guilty of negligence
in not taking the necessary precaution to avoid the collision, in the light
of his admission that, at a distance of 30 meters, he already saw the
front wheels of the truck wiggling and that the vehicle was usurping his
 lane coming towards his direction. Had he exercised ordinary prudence,
he could have stopped his bus or swerved it to the side of the road even
down to its shoulder. And yet, Susulin shifted to third gear so as to, as
claimed by him, give more power and speed to his bus in overtaking or
passing a hand tractor which was being pushed along the shoulder of the
road." (Rollo, p. 50)

The respondent Court of Appeals ruling on the contrary, opined that "the bus
driver had the last clear chance to avoid the collision and his reckless negligence
in proceeding to overtake the hand tractor was the proximate cause of the
collision." (Rollo, p. 95). Said court also noted that "the record also discloses that
the bus driver was not a competent and responsible driver. His driver's license
was confiscated for a traffic violation on April 17, 1983 and he was using a
ticket for said traffic violation on the day of the accident in question (pp. 16-18,
TSN, July 23, 1984). He also admitted that he was not a regular driver of the
bus that figured in the mishap and was not given any practical examination. (pp.
11, 96, TSN, supra)." (Rollo, p. 96)

The respondent Court quoting People v. Vender, CA-G.R. 11114-41-CR,

August 28, 1975 held that "We are not prepared to uphold the trial court's
finding that the truck was running fast before the impact. The national road,
from its direction, was descending. Courts can take judicial notice of the fact
that a motor vehicle going down or descending is more liable to get out of
control than one that is going up or ascending for the simple reason that the
one which is going down gains added momentum while that which is going up
loses its initial speeding in so doing."

On the other hand, the trial court found and We are convinced that the cargo
truck was running fast. It did not overlook the fact that the road was
descending as in fact it mentioned this circumstance as one of the factors
disregarded by the cargo truck driver along with the fact that he was driving an
old 1947 cargo truck whose front wheels are already wiggling and the fact that
there is a passenger bus approaching it. In holding that the driver of the cargo
truck was negligent, the trial court certainly took into account all these factors
so it was incorrect for the respondent court to disturb the factual findings of the
trial court, which is in a better position to decide the question, having heard the
witnesses themselves and observed their deportment. Cdpr

The respondent court adopted the doctrine of "last clear chance." The doctrine,
stated broadly, is that the negligence of the plaintiff does not preclude a
recovery for the negligence of the defendant where it appears that the
defendant, by exercising reasonable care and prudence, might have avoided
injurious consequences to the plaintiff notwithstanding the plaintiff's negligence.
In other words, 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. As the doctrine is usually
stated, 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. (Sangco, Torts and Damages, 4th Ed., 1986, p.
165).

The practical import of the doctrine is that a negligent defendant is held liable
to a negligent plaintiff, or even to a plaintiff who has been grossly negligent in
placing himself in peril, if he, aware of the plaintiffs peril, or according to some
authorities, should have been aware of it in the reasonable exercise of due care,
had in fact an opportunity later than that of the plaintiff to avoid an accident
(57 Am. Jur., 2d, pp. 798-799).

In the recent case of Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate
Court, et al. (G.R. Nos. 66102-04, August 30, 1990), the Court citing the
landmark decision held in the case of Anuran, et al. v. Buno, et al. (123 Phil.
1073) ruled that the principle of "last clear chance" applies "in a suit between
the owners and drivers of 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."

Furthermore, "as between defendants: The doctrine cannot be extended into the
field of joint tortfeasors as a test of whether only one of them should be held
liable to the injured person by reason of his discovery of the latter's peril, and it
cannot be invoked as between defendants concurrently negligent. As against
third persons, a negligent actor cannot defend by pleading that another had
negligently failed to take action which could have avoided the injury." (57 Am.
Jur. 2d, pp. 806-807).

All premises considered, the Court is convinced that the respondent 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.
Therefore, the respondent court erred in absolving the owner and driver of the
cargo truck from liability.

Pursuant to the new policy of this Court to grant an increased death indemnity
to the heirs of the deceased, their respective awards of P30,000.00 are hereby
increased to P50,000.00. cdll

ACCORDINGLY, the petition is GRANTED; the appealed judgment and

resolution of the Court of Appeals are hereby REVERSED and SET ASIDE and
the judgment of the lower court is REINSTATED with the modification on the
indemnity for death of each of the victims which is hereby increased to
P50,000.00 each. No pronouncement as to costs.

SO ORDERED.

||| (Bustamante v. Court of Appeals, G.R. No. 89880, [February 6, 1991], 271
PHIL 633-643)
 G.R. No. 70493. May 18, 1989.]

GLAN PEOPLE'S LUMBER AND HARDWARE, GEORGE LIM, FABIO

S. AGAD, FELIX LIM and PAUL ZACARIAS y
INFANTE, petitioners, vs. INTERMEDIATE APPELLATE COURT,
CECILIA ALFEREZ VDA. DE CALIBO, Minors ROYCE STEPHEN,
JOYCE JOAN, JANISE MARIE, JACQUELINE BRIGITTE, JOCELINE
CORAZON, JULIET GERALDINE, JENNIFER JILL, all surnamed
CALIBO, represented by their mother, CECILIA A. VDA. DE
CALIBO, respondents.

Rufino Mayor and Isidro M. Ampig for petitioners.

Manuel L. Hontanosas for private respondents.

SYLLABUS

1. TORTS AND DAMAGES; DOCTRINE OF LAST CLEAR CHANCE. — The law is

that the person who has the last fair chance to avoid the impending harm and
fails to do so is chargeable with the consequences.

2. ID.; ID.; FAILURE TO OBSERVE THE DOCTRINE. — Considering that both

drivers had a full view of each other's vehicle from a distance of one hundred
fifty meters, with both vehicles traveling at a speed of approximately thirty
kilometers per hour and that the truck had been brought to a stop while the
jeep was still thirty meters away, it is logical to conclude that the driver of the
jeep had the last clear chance to avoid the accident by stopping in his turn or
swerving the jeep away from the truck.

3. CIVIL PROCEDURE; AUTHORITY OF THE SUPREME COURT TO REVIEW

FINDINGS OF THE APPELLATE COURT DIRECTLY IN CONFLICT WITH THOSE
OF THE TRIAL COURT. — The Supreme Court may review the findings of facts
of the Court of Appeals if they are in conflict with those of the trial court.
 D E C I S I O N

NARVASA, J : p

There is a two-fold message in this judgment that bears stating at the outset.
The first, an obvious one, is that it is the objective facts established by proofs
presented in a controversy that determine the verdict, not the plight of the
persons involved, no matter how deserving of sympathy and commiseration
because, for example, an accident of which they are the innocent victims has
brought them to reduced circumstances or otherwise tragically altered their
lives. The second is that the doctrine laid done many, many years ago in Picart
vs. Smith, 1 continues to be good law to this day.

The facts giving rise to the controversy at bar are tersely and quite accurately
recounted by the Trial Court as follows: 2

"Engineer Orlando T. Calibo, Agripino Roranes, and Maximo Patos were

on the jeep owned by the Bacnotan Consolidated Industries, Inc., with
Calibo at the wheel, as it approached from the South Lizada Bridge going
towards the direction of Davao City at about 1:45 in the afternoon of
July 4, 1979. At about that time, the cargo truck, loaded with cement
bags, GI sheets, plywood, driven by defendant Paul Zacarias y Infante,
coming from the opposite direction of Davao City and bound for Glan,
South Cotabato, had just crossed said bridge. At about 59 yards after
crossing the bridge, the cargo truck and the jeep collided as a
consequence of which Engineer Calibo died while Roranes and Patos
sustained physical injuries. Zacarias was unhurt. As a result of the impact,
the left side of the truck was slightly damaged while the left side of the
jeep, including its fender and hood, was extensively damaged. After the
impact, the jeep fell and rested on its right side on the asphalted road a
few meters to the rear of the truck, while the truck stopped on its wheels
on the road.
 On November 27, 1979, the instant case for damages was filed by the
surviving spouse and children of the late Engineer Calibo who are
residents of Tagbilaran City against the driver and owners of the cargo
truck.

For failure to file its answer to the third party complaint, third party
defendant, which insured the cargo truck involved, was declared in
default."

The case filed by the heirs of Engineer Calibo — his widow and minor children,
private respondents herein — was docketed as Civil Case No. 3283 of the
Court of First Instance of Bohol. 3 Named defendants in the complaint were
"Felix S. Agad, George Lim and Felix Lim . . . (who) appear to be the
co-owners of the Glan People's Lumber and Hardware . . . (and) Paul
Zacarias y Infante." 4 The defendants' answer however alleged that the
lumber and hardware business was exclusively owned by George Y. Lim, this
being evidenced by the Certificate of Registration issued by the Bureau of
Domestic Trade; Fabio S. Agad was not a co-owner thereof but "merely
employed by . . . George Y. Lim as bookkeeper"; and Felix Lim had no
connection whatever with said business, "he being a child only eight (8) years
of age." 5

"After (trial, and) a careful evaluation of the evidence, both testimonial and
documentary," the Court reached the conclusion "that the plaintiffs failed to
establish by preponderance of evidence the negligence, and thus the liability, of
the defendants." Accordingly, the Court dismissed the complaint (and
defendants' counterclaim) "for insufficiency of evidence." Likewise dismissed was
third-party complaint presented by the defendants against the insurer of the
truck. The circumstances leading to the Court's conclusion just mentioned, are
detailed in the Court's decision, as follows:

1. Moments before its collision with the truck being operated by Zacarias, the
jeep of the deceased Calibo was "zigzagging." 6
2. Unlike Zacarias who readily submitted himself to investigation by the police,
Calibo's companions, Roranes (an accountant), and Patos, who suffered injuries
on account of the collision, refused to be so investigated or give statements to
the police officers. This, plus Roranes' waiver of the right to institute criminal
proceedings against Zacarias, and the fact that indeed no criminal case was
ever instituted in Court against Zacarias, were "telling indications that they did
not attribute the happening to defendant Zacarias' negligence or fault." 7

3. Roranes' testimony, given in plaintiffs' behalf, was "not as clear and detailed
as that of . . . Zacarias," and was "uncertain and even contradicted by the
physical facts and the police investigators Dimaano and Esparcia." 8

4. That there were skid marks left by the truck's tires at the scene, and none by
the jeep, demonstrates that the driver of the truck had applied the brakes and
the jeep's driver had not; and that the jeep had on impact fallen on its right side
is indication that it was running at high speed. Under the circumstances,
according to the Court, given "the curvature of the road and the descending
grade of the jeep's lane, it was negligence on the part of the driver of the jeep,
Engr. Calibo, for not reducing his speed upon sight of the truck and failing to
apply the brakes as he got within collision range with the truck."

5. Even if it be considered that there was some antecedent negligence on the

part of Zacarias shortly before the collision, in that he had caused his truck to
run some 25 centimeters to the left of the center of the road, Engr. Calibo had
the last clear chance of avoiding the accident because he still had ample room in
his own lane to steer clear of the truck, or he could simply have braked to a full
stop.

The Court of Appeals saw things differently. It rendered judgment 9 on the

plaintiffs' appeal, 10 reversing the decision of the Trial Court. It found Zacarias
to be negligent on the basis of the following circumstances, to wit:

1) "the truck driven by defendant Zacarias occupied the lane of the jeep
when the collision occurred," and although Zacarias saw the jeep from a
 distance of about 150 meters, he "did not drive his truck back to his lane

in order to avoid collision with the oncoming jeep . . . ;" 11 what is worse,
"the truck driver suddenly applied his brakes even as he knew that he was
still within the lane of the jeep;" 12 had both vehicles stayed in their
respective lanes, the collision would never have occurred, they would have
passed "alongside each other safely;" 13

2) Zacarias had no license at the time; what he handed to Pfc. Esparcia,

on the latter's demand, was the "driver's license of his co-driver
Leonardo Baricuatro;" 14

3) the waiver of the right to file criminal charges against Zacarias should
not be taken against "plaintiffs" Roranes and Patos who had the right,
under the law, to opt merely to bring a civil suit. 15

The Appellate Court opined that Zacarias' negligence "gave rise to the
presumption of negligence on the part of his employer, and their liability is both
primary and solidary." It therefore ordered "the defendants jointly and
solidarily to indemnify the plaintiffs the following amounts:

(1) P30,000.00 for the death of Orlando Calibo;

(2) P378,000.00 for the loss of earning capacity of the deceased

(3) P15,000.00 for attorney's fees;

(4) Cost of suit." 16

The defendants George Lim, Felix Lim, Fabio S. Agad and Paul Zacarias have
appealed to this Court on certiorari and pray for a reversal of the judgment of
the Intermediate Appellate Court which, it is claimed, ignored or ran counter to
the established facts. A review of the record confirms the merit of this assertion
and persuades this Court that said judgment indeed disregarded facts clearly
and undisputably demonstrated by the proofs. The appealed judgment,
consequently, will have to be reversed.

The finding that "the truck driven by defendant Paul Zacarias occupied the lane
of the jeep when the collision occurred" is a loose one, based on nothing more
than the showing that at the time of the accident, the truck driven by Zacarias
had edged over the painted center line of the road into the opposite lane by a
width of twenty-five (25) centimeters. It ignores the fact that by the
uncontradicted evidence, the actual center line of the road was not that
indicated by the painted stripe but, according to measurements made and
testified by Patrolman Juanito Dimaano, one of the two officers who
investigated the accident, correctly lay thirty-six (36) centimeters farther to
the left of the truck's side of said stripe. LibLex

The unimpugned testimony of Patrolman Dimaano, a witness for the private

respondents, is to the effect that the jeep's lane was three (3) meters and
seventy-five (75) centimeters wide, and that of the truck three (3) meters and
three (3) centimeters, measured from the center stripe to the corresponding
side lines or outer edges of the road. 17 The total width of the road being,
therefore, six (6) meters and seventy-eight (78) centimeters, the true center
line equidistant from both side lines would divide the road into two lanes each
three (meters) and thirty-nine (39) centimeters wide. Thus, although it was not
disputed that the truck overrode the painted stripe by twenty-five (25)
centimeters, it was still at least eleven (11) centimeters away from its side of
the true center line of the road and well inside its own lane when the accident
occurred. By this same reckoning, since it was unquestionably the jeep that
rammed into the stopped truck, it may also be deduced that it (the jeep) was at
the time travelling beyond its own lane and intruding into the lane of the truck
by at least the same 11-centimeter width of space.

Not only was the truck's lane, measured from the incorrectly located center
stripe uncomfortably narrow, given that vehicle's width of two (2) meters and
forty-six (46) centimeters; the adjacent road shoulder was also virtually
impassable, being about three (3) inches lower than the paved surface of the
road and "soft" — not firm enough to offer traction for safe passage — besides
which, it sloped gradually down to a three foot-deep ravine with a river
below. 18 The truck's lane as erroneously demarcated by the center stripe gave
said vehicle barely half a meter of clearance from the edge of the road and the
dangerous shoulder and little room for maneuver, in case this was made
necessary by traffic contingencies or road conditions, if it always kept to said
lane. It being also shown that the accident happened at or near the point of the
truck's approach to a curve, 19 which called for extra precautions against
driving too near the shoulder, it could hardly be accounted negligent on the part
of its driver to intrude temporarily, and by only as small as a twenty-five
centimeter-wide space (less than ten inches), into the opposite lane in order to
insure his vehicle's safety. This, even supposing that said maneuver was in fact
an intrusion into the opposite lane, which was not the case at all as just pointed
out.

Nor was the Appellate Court correct in finding that Paulino Zacarias had acted
negligently in applying his brakes instead of getting back inside his lane upon
espying the approaching jeep. Being well within his own lane, as has already
been explained, he had no duty to swerve out of the jeep's way as said Court
would have had him do. And even supposing that he was in fact partly inside the
opposite lane, coming to a full stop with the jeep still thirty (30) meters away
cannot be considered an unsafe or imprudent action, there also being
uncontradicted evidence that the jeep was "zigzagging" 20 and hence no way of
telling in which direction it would go as it approached the truck.

Also clearly erroneous is the finding of the Intermediate Appellate Court that
Zacarias had no driver's license at the time. The traffic accident report attests
to the proven fact that Zacarias voluntarily surrendered to the investigating
officers his driver's license, valid for 1979, that had been renewed just the day
before the accident, on July 3, 1979. 21 The Court was apparently misled by
the circumstance that when said driver was first asked to show his license by the
investigators at the scene of the collision, he had first inadvertently produced
the license of a fellow driver, Leonardo Baricuatro, who had left said license in
Davao City and had asked Zacarias to bring it back to him in Glan, Cotabato. 22
The evidence not only acquits Zacarias of any negligence in the matter; there
are also quite a few significant indicators that it was rather Engineer Calibo's
negligence that was the proximate cause of the accident. Zacarias had told
Patrolman Dimaano at the scene of the collision and later confirmed in his
written statement at the police headquarters 23 that the jeep had been
"zigzagging," which is to say that it was travelling or being driven erratically at
the time. The other investigator, Patrolman Jose Esparcia, also testified that
eyewitnesses to the accident had remarked on the jeep's "zigzagging." 24 There is
moreover more than a suggestion that Calibo had been drinking shortly before
the accident. The decision of the Trial Court adverts to further testimony of
Esparcia to the effect that three of Calibo's companions at the beach party he
was driving home from when the collision occurred, who, having left ahead of
him went to the scene when they heard about the accident, had said that there
had been a drinking spree at the party and, referring to Calibo, had remarked:
"Sabi na huag nang mag drive . . . pumipilit," (loosely translated, "He was
advised not to drive, but he insisted.")

It was Calibo whose driver's license could not be found on his person at the scene
of the accident, and was reported by his companions in the jeep as having been
lost with his wallet at said scene, according to the traffic accident report,
Exhibit "J". Said license unexplainedly found its way into the record some two
years later. Cdpr

Reference has already been made to the finding of the Trial Court that while
Zacarias readily submitted to interrogation and gave a detailed statement to
the police investigators immediately after the accident, Calibo's two companions
in the jeep and supposed eyewitnesses, Agripino Roranes and Maximo Patos,
refused to give any statements. Furthermore, Roranes who, together with Patos,
had sustained injuries as a result of the collision, waived his right to file a
criminal case against Zacarias. 25

Even, however, ignoring these telltale indicia of negligence on the part of Calibo,
and assuming some antecedent negligence on the part of Zacarias in failing to
keep within his designated lane, incorrectly demarcated as it was, the physical
facts, either expressly found by the Intermediate Appellate Court or which may
be deemed conceded for lack of any dispute, would still absolve the latter of any
actionable responsibility for the accident under the rule of the last clear chance.

Both drivers, as the Appellate Court found, had a full view of each other's vehicle
from a distance of one hundred fifty meters. Both vehicles were travelling at a
speed of approximately thirty kilometers per hour. 26 The private respondents
have admitted that the truck was already at a full stop when the jeep plowed
into it. And they have not seen fit to deny or impugn petitioners' imputation
that they also admitted the truck had been brought to a stop while the jeep was
still thirty meters away. 27 From these facts the logical conclusion emerges that
the driver of the jeep had what judicial doctrine has appropriately called the
last clear chance to avoid the accident, while still at that distance of thirty
meters from the truck, by stopping in his turn or swerving his jeep away from
the truck, either of which he had sufficient time to do while running at a speed
of only thirty kilometers per hour. In those circumstances, his duty was to seize
that opportunity of avoidance, not merely rely on a supposed right to expect, as
the Appellate Court would have it, the truck to swerve and leave him a clear
path.

The doctrine of the last clear chance provides as valid and complete a defense to
accident liability today as it did when invoked and applied in the 1918 case
of Picart vs. Smith, supra, which involved a similar state of facts. Of those facts,
which should be familiar to every student of law, it is only necessary to recall the
summary made in the syllabus of this Court's decision that: llcd

"(t)he plaintiff was riding a pony on a bridge. Seeing an automobile ahead

he improperly pulled his horse over to the railing on the right. The driver
of the automobile, however guided his car toward the plaintiff without
diminution of speed until he was only few feet away. He then turned to
the right but passed so closely to the horse that the latter being
frightened, jumped around and was killed by the passing car. . . . ."
 Plaintiff Picart was thrown off his horse and suffered contusions which
required several days of medical attention. He sued the defendant Smith for
the value of his animal, medical expenses and damage to his apparel and
obtained judgment from this Court which, while finding that there was
negligence on the part of both parties, held that of the defendant was the
immediate and determining cause of the accident and that of the plaintiff
". . . the more remote factor in the case":

"It goes without saying that the plaintiff himself was not free from fault,
for he was guilty of antecedent negligence in planting himself on the
wrong side of the road. But as we have already stated, the defendant was
also negligent; and in such case the problem always is to discover which
agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the
negligence of the defendant succeeded the negligence of the plaintiff by
an appreciable interval. Under these circumstances the law is that the
person who has the last fair chance to avoid the impending harm and
fails to do so is chargeable with the consequences, without reference to
the prior negligence of the other party."

Since said ruling clearly applies to exonerate petitioner Zacarias and his
employer (and co-petitioner) George Lim, an inquiry into whether or not the
evidence support the latter's additional defense of due diligence in the selection
and supervision of said driver is no longer necessary and will not be undertaken.
The fact is that there is such evidence in the record which has not been
controverted.

It must be pointed out, however, that the Intermediate Appellate Court also
seriously erred in holding the petitioners Pablo S. Agad and Felix Lim solidarily
liable for the damages awarded in its appealed decision, as alleged owners, with
petitioner George Lim, of Glan People's Lumber and Hardware, employer of
petitioner Zacarias. This manifestly disregarded, not only the certificate of
registration issued by the Bureau of Domestic Trade identifying Glan People's
Lumber and Hardware as a business name registered by George Lim, 28 but also
unimpugned allegations into the petitioners' answer to the complaint that Pablo
S. Agad was only an employee of George Lim and that Felix Lim, then a child of
only eight (8) years, was in no way connected with the business. LLpr

In conclusion, it must also be stated that there is no doubt of this Court's power
to review the assailed decision of the Intermediate Appellate Court under the
authority of precedents recognizing exceptions to the familiar rule binding it to
observe and respect the latter's findings of fact. Many of those exceptions may
be cited to support the review here undertaken, but only the most obvious —
that said findings directly conflict with those of the Trial Court — will
suffice. 29 In the opinion of this Court and after a careful review of the record,
the evidence singularly fails to support the findings of the Intermediate
Appellate Court which, for all that appears, seem to have been prompted rather
by sympathy for the heirs of the deceased Engineer Calibo than by an objective
appraisal of the proofs and a correct application of the law to the established
facts. Compassion for the plight of those whom an accident has robbed of the
love and support of a husband and father is an entirely natural and
understandable sentiment. It should not, however, be allowed to stand in the
way of, much less to influence, a just verdict in a suit at law.

WHEREFORE, the appealed judgment of the Intermediate Appellate Court is

hereby REVERSED, and the complaint against herein petitioners in Civil Case No.
3283 of the Court of First Instance of Bohol, Branch IV, is DISMISSED. No
pronouncement as to costs.

SO ORDERED.

||| (Glan People's Lumber and Hardware v. Intermediate Appellate Court, G.R. No.
70493, [May 18, 1989], 255 PHIL 447-459)

[G.R. Nos. 79050-51. November 14, 1989.]

 PANTRANCO NORTH EXPRESS, INC. petitioner, vs. MARICAR
BASCOS BAESA, thru her personal guardian FRANCISCA O.
BASCOS, FE O. ICO, in her behalf and in behalf of her minor
children, namely ERWIN, OLIVE, EDMUNDO and SHARON
ICO, respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for respondents.

SYLLABUS

1.CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN

APPLICABLE. — The doctrine of last clear chance applies only in a situation
where the defendant, having the last fair chance to avoid the impending harm
and failed to do so, becomes liable for all the consequences of the accident
notwithstanding the prior negligence of the plaintiff.

2.ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that

the doctrine of last clear chance may be applied, it must be shown that the
person who allegedly had the last opportunity to avert the accident was aware
of the existence of the peril or with exercise of due care should have been aware
of it.

3.ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR

BY AVAILABLE MEANS. — This doctrine of last chance has no application to a
case where a person is to act instantaneously, and if the injury cannot be
avoided by using all means available after the peril is or should have been
discovered.

4.ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH

HIGHWAY OR A STOP INTERSECTION. — Section 43 (c), Article III, Chapter IV
of Republic Act No. 1436 cannot apply to case a bar where at the time of the
accident, the jeepney had already crossed the intersection.
5.ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A
finding of negligence on the part of the driver establishes a presumption that
the employer has been negligent and the latter has the burden of proof that it
has exercised due negligence not only in the selection of its employees but also in
adequately supervising their work.

6.ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR

DAMAGES. — Plaintiff's failure to present documentary evidence to support
their claim for damages for loss of earning capacity of the deceased victim does
not bar recovery of the damages, if such loss may be based sufficiently on their
testimonies.

7.ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a
person was fixed by this Court at (P30,000.00).

D E CI S IO N

CORTES, J : p

In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to
review the decision of the Court of Appeals in CA-G.R. No. 05494-95 which
affirmed the decisions of the Court of First Instance of Rosales, Pangasinan in
Civil Case No. 561-R and Civil Case No. 589-R wherein PANTRANCO was
ordered to pay damages and attorney's fees to herein private respondents. Cdpr

The pertinent fact are as follows:

At about 7:00 o'clock in the morning of June 12, 1981, the spouses Ceasar and
Marilyn Baesa and their children Harold Jim, Marcelino and Maricar, together
with spouses David Ico and Fe O. Ico with their son Erwin Ico and seven other
persons, were aboard a passenger jeepney on their way to a picnic at Malalam
River, Ilagan, Isabela, to celebrate the fifth wedding anniversary of Ceasar and
Marilyn Baesa.
The group, numbering fifteen (15) persons, rode in the passenger jeepney driven
by David Ico, who was also the registered owner thereof. From Ilagan, Isabela,
they proceeded to Barrio Capayacan to deliver some viands to one Mrs. Bascos
and thenceforth to San Felipe, taking the highway going to Malalam River. Upon
reaching the highway, the jeepney turned right and proceeded to Malalam River
at a speed of about 20 kph. While they were proceeding towards Malalam River,
a speeding PANTRANCO bus from Aparri, on its regular route to Manila,
encroached on the jeepney's lane while negotiating a curve, and collided with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa
and their children, Harold Jim and Marcelino Baesa, died while the rest of the
passengers suffered injuries. The jeepney was extensively damaged. After the
accident the driver of the PANTRANCO Bus, Ambrosio Ramirez, boarded a car
and proceeded to Santiago, Isabela. From that time on up to the present,
Ramirez has never been seen and has apparently remained in hiding.

All the victims and/or their surviving heirs except herein private respondents
settled the case amicably under the "No Fault" insurance coverage of
PANTRANCO.

Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself
and for her minor children, filed separate actions for damages arising from
quasi-delict against PANTRANCO, respectively docketed as Civil Case No.
561-R and 589-R of the Court of First Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico's alleged
negligence as the proximate cause of the accident, invoked the defense of due
diligence in the selection and supervision of its driver, Ambrosio Ramirez. cdll

On July 3, 1984, the CFI of Pangasinan rendered a decision against

PANTRANCO awarding the total amount of Two Million Three Hundred Four
Thousand Six Hundred Forty-Seven (P2,304,647.00) as damages, plus 10%
thereof as attorney's fees and costs to Maricar Baesa in Civil Case No. 561-R,
and the total amount of Six Hundred Fifty Two Thousand Six Hundred
Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as attorney's
fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the
cases were consolidated and the Court of Appeals modified the decision of the
trial court by ordering PANTRANCO to pay the total amount of One Million One
Hundred Eighty-Nine Thousand Nine Hundred Twenty Seven Pesos
(P1,189,927.00) as damages, plus Twenty Thousand Pesos (P20,000.00) as
attorney's fees to Maricar Baesa, and the total amount of Three Hundred
Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos
(P10,000.00) as attorney's fees to Fe Ico and her children, and to pay the costs
in both cases. The dispositive portion of the assailed decision reads as follows:

WHEREFORE, the decision appealed from is hereby modified by ordering

the defendant PANTRANCO North Express, Inc. to pay:

I.The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the
following damages:

A)As compensatory damages for the death of Ceasar Baesa —

P30,000.00;

B)As compensatory damages for the death of Marilyn Baesa —

P30,000.00;

C)As compensatory damages for the death of Harold Jim Baesa and
Marcelino Baesa — P30,000.00;

D)For the loss of earnings of Ceasar Baesa — P630,000.00;

E)For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F)For the burial expenses of the deceased Ceasar and Marilyn Baesa —
P41,200.00;

G)For hospitalization expenses of Maricar Baesa — P3,727.00;

H)As moral damages — P50,000.00;

I)As attorney's fees — P20,000.00;

II.The plaintiffs in Civil Case No. 589-R, the following damages:

 A)As compensatory damages for the death of David Ico — P30,000.00;

B)For loss of earning capacity of David Ico — P252,000.00;

C)As moral damages for the death of David Ico and the injury of Fe Ico —
P30,000.00

D)As payment for the jeepney — P20,000.00;

E)For the hospitalization of Fe Ico — P12,000.000;

F)And for attorney's fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil

Case No. 561-R, and the medical expenses in the sum of P3,273.55,
should be deducted from the award in her favor. Cdpr

All the foregoing amounts herein awarded except the costs shall earn
interest at the legal rate from date of this decision until fully paid. [CA
Decision, pp. 14-15; Rollo, pp. 57-58.]

PANTRANCO filed a motion for reconsideration of the Court of Appeal's decision,

but on June 26, 1987, it denied the same for lack of merit. PANTRANCO then
filed the instant petition for review.

Petitioner faults the Court of Appeals for not applying the doctrine of the "last
clear chance" against the jeepney driver. Petitioner claims that under the
circumstances of the case, it was the driver of the passenger jeepney who had
the last clear chance to avoid the collision and was therefore negligent in failing
to utilize with reasonable care and competence his then existing opportunity to
avoid the harm.

The doctrine of the last clear chance was defined by this Court in the case
of Ong v. Metropolitan Water District, 104 Phil. 397 (1958), in this wise:

The doctrine of the last clear chance simply, means that the negligence of
a claimant does not preclude a recovery for the negligence of defendant
 where it appears that the latter, by exercising reasonable care and
prudence, might have avoided injurious consequences to claimant
notwithstanding his negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior or
antecedent negligence but the defendant, who had the last fair chance to avoid
the impending harm and failed to do so, is made liable for all the consequences
of the accident notwithstanding the prior negligence of the plaintiff [Picart v.
Smith, 37 Phil. 809 (1918); Glan People's Lumber and Hardware, et al. v.
Intermediate Appellate Court, Cecilia Alferez Vda. de Calibo, et al., G.R. No.
70493, May 18, 1989]. The subsequent negligence of the defendant in failing
to exercise ordinary care to avoid injury to plaintiff becomes the immediate or
proximate cause of the accident which intervenes between the accident and the
more remote negligence of the plaintiff, thus making the defendant liable to the
plaintiff [Picart v. Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a
defendant liable to a plaintiff who was guilty of prior or antecedent negligence,
although it may also be raised as a defense to defeat claim for damages. llcd

To avoid liability for the negligence of its driver, petitioner claims that the
original negligence of its driver was not the proximate cause of the accident and
that the sole proximate cause was the supervening negligence of the jeepney
driver David Ico in failing to avoid the accident. It is petitioner's position that
even assuming arguendo,that the bus encroached into the lane of the jeepney,
the driver of the latter could have swerved the jeepney towards the spacious
dirt shoulder on his right without danger to himself or his passengers.

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner's contention, the doctrine of "last clear chance" finds
no application in this case. For the doctrine to be applicable, it is necessary to
show that the person who allegedly had the last opportunity to avert the
accident was aware of the existence of the peril or should, with exercise of due
care, have been aware of it. One cannot be expected to avoid an accident or
injury if he does not know or could not have known the existence of the peril. In
this case, there is nothing to show that the jeepney driver David Ico knew of the
impending danger. When he saw at a distance that the approaching bus was
encroaching on his lane, he did not immediately swerve the jeepney to the dirt
shoulder on his right since he must have assumed that the bus driver will return
the bus to its own lane upon seeing the jeepney approaching from the opposite
direction. As held by this Court in the case of Vda. De Bonifacio v. BLTB, G.R. No.
L-26810, August 31, 1970, 34 SCRA 618, a motorist who is properly
proceeding on his own side of the highway is generally entitled to assume that
an approaching vehicle coming towards him on the wrong side, will return to his
proper lane of traffic. There was nothing to indicate to David Ico that the bus
could not return to its own lane or was prevented from returning to the proper
lane by anything beyond the control of its driver. Leo Marantan, an alternate
driver of the Pantranco bus who was seated beside the driver Ramirez at the
time of the accident, testified that Ramirez had no choice but to swerve the
steering wheel to the left and encroach on the jeepney's lane because there was
a steep precipice on the right [CA Decision, p. 2; Rollo, p. 45]. However, this is
belied by the evidence on record which clearly shows that there was enough
space to swerve the bus back to its own lane without any danger [CA Decision, p.
7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time
of the accident the Pantranco bus was speeding towards Manila [CA Decision, p.
2; Rollo, p. 45]. By the time David Ico must have realized that the bus was not
returning to its own lane, it was already too late to swerve the jeepney to his
right to prevent an accident. The speed at which the approaching bus was
running prevented David Ico from swerving the jeepney to the right shoulder of
the road in time to avoid the collision. Thus, even assuming that the jeepney
driver perceived the danger a few seconds before the actual collision, he had no
opportunity to avoid it. This Court has held that the last clear chance doctrine
"can never apply where the party charged is required to act instantaneously,
and if the injury cannot be avoided by the application of all means at hand after
the peril is or should have been discovered" [Ong v. Metropolitan Water
District, supra]. prcd

Petitioner likewise insists that David Ico was negligent in failing to observe
Section 43 (c), Article III Chapter IV of Republic Act No. 4136 * which provides
that the driver of a vehicle entering a through highway or a stop intersection
shall yield the right of way to all vehicles approaching in either direction on such
through highway.

Petitioner's misplaced reliance on the aforesaid law is readily apparent in this

case. The cited law itself provides that it applies only to vehicles entering a
through highway or a stop intersection. At the time of the accident, the jeepney
had already crossed the intersection and was on its way to Malalam River.
Petitioner itself cited Fe Ico's testimony that the accident occurred after the
jeepney had travelled a distance of about two (2) meters from the point of
intersection [Petition p. 10; Rollo, p. 27]. In fact, even the witness for the
petitioner, Leo Marantan, testified that both vehicles were coming from
opposite directions [CA Decision, p. 7; Rollo, p. 50], clearly indicating that the
jeepney had already crossed the intersection.

Considering the foregoing, the Court finds that the negligence of petitioner's
driver in encroaching into the lane of the incoming jeepney and in failing to
return the bus to its own lane immediately upon seeing the jeepney coming
from the opposite direction was the sole and proximate cause of the accident
without which the collision would not have occurred. There was no supervening
or intervening negligence on the part of the jeepney driver which would have
made the prior negligence of petitioner's driver a mere remote cause of the
accident.

II
On the issue of its liability as an employer, petitioner claims that it had observed
the diligence of a good father of a family to prevent damage, conformably to the
last paragraph of Article 2180 of the Civil Code. Petitioner adduced evidence to
show that in hiring its drivers, the latter are required to have professional
driver's license and police clearance. The drivers must also pass written
examinations, interviews and practical driving tests, and are required to
undergo a six-month training period. Rodrigo San Pedro, petitioner's Training
Coordinator, testified on petitioner's policy of conducting regular and
continuing training programs and safety seminars for its drivers, conductors,
inspectors and supervisors at a frequency rate of at least two (2) seminars a
month.

On this point, the Court quotes with approval the following findings of the trial
court which was adopted by the Court of Appeals in its challenged decision:

When an injury is caused by the negligence of an employee, there

instantly arises a presumption that the employer has been negligent
either in the selection of his employees or in the supervision over their
acts. Although this presumption is only a disputable presumption which
could be overcome by proof of diligence of a good father of a family, this
Court believes that the evidence submitted by the defendant to show that
it exercised the diligence of a good father of a family in the case of
Ramirez, as a company driver is far from sufficient. No support evidence
has been adduced. The professional driver's license of Ramirez has not
been produced. There is no proof that he is between 25 to 38 years old.
There is also no proof as to his educational attainment, his age, his weight
and the fact that he is married or not. Neither are the result of the
written test, psychological and physical test, among other tests, have
been submitted in evidence [sic]. His NBI or police clearances and
clearances from previous employment were not marked in evidence. No
evidence was presented that Ramirez actually and really attended the
seminars. Vital evidence should have been the certificate of attendance or
certificate of participation or evidence of such participation like a logbook
signed by the trainees when they attended the seminars. If such records
 are not available, the testimony of the classmates that Ramirez was their
classmate in said seminar (should have been presented) [CA Decision, pp.
8-9; Rollo, pp. 51-52]. LLphil

Petitioner contends that the fact that Ambrosio Ramirez was employed and
remained as its driver only means that he underwent the same rigid selection
process and was subjected to the same strict supervision imposed by petitioner
on all applicants and employees. It is argued by the petitioner that unless proven
otherwise, it is presumed that petitioner observed its usual recruitment
procedure and company polices on safety and efficiency [Petition, p. 20; Rollo, p.
37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to
the presumption of negligence on the part of petitioner and the burden of
proving that it exercised due diligence not only in the selection of its employees
but also in adequately supervising their work rests with the petitioner [Lilius v.
Manila Railroad Company, 59 Phil. 758 (1934); Umali v. Bacani, G.R. No.
L-40570, June 30, 1976, 69 SCRA 623]. Contrary to petitioner's claim,
there is no presumption that the usual recruitment procedures and safety
standards were observed. The mere issuance of rules and regulations and the
formulation of various company policies on safety, without showing that they
are being complied with, are not sufficient to exempt petitioner from liability
arising from the negligence of its employee. It is incumbent upon petitioner to
show that in recruiting and employing the erring driver, the recruitment
procedures and company policies on efficiency and safety were followed.
Petitioner failed to do this. Hence, the Court finds no cogent reason to disturb
the finding of both the trial court and the Court of Appeals that the evidence
presented by the petitioner, which consists mainly of the uncorroborated
testimony of its Training Coordinator, is insufficient to overcome the
presumption of negligence against petitioner. LexLib

III
On the question of damages, petitioner claims that the Court of Appeals erred in
fixing the damages for the loss of earning capacity of the deceased victims.
Petitioner assails respondent court's findings because no documentary evidence
in support thereof, such as income tax returns, pay-rolls, pay slips or invoices
obtained in the usual course of business, were presented [Petition, p. 22; Rollo, p.
39]. Petitioner argues that the "bare and self-serving testimonies of the wife of
the deceased David Ico and the mother of the deceased Marilyn Baesa . . . have
no probative value to sustain in law the Court of Appeals' conclusion on the
respective earnings of the deceased victims." [Petition, pp. 21-22; Rollo, pp.
38-39.] It is petitioner's contention that the evidence presented by the private
respondent does not meet the requirements of clear and satisfactory evidence to
prove actual and compensatory damages.

The Court finds that the Court of Appeals committed no reversible error in
fixing the amount of damages for the loss of earning capacity of the deceased
victims. While it is true that private respondents should have presented
documentary evidence to support their claim for damages for loss of earning
capacity of the deceased victims, the absence thereof does not necessarily bar
the recovery of the damages in question. The testimony of Fe Ico and Francisca
Bascos as to the earning capacity of David Ico, and the spouses Baesa,
respectively, are sufficient to establish a basis from which the court can make a
fair and reasonable estimate of the damages for the loss of earning capacity of
the three deceased victims. Moreover, in fixing the damages for loss of earning
capacity of a deceased victim, the court can consider the nature of his
occupation, his educational attainment and the state of his health at the time of
death.

In the instant case, David Ico was thirty eight (38) years old at the time of his
death in 1981 and was driving his own passenger jeepney. The spouses Ceasar
and Marilyn Baesa were both thirty (30) years old at the time of their death.
Ceasar Baesa was a commerce degree holder and the proprietor of the Cauayan
Press, printer of the Cauayan Valley Newspaper and the Valley Times at
Cauayan, Isabela. Marilyn Baesa graduated as a nurse in 1976 and at the time
of her death, was the company nurse, personnel manager, treasurer and cashier
of the Ilagan Press at Ilagan, Isabela. Respondent court duly considered these
factors, together with the uncontradicted testimonies of Fe Ico and Francisca
Bascos, in fixing the amount of damages for the loss of earning capacity of David
Ico and the spouses Baesa. LibLex

However, it should be pointed out that the Court of Appeals committed error in
fixing the compensatory damages for the death of Harold Jim Baesa and
Marcelino Baesa. Respondent court awarded to plaintiff (private respondent)
Maricar Baesa Thirty Thousand Pesos (P30,000.00) as "compensatory damages
for the death of Harold Jim Baesa and Marcelino Baesa." [CA Decision, p. 14;
Rollo, 57]. In other words, the Court of Appeals awarded only Fifteen Thousand
Pesos (P15,000.00) as indemnity for the death of Harold Jim Baesa and
another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa.
This is clearly erroneous. In the case ofPeople v. de la Fuente, G.R. Nos.
63251-52, December 29, 1983, 126 SCRA 518, the indemnity for the death
of a person was fixed by this Court at Thirty Thousand Pesos (P30,000.00).
Plaintiff Maricar Baesa should therefore be awarded Sixty Thousand Pesos
(P60,000.00) as indemnity for the death of her brothers, Harold Jim Baesa
and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the death of
each brother.

The other items of damages awarded by respondent court which were not
challenged by the petitioner are hereby affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of

respondent Court of Appeals is hereby AFFIRMED with the modification that
the amount of compensatory damages for the death of Harold Jim Baesa and
Marcelino Baesa are increased to Thirty Thousand Pesos (P30,000.00) each. LLphil

SO ORDERED.
||| (Pantranco North Express, Inc. v. Baesa, G.R. Nos. 79050-51, [November 14,
1989], 258-A PHIL 975-986)

G.R. No. 97626. March 14, 1997.]

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.

Carpio Villaraza & Cruz for petitioners.

Roberto C . Bermejo for private respondents.

SYLLABUS

1. CIVIL LAW; ELEMENTS OF QUASI-DELICT. — There are three elements of a

quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the
defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant
and the damages incurred by the plaintiff.

2. ID,; ID.; NEGLIGENCE; DEFINED AND CONSTRUED. — 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 do. The
seventy-eight (78)-year-old, yet still relevant, case of Picart v. Smith, 37 Phil.
809 [1918], provides the test by which to determine the existence of negligence
in a particular case which may be stated as follows: Did the defendant in doing
the alleged negligent act use that reasonable care and caution which an
ordinarily prudent person would have used in the same situation? If not, then he
is guilty of negligence. The law here in effect adopts the standard supposed to be
supplied by the imaginary conduct of the discreetpaterfamilias of the Roman
law. The existence of negligence in a given case is not determined by reference to
the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of
ordinary intelligence and prudence and determines liability by that.

3. ID.; ID.; ID.; WHEN PRESENT; CASE AT BAR. — The fact that the duplicate
slip was not compulsorily required by the bank in accepting deposits should not
relieve the petitioner bank of responsibility. The odd circumstance alone that
such duplicate copy lacked one vital information — that of the name of the
account holder — should have already put Ms. Mabayad on guard. Rather than
readily validating the incomplete duplicate copy, she should have proceeded
more cautiously by being more probing as to the true reason why the name of
the account holder in the duplicate slip was left blank while that in the original
was filled up. She should not have been so naive in accepting hook, line and
sinker the too shallow excuse of Ms. Irene Yabut to the effect that since the
duplicate copy was only for her personal record, she would simply fill up the
blank space later on. A "reasonable man of ordinary prudence" would not have
given credence to such explanation and would have insisted that the space left
blank be filled up as a condition for validation. It was this negligence of Ms.
Azucena Mabayad, coupled by the negligence of the petitioner bank in the
selection and supervision of its bank teller, which was the proximate cause of the
loss suffered by the private respondent, and not the latter's act of entrusting
cash to a dishonest employee, as insisted by the petitioners.

4. ID.; DAMAGES; PROXIMATE CAUSE; DEFINED; CASE AT BAR. — Proximate

cause is determined on the facts of each case upon mixed considerations of logic,
common sense, policy and precedent. Vda. de Bataclan v. Medina, 102 Phil.
181, 186 [1957], reiterated in the case of Bank of the Phil. Islands v. Court of
Appeals, 216 SCRA 51, 75 [1992], defines proximate cause 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. . . . " In this case, absent the act of Ms. Mabayad in negligently
validating the incomplete duplicate copy of the deposit slip, Ms. Irene Yabut
would not have the facility with which to perpetrate her fraudulent scheme
with impunity.

5. ID.; ID.; ID.; DOCTRINE OF "LAST CLEAR CHANCE"; CONSTRUED. — 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.

6. ID.; ID.; MORE THAN THAT OF A GOOD FATHER OF A FAMILY; DEGREE OF

DILIGENCE REQUIRED FROM A BANK. — In the case of banks, the degree of
diligence required is more than that of a good father of a family. Considering
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. As
elucidated in Simex International (Manila), Inc. v. Court of Appeals, 183 SCRA
360, 367 [1990], in every case, the depositor expects the bank to treat his
account with the utmost fidelity, whether such account consists only of a few
hundred pesos or of millions. The bank must record every single transaction
accurately, down to the last centavo, and as promptly as possible. This has to be
done if the account is to reflect at any given time the amount of money the
depositor can dispose as he sees fit, confident that the bank will deliver it as and
to whomever he directs. A blunder on the part of the bank, such as the failure to
duly credit him his deposits as soon as they are made, can cause the depositor
not a little embarrassment if not financial loss and perhaps even civil and
criminal litigation.

7. ID.; ID.; AWARD THEREOF; WHEN MITIGATED BY CONTRIBUTORY

NEGLIGENCE; CASE AT BAR. — The damage would definitely not have
ballooned to such an amount if only RMC, particularly Romeo Lipana, had
exercised even a little vigilance in their financial affairs. This omission by RMC
amounts to contributory negligence which shall mitigate the damages that may
be awarded to the private respondent under Article 2179 of the New Civil Code,
to wit: ". . . When the plaintiff's own negligence was the immediate and
proximate cause of his injury, he cannot recover damages. But if his negligence
was only contributory, the immediate and proximate cause of the injury being
the defendant's lack of due care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded." In view of this, we believe
that the demands of substantial justice are satisfied by allocating the damage on
a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate
court, except the award of P25,000.00 attorney's fees, shall be borne by
private respondent RMC; only the balance of 60% needs to be paid by the
petitioners. The award of attorney's fees shall be borne exclusively by the
petitioners.

PADILLA, J., dissenting:

1. CIVIL LAW; DAMAGES; DOCTRINE OF "LAST CLEAR CHANCE";

CONSTRUED. — Coming to the doctrine of "last clear chance" it is Justice
Padilla's considered view that the doctrine assumes that the negligence of the
defendant was subsequent to the negligence of the plaintiff and the same must
be the proximate cause of the injury. In short, there must be a last and
a clear chance, not a last possible chance, to avoid the accident or injury. It
must have been a chance as would have enabled a reasonably prudent man in
like position to have acted effectively to avoid the injury and the resulting
damage to himself.

2. ID.; ID.; ID.; APPLICABLE WHEN THE PRIVATE RESPONDENT FAILED TO

EXAMINE ITS MONTHLY BANK STATEMENT. — In the case at bar, the bank
was not remiss in its duty of sending monthly bank statements to private
respondent RMC so that any error or discrepancy in the entries therein could be
brought to the bank's attention at the earliest opportunity. Private respondent
failed to examine these bank statements not because it was prevented by some
cause in not doing so, but because it was purposely negligent as it admitted that
it does not normally check bank statements given by banks. It was private
respondent who had the last and clear chance to prevent any further
misappropriation by Yabut had it only reviewed the status of its current
accounts on the bank statement sent to it monthly or regularly. Since a sizable
amount of cash was entrusted to Yabut, private respondent should, at least,
have taken care of its concerns, as what the law presumes. Its negligence,
therefore, is not contributory but the immediate and proximate cause of its
injury.

D E CI S IO N

HERMOSISIMA, JR., J : p

Challenged in this petition for review is the Decision dated February 28,
1991 1 rendered by public respondent Court of Appeals which affirmed the
Decision dated November 15, 1985 of the Regional Trial Court, National
Capital Judicial Region, Branch CLX (160), Pasig City, in Civil Case No. 27288
entitled Rommel's Marketing Corporation, etc. v. Philippine Bank of
Commerce, now absorbed by Philippine Commercial and Industrial Bank.

The case stemmed from a complaint filed by the private respondent Rommel's
Marketing Corporation (RMC for brevity), represented by its President and
General Manager Romeo Lipana, to recover from the former Philippine Bank of
Commerce (PBC for brevity), now absorbed by the Philippine Commercial
International Bank, the sum of P304,979.74 representing various deposits it
had made in its current account with said bank but which were not credited to
its account, and were instead deposited to the account of one Bienvenido Cotas,
allegedly due to the gross and inexcusable negligence of the petitioner bank.

RMC maintained two (2) separate current accounts, Current Account Nos.
53-01980-3 and 53-01748-7, with the Pasig Branch of PBC in connection
with its business of selling appliances.

In the ordinary and usual course of banking operations, current account deposits
are accepted by the bank on the basis of deposit slips prepared and signed by the
depositor, or the latter's agent or representative, who indicates therein the
current account number to which the deposit is to be credited, the name of the
depositor or current account holder, the date of the deposit, and the amount of
the deposit either in cash or checks. The deposit slip has an upper portion or
stub, which is detached and given to the depositor or his agent; the lower
portion is retained by the bank. In some instances, however, the deposit slips are
prepared in duplicate by the depositor. The original of the deposit slip is
retained by the bank, while the, duplicate copy is returned or given to the
depositor.

From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have
entrusted RMC funds in the form of cash totalling P304,979.74 to his
secretary, Irene Yabut, for the purpose of depositing said funds in the current
accounts of RMC with PBC. It turned out, however, that these deposits, on all
occasions, were not credited to RMC's account but were instead deposited to
Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas who likewise
maintains an account with the same bank. During this period, petitioner bank
had, however, been regularly furnishing private respondent with monthly
statements showing its current accounts balances. Unfortunately, it had never
been the practice of Romeo Lipana to check these monthly statements of
account reposing complete trust and confidence on petitioner bank.

Irene Yabut's modus operandi is far from complicated. She would accomplish
two (2) copies of the deposit slip, an original and a duplicate. The original
showed the name of her husband as depositor and his current account number.
On the duplicate copy was written the account number of her husband but the
name of the account holder was left blank. PBC's teller, Azucena Mabayad,
would, however, validate and stamp both the original and the duplicate of these
deposit slips retaining only the original copy despite the lack of information on
the duplicate slip. The second copy was kept by Irene Yabut allegedly for record
purposes. 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 written
thereon, which is that of her husband's, and make it appear to be RMC's account
number, i.e., C.A. No. 53-01980-3. With the daily remittance records also
prepared by Ms. Yabut and submitted to private respondent RMC together with
the validated duplicate slips with the latter's name and account number, she
made her company believe that all the while the amounts she deposited were
being credited to its account when, in truth and in fact, they were being
deposited by her and credited by the petitioner bank in the account of Cotas.
This went on in a span of more than one (1) year without private respondent's
knowledge.

Upon discovery of the loss of its funds, RMC demanded from petitioner bank the
return of its money, but as its demand went unheeded, it filed a collection suit
before the Regional Trial Court of Pasig, Branch 160. The trial court found
petitioner bank negligent and ruled as follows:

"WHEREFORE, judgment is hereby rendered sentencing defendant

Philippine Bank of Commerce, now absorbed by defendant Philippine
Commercial & Industrial Bank, and defendant Azucena Mabayad to pay
 the plaintiff, jointly and severally, and without prejudice to any criminal
action which may be instituted if found warranted:

1. The sum of P304,979.72, representing plaintiff's lost deposit, plus

interest thereon at the legal rate from the filing of the complaint;

2. A sum equivalent to 14% thereof, as exemplary damages;

3. A sum equivalent to 25% of the total amount due, as and for

attorney's fees; and

4. Costs.

Defendants' counterclaim is hereby dismissed for lack of merit." 2

On appeal, the appellate court affirmed the foregoing decision with

modifications, viz:

"WHEREFORE, the decision appealed from herein is MODIFIED in the

sense that the awards of exemplary damages and attorney's fees specified
therein are eliminated and instead, appellants are ordered to pay
plaintiff, in addition to the principal sum of P304,979.74 representing
plaintiff's lost deposit plus legal interest thereon from the filing of the
complaint, P25,000.00 attorney's fees and costs in the lower court as
well as in this Court." 3

Hence, this petition anchored on the following grounds:

1) The proximate cause of the loss is the negligence of respondent

Rommel Marketing Corporation and Romeo Lipana in entrusting
cash to a dishonest employee.

2) The failure of respondent Rommel Marketing Corporation to

cross-check the bank's statements of account with its own records
during the entire period of more than one (1) year is the proximate
cause of the commission of subsequent frauds and misappropriation
committed by Ms. Irene Yabut.

3) The duplicate copies of the deposit slips presented by respondent

Rommel Marketing Corporation are falsified and are not proof that
 the amounts appearing thereon were deposited to respondent
Rommel Marketing Corporation's account with the bank.

4) The duplicate copies of the deposit slips were used by Ms. Irene Yabut
to cover up her fraudulent acts against respondent Rommel
Marketing Corporation, and not as records of deposits she made
with the bank. 4

The petition has no merit.

Simply put, the main issue posited before us is: What is the proximate cause of
the loss, to the tune of P304,979.74, suffered by the private respondent RMC
— petitioner bank's negligence or that of private respondent's?

Petitioners submit that the proximate cause of the loss is the negligence of
respondent RMC and Romeo Lipana in entrusting cash to a dishonest employee
in the person of Ms. Irene Yabut. 5 According to them, it was impossible for the
bank to know that the money deposited by Ms. Irene Yabut belong to RMC;
neither was the bank forewarned by RMC that Yabut will be depositing cash to
its account. Thus, it was impossible for the bank to know the fraudulent design
of Yabut considering that her husband, Bienvenido Cotas, also maintained an
account with the bank For the bank to inquire into the ownership of the cash
deposited by Ms. Irene Yabut would be irregular. Otherwise stated, it was RMC's
negligence in entrusting cash to a dishonest employee which provided Ms. Irene
Yabut the opportunity to defraud RMC. 6

Private respondent, on the other hand, maintains that the proximate cause of
the loss was the negligent act of the bank, thru its teller Ms. Azucena Mabayad,
in validating the deposit slips, both original and duplicate, presented by Ms.
Yabut to Ms. Mabayad, notwithstanding the fact that one of the deposit slips
was not completely accomplished.

We sustain the private respondent.

Our law on quasi-delicts states:

 "Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of
this Chapter."

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff;
(b) fault or negligence of the defendant, or some other person for whose acts he
must respond; and (c) the connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by the plaintiff. 7

In the case at bench, there is no dispute as to the damage suffered by the private
respondent (plaintiff in the trial court) RMC in the amount of P304,979.74. It
is in ascribing fault or negligence which caused the damage where the parties
point to each other as the culprit.

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 do. The seventy-eight (78)-year-old, yet still relevant, case of Picart
v. Smith, 8 provides the test by which to determine the existence of negligence in
a particular case which may be stated as follows: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he is guilty
of negligence. The law here in effect adopts the standard supposed to be supplied
by the imaginary conduct of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by reference to the
personal judgment of the actor in the situation before him. The law considers
what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.

Applying the above test, it appears that the bank's teller, Ms. Azucena Mabayad,
was negligent in validating, officially stamping and signing all the deposit slips
prepared and presented by Ms. Yabut, despite the glaring fact that the duplicate
copy was not completely accomplished contrary to the self-imposed procedure
of the bank with respect to the proper validation of deposit slips, original or
duplicate, as testified to by Ms. Mabayad herself, thus:

"Q: Now, as teller of PCIB, Pasig Branch, will you please tell us Mrs.
Mabayad your important duties and functions?

A: I accept current and savings deposits from depositors and

encashments.

Q: Now in the handling of current account deposits of bank clients, could

you tell us the procedure you follow?

A: The client or depositor or the authorized representative prepares a

deposit slip by filling up the deposit slip with the name, the account
number, the date, the cash breakdown, if it is deposited for cash,
and the check number, the amount and then he signs the deposit
slip.

Q: Now, how many deposit slips do you normally require in

accomplishing current account deposit, Mrs. Mabayad?

A: The bank requires only one copy of the deposit although some of our
clients prepare the deposit slip in duplicate.

Q: Now in accomplishing current account deposits from your clients,

what do you issue to the depositor to evidence the deposit made?

A: We issue or we give to the clients the depositor's stub as a receipt of

the deposit.

Q: And who prepares the deposit slip?

A: The depositor or the authorized representative sir.

Q: Where does the depositor's stub comes (sic) from Mrs. Mabayad, is it
with the deposit slip?

A: The depositor's stub is connected with the deposit slip or the bank's
copy. In a deposit slip, the upper portion is the depositor's stub and
 the lower portion is the bank's copy, and you can detach the bank's
copy from the depositor's stub by tearing it sir.

Q: Now what do you do upon presentment of the deposit slip by the

depositor or the depositor's authorized representative?

A: We see to it that the deposit slip 9 is properly accomplished and then

we count the money and then we tally it with the deposit slip sir.

Q: Now is the depositor's stub which you issued to your clients validated?

A: Yes, sir. " 10 [Emphasis ours.]

Clearly, Ms. Mabayad failed to observe this very important procedure. The fact
that the duplicate slip was not compulsorily required by the bank in accepting
deposits should not relieve the petitioner bank of responsibility. The odd
circumstance alone that such duplicate copy lacked one vital information —
that of the name of the account holder — should have already put Ms. Mabayad
on guard. Rather than readily validating the incomplete duplicate copy, she
should have proceeded more cautiously by being more probing as to the true
reason why the name of the account holder in the duplicate slip was left blank
while that in the original was filled up. She should not have been so naive in
accepting hook, line and sinker the too shallow excuse of Ms. Irene Yabut to the
effect that since the duplicate copy was only for her personal record, she would
simply fill up the blank space later on. 11 A "reasonable man of ordinary
prudence" 12 would not have given credence to such explanation and would have
insisted that the space left blank be filled up as a condition for validation.
Unfortunately, this was not how bank teller Mabayad proceeded thus resulting
in huge losses to the private respondent.

Negligence here lies not only on the part of Ms. Mabayad but also on the part of
the bank itself in its lackadaisical selection and supervision of Ms. Mabayad. This
was exemplified in the testimony of Mr. Romeo Bonifacio, then Manager of the
Pasig Branch of the petitioner bank and now its Vice-President, to the effect
that, while he ordered the investigation of the incident, he never came to know
that blank deposit slips were validated in total disregard of the bank's validation
procedures, viz:

"Q: Did he ever tell you that one of your cashiers affixed the stamp mark
of the bank on the deposit slips and they validated the same with
the machine, the fact that those deposit slips were unfilled up, is
there any report similar to that?

A: No, it was not the cashier but the teller.

Q: The teller validated the blank deposit slip?

A: No it was not reported.

Q: You did not know that any one in the bank tellers or cashiers validated
the blank deposit slip?

A: I am not aware of that.

Q: It is only now that you are aware of that?

A: Yes, sir." 13

Prescinding from the above, public respondent Court of Appeals aptly observed:

"xxx xxx xxx

It was in fact only when he testified in this case in February, 1983, or

after the lapse of more than seven (7) years counted from the period
when the funds in question were deposited in plaintiffs accounts (May,
1975 to July, 1976) that bank manager Bonifacio admittedly became
aware of the practice of his teller Mabayad of validating blank deposit
slips. Undoubtedly, this is gross, wanton, and inexcusable negligence in
the appellant bank's supervision of its employees." 14

It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the
petitioner bank in the selection and supervision of its bank teller, which was the
proximate cause of the loss suffered by the private respondent, and not the
latter's act of entrusting cash to a dishonest employee, as insisted by the
petitioners.
Proximate cause is determined on the facts of each case upon mixed
considerations of logic, common sense, policy and precedent. 15 Vda. de
Bataclan v. Medina, 16reiterated in the case of Bank of the Phil. Islands v. Court
of Appeals, 17 defines proximate cause 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. . . ." In this case,
absent the act of Ms. Mabayad in negligently validating the incomplete duplicate
copy of the deposit slip, Ms. Irene Yabut would not have the facility with which
to perpetrate her fraudulent scheme with impunity. Apropos, once again, is the
pronouncement made by the respondent appellate court, to wit:

". . . Even if Yabut had the fraudulent intention to misappropriate the

funds entrusted to her by plaintiff, she would not have been able to
deposit those funds in her husband's current account, and then make
plaintiff believe that it was in the latter's accounts wherein she had
deposited them, had it not been for bank teller Mabayad's aforesaid gross
and reckless negligence. The latter's negligence was thus the proximate,
immediate and efficient cause that brought about the loss claimed by
plaintiff in this case, and the failure of plaintiff to discover the same soon
enough by failing to scrutinize the monthly statements of account being
sent to it by appellant bank could not have prevented the fraud and
misappropriation which Irene Yabut had already completed when she
deposited plaintiff's money to the account of her husband instead of to
the latter's. accounts." 18

Furthermore, 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. 19 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. 20 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.

At this juncture, it is worth to discuss the degree of diligence ought to be

exercised by banks in dealing with their clients.

The New Civil Code provides:

"ART. 1173. The fault or negligence of the obligor consists in the omission
of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of articles 1171
and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a
family shall be required. (1104a)"

In the case of banks, however, the degree of diligence required is more than that
of a good father of a family. Considering 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. 21

As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in

every case, the depositor expects the bank to treat his account with the utmost
fidelity, whether such account consists only of a few hundred pesos or of millions.
The bank must record every single transaction accurately, down to the last
centavo, and as promptly as possible. This has to be done if the account is to
reflect at any given time the amount of money the depositor can dispose as he
sees fit, confident that the bank will deliver it as and to whomever he directs. A
blunder on the part of the bank, such as the failure to duly credit him his
deposits as soon as they are made, can cause the depositor not a little
embarrassment if not financial loss and perhaps even civil and criminal
litigation.

The point is that as a business affected with public interest and because of the
nature of its functions, the bank is under obligation to treat the accounts of its
depositors with meticulous care, always having in mind the fiduciary nature of
their relationship. In the case before us, it is apparent that the petitioner bank
was remiss in that duty and violated that relationship. LexLib

Petitioners nevertheless aver that the failure of respondent RMC to cross-check

the bank's statements of account with its own records during the entire period
of more than one (1) year is the proximate cause of the commission of
subsequent frauds and misappropriation committed by Ms. Irene Yabut.

We do not agree.

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 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.

The foregoing notwithstanding, it cannot be denied that, indeed, private

respondent was likewise negligent in not checking its monthly statements of
account. Had it done so, the company would have been alerted to the series of
frauds being committed against RMC by its secretary. The damage would
definitely not have ballooned to such an amount if only RMC, particularly
Romeo Lipana, had exercised even a little vigilance in their financial affairs. This
omission by RMC amounts to contributory negligence which shall mitigate the
damages that may be awarded to the private respondent 23 under Article
2179 of the New Civil Code, to wit:

". . . When the plaintiff's own negligence was the immediate and
proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of
the injury being the defendant's lack of due care, the plaintiff may
recover damages, but the courts shall mitigate the damages to be
awarded."

In view of this, we believe that the demands of substantial justice are satisfied by
allocating the damage on a 60-40 ratio. Thus, 40% of the damage awarded by
the respondent appellate court, except the award of P25,000.00 attorney's
fees, shall be borne by private respondent RMC; only the balance of 60% needs
to be paid by the petitioners. The award of attorney's fees shall be borne
exclusively by the petitioners.

WHEREFORE, the decision of the respondent Court of Appeals is modified by

reducing the amount of actual damages private respondent is entitled to by
40%. Petitioners may recover from Ms. Azucena Mabayad the amount they
would pay the private respondent. Private respondent shall have recourse
against Ms. Irene Yabut. In all other respects, the appellate court's decision is
AFFIRMED.

Proportionate costs.
SO ORDERED.

Bellosillo, Vitug and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J ., dissenting:

I regret that I cannot join the majority in ruling that the proximate cause of the
damage suffered by Rommel's Marketing Corporation (RMC) is mainly "the
wanton and reckless negligence of the petitioner's employee in validating the
incomplete duplicate deposit slips presented by Ms. Irene Yabut" (Decision, p.
15). Moreover, I find it difficult to agree with the ruling that "petitioners are
entitled to claim reimbursement from her (the bank teller) for whatever they
shall be ordered to pay in this case."

It seems that an innocent bank teller is being unduly burdened with what should
fall on Ms. Irene Yabut, RMC's own employee, who should have been charged
with estafa or estafa through falsification of private document. Interestingly, the
records are silent on whether RMC had ever filed any criminal case against Ms.
Irene Yabut, aside from the fact that she does not appear to have been
impleaded even as a party defendant in any civil case for damages. Why is RMC
insulating Ms. Irene Yabut from liability when in fact she orchestrated the entire
fraud on RMC, her employer?

To set the record straight, it is not completely accurate to state that from 5
May 1975 to 16 July 1976, Miss Irene Yabut had transacted with PCIB (then
PBC) through only one teller in the person of Azucena Mabayad. In fact, when
RMC filed a complaint for estafa before the Office of the Provincial Fiscal of Rizal,
it indicted all the tellers of PCIB in the branch who were accused of conspiracy
to defraud RMC of its current account deposits. (See Annex B, Rollo, p. 22 and
47).
Even private respondent RMC, in its Comment, maintains that "when the
petitioner's tellers" allowed Irene Yabut to carry out her modus
operandi undetected over a period of one year, "their negligence cannot but be
gross. (Rollo, p. 55; see also Rollo, pp. 58 to 59). This rules out the possibility
that there may have been some form of collusion between Yabut and bank teller
Mabayad. Mabayad was just unfortunate that private respondent's
documentary evidence showed that she was the attending teller in the bulk of
Yabut's transactions with the bank. aisadc

Going back to Yabut's modus operandi, it is not disputed that each time Yabut
would transact business with PBC's tellers, she would accomplish two (2) copies
of the current account deposit slip. PBC's deposit slip, as issued in 1975, had
two parts. The upper part was called the depositor's stub and the lower part
was called the bank copy. Both parts were detachable from each other. The
deposit slip was prepared and signed by the depositor or his representative, who
indicated therein the current account number to which the deposit was to be
credited, the name of the depositor or current account holder, the date of the
deposit, and the amount of the deposit either in cash or in checks. (Rollo, p.
137)

Since Yabut deposited money in cash, the usual bank procedure then was for the
teller to count whether the cash deposit tallied with the amount written down
by the depositor in the deposit slip. If it did, then the teller proceeded to verify
whether the current account number matched with the current account name
as written in the deposit slip.

In the earlier days before the age of full computerization, a bank normally
maintained a ledger which served as a repository of accounts to which debits
and credits resulting from transactions with the bank were posted from books
of original entry. Thus, it was only after the transaction was posted in the ledger
that the teller proceeded to machine validate the deposit slip and then affix his
signature or initial to serve as proof of the completed transaction.
It should be noted that the teller validated the depositor's stub in the upper
portion and the bank copy on the lower portion on both the original and
duplicate copies of the deposit slips presented by Yabut. The teller, however,
detached the validated depositor's stub on the original deposit slip and allowed
Yabut to retain the whole validated duplicate deposit slip that bore the same
account number as the original deposit slip, but with the account name
purposely left blank by Yabut, on the assumption that it would serve no other
purpose but for a personal record to complement the original validated
depositor's stub.

Thus, when Yabut wrote the name of RMC on the blank account name on the
validated duplicate copy of the deposit slip, tampered with its account number,
and superimposed RMC's account number, said act only served to cover-up the
loss already caused by her to RMC, or after the deposit slip was validated by the
teller in favor of Yabut's husband. Stated otherwise, when there is a clear
evidence of tampering with any of the material entries in a deposit slip, the
genuineness and due execution of the document become an issue in resolving
whether or not the transaction had been fair and regular and whether the
ordinary course of business had been followed by the bank.

It is logical, therefore, to conclude that the legal or proximate cause of RMC's

loss was when Yabut, its employee, deposited the money of RMC in her
husband's name and account number instead of that of RMC, the rightful owner
of such deposited funds. Precisely, it was the criminal act of Yabut that directly
caused damage to RMC, her employer, not the validation of the deposit slip by
the teller as the deposit slip was made out by Yabut in her husband s name and
to his account.

Even if the bank teller had required Yabut to completely fill up the duplicate
deposit slip, the original deposit slip would nonetheless still be validated under
the account of Yabut's husband. In fine, the damage had already been done to
RMC when Yabut deposited its funds in the name and account number of her
husband with petitioner bank. It is then entirely left to speculation what Yabut
would have done afterwards — like tampering both the account number and
the account name on the stub of the original deposit slip and on the duplicate
copy — in order to cover up her crime.

Under the circumstances in this case, there was no way for PBC's bank tellers to
reasonably foresee that Yabut might or would use the duplicate deposit slip to
cover up her crime. In the first place, the bank tellers were absolutely unaware
that a crime had already been consummated by Yabut when her transaction by
her sole doing was posted in the ledger and validated by the teller in favor of her
husband's account even if the funds deposited belonged to RMC.

The teller(s) in this case were not in any way proven to be parties to the crime
either as accessories or accomplices. Nor could it be said that the act of posting
and validation was in itself a negligent act because the teller(s) simply had no
choice but to accept and validate the deposit as written in the original deposit
slip under the account number and name of Yabut's husband. Hence, the act of
validating the duplicate copy was not the proximate cause of RMC's injury but
merely a remote cause which an independent cause or agency merely took
advantage of to accomplish something which was not the probable or natural
effect thereof. That explains why Yabut still had to tamper with the account
number of the duplicate deposit slip after filling in the name of RMC in the blank
space.

Coming now to the doctrine of "last clear chance," it is my considered view that
the doctrine assumes that the negligence of the defendant was subsequent to the
negligence of the plaintiff and the same must be the proximate cause of the
injury. In short, there must be a last and a clear chance, not a last possible
chance, to avoid the accident or injury. It must have been a chance as would
have enabled a reasonably prudent man in like position to have acted effectively
to avoid the injury and the resulting damage to himself.
In the case at bar, the bank was not remiss in its duty of sending monthly bank
statements to private respondent RMC so that any error or discrepancy in the
entries therein could be brought to the bank's attention at the earliest
opportunity. Private respondent failed to examine these bank statements not
because it was prevented by some cause in not doing so, but because it was
purposely negligent as it admitted that it does not normally check bank
statements given by banks.

It was private respondent who had the last and clear chance to prevent any
further misappropriation by Yabut had it only reviewed the status of its current
accounts on the bank statements sent to it monthly or regularly. Since a sizable
amount of cash was entrusted to Yabut, private respondent should, at least,
have taken ordinary care of its concerns, as what the law presumes. Its
negligence, therefore, is not contributory but the immediate and proximate
cause of its injury.

I vote to grant the petition.

||| (Philippine Bank of Commerce v. Court of Appeals, G.R. No. 97626, [March
14, 1997], 336 PHIL 667-687)

G.R. No. L-7664. August 29, 1958.]

MR. AND MRS. AMADOR C. ONG, plaintiffs-appellants, vs.

METROPOLITAN WATER DISTRICT, defendant-appellee.

Tomas Tria Tirona for appellants.

Government Corporate Counsel Ambrosio Padilla and Juan C.

Jimenez for appellee.

SYLLABUS
 1. DAMAGES; FAULT OR NEGLIGENCE; CLAIMANT HAS BURDEN TO
PROVE. — The person claiming damages has the burden of proving that the
damages is caused by the fault or negligence of the person from whom the
damage is claimed, or of one of his employees (Walter A. Smith & Co. vs.
Cadwallader Gibson Lumber Co., 55 Phil., 517).

2. ID.; ABSENCE OF NEGLIGENCE OF OPERATOR OF SWIMMING

POOLS; DROWNING OR DEATH OF PATRON. — The operator of swimming
pools will not be held liable for the drowning or death of 3 patron, if said
operator had exercised due diligence in the election of, and supervision over,
its employees and that it had observed the diligence required by law under
the circumstances — in that it has taken all necessary precautions to avoid
danger to the lives of its patrons or prevent accident. which may cause their
death.

3. WORDS AND PHRASES; "DOCTRINE OF LAST CLEAR CHANCE." —

The doctrine of last clear chance simply means that the negligence of a
claimant does not preclude a recovery for the negligence of defendant where
it appears that the latter, by exercising reasonable care and prudence, might
have avoided injurious consequences to claimant notwithstanding his
negligence. Or "As the doctrine usually is stated, a person who has the last
clear chance or opportunity of avoiding an accident, notwithstanding the
negligent acts of his opponent or the negligence of a third person which is
imputed to his opponent, is considered in law solely responsible for the
consequences of the accident." (38 Am. Jur. pp. 900-902.)

D E CI S IO N

BAUTISTA ANGELO, J : p

Plaintiffs spouses seek to recover from defendant, a government-owned

corporation, the sum of P50,000 as damages, P5,000 as funeral expenses,
and P11,000 as attorneys' fees, for the death of their son Dominador Ong in
one of the swimming pools operated by defendant.

Defendant admits the fact that plaintiffs' son was drowned in one of its
swimming pools but avers that his death was caused by his own negligence or
by unavoidable accident. Defendant also avers that it had exercised due
diligence in the selection of, and supervision over, its employees and that it
had observed the diligence required by law under the circumstances.

After trial, the lower court found that the action of plaintiffs is
untenable and dismissed the complaint without pronouncement as to costs.
Plaintiffs took the case on appeal directly to this Court because the amount
involved exceeds the sum of P50,000.

Defendant owns and operates three recreational swimming pools at its

Balara filters, Diliman, Quezon City, to which people are invited and for
which a nominal fee of P0.50 for adults and P0.20 for children is charged.
The main pool is between two small pools of oval shape known as the "Wading
pool" and the "Beginners Pool." There are diving boards in the big pools and
the depths of the water at different parts are indicated by appropriate
marks on the wall. The care and supervision of the pools and the users thereof
is entrusted to a recreational section composed of Simeon Chongco as chief,
Armando Rule, a male nurse, and six lifeguards who had taken the life-saving
course given by the Philippine Red Cross at the YMCA in Manila. For the
safety of its patrons, defendant has provided the pools with a ring buoy, toy
roof, towing line, saving kit and a resuscitator. There is also a sanitary
inspector who is in charge of a clinic established for the benefit of the patrons.
Defendant has also on display in a conspicuous place certain rules and
regulations governing the use of the pools, one of which prohibits the
swimming in the pool alone or without any attendant. Although defendant
does not maintain a full- time physician in the swimming pool compound, it
has however a nurse and a sanitary inspector ready to administer injections
or operate the oxygen resuscitator if the need should arise.
 In the afternoon of July 5, 1952, at about 1:00 o'clock, Dominador
Ong, a 14-year old high school student and a boy scout, and his brothers
Ruben and Eusebio, went to defendant's swimming pools. This was not the
first time that the three brothers had gone to said natatorium for they had
already been there four or five times before. They arrived at the natatorium
at about 1:45 p.m. After paying the requisite admission fee, they
immediately went to one of the small pools where the water was shallow. At
about 4:35 p.m., Dominador Ong told his brothers that he was going to the
locker room in an adjoining building to drink a bottle of coke. Upon hearing
this, Ruben and Eusebio went to the bigger pool leaving Dominador in the
small pool and so they did not see the latter when he left the pool to get a
bottle of coke. In that afternoon, there were two lifeguards on duty in the
pool compound, namely, Manuel Abaño and Mario Villanueva. The tour of
duty of Abaño was from 8:00 to 12:00 in the morning and from 2:00 to
6:00 in the afternoon, and of Villanueva from 7:30 to 11:30 a.m. and from
12:30 to 4:30 p.m. Between 4:00 to 5:00 that afternoon, there were about
twenty bathers inside the pool area and Manuel Abaño was going around the
pools to observe the bathers in compliance with the instructions of his chief.

Between 4:40 to 4:45 p.m., some boys who were in the pool area
informed a bather by the name of Andres Hagad, Jr., that somebody was
swimming under water for quite a long time. Another boy informed lifeguard
Manuel Abaño of the same happening and Abaño immediately jumped into
the big swimming pool and retrieved the apparently lifeless body of
Dominador Ong from the bottom. The body was placed at the edge of the
pool and Abaño immediately applied manual artificial respiration. Soon after,
male nurse Armando Rule came to render assistance, followed by sanitary
inspector Iluminado Vicente who, after being called by phone from the clinic
by one of the security guards, boarded a jeep carrying with him the
resuscitator and a medicine kit, and upon arriving he injected the boy with
camphorated oil. After the injection, Vicente left on a jeep in order to fetch
Dr. Ayuyao from the University of the Philippines. Meanwhile, Abaño
continued the artificial manual respiration, and when this failed to revive
him, they applied the resuscitator until the two oxygen tanks were exhausted.
Not long thereafter, Dr. Ayuyao arrived with another resuscitator, but the
same became of no use because he found the boy already dead. The doctor
ordered that the body be taken to the clinic.

In the evening of the same day, July 5, 1952, the incident was
investigated by the Police Department of Quezon City and in the
investigation boys Ruben Ong and Andres Hagad, Jr. gave written statements.
On the following day, July 6, 1952, an autopsy was performed by Dr.
Enrique V. de los Santos, Chief, Medico Legal Division, National Bureau of
Investigation, who found in the body of the deceased the following: an
abrasion on the right elbow lateral aspect; contusion on the right forehead;
hematoma on the scalp, frontal region, right side; a congestion in the brain
with petechial subcortical hemorrhage, frontal lobe; cyanosis on the face and
on the nails; the lung was soggy with fine froth in the bronchioles; dark fluid
blood in the heart; congestion in the visceral organs, and brownish fluid in the
stomach. The death was due to asphyxia by submersion in water.

The issue posed in this appeal is whether the death of minor Dominador
Ong can be attributed to the negligence of defendant and/or its employees so
as to entitle plaintiffs to recover damages.

The present action is governed by Article 2176 in relation to Article

2080 of the new Civil Code. The first article provides that "whoever by act or
omission causes damage to another, there being fault or negligence, is obliged
to pay for the damages done." Such fault or negligence is called quasi-delict.
Under the second article, this obligation is demandable not only for one's own
acts or omissions but also for those of persons for whom one is responsible. In
addition, we may quote the following authorities cited in the decision of the
trial court:
 "'The rule is well settled that the owners of resorts to which people
generally are expressly or by implication invited are legally bound to
exercise ordinary care and prudence in the management and
maintenance of such resorts, to the end of making them reasonably safe
for visitors' (Larkin vs. Saltair Beach Co., 30 Utah 86, 83 Pac. 688).

"'Although the proprietor of a natatorium is liable for injuries to a

patron, resulting from lack of ordinary care in providing for his safety,
without the fault of the patron, he is not, however, in any sense deemed
to be the insurer of the safety of patrons. And the death of a patron
within his premises does not cast upon him the burden of excusing himself
from any presumption of negligence' (Bertalot vs. Kinnare. 72 Ill. App.
52, 22 A. L. R. 635; Flora vs. Bimini Water Co., 161 Cal. 495, 119 Pac.
661). Thus in Bertalot vs. Kinnare, supra, it was held that there could be
no recovery for the death by drowning of a fifteen-year boy in
defendant's natatorium, where it appeared merely that he was lastly
seen alive in water at the shallow end of the pool, and some ten or fifteen
minutes later was discovered unconscious, and perhaps lifeless, at the
bottom of the pool, all efforts to resuscitate him being without avail."

Since the present action is one for damages founded on culpable

negligence, the principle to be observed is that the person claiming damages
has the burden of proving that the damage is caused by the fault or
negligence of the person from whom the damage is claimed, or of one of his
employees (Walter A. Smith & Co.vs. Cadwallader Gibson Lumber Co., 55
Phil., 517). The question then that arises is: Have appellants established by
sufficient evidence the existence of fault or negligence on the part of appellee
so as to render it liable for damages for the death of Dominador Ong?

There is no question that appellants had striven to prove that appellee

failed to take the necessary precaution to protect the lives of its patrons by
not placing at the swimming pools efficient and competent employees who
may render help at a moment's notice, and they ascribed such negligence to
appellee because the lifeguard it had on the occasion minor Ong was
drowning was not available or was attending to something else with the
result that his help came late. Thus, appellants tried to prove through the
testimony of Andres Hagad, Jr. and Ruben Ong that when Eusebio Ong and
Hagad, Jr. detected that there was a drowning person in the bottom of the
big swimming pool and shouted to the lifeguard for help, lifeguard Manuel
Abaño did not immediately respond to the alarm and it was only upon the
third call that he threw away the magazine he was reading and allowed
three or four minutes to elapse before retrieving the body from the water.
This negligence of Abaño, they contend, is attributable to appellee.

But the claim of these two witnesses not only was vehemently denied by
lifeguard Abaño, but is belied by the written statements given by them in the
investigation conducted by the Police Department of Quezon City
approximately three hours after the happening of the accident. Thus, these
two boys admitted in the investigation that they narrated in their
statements everything they knew of the accident, but, as found by the trial
nowhere in said statements do they state that the lifeguard was chatting
with the security guard at the gate of the swimming pool or was reading a
comic magazine when the alarm was given for which reason he failed to
immediately respond to the alarm. On the contrary, what Ruben Ong
particularly emphasized therein was that after the lifeguard heard the shouts
for help,the latter immediately dived into the pool to retrieve the person
under water who turned out to be his brother. For this reason, the trial court
made this conclusion: "The testimony of Ruben Ong and Andres Hagad, Jr. as
to the alleged failure of the lifeguard Abaño to immediately respond to their
call may therefore be disregarded because they are belied by their written
statements." (Emphasis supplied.).

On the other hand, there is sufficient evidence to show that appellee has
taken all necessary precautions to avoid danger to the lives of its patrons or
prevent accident which may cause their death. Thus, it has been shown that
the swimming pools of appellee are provided with a ring buoy, toy roof,
towing line, oxygen resuscitator and a first aid medicine kit. The bottom of
the pools is painted with black colors so as to insure clear visibility. There is on
display in a conspicuous place within the area certain rules and regulations
governing the use of the pools. Appellee employs six lifeguards who are all
trained as they had taken a course for that purpose and were issued
certificates of proficiency. These lifeguards work on schedule prepared by
their chief and arranged in such a way as to have two guards at a time on
duty to look after the safety of the bathers. There is a male nurse and a
sanitary inspector with a clinic provided with oxygen resuscitator. And there
are security guards who are available always in case of emergency. .

The record also shows that when the body of minor Ong was retrieved
from the bottom of the pool, the employees of appellee did everything
possible to bring him back to life. Thus, after he was placed at the edge of the
pool, lifeguard Abaño immediately gave him manual artificial respiration.
Soon thereafter, nurse Armando Rule arrived, followed by sanitary inspector
Iluminado Vicente who brought with him an oxygen resuscitator. When they
found that the pulse of the boy was abnormal, the inspector immediately
injected him with camphorated oil. When the manual artificial respiration
proved ineffective they applied the oxygen resuscitator until its contents were
exhausted. And while all these efforts were being made, they sent for Dr.
Ayuyao from the University of the Philippines who however came late because
upon examining the body found him to be already dead. All of the foregoing
shows that appellee has done what is humanly possible under the
circumstances to restore life to minor Ong and for that reason it is unfair to
hold it liable for his death.

Sensing that their former theory as regards the liability of appellee may
not be of much help, appellants now switch to the theory that even if it be
assumed that the deceased is partly to be blamed for the unfortunate
incident, still appellee may be held liable under the doctrine of "last clear
chance" for the reason that, having the last opportunity to save the victim, it
failed to do so.

We do not see how this doctrine may apply, considering that the record
does not show how minor Ong came into the big swimming pool. The only
thing the record discloses is that minor Ong informed his elder brothers that
he was going to the locker room to drink a bottle of coke but that from that
time on nobody knew what happened to him until his lifeless body was
retrieved. The doctrine of last clear chance simply means that the negligence
of a claimant does not preclude a recovery for the negligence of defendant
where it appears that the latter, by exercising reasonable care and prudence,
might have avoided injurious consequences to claimant notwithstanding his
negligence. Or, "As the doctrine usually is stated, a person who has the last
clear chance or opportunity of avoiding an accident, notwithstanding the
negligent acts of his opponent or the negligence of a third person which is
imputed to his opponent, is considered in law solely responsible for the
consequences of the accident." (38 Am. Jur. pp. 900-902)

"It goes without saying that the plaintiff himself was not free from
fault, for he was guilty of antecedent negligence in planting himself in the
wrong side of the road. But as we have already stated, the defendant was
also negligent; and in such case the problem always is to discover which
agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the
negligence of the defendant succeeded the negligence of the plaintiff by
an appreciable interval. Under these circumstances, the law is that a
person who has the last clear chance to avoid the impending harm and
fails to do so is chargeable with the consequences, without reference to
the prior negligence of the other party." (Picart vs. Smith, 37 Phil., 809)

Since it is not known how minor Ong came into the big swimming pool
and it being apparent that he went there without any companion in violation
of one of the regulations of appellee as regards the use of the pools, and it
appearing that lifeguard Abaño responded to the call for help as soon as his
 attention was called to it and immediately after retrieving the body all
efforts at the disposal of appellee had been put into play in order to bring him
back to life, it is clear that there is no room for the application of the doctrine
now invoked by appellants to impute liability to appellee.

"The last clear chance doctrine can never apply where the party
charged is required to act instantaneously, and if the injury cannot be
avoided by the application of all means at hand after the peril is or should
have been discovered; at least in cases in which any previous negligence of
the party charged cannot be said to have contributed to the injury.
O'Mally vs. Eagan, 77 ALR 582, 43 Wyo. 233, 350, 2, P2d 1063."
(A.L.R. Digest, Vol. 8, pp. 955-956)

Before closing, we wish to quote the following observation of the trial

court, which we find supported by the evidence: "There is (also) a strong
suggestion coming from the expert evidence presented by both parties that
Dominador Ong might have dived where the water was only 5.5 feet deep,
and in so doing he might have hit or bumped his forehead against the bottom
of the pool, as a consequence of which he was stunned, and which eventually
led to his drowning. As a boy scout he must have received instructions in
swimming. He knew, or must have known, that it was dangerous for him to
dive in that part of the pool."

Wherefore, the decision appealed from being in accordance with law

and the evidence, we hereby affirm the same, without pronouncement as to
costs.

||| (Ong v. Metropolitan Water District, G.R. No. L-7664, [August 29, 1958],
104 PHIL 397-406)

G.R. Nos. L-21353 and L-21354. May 20, 1966.]

GREGORIO ANURAN, MARIA MALIGAYA, LAPAZ LARO, ET

AL., petitioners, vs. PEPITO BUÑO, PEDRO GAHOL, LUISA
 ALCANTARA, GUILLERMO RAZON, ANSELMO MALIGAYA and
CEFERINA ARO, respondents.

Victoriano A. Endaya for petitioners.

Trinidad & Borromeo for respondents Buño, et al.

Contreras & Adapon for respondents Razon, et al.

SYLLABUS

1. COMMON CARRIERS; DUTY TO TRANSPORT PASSENGERS SAFELY;

LIABILITY OF DRIVER AND OWNER OF VEHICLE. — The driver and the owner
of the vehicle must answer for injuries to its passengers resulting from the
negligence of the driver.

2. ID.; ID.; APPLICATION OF PRINCIPLE OF LAST CLEAR CHANCE. — The

principle of "last clear chance" applies in a suit between the owners and drivers
of two colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual obligation.

D E CI S IO N

BENGZON, C.J : p

At noon of January 12, 1958, a passenger jeepney was parked on the road to
Taal, Batangas. A motor truck speeding along, negligently bumped it from
behind, with such violence that three of its passengers died, even as two others
(passengers too) suffered injuries that required their confinement at the
Provincial Hospital for many days.

So, in February 1958 these suits were instituted by the representatives of the
dead and of the injured, to recover consequential damages against the driver
and the owners of the truck and also against the driver and the owners of the
jeepney.

The Batangas court of first instance, after trial, rendered judgment absolving
the driver of the jeepney and its owners, but it required the truck driver and
the owners thereof to make compensation.

The plaintiffs appealed to the Court of Appeals insisting that the driver and the
owners of the jeepney should also be made liable for damages.

The last mentioned court, upon reviewing the record, declared that:

"It is admitted that at about noon-time on January 13, 1958, the

passenger jeepney owned by defendants spouses Pedro Gahol and Luisa
Alcantara, bearing plate No. TPU-13548, then being driven by their
regular driver, defendant Pepito Buño, was on its regular route travelling
from Mahabang Ludlod, Taal, Batangas, towards the poblacion of the
said municipality. When said passenger jeepney crossed the bridge
separating Barrios Mahabang Ludlod and Balisong, Taal, Batangas, it had
fourteen passengers, excluding the driver, according to the testimony of
defendant Buño (pp. 12 & 18, t.s.n. July 17, 1958), or sixteen
passengers according to the testimony of plaintiff Edita de Sagun, (pp. 9,
12 & 13, t.s.n. June 26, 1958). However, the facts remains that the
vehicle was overloaded with passengers at the time, because according to
the partial stipulation of facts "the maximum capacity of the Jeepney
bearing plate No. TPU-13548 of said defendants was eleven (11)
passengers including the driver." (Printed Rec. on Appeal, pp. 35, 37.)

"After crossing the bridge, defendant Buño stopped his vehicle in order to
allow one of his passengers to alight. But he so parked his jeepney in such
a way that one-half of its width (the left wheels) — was on the asphalted
pavement of the road and the other half, on the right shoulder of said
road (pp. 21-22, t.s.n. May 26, 1958; p. 12 t.s.n. July 17, 1958).
Approximately five minutes later and before Buño could start his vehicle,
a speeding water truck, which bore plate No. T-17526 and owned by
defendants-spouses Anselmo Maligaya and Ceferina Aro, then being
 driven by Guillermo Razon from the direction of Mahabang Ludlod, Taal,
Batangas, towards the poblacion of that municipality, violently smashed
against the parked jeepney from behind, causing it to turn turtle into a
nearby ditch."

Then said Appellate Court went on to affirm the exoneration of the jeepney
driver and of its owners. It explained that although "the driver of the ill-starred
vehicle Was not free from fault, for he was guilty of an antecedent negligence in
parking his vehicle with a portion thereof occupying the asphalted road", it
considered the truck driver guilty of greater negligence which was the efficient
cause of the collision; and applying the doctrine of the "last clear chance" 1 said
court ordered the owners of the truck to pay, solidarily with its driver, damages
as follows:

". . . the sum of P6,000.00 for the death of their daughter Emelita,
another sum of P5,000.00 as moral damages and the sum of P500.00
as actual damages, and to plaintiffs Simplicio, Alberto, Avelina and
Alfredo, all surnamed Arriola, and represented by their guardian ad
litem Agustin Arriola, the sum of P6,000.00 for the death of their
natural mother, Leonor Masongsong, another sum of P5,000.00 as
moral damages, the sum of P3,600.00 for loss of earning capacity of said
deceased and the sum of P850.00 as actual damages."

The plaintiff brought the matter to this Supreme Court insisting that the driver
and the owners of the jeepney should also be made liable.

We gave due course to the petition for review, because we thought the decision
meant exoneration of the carrier from liability to its
passengers, notwithstanding the negligence of its driver.

Upon further and more extended consideration of the matter, we have become
convinced that error of law was committed in releasing the jeepney from
liability. It must be remembered that the obligation of the carrier to transport
its passengers safely is such that the New Civil Code requires "utmost diligence"
from the carriers (Act. 1755) who are "presumed to have been at fault or to
have acted negligently, unless they prove that they have observed extraordinary
diligence" (Art. 1756). In this instance, this legal presumption of negligence is
confirmed by the Court of Appeals' finding that the driver of the jeepney in
question was at fault in parking the vehicle improperly. It must follow that the
driver — and the owners — of the jeepney must answer for injuries to its
passengers.

The 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 obligation. 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.

Now, as to damages. The driver and the owners of the truck have not appealed
from the Court of Appeals' assessment. 'The plaintiffs (petitioners) have not
asked here for a greater amount of indemnity. They merely pray for a
declaration that Pepito Buño, Pedro Gahol and Luisa Alcantara (the driver and
the owners of the jeepney, respectively) be declared jointly and severally liable
with the other defendants.

WHEREFORE, affirming the decision under review, we hereby modify it in the

sense prayed for by plaintiffs-petitioners. The three defendants last mentioned
are required to pay solidarily with the other defendants-respondents the
amounts fixed by the appealed decision. Costs of both appeals against said three
defendants. So ordered.

Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala,

Makalintal and Bengzon, J.P., JJ., concur.

Barrera and Sanchez, JJ., took no part.

||| (Anuran v. Buño, G.R. Nos. L-21353 and L-21354, [May 20, 1966], 123
PHIL 1073-1077)
 [G.R. No. 120027. April 21, 1999.]

EDNA A. RAYNERA, for herself and on behalf of the minors

RIANNA and REIANNE RAYNERA, petitioners, vs. FREDDIE
HICETA and JIMMY ORPILLA,respondents.

Roberto L. Mendoza for petitioners.

Antonio M. Chavez & Associates for respondents.

SYNOPSIS

Petitioners herein are heirs of Reynaldo Raynera who was killed by an accident
on his way home at about 2:00 A.M. Respondents, Freddie Hiceta and Jimmy
Orpilla were owner and driver, respectively, of an Isuzu truck trailer which was
involved in the said accident. At time of his death, Reynaldo was manager of the
Engineering Department, Kawasaki Motors (Phils.) Corporation. The heirs of the
deceased demanded from respondents' payment of damages arising from the
death of Reynaldo as a result of the vehicular accident. The respondents refused
to pay the claims. Petitioners, hence, filed with the Regional Trial Court, Manila
a complaint for damages against respondents' owner and driver of the Isuzu
truck. Petitioners sought recovery of the damages caused by the negligent
operation of the truck-trailer at nighttime on the highway, without tail the
lights. The trial court rendered a decision in favor of petitioners. The trial court
held that respondents' negligence was the immediate and proximate cause of
the victim's death. The trial court also applied the doctrine of contributory
negligence and reduced the responsibility of respondents by 20%. Respondents
appealed to the Court of Appeals. The appellate court held that the victim's
bumping into the left rear portion of the truck was the proximate cause of his
death, and consequently, absolved respondents from liability. Hence, this
petition for certiorari. cdasia
The Supreme Court found that the direct cause of the accident was the
negligence of the victim. Traveling behind the truck, he had responsibility of
avoiding bumping the vehicle in front of him. The Court agreed with the Court
of Appeals that the responsibility to avoid the collision with the front vehicle lies
with the driver of the rear vehicle. He had the last clear chance of avoiding the
accident. The Court denied the petition for review on certiorari and affirmed
the decision of the Court of Appeals.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE COURT OF

APPEALS; GENERALLY CONSIDERED FINAL AND MAY NOT BE REVIEWED
ON APPEAL; EXCEPTION. — The rule is well-settled that factual findings of the
Court of Appeals are generally considered final and may not be reviewed on
appeal. However, this principle admits of certain exceptions, among which is
when the findings of the appellate court are contrary to those of the trial court,
a reexamination of the facts and evidence may be undertaken. SCHIcT

2. CRIMINAL LAW; QUASI-DELICT; NEGLIGENCE, DEFINED. — 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. ESCcaT

3. ID.; ID.; PROXIMATE CAUSE; DEFINED. — Proximate cause is that cause,

which, in natural and continuous sequence, unbroken by any efficiency
intervening cause, produces the injury and without which the result would not
have occurred.

4. ID.; ID.; DOCTRINE OF LAST CLEAR CHANCE; THE DRIVERS OF THE

VEHICLES "WHO BUMP THE REAR OF ANOTHER VEHICLE" ARE PRESUMED
TO BE THE CAUSE OF THE ACCIDENT, UNLESS CONTRADICTED BY OTHER
EVIDENCE; CASE AT BAR. — It has been said that drivers of vehicles "who
bump the rear of another vehicle" are presumed to be "the cause of the accident,
unless contradicted by other evidence." The rationale behind the presumption is
that the driver of the rear vehicle has full control of the situation as he is in a
position to observe the vehicle in front of him. We agree with the Court of
Appeals that the responsibility to avoid the collision with the front vehicle lies
with the driver of the rear vehicle. Consequently, no other person was to blame
but the victim himself since he was the one who bumped his motorcycle into the
rear of the Isuzu truck. He had the last clear chance of avoiding the accident. TAaEIc

D E CI S IO N

PARDO, J : p

The case is a petition for review on certiorari of the decision of the Court of
Appeals, 1 reversing that of the Regional Trial Court, Branch 45, Manila. 2

The rule is well-settled that factual findings of the Court of Appeals are
generally considered final and may not be reviewed on appeal. However, this
principle admits of certain exceptions, among which is when the findings of the
appellate court are contrary to those of the trial court, a re-examination of the
facts and evidence may be undertaken. 3 This case falls under the cited
exception. LexLib

The antecedent facts are as follows:

Petitioner Edna A. Raynera was the widow of Reynaldo Raynera and the
mother and legal guardian of the minors Rianna and Reianne, both
surnamed Raynera. Respondents Freddie Hiceta and Jimmy Orpilla were the
owner and driver, respectively, of an Isuzu truck-trailer, with plate No. NXC
848, involved in the accident.

On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on
his way home. He was riding a motorcycle traveling on the southbound lane of
East Service Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of
him at 20 to 30 kilometers per hour. 4 The truck was loaded with two (2) metal
sheets extended on both sides, two (2) feet on the left and three (3) feet on the
right. There were two (2) pairs of red lights, about 35 watts each, on both sides
of the metal plates. 5 The asphalt road was not well lighted.

At some point on the road, Reynaldo Raynera crashed his motorcycle into the
left rear portion of the truck trailer, which was without tail lights. Due to the
collision, Reynaldo sustained head injuries and truck helper Geraldino D.
Lucelo 6 rushed him to the Parañaque Medical Center. Upon arrival at the
hospital, the attending physician, Dr. Marivic Aguirre, 7 pronounced
Reynaldo Raynera dead on arrival.

At the time of his death, Reynaldo was manager of the Engineering Department,
Kawasaki Motors (Phils.) Corporation. He was 32 years old, had a life
expectancy of sixty five (65) years, and an annual net earnings of not less than
seventy three thousand five hundred (P73,500.00) pesos, 8 with a potential
increase in annual net earnings of not less than ten percent (10%) of his salary. 9

On May 12, 1989, the heirs of the deceased demanded 10 from respondents
payment of damages arising from the death of Reynaldo Raynera as a result of
the vehicular accident. The respondents refused to pay the claims.

On September 13, 1989, petitioners filed with the Regional Trial Court,
Manila 11 a complaint 12 for damages against respondents owner and driver of
the Isuzu truck.

In their complaint against respondents, petitioners sought recovery of damages

for the death of Reynaldo Raynera caused by the negligent operation of the
truck-trailer at nighttime on the highway, without tail lights.

In their answer filed on April 4, 1990, respondents alleged that the truck was
travelling slowly on the service road, not parked improperly at a dark portion of
the road, with no tail lights, license plate and early warning device. cda
At the trial, petitioners presented Virgilio Santos. He testified that at about
1:00 and 2:00 in the morning of March 23, 1989, he and his wife went to
Alabang market, on board a tricycle. They passed by the service road going
south, and saw a parked truck trailer, with its hood open and without tail lights.
They would have bumped the truck but the tricycle driver was quick in avoiding
a collision. The place was dark, and the truck had no early warning device to
alert passing motorists. 13

On the other hand, respondents presented truck helper Geraldino Lucelo. 14 He

testified that at the time the incident happened, the truck was slowly traveling
at approximately 20 to 30 kilometers per hour. Another employee of
respondents, auto-mechanic Rogoberto Reyes, 15 testified that at about 3:00 in
the afternoon of March 22, 1989, with the help of Lucelo, he installed two (2)
pairs of red lights, about 30 to 40 watts each, on both sides of the steel
plates. 16 On his part, traffic investigation officer Cpl. Virgilio del
Monte 17 admitted that these lights were visible at a distance of 100 meters.

On December 19, 1991, the trial court rendered decision in favor of petitioners.
It found respondents Freddie Hiceta and Jimmy Orpilla negligent in view of
these circumstances: (1) the truck trailer had no license plate and tail lights; (2)
there were only two pairs of red lights, 50 watts 18 each, on both sides of the
steel plates; and (3) the truck trailer was improperly parked in a dark area.

The trial court held that respondents' negligence was the immediate and
proximate cause of Reynaldo Raynera's death, for which they are jointly and
severally liable to pay damages to petitioners. The trial court also held that the
victim was himself negligent, although this was insufficient to overcome
respondents' negligence. The trial court applied the doctrine of contributory
negligence 19 and reduced the responsibility of respondents by 20% on account
of the victim's own negligence. LLphil

The dispositive portion of the lower court's decision reads as follows:

 "All things considered, the Court is of the opinion that it is fair and
reasonable to fix the living and other expenses of the deceased the sum of
P54,000.00 a year or about P4,500.00 a month (P150.00 p/d) and
that, consequently, the loss or damage sustained by the plaintiffs may be
estimated at P1,674,000.00 for the 31 years of Reynaldo Raynera's life
expectancy.

"Taking into account the cooperative negligence of the deceased

Reynaldo Raynera, the Court believes that the demand of substantial
justice are satisfied by allocating the damages on 80-20 ratio. Thus,
P1,337,200.00 shall be paid by the defendants with interest thereon, at
the legal rate, from date of decision, as damages for the loss of earnings.
To this sum, the following shall be added: prcd

(a) P33,412.00, actually spent for funeral services, interment and

memorial lot;

(b) P20,000.00 as attorney's fees;

(c) cost of suit.

"SO ORDERED." 20

On January 10, 1992, respondents Hiceta and Orpilla appealed to the Court of
Appeals. 21

After due proceedings, on April 28, 1995, the Court of Appeals rendered
decision setting aside the appealed decision. The appellate court held that
Reynaldo Raynera's bumping into the left rear portion of the truck was the
proximate cause of his death, 22 and consequently, absolved respondents from
liability.

Hence, this petition for review on certiorari. cdtai

In this petition, the heirs of Reynaldo Raynera contend that the appellate court
erred in: (1) overturning the trial court's finding that respondents' negligent
operation of the Isuzu truck was the proximate cause of the victim's death; (2)
applying the doctrine of last clear chance; (3) setting aside the trial court's
award of actual and compensatory damages.

The issues presented are (a) whether respondents were negligent, and if so, (b)
whether such negligence was the proximate cause of the death of
Reynaldo Raynera.

Petitioners maintain that the proximate cause of Reynaldo Raynera's death was
respondents' negligence in operating the truck trailer on the highway without
tail lights and license plate.

The Court finds no reason to disturb the factual findings of the Court of Appeals.

"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." 23

Proximate cause is "that cause, which, in natural and continuous sequence,

unbroken by any efficient intervening cause, produces the injury, and without
which the result would not have occurred." 24

During the trial, it was established that the truck had no tail lights. The
photographs taken of the scene of the accident showed that there were no tail
lights or license plates installed on the Isuzu truck. Instead, what were installed
were two (2) pairs of lights on top of the steel plates, and one (1) pair of lights
in front of the truck. With regard to the rear of the truck, the photos taken and
the sketch in the spot report proved that there were no tail lights. cdtai

Despite the absence of tail lights and license plate, respondents' truck was visible
in the highway. It was traveling at a moderate speed, approximately 20 to 30
kilometers per hour. It used the service road, instead of the highway, because the
cargo they were hauling posed a danger to passing motorists. In compliance
with the Land Transportation Traffic Code (Republic Act No.
4136)" 25 respondents installed 2 pairs of lights on top of the steel plates, as
the vehicle's cargo load extended beyond the bed or body thereof.
We find that the direct cause of the accident was the negligence of the victim.
Traveling behind the truck, he had the responsibility of avoiding bumping the
vehicle in front of him. He was in control of the situation. His motorcycle was
equipped with headlights to enable him to see what was in front of him. He was
traversing the service road where the prescribed speed limit was less than that
in the highway.

Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts
bulbs were on top of the steel plates, 26 which were visible from a distance of
100 meters. 27Virgilio Santos admitted that from the tricycle where he was on
board, he saw the truck and its cargo of iron plates from a distance of ten (10)
meters. 28 In light of these circumstances, an accident could have been easily
avoided, unless the victim had been driving too fast and did not exercise due
care and prudence demanded of him under the circumstances.

Virgilio Santos' testimony strengthened respondents' defense that it was the

victim who was reckless and negligent in driving his motorcycle at high speed.
The tricycle where Santos was on board was not much different from the
victim's motorcycle that figured in the accident. Although Santos claimed the
tricycle almost bumped into the improperly parked truck, the tricycle driver
was able to avoid hitting the truck. cdphil

It has been said that drivers of vehicles "who bump the rear of another vehicle"
are presumed to be "the cause of the accident, unless contradicted by other
evidence".29 The rationale behind the presumption is that the driver of the rear
vehicle has full control of the situation as he is in a position to observe the vehicle
in front of him.

We agree with the Court of Appeals that the responsibility to avoid the collision
with the front vehicle lies with the driver of the rear vehicle.

Consequently, no other person was to blame but the victim himself since he was
the one who bumped his motorcycle into the rear of the Isuzu truck. He had the
last clear chance of avoiding the accident. LexLib
WHEREFORE, we DENY the petition for review on certiorari and AFFIRM the
decision of the Court of Appeals in CA-G.R. CV No. 35895, dismissing the
amended complaint in Civil Case No. 89-50355, Regional Trial Court, Branch
45, Manila.

No costs.

SO ORDERED.

||| (Raynera v. Hiceta, G.R. No. 120027, [April 21, 1999], 365 PHIL 546-555)

[G.R. No. 112160. February 28, 2000.]

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioners, vs.

COURT OF APPEALS, ASIAN SAVINGS BANK, MAXIMO C.
CONTRERAS and VICENTE MAÑOSCA, respondents.

Singson Valdez & Associates for petitioners.

Angara Abello Concepcion Regala & Cruz for Asian Savings Bank.

SYNOPSIS

On February 3, 1983, petitioners spouses Canlas filed a case for annulment of

deed of real estate mortgage with prayer for the issuance of a writ of
preliminary injunction against herein respondents Asian Savings Bank and
Vicente Mañosca. Petitioners alleged in their complaint that the two parcels of
land in question which were mortgaged to respondent bank by Vicente Mañosca
was without their consent and thus, asked the court a quo to annul the real
estate mortgage and to restrain respondent sheriff from issuing the certificate
of sheriff's sale. After trial on the merits, the lower court rendered a decision on
June 1, 1989 declaring the deed of mortgage null and void and the public
auction conducted by defendant sheriff illegal and without binding effect.
Aggrieved by the decision, Asian Savings Bank appealed to the Court of Appeals.
On September 30, 1983, the appellate court reversed the ruling of the lower
court. Dissatisfied, petitioners filed a petition for review oncertiorari seeking to
reverse and set aside the decision of the Court of Appeals. IcCDAS

The Supreme Court found the petition impressed with merit. The Court ruled
that assuming that Osmundo Canlas was negligent in giving Vicente Mañosca
the opportunity to perpetrate the fraud by entrusting to the latter the owner's
copy of the transfer certificates of title of subject parcels of land, it cannot be
denied that the bank had the last clear chance to prevent the fraud, by the
simple expedient of faithfully complying with the requirements for banks to
ascertain the identity of the persons transacting with them. For not observing
the degree of diligence required of banking institutions, whose business is
impressed with public interest, respondent bank has to bear the loss sued upon.
Accordingly, the petition was granted and the assailed decision was reversed
and set aside.

SYLLABUS

1. CIVIL LAW; SPECIAL CONTRACTS; QUASI-DELICT; DEGREE OF DILIGENCE

REQUIRED OF BANKS. — The degree of diligence required of banks is more than
that of a good father of a family; in keeping with their responsibility to exercise
the necessary care and prudence in dealing even on a registered 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 purchasers
or mortgagees for value and in good faith.

2. ID.; ID.; ID.; DOCTRINE OF LAST CLEAR CHANCE; APPLICABLE IN CASE AT

BAR. — Under the doctrine of last clear chance, which is applicable here, the
respondent bank must suffer the resulting loss. In essence, the doctrine of last
clear chance is to the effect 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 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.

3. ID.; ID.; MORTGAGE; A MORTGAGE CONSTITUTED BY AN IMPOSTOR IS

VOID. — Settled is the rule that a contract of mortgage must be constituted
only by the absolute owner on the property mortgaged; a mortgage, constituted
by an impostor is void. Considering that it was established indubitably that the
contract of mortgage sued upon was entered into and signed by impostors who
misrepresented themselves as the spouses Osmundo Canlas and Angelina Canlas.

D E CI S IO N

PURISIMA, J : p

At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to review and set aside the Decision 1 of the Court of Appeals in CA-G.R.
CV No. 25242, which reversed the Decision 2 of Branch 59 of the Regional Trial
Court of Makati City in Civil Case No. M-028; the dispositive portion of which
reads:

"WHEREFORE, the decision appealed from is hereby REVERSED and SET

ASIDE and a new one is hereby entered DISMISSING the complaint of the
spouses Osmundo and Angelina Canlas. On the counterclaim of defendant
Asian Savings Bank, the plaintiffs Canlas spouses are hereby ordered to
pay the defendant Asian Savings Bank the amount of P50,000.00 as
 moral and exemplary damages plus P15,000.00 as and for attorney's
fees. prLL

With costs against appellees.

SO ORDERED." 3

The facts that matter:

Sometime in August, 1982, the petitioner, Osmundo S. Canlas, and private

respondent, Vicente Mañosca, decided to venture in business and to raise the
capital needed therefor. The former then executed a Special Power of Attorney
authorizing the latter to mortgage two parcels of land situated in San Dionisio,
(BF Homes) Parañaque, Metro Manila, each lot with semi-concrete residential
house existing thereon, and respectively covered by Transfer Certificate of Title
No. 54366 in his (Osmundo's) name and Transfer Certificate of Title No.
S-78498 in the name of his wife Angelina Canlas. cdtai

Subsequently, Osmundo Canlas agreed to sell the said parcels of land to Vicente
Mañosca, for and in consideration of P850,000.00, P500,000.00 of which
payable within one week, and the balance of P350,000.00 to serve as his
(Osmundo's) investment in the business. Thus, Osmundo Canlas delivered to
Vicente Mañosca the transfer certificates of title of the parcels of land involved.
Vicente Mañosca, as his part of the transaction, issued two postdated checks in
favor of Osmundo Canlas in the amounts of P40,000.00 and P460,000.00,
respectively, but it turned out that the check covering the bigger amount was
not sufficiently funded. 4

On September 3, 1982, Vicente Mañosca was able to mortgage the same

parcels of land for P100,000.00 to a certain Attorney Manuel Magno, with the
help of impostors who misrepresented themselves as the spouses, Osmundo
Canlas and Angelina Canlas. 5

On September 29, 1982, private respondent Vicente Mañosca was granted a

loan by the respondent Asian Savings Bank (ASB) in the amount of
P500,000.00, with the use of subject parcels of land as security, and with the
involvement of the same impostors who again introduced themselves as the
Canlas spouses. 6 When the loan it extended was not paid, respondent bank
extrajudicially foreclosed the mortgage. LLjur

On January 15, 1983, Osmundo Canlas wrote a letter informing the

respondent bank that the execution of subject mortgage over the two parcels of
land in question was without their (Canlas spouses) authority, and request that
steps be taken to annul and/or revoke the questioned mortgage. On January 18,
1983, petitioner Osmundo Canlas also wrote the office of Sheriff Maximo C.
Contreras, asking that the auction sale scheduled on February 3, 1983 be
canceled or held in abeyance. But respondents Maximo C. Contreras and Asian
Savings Bank refused to heed petitioner Canlas' stance and proceeded with the
scheduled auction sale. 7

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 Sheriff's Sale. 8

For failure to file his answer, despite several motions for extension of time for
the filing thereof, Vicente Mañosca was declared in default. 9

On June 1, 1989, the lower court a quo came out with a decision annulling
subject deed of mortgage and disposing, thus:

"Premises considered, judgment is hereby rendered as follows:

1. Declaring the deed of real estate mortgage (Exhibit 'L') involving the
properties of the plaintiffs as null and void;

2. Declaring the public auction sale conducted by the defendant Sheriff,

involving the same properties as illegal and without binding effect;

3. Ordering the defendants, jointly and severally, to pay the plaintiff's

the sum of P20,000.00 representing attorney's fees;
 4. On defendant ASB's crossclaim: ordering the cross-defendant Vicente
Mañosca to pay the defendant ASB the sum of P350,000 00,
representing the amount which he received as proceeds of the loan
secured by the void mortgage, plus interest at the legal rate, starting
February 3, 1983, the date when the original complaint was filed, until
the amount is fully paid; cdasia

5. With costs against the defendants.

SO ORDERED." 10

From such Decision below, Asian Savings Bank appealed to the Court of Appeals,
which handed down the assailed judgment of reversal, dated September 30,
1983, in CA-G.R. CV No. 25242. Dissatisfied therewith, the petitioners found
their way to this Court via the present Petition; theorizing that: LLjur

"I

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE

MORTGAGE OF THE PROPERTIES SUBJECT OF THIS CASE WAS VALID.

II

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT

PETITIONERS ARE NOT ENTITLED TO RELIEF BECAUSE THEY WERE
NEGLIGENT AND THEREFORE MUST BEAR THE LOSS.

III

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT

RESPONDENT ASB EXERCISED DUE DILIGENCE IN GRANTING THE
LOAN APPLICATION OF RESPONDENT.

IV

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT

RESPONDENT ASB DID NOT ACT WITH BAD FAITH IN PROCEEDING
WITH THE FORECLOSURE SALE OF THE PROPERTIES. LLjur

V
 RESPONDENT COURT OF APPEALS ERRED IN AWARDING
RESPONDENT ASB MORAL DAMAGES." 11

The Petition is impressed with merit.

Article 1173 of the Civil Code provides:

"ARTICLE 1173. The fault or negligence of the obligor consist in the

omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of
Articles 1171 and 2201, paragraph 2, shall apply. cdasia

If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a family
shall be required. (1104)"

The degree of diligence required of banks is more than that of a good father of a
family; 12 in keeping with their responsibility to exercise the necessary care and
prudence in dealing even on a registered 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 purchasers 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. Felizado Mangubat, Assistant Vice President of Asian Savings Bank,
thus testified inter alia: LexLib

"xxx xxx xxx

Q: According to you, the basis for your having recommended for the
approval of MANASCO's (sic) loan particularly that one involving
the property of plaintiff in this case, the spouses OSMUNDO
CANLAS and ANGELINA CANLAS, the basis for such approval was
that according to you all the signatures and other things taken into
account matches with that of the document previously executed by
the spouses CANLAS?

A: That is the only basis for accepting the signature on the mortgage, the
basis for the recommendation of the approval of the loan are the
financial statement of MAÑOSCA?

A: Yes, among others the signature and TAX Account Number, Residence
Certificate appearing on the previous loan executed by the spouses
CANLAS, I am referring to EXHIBIT 5, mortgage to ATTY MAGNO,
those were made the basis.

A: That is just the basis of accepting the signature, because at that time
the loan have been approved already on the basis of the financial
statement of the client the Bank Statement. Wneh (sic) it was
approved we have to base it on the Financial Statement of the
client, the signatures were accepted only for the purpose of signing
the mortgage not for the approval, we don't (sic) approve loans on
the signature cdtai

ATTY. CLAROS:

Would you agree that as part of ascertaining the identity of the parties
particularly the mortgage, you don't consider also the signature,
the Residence Certificate, the particular address of the parties
involved cdll

A: I think the question defers (sic) from what you asked a while ago.
 Q: Among others?

A: We have to accept the signature on the basis of the other signatures

given to us it being a public instrument.

ATTY CARLOS:

You mean to say the criteria of ascertaining the identity of the

mortgagor does not depend so much on the signature on the
residence certificate they have presented. cdtai

A: We have to accept that.

xxx xxx xxx

A: We accepted the signature on the basis of the mortgage in favor of

ATTY. MAGNO duly notarized which I have been reiterrting (sic)
entitled to full faith considering that it is a public instrument.

ATTY CARLOS:

What other requirement did you take into account in ascertaining the
identification of the parties particularly the mortgage in this case?

A: Residence Certificate.

Q: Is that all, is that the only requirement?

A: We requested for others but they could not produce, and because they
presented to us the Residence Certificate which matches on the
signature on the Residence Certificate in favor of Atty. Magno." 14

Evidently, the efforts exerted by the bank to verify the identity of the couple
posing as Osmundo Canlas and Angelina Canlas fell short of the responsibility of
the bank to observe more than the diligence of a good father of a family. The
negligence of respondent bank was magnified by the fact that the previous deed
of mortgage (which was used as the basis for checking the genuineness of the
signatures of the supposed Canlas spouses) did not bear the tax account number
of the spouses, 15 as well as the Community Tax Certificate of Angelina
Canlas 16 But such fact notwithstanding, the bank did not require the impostors
to submit additional proof of their true identity. prcd
Under the doctrine of last clear chance, which is applicable here, the respondent
bank must suffer the resulting loss. In essence, the doctrine of last clear chance is
to the effect 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 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. 17

Assuming that Osmundo Canlas was negligent in giving Vicente Mañosca the
opportunity to perpetrate the fraud, by entrusting to latter the owner's copy of
the transfer certificates of title of subject parcels of land, it cannot be denied
that the bank had the last clear chance to prevent the fraud, by the simple
expedient of faithfully complying with the requirements for banks to ascertain
the identity of the persons transacting with them. cdphil

For not observing the degree of diligence required of banking institutions, whose
business is impressed with public interest, respondent Asian Savings Bank has to
bear the loss sued upon.

In ruling for respondent bank, the Court of Appeals concluded that the
petitioner Osmundo Canlas was a party to the fraudulent scheme of Mañosca
and therefore, estopped from impugning the validity of subject deed of
mortgage; ratiocinating thus:

"xxx xxx xxx

Thus, armed with the titles and the special power of attorney, Mañosca
went to the defendant bank and applied for a loan. And when Mañosca
came over to the bank to submit additional documents pertinent to his
loan application, Osmundo Canlas was with him, together with a certain
 Rogelio Viray. At that time, Osmundo Canlas was introduced to the bank
personnel as 'Leonardo Rey'. LexLib

When he was introduced as 'Leonardo Rey' for the first time Osmundo
should have corrected Mañosca right away. But he did not. Instead, he
even allowed Mañosca to avail of his (Osmundo's) membership privileges
at the Metropolitan Club when Mañosca invited two officers of the
defendant bank to a luncheon meeting which Osmundo also attended.
And during that meeting, Osmundo did not say who he really is, but even
let Mañosca introduced him again as 'Leonardo Rey', which all the more
indicates that he connived with Mañosca in deceiving the defendant bank.

Finally, after the loan was finally approved, Osmundo accompanied

Mañosca to the bank when the loan was released. At that time, a
manager's check for P200,000.00 was issued in the name of Oscar
Motorworks, which Osmundo admits he owns and operates. cdasia

Collectively, the foregoing circumstances cannot but conjure to a single

conclusion that Osmundo actively participated in the loan application of
defendant Asian Savings Bank, which culminated in his receiving a
portion of the process thereof." 18

A meticulous and painstaking scrutiny of the Records on hand, reveals, however,

that the findings arrived at by the Court of Appeals are barren of any
sustainable basis. For instance, the execution of the deeds of mortgages
constituted by Mañosca on subject pieces of property of petitioners were made
possible not by the Special Power of Attorney executed by Osmundo Canlas in
favor of Mañosca but through the use of impostors who misrepresented
themselves as the spouses Angelina Canlas and Osmundo Canlas. It cannot be
said therefore, that the petitioners authorized Vicente Mañosca to constitute the
mortgage on their parcels of land. LLjur

What is more, Osmundo Canlas was introduced as "Leonardo Rey" by Vicente

Mañosca, only on the occasion of the luncheon meeting at the Metropolitan
Club. 19Thereat, the failure of Osmundo Canlas to rectify Mañosca's
misrepresentations could not be taken as a fraudulent act. As well explained by
the former, he just did not want to embarrass Mañosca, so that he waited for
the end of the meeting to correct Mañosca. 20

Then, too, Osmundo Canlas recounted that during the said luncheon meeting,
they did not talk about the security or collateral for the loan of Mañosca with
ASB. 21 So also, Mrs. Josefina Rojo, who was the Account Officer of Asian
Savings Bank when Mañosca applied for subject loan, corroborated the
testimony of Osmundo Canlas, she testified: cdrep

"xxx xxx xxx

Q: Now could you please describe out the lunch conference at the Metro
Club in Makati?

A: Mr Mangubat, Mr Mañosca and I did not discuss with respect to the

loan application and discuss primarily his business.

xxx xxx xxx

Q: So, what is the main topic of your discussion during the meeting?

A: The main topic was then, about his business although, Mr. Leonardo
Rey, who actually turned out as Mr. Canlas, supplier of Mr.
Mañosca.

Q: I see. . . other than the business of Mr. Mañosca, were there any other
topic discussed ?

A: YES.

Q: And what was the topic?

A: General Economy then.

xxx xxx xxx" 22

Verily, Osmundo Canlas was left unaware of the illicit plan of Mañosca,
explaining thus why he (Osmundo) did not bother to correct what Mañosca
misrepresented and to assert ownership over the two parcels of land in
question. cdll
Not only that, while it is true that Osmundo Canlas was with Vicente Mañosca
when the latter submitted the documents needed for his loan application, and
when the check of P200,000.00 was released, the former did not know that
the collateral used by Mañosca for the said loan were their (Canlas spouses')
properties. Osmundo happened to be with Mañosca at the time because he
wanted to make sure that Mañosca would make good his promise to pay the
balance of the purchase price of the said lots out of the proceeds of the loan. 23

The receipt by Osmundo Canlas of the P200,000.00 check from ASB could not
stop him from assailing the validity of the mortgage because the said amount
was in payment of the parcels of land he sold to Mañosca. 24

What is decisively clear on record is that Mañosca managed to keep Osmundo

Canlas uninformed of his (Mañosca's) intention to use the parcels of land of the
Canlas spouses as security for the loan obtained from Asian Savings Bank. Since
Vicente Mañosca showed Osmundo Canlas several certificates of title of lots
which, according to Mañosca were the collaterals, Osmundo Canlas was
confident that their (Canlases') parcels of land were not involved in the loan
transactions with the Asian Savings Bank. 25 Under the attendant facts and
circumstances, Osmundo Canlas was undoubtedly negligent, which negligence
made them (petitioners) undeserving of an award of attorney's fees. LLjur

Settled is the rule that a contract of mortgage must be constituted only by the
absolute owner on the property mortgaged; 26 a mortgage, constituted by an
impostor is void. 27 Considering that it was established indubitably that the
contract of mortgage sued upon was entered into and signed by impostors who
misrepresented themselves as the spouses Osmundo Canlas and Angelina Canlas,
the Court is of the ineluctable conclusion and finding that subject contract of
mortgage is a complete nullity.

WHEREFORE, the Petition is GRANTED and the Decision of the Court of

Appeals, dated September 30, 1993, in CA-G.R. CV No. 25242 SET ASIDE.
The Decision of Branch 59 of the Regional Trial Court of Makati City in Civil
Case No. M-028 is hereby REINSTATED. No pronouncement as to costs. LLjur

SO ORDERED.

||| (Canlas v. Court of Appeals, G.R. No. 112160, [February 28, 2000], 383
PHIL 315-328)

[G.R. No. 138569. September 11, 2003.]

THE CONSOLIDATED BANK and TRUST

CORPORATION, petitioner, vs. COURT OF APPEALS and L.C. DIAZ
and COMPANY, CPA's, respondents.

D E CI S IO N

CARPIO, J : p

The Case

Before us is a petition for review of the Decision 1 of the Court of Appeals dated
27 October 1998 and its Resolution dated 11 May 1999. The assailed decision
reversed the Decision 2 of the Regional Trial Court of Manila, Branch 8,
absolving petitioner Consolidated. Bank and Trust Corporation, now known as
Solidbank Corporation ("Solidbank"), of any liability. The questioned resolution of
the appellate court denied the motion for reconsideration of Solidbank but
modified the decision by deleting the award of exemplary damages, attorney's
fees, expenses of litigation and cost of suit. caAICE

The Facts

Solidbank is a domestic banking corporation organized and existing under

Philippine laws. Private respondent L.C. Diaz and Company, CPA's ("L.C. Diaz"),
is a professional partnership engaged in the practice of accounting.
Sometime in March 1976, L.C. Diaz opened a savings account with Solidbank,
designated as Savings Account No. S/A 200-16872-6.

On 14 August 1991, L.C. Diaz through its cashier, Mercedes Macaraya

("Macaraya"), filled up a savings (cash) deposit slip for P990 and a savings
(checks) deposit slip for P50. Macaraya instructed the messenger of L.C. Diaz,
Ismael Calapre ("Calapre"), to deposit the money with Solidbank. Macaraya also
gave Calapre the Solidbank passbook.

Calapre went to Solidbank and presented to Teller No. 6 the two deposit slips
and the passbook. The teller acknowledged receipt of the deposit by returning to
Calapre the duplicate copies of the two deposit slips. Teller No. 6 stamped the
deposit slips with the words "DUPLICATE" and "SAVING TELLER 6 SOLIDBANK
HEAD OFFICE." Since the transaction took time and Calapre had to make
another deposit for L.C. Diaz with Allied Bank, he left the passbook with
Solidbank. Calapre then went to Allied Bank. When Calapre returned to
Solidbank to retrieve the passbook, Teller No. 6 informed him that "somebody
got the passbook. 3 Calapre went back to L.C. Diaz and reported the incident to
Macaraya.

Macaraya immediately prepared a deposit slip in duplicate copies with a check

of P200,000. Macaraya, together with Calapre, went to Solidbank and
presented to Teller No. 6 the deposit slip and check. The teller stamped the
words "DUPLICATE" and "SAVING TELLER 6 SOLIDBANK HEAD OFFICE" on
the duplicate copy of the deposit slip. When Macaraya asked for the passbook,
Teller No. 6 told Macaraya that someone got the passbook but she could not
remember to whom she gave the passbook. When Macaraya asked Teller No. 6 if
Calapre got the passbook, Teller No. 6 answered that someone shorter than
Calapre got the passbook. Calapre was then standing beside Macaraya.

Teller No. 6 handed to Macaraya a deposit slip dated 14 August 1991 for the
deposit of a check for P90,000 drawn on Philippine Banking Corporation
("PBC"). This PBC check of L.C. Diaz was a check that it had "long closed." 4 PBC
subsequently dishonored the check because of insufficient funds and because the
signature in the check differed from PBC's specimen signature. Failing to get
back the passbook, Macaraya went back to her office and reported the matter
to the Personnel Manager of L.C. Diaz, Emmanuel Alvarez.

The following day, 15 August 1991, L.C. Diaz through its Chief Executive Officer,
Luis C. Diaz ("Diaz"), called up Solidbank to stop any transaction using the same
passbook until L.C. Diaz could open a new account. 5 On the same day, Diaz
formally wrote Solidbank to make the same request. It was also on the same day
that L.C. Diaz learned of the unauthorized withdrawal the day before, 14
August 1991, of P300,000 from its savings account. The withdrawal slip for
the P300,000 bore the signatures of the authorized signatories of L.C. Diaz,
namely Diaz and Rustico L. Murillo. The signatories, however, denied signing the
withdrawal slip. A certain Noel Tamayo received the P300,000. IaSCTE

In an Information 6 dated 5 September 1991, L.C. Diaz charged its messenger,

Emerano Ilagan ("Ilagan") and one Roscon Verdazola with Estafa through
Falsification of Commercial Document. The Regional Trial Court of Manila
dismissed the criminal case after the City Prosecutor filed a Motion to Dismiss
on 4 August 1992.

On 24 August 1992, L.C. Diaz through its counsel demanded from Solidbank
the return of its money. Solidbank refused.

On 25 August 1992, L.C. Diaz filed a Complaint 7 for Recovery of a Sum of

Money against Solidbank with the Regional Trial Court of Manila, Branch 8.
After trial, the trial court rendered on 28 December 1994 a decision absolving
Solidbank and dismissing the complaint.

L.C. Diaz then appealed 8 to the Court of Appeals. On 27 October 1998, the
Court of Appeals issued its Decision reversing the decision of the trial court.

On 11 May 1999, the Court of Appeals issued its Resolution denying the motion
for reconsideration of Solidbank. The appellate court, however, modified its
decision by deleting the award of exemplary damages and attorney's fees.
 The Ruling of the Trial Court

In absolving Solidbank, the trial court applied the rules on savings account
written on the passbook. The rules state that "possession of this book shall raise
the presumption of ownership and any payment or payments made by the bank
upon the production of the said book and entry therein of the withdrawal shall
have the same effect as if made to the depositor personally." 9

At the time of the withdrawal, a certain Noel Tamayo was not only in
possession of the passbook, he also presented a withdrawal slip with the
signatures of the authorized signatories of L.C. Diaz. The specimen signatures of
these persons were in the signature cards. The teller stamped the withdrawal
slip with the words "Saving Teller No. 5." The teller then passed on the
withdrawal slip to Genere Manuel ("Manuel") for authentication. Manuel verified
the signatures on the withdrawal slip. The withdrawal slip was then given to
another officer who compared the signatures on the withdrawal slip with the
specimen on the signature cards. The trial court concluded that Solidbank acted
with care and observed the rules on savings account when it allowed the
withdrawal of P300,000 from the savings account of L.C. Diaz.

The trial court pointed out that the burden of proof now shifted to L.C. Diaz to
prove that the signatures on the withdrawal slip were forged. The trial court
admonished L.C. Diaz for not offering in evidence the National Bureau of
Investigation ("NBI") report on the authenticity of the signatures on the
withdrawal slip for P300,000. The trial court believed that L.C. Diaz did not
offer this evidence because it is derogatory to its action.

Another provision of the rules on savings account states that the depositor must
keep the passbook "under lock and key." 10 When another person presents the
passbook for withdrawal prior to Solidbank's receipt of the notice of loss of the
passbook, that person is considered as the owner of the passbook. The trial court
ruled that the passbook presented during the questioned transaction was "now
out of the lock and key and presumptively ready for a business transaction." 11
Solidbank did not have any participation in the custody and care of the
passbook. The trial court believed that Solidbank's act of allowing the
withdrawal of P300,000 was not the direct and proximate cause of the loss.
The trial court held that L.C. Diaz's negligence caused the unauthorized
withdrawal. Three facts establish L.C. Diaz's negligence: (1) the possession of the
passbook by a person other than the depositor L.C. Diaz; (2) the presentation of
a signed withdrawal receipt by an unauthorized person; and (3) the possession
by an unauthorized person of a PBC check "long closed" by L.C. Diaz, which
check was deposited on the day of the fraudulent withdrawal.

The trial court debunked L.C. Diaz's contention that Solidbank did not follow the
precautionary procedures observed by the two parties whenever L.C. Diaz
withdrew significant amounts from its account. L.C. Diaz claimed that a letter
must accompany withdrawals of more than P20,000. The letter must request
Solidbank to allow the withdrawal and convert the amount to a manager's
check. The bearer must also have a letter authorizing him to withdraw the same
amount. Another person driving a car must accompany the bearer so that he
would not walk from Solidbank to the office in making the withdrawal. The trial
court pointed out that L.C. Diaz disregarded these precautions in its past
withdrawal. On 16 July 1991, L.C. Diaz withdrew P82,554 without any
separate letter of authorization or any communication with Solidbank that the
money be converted into a manager's check.

The trial court further justified the dismissal of the complaint by holding that
the case was a last ditch effort of L.C. Diaz to recover P300,000 after the
dismissal of the criminal case against Ilagan.

The dispositive portion of the decision of the trial court reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered DISMISSING

the complaint.

The Court further renders judgment in favor of defendant bank pursuant

to its counterclaim the amount of Thirty Thousand Pesos (P30,000.00)
as attorney's fees.
 With costs against plaintiff.

SO ORDERED. 12

The Ruling of the Court of Appeals

The Court of Appeals ruled that Solidbank's negligence was the proximate cause
of the unauthorized withdrawal of P300,000 from the savings account of L.C.
Diaz. The appellate court reached this conclusion after applying the provision of
the Civil Code on quasi-delict, to wit:

Article 2176. Whoever by act or omission causes damage to another,

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

The appellate court held that the three elements of a quasi-delict are present
in this case, namely: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose acts he must
respond; and (c) the connection of cause and effect between the fault or
negligence of the defendant and the damage incurred by the plaintiff.

The Court of Appeals pointed out that the teller of Solidbank who received the
withdrawal slip for P300,000 allowed the withdrawal without making the
necessary inquiry. The appellate court stated that the teller, who was not
presented by Solidbank during trial, should have called up the depositor because
the money to be withdrawn was a significant amount. Had the teller called up
L.C. Diaz, Solidbank would have known that the withdrawal was unauthorized.
The teller did not even verify the identity of the impostor who made the
withdrawal. Thus, the appellate court found Solidbank liable for its negligence in
the selection and supervision of its employees.

The appellate court ruled that while L.C. Diaz was also negligent in entrusting its
deposits to its messenger and its messenger in leaving the passbook with the
teller, Solidbank could not escape liability because of the doctrine of "last clear
chance." Solidbank could have averted the injury suffered by L.C. Diaz had it
called up L.C. Diaz to verify the withdrawal.

The appellate court ruled that the degree of diligence required from Solidbank is
more than that of a good father of a family. The business and functions of banks
are affected with public interest. Banks are obligated to treat the accounts of
their depositors with meticulous care, always having in mind the fiduciary
nature of their relationship with their clients. The Court of Appeals found
Solidbank remiss in its duty, violating its fiduciary relationship with L.C. Diaz.

The dispositive portion of the decision of the Court of Appeals reads:

WHEREFORE, premises considered, the decision appealed from is hereby

REVERSED and a new one entered.

1. Ordering defendant-appellee Consolidated Bank and Trust

Corporation. to pay plaintiff-appellant the sum of Three
Hundred Thousand Pesos (P300,000.00), with interest
thereon at the rate of 12% per annum from the date of filing
of the complaint until paid, the sum of P20,000.00 as
exemplary damages, and P20,000.00 as attorney's fees and
expenses of litigation as well as the cost of suit; and

2. Ordering the dismissal of defendant-appellee's counterclaim in

the amount of P30,000.00 as attorney's fees.

SO ORDERED. 13

Acting on the motion for reconsideration of Solidbank, the appellate court

affirmed its decision but modified the award of damages. The appellate court
deleted the award of exemplary damages and attorney's fees.
Invoking Article 2231 14 of the Civil Code, the appellate court ruled that
exemplary damages could be granted if the defendant acted with gross
negligence. Since Solidbank was guilty of simple negligence only, the award of
exemplary damages was not justified. Consequently, the award of attorney's
 fees was also disallowed pursuant to Article 2208 of the Civil Code. The
expenses of litigation and cost of suit were also not imposed on Solidbank.

The dispositive portion of the Resolution reads as follows:

WHEREFORE, foregoing considered, our decision dated October 27,

1998 is affirmed with modification by deleting the award of exemplary
damages and attorney's fees, expenses of litigation and cost of suit.

SO ORDERED. 15

Hence, this petition.

The Issues

Solidbank seeks the review of the decision and resolution of the Court of Appeals
on these grounds:

I. THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER

BANK SHOULD SUFFER THE LOSS BECAUSE ITS TELLER
SHOULD HAVE FIRST CALLED PRIVATE RESPONDENT BY
TELEPHONE BEFORE IT ALLOWED THE WITHDRAWAL OF
P300,000.00 TO RESPONDENT'S MESSENGER EMERANO
ILAGAN, SINCE THERE IS NO AGREEMENT BETWEEN THE
PARTIES IN THE OPERATION OF THE SAVINGS ACCOUNT, NOR
IS THERE ANY BANKING LAW, WHICH MANDATES THAT A
BANK TELLER SHOULD FIRST CALL UP THE DEPOSITOR BEFORE
ALLOWING A WITHDRAWAL OF A BIG AMOUNT IN A SAVINGS
ACCOUNT.

II. THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF

LAST CLEAR CHANCE AND IN HOLDING THAT PETITIONER
BANK'S TELLER HAD THE LAST OPPORTUNITY TO WITHHOLD
THE WITHDRAWAL WHEN IT IS UNDISPUTED THAT THE TWO
SIGNATURES OF RESPONDENT ON THE WITHDRAWAL SLIP ARE
GENUINE AND PRIVATE RESPONDENT'S PASSBOOK WAS DULY
PRESENTED, AND CONTRARIWISE RESPONDENT WAS
NEGLIGENT IN THE SELECTION AND SUPERVISION OF ITS
 MESSENGER EMERANO ILAGAN, AND IN THE SAFEKEEPING OF
ITS CHECKS AND OTHER FINANCIAL DOCUMENTS.

III. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE

INSTANT CASE IS A LAST DITCH EFFORT OF PRIVATE
RESPONDENT TO RECOVER ITS P300,000.00 AFTER FAILING IN
ITS EFFORTS TO RECOVER THE SAME FROM ITS EMPLOYEE
EMERANO ILAGAN.

IV. THE COURT OF APPEALS ERRED IN NOT MITIGATING THE

DAMAGES AWARDED AGAINST PETITIONER UNDER ARTICLE
2197 OF THE CIVIL CODE, NOTWITHSTANDING ITS FINDING
THAT PETITIONER BANK'S NEGLIGENCE WAS ONLY
CONTRIBUTORY. 16

The Ruling of the Court

The petition is partly meritorious.

Solidbank's Fiduciary Duty under the Law

The rulings of the trial court and the Court of Appeals conflict on the
application of the law. The trial court pinned the liability on L.C. Diaz based on
the provisions of the rules on savings account, a recognition of the contractual
relationship between Solidbank and L.C. Diaz, the latter being a depositor of the
former. On the other hand, the Court of Appeals applied the law
on quasi-delict to determine who between the two parties was ultimately
negligent. The law on quasi-delict or culpa aquiliana is generally applicable
when there is no pre-existing contractual relationship between the parties.

We hold that Solidbank is liable for breach of contract due to negligence,

or culpa contractual.

The contract between the bank and its depositor is governed by the provisions of
the Civil Code on simple loan. 17 Article 1980 of the Civil Code expressly
provides that ". . . savings . . . deposits of money in banks and similar institutions
shall be governed by the provisions concerning simple loan." There is a
debtor-creditor relationship between the bank and its depositor. The bank is the
debtor and the depositor is the creditor. The depositor lends the bank money
and the bank agrees to pay the depositor on demand. The savings deposit
agreement between the bank and the depositor is the contract that determines
the rights and obligations of the parties.

The law imposes on banks high standards in view of the fiduciary nature of
banking. Section 2 of Republic Act No. 8791 ("RA 8791"), 18 which took effect
on 13 June 2000, declares that the State recognizes the "fiduciary nature of
banking that requires high standards of integrity and performance." 19 This new
provision in the general banking law, introduced in 2000, is a statutory
affirmation of Supreme Court decisions, starting with the 1990 case of Simex
International v. Court of Appeals, 20 holding that "the bank is under obligation
to treat the accounts of its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship. 21

This fiduciary relationship means that the bank's obligation to observe "high
standards of integrity and performance" is deemed written into every deposit
agreement between a bank and its depositor. The fiduciary nature of banking
requires banks to assume a degree of diligence higher than that of a good father
of a family. Article 1172 of the Civil Code states that the degree of diligence
required of an obligor is that prescribed by law or contract, and absent such
stipulation then the diligence of a good father of a family. 22 Section 2 of RA
8791 prescribes the statutory diligence required from banks — that banks
must observe "high standards of integrity and performance" in servicing their
depositors. Although RA 8791 took effect almost nine years after the
unauthorized withdrawal of the P300,000 from L.C. Diaz's savings account,
jurisprudence 23 at the time of the withdrawal already imposed on banks the
same high standard of diligence required under RA No. 8791.

However, the fiduciary nature of a bank-depositor relationship does not convert

the contract between the bank and its depositors from a simple loan to a trust
agreement, whether express or implied. Failure by the bank to pay the depositor
is failure to pay a simple loan, and not a breach of trust. 24 The law simply
imposes on the bank a higher standard of integrity and performance in
complying with its obligations under the contract of simple loan, beyond those
required of non-bank debtors under a similar contract of simple loan.

The fiduciary nature of banking does not convert a simple loan into a trust
agreement because banks do not accept deposits to enrich depositors but to earn
money for themselves. The law allows banks to offer the lowest possible interest
rate to depositors while charging the highest possible interest rate on their own
borrowers. The interest spread or differential belongs to the bank and not to the
depositors who are not cestui que trust of banks. If depositors are cestui que
trust of banks, then the interest spread or income belongs to the depositors, a
situation that Congress certainly did not intend in enacting Section 2 of RA
8791.

Solidbank's Breach of its Contractual Obligation

Article 1172 of the Civil Code provides that "responsibility arising from
negligence in the performance of every kind of obligation is demandable." For
breach of the savings deposit agreement due to negligence, or culpa contractual,
the bank is liable to its depositor.

Calapre left the passbook with Solidbank because the "transaction took time"
and he had to go to Allied Bank for another transaction. The passbook was still
in the hands of the employees of Solidbank for the processing of the deposit
when Calapre left Solidbank. Solidbank's rules on savings account require that
the "deposit book should be carefully guarded by the depositor and kept under
lock and key, if possible." When the passbook is in the possession of Solidbank's
tellers during withdrawals, the law imposes on Solidbank and its tellers an even
higher degree of diligence in safeguarding the passbook.

Likewise, Solidbank's tellers must exercise a high degree of diligence in insuring

that they return the passbook only to the depositor or his authorized
representative. The tellers know, or should know, that the rules on savings
account provide that any person in possession of the passbook is presumptively
its owner. If the tellers give the passbook to the wrong person, they would be
clothing that person presumptive ownership of the passbook, facilitating
unauthorized withdrawals by that person. For failing to return the passbook to
Calapre, the authorized representative of L.C. Diaz, Solidbank and Teller No. 6
presumptively failed to observe such high degree of diligence in safeguarding the
passbook, and in insuring its return to the party authorized to receive the same.

In culpa contractual, once the plaintiff proves a breach of contract, there is a

presumption that the defendant was at fault or negligent. The burden is on the
defendant to prove that he was not at fault or negligent. In contrast, in culpa
aquiliana the plaintiff has the burden of proving that the defendant was
negligent. In the present case, L.C. Diaz has established that Solidbank breached
its contractual obligation to return the passbook only to the authorized
representative of L.C. Diaz. There is thus a presumption that Solidbank was at
fault and its teller was negligent in not returning the passbook to Calapre. The
burden was on Solidbank to prove that there was no negligence on its part or its
employees.

Solidbank failed to discharge its burden. Solidbank did not present to the trial
court Teller No. 6, the teller with whom Calapre left the passbook and who was
supposed to return the passbook to him. The record does not indicate that Teller
No. 6 verified the identity of the person who retrieved the passbook. Solidbank
also failed to adduce in evidence its standard procedure in verifying the identity
of the person retrieving the passbook, if there is such a procedure, and that
Teller No. 6 implemented this procedure in the present case.

Solidbank is bound by the negligence of its employees under the principle

of respondeat superior or command responsibility. The defense of exercising the
required diligence in the selection and supervision of employees is not a complete
defense in culpa contractual, unlike in culpa aquiliana. 25
The bank must not only exercise "high standards of integrity and performance,"
it must also insure that its employees do likewise because this is the only way to
insure that the bank will comply with its fiduciary duty. Solidbank failed to
present the teller who had the duty to return to Calapre the passbook, and thus
failed to prove that this teller exercised the "high standards of integrity and
performance" required of Solidbank's employees. ETHCDS

Proximate Cause of the Unauthorized Withdrawal

Another point of disagreement between the trial and appellate courts is the
proximate cause of the unauthorized withdrawal. The trial court believed that
L.C. Diaz's negligence in not securing its passbook under lock and key was the
proximate cause that allowed the impostor to withdraw the P300,000. For the
appellate court, the proximate cause was the teller's negligence in processing the
withdrawal without first verifying with L.C. Diaz. We do not agree with either
court.

Proximate cause is that cause which, in natural and continuous sequence,

unbroken by any efficient intervening cause, produces the injury and without
which the result would not have occurred. 26 Proximate cause is determined by
the facts of each case upon mixed considerations of logic, common sense, policy
and precedent. 27

L.C. Diaz was not at fault that the passbook landed in the hands of the impostor.
Solidbank was in possession of the passbook while it was processing the deposit.
After completion of the transaction, Solidbank had the contractual obligation to
return the passbook only to Calapre, the authorized representative of L.C. Diaz.
Solidbank failed to fulfill its contractual obligation because it gave the passbook
to another person.

Solidbank's failure to return the passbook to Calapre made possible the

withdrawal of the P300,000 by the impostor who took possession of the
passbook. Under Solidbank's rules on savings account, mere possession of the
passbook raises the presumption of ownership. It was the negligent act of
Solidbank's Teller No. 6 that gave the impostor presumptive ownership of the
passbook. Had the passbook not fallen into the hands of the impostor, the loss of
P300,000 would not have happened. Thus, the proximate cause of the
unauthorized withdrawal was Solidbank's negligence in not returning the
passbook to Calapre.

We do not subscribe to the appellate court's theory that the proximate cause of
the unauthorized withdrawal was the teller's failure to call up L.C. Diaz to verify
the withdrawal. Solidbank did not have the duty to call up L.C. Diaz to confirm
the withdrawal. There is no arrangement between Solidbank and L.C. Diaz to
this effect. Even the agreement between Solidbank and L.C. Diaz pertaining to
measures that the parties must observe whenever withdrawals of large amounts
are made does not direct Solidbank to call up L.C. Diaz.

There is no law mandating banks to call up their clients whenever their

representatives withdraw significant amounts from their accounts. L.C. Diaz
therefore had the burden to prove that it is the usual practice of Solidbank to
call up its clients to verify a withdrawal of a large amount of money. L.C. Diaz
failed to do so.

Teller No. 5 who processed the withdrawal could not have been put on guard to
verify the withdrawal. Prior to the withdrawal of P300,000, the impostor
deposited with Teller No. 6 the P90,000 PBC check, which later bounced. The
impostor apparently deposited a large amount of money to deflect suspicion
from the withdrawal of a much bigger amount of money. The appellate court
thus erred when it imposed on Solidbank the duty to call up L.C. Diaz to confirm
the withdrawal when no law requires this from banks and when the teller had
no reason to be suspicious of the transaction.

Solidbank continues to foist the defense that Ilagan made the withdrawal.
Solidbank claims that since Ilagan was also a messenger of L.C. Diaz, he was
familiar with its teller so that there was no more need for the teller to verify the
withdrawal. Solidbank relies on the following statements in the Booking and
Information Sheet of Emerano Ilagan:

. . . Ilagan also had with him (before the withdrawal) a forged check of
PBC and indicated the amount of P90,000 which he deposited in favor
of L.C. Diaz and Company. After successfully withdrawing this large sum
of money, accused Ilagan gave alias Rey (Noel Tamayo) his share of the
loot. Ilagan then hired a taxicab in the amount of P1,000 to transport
him (Ilagan) to his home province at Bauan, Batangas. Ilagan
extravagantly and lavishly spent his money but a big part of his loot was
wasted in cockfight and horse racing. Ilagan was apprehended and
meekly admitted his guilt. 28 (Emphasis supplied.)

L.C. Diaz refutes Solidbank's contention by pointing out that the person who
withdrew the P300,000 was a certain Noel Tamayo. Both the trial and
appellate courts stated that this Noel Tamayo presented the passbook with the
withdrawal slip.

We uphold the finding of the trial and appellate courts that a certain Noel
Tamayo withdrew the P300,000. The Court is not a trier of facts. We find no
justifiable reason to reverse the factual finding of the trial court and the Court
of Appeals. The tellers who processed the deposit of the P90,000 check and the
withdrawal of the P300,000 were not presented during trial to substantiate
Solidbank's claim that Ilagan deposited the check and made the questioned
withdrawal. Moreover, the entry quoted by Solidbank does not categorically
state that Ilagan presented the withdrawal slip and the passbook.

Doctrine of Last Clear Chance

The doctrine of last clear chance states that where both parties are negligent
but the negligent act of one is appreciably later than that of the other, or where
it is impossible to determine whose fault or negligence caused the loss, the one
who had the last clear opportunity to avoid the loss but failed to do so, is
chargeable with the loss. 29 Stated differently, the antecedent negligence of the
plaintiff does not preclude him from recovering damages caused by the
supervening negligence of the defendant, who had the last fair chance to
prevent the impending harm by the exercise of due diligence. 30

We do not apply the doctrine of last clear chance to the present case. Solidbank
is liable for breach of contract due to negligence in the performance of its
contractual obligation to L.C. Diaz. This is a case of culpa contractual, where
neither the contributory negligence of the plaintiff nor his last clear chance to
avoid the loss, would exonerate the defendant from liability. 31 Such
contributory negligence or last clear chance by the plaintiff merely serves to
reduce the recovery of damages by the plaintiff but does not exculpate the
defendant from his breach of contract. 32

Mitigated Damages

Under Article 1172, "liability (for culpa contractual) may be regulated by the
courts, according to the circumstances." This means that if the defendant
exercised the proper diligence in the selection and supervision of its employee, or
if the plaintiff was guilty of contributory negligence, then the courts may reduce
the award of damages. In this case, L.C. Diaz was guilty of contributory
negligence in allowing a withdrawal slip signed by its authorized signatories to
fall into the hands of an impostor. Thus, the liability of Solidbank should be
reduced.

In Philippine Bank of Commerce v. Court of Appeals, 33 where the Court held

the depositor guilty of contributory negligence, we allocated the damages
between the depositor and the bank on a 40-60 ratio. Applying the same ruling
to this case, we hold that L.C. Diaz must shoulder 40% of the actual damages
awarded by the appellate court. Solidbank must pay he other 60% of the actual
damages.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with

MODIFICATION. Petitioner Solidbank Corporation shall pay private respondent
L.C. Diaz and Company, CPA's only 60% of the actual damages awarded by the
Court of Appeals. The remaining 40% of the actual damages shall be borne by
private respondent L.C. Diaz and Company, CPA's. Proportionate costs.

SO ORDERED.

Davide, Jr., C.J., Vitug and Ynares-Santiago, JJ., concur.

Azcuna, J., is on official leave.

||| (Consolidated Bank and Trust Corp. v. Court of Appeals, G.R. No. 138569,
[September 11, 2003], 457 PHIL 688-713)

[G.R. No. 140698. June 20, 2003.]

ROGELIO ENGADA, petitioner, vs. HON. COURT OF APPEALS,

Former Fourteenth Division, Manila, and PEOPLE OF THE
PHILIPPINES, respondents.

Norberto J. Posecion for petitioner.

The Solicitor General for respondents.

SYNOPSIS

The trial court found petitioner guilty of simple imprudence resulting in physical
injuries and damage to property, and sentenced him to suffer one month and
one day of arresto mayor and pay damages. The Court of Appeals increased the
prison term imposed on petitioner to four months of arresto mayor. In this
petition for review, he insisted that the Supreme Court should relax the rule
that only legal questions can be raised because the Court of Appeals
misapprehended the facts, and erred in its conclusion as to the proximate cause
of the collision. He insisted that the CA erred when it found him negligent for
occupying the lane of the Tamaraw jeepney, and then failing to return to his
original lane at the safest and earliest opportunity. He insisted that had the
driver of the Tamaraw not swerved to the left, the collision would have been
avoided, hence, it was he who was clearly negligent at the time of accident. TIDHCc

The Supreme Court found that the petitioner was negligent in several ways, and
his negligence was the proximate cause of the collision. In abandoning his lane,
he did not see to it first that the opposite lane was free of oncoming traffic and
was available for safe passage. For failing to observe the duty of diligence and
care imposed on drivers of vehicles abandoning their lane, petitioner must be
liable. The Court denied the petition and affirmed the decision of the Court of
Appeals.

SYLLABUS

1. CIVIL LAW; TRANSPORTATION; RESTRICTIONS ON OVERTAKING AND

PASSING. — It is a settled rule 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 he should not proceed if he cannot do so in
safety. This rule is consistent with Section 41, paragraph (a) of R.A. 4136 as
amended, otherwise known as The Land Transportation and Traffic Code,
which provides: Sec. 41. Restrictions on overtaking and passing. — (a) The
driver of a vehicle shall not drive to the left side of the center line of a highway
in overtaking or passing another vehicle proceeding in the same direction, unless
such left side is clearly visible and is free of oncoming traffic for a sufficient
distance ahead to permit such overtaking or passing to be made in safety. THEDcS

2. ID.; ID.; DOCTRINE OF LAST CLEAR CHANCE; CONSTRUED, NOT

APPLICABLE IN CASE AT BAR. — The doctrine of last clear chance states that
a person who has the last clear chance or opportunity of avoiding an accident,
notwithstanding the negligent acts of his opponent, is considered in law solely
responsible for the consequences of the accident. But as already stated on this
point, no convincing evidence was adduced by petitioner to support his
invocation of the abovecited doctrine. Instead, what has been shown is the
presence of an emergency and the proper application of the emergency rule.
Petitioner's act of swerving to the Tamaraw's lane at a distance of 30 meters
from it and driving the Isuzu pick-up at a fast speed as it approached the
Tamaraw, denied Iran time and opportunity to ponder the situation at all.
There was no clear chance to speak of. ADSTCa

D E CI S IO N

QUISUMBING, J : p

This petition for review seeks the reversal of the decision 1 dated May 31, 1999
of the Court of Appeals in CA-G.R. CR No. 18358, which affirmed with
modification the judgment 2 dated August 25, 1994, of the Regional Trial
Court of Iloilo City, Branch 29, in Criminal Case No. 36223. The RTC found
petitioner guilty beyond reasonable doubt of simple imprudence resulting in
physical injuries and damage to property, and sentenced him to (a) suffer
imprisonment for one month and one day of arresto mayor; (b) pay private
complainant, Mrs. Sheila Seyan, the amount of fifty one thousand pesos
(P51,000) for the total destruction of the Toyota Tamaraw jeepney, and one
hundred ten thousand pesos (P110,000) for her hospital and medical expenses,
and (c) pay the costs of suit. The CA increased the prison term imposed on
petitioner to four months of arresto mayor.

The facts culled from the records are as follows:

On November 29, 1989, at about 1:30 in the afternoon, Edwin Iran was
driving a blue Toyota Tamaraw jeepney bound for Iloilo City. On board was
Sheila Seyan, the registered owner of the Tamaraw. While traversing the road
along Barangay Acquit, Barotac Nuevo, the Tamaraw passengers allegedly saw
from the opposite direction a speeding Isuzu pick-up, driven by petitioner
Rogelio Engada. The pick-up had just negotiated a hilly gradient on the highway.
When it was just a few meters away from the Tamaraw, the Isuzu pick-up's
right signal light flashed, at the same time, it swerved to its left, encroaching
upon the lane of the Tamaraw and headed towards a head-on collision course
with it. Seyan shouted at Iran to avoid the pick-up. Iran swerved to his left but
the pick-up also swerved to its right. Thus, the pick-up collided with the
Tamaraw, hitting the latter at its right front passenger side. The impact caused
the head and chassis of the Tamaraw to separate from its body. Seyan was
thrown out of the Tamaraw and landed on a ricefield. The pick-up stopped
diagonally astride the center of the road.

Seyan and Iran were brought to Barotac Nuevo Medicare Hospital. 3 Seyan was
profusely bleeding from her nose and was in a state of shock with her eyes closed.
In the afternoon of the same day, November 29, 1989, she was transferred to
St. Paul's Hospital in Iloilo City where she was confined. Her medical certificate
revealed that she suffered a fracture on the right femur, lacerated wound on
the right foot, multiple contusions, abrasions, blunt abdominal injury, and
lacerations of the upper-lower pole of the right kidney. 4 She was discharged
from the hospital only on January 15, 1990.

Seyan incurred P130,000 in medical expenses. The Toyota Tamaraw jeepney

ended up in the junk heap. Its total loss was computed at P80,000.

A criminal complaint for damage to property through reckless imprudence with

serious physical injuries was filed with the Municipal Trial Court of Barotac
Nuevo against petitioner Rogelio Engada and Edwin Iran. 5 Probable cause was
found against petitioner, while the complaint against Iran was dismissed. 6

Consequently, an Information was filed against petitioner charging him with

serious physical injuries and damage to property through reckless imprudence,
thus:

That on or about November 29, 1989, in the Municipality of Barotac

Nuevo, Province of Iloilo, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused Rogelio Engada driving an
 Isuzu Pick-up with Plate No. SAR 117 owned by the Land Bank of the
Philippines, did then and there wilfully, unlawfully and with reckless
imprudence drive said pick-up in a careless, reckless and imprudent
manner with disregard of traffic laws and regulations, and as a result of
such negligent and reckless driving the ISUZU Pick-up driven by the
accused bumped a Toyota Tamaraw jeep with Plate No. FBF 601 owned
by Joelito and Sheila Seyan and driven by Edwin Iran thereby causing
damage to the Toyota Tamaraw in the amount of P80,000.00 and
serious physical injuries to Mrs. Sheila Seyan who was riding said vehicle,
the injuries barring complications will heal in more than 30 days.

CONTRARY TO LAW. 7

After trial, the court rendered on August 25, 1994 a decision, disposing as
follows:

WHEREFORE, the Court, finding the accused guilty beyond reasonable

doubt of Simple Imprudence resulting [in] physical injuries and damage
to property defined and penalized in Article 263, paragraph 4 and in
relation with Article 365, paragraph 2 of the Revised Penal Code, hereby
sentences the accused Rogelio Engada to suffer imprisonment of ONE (1)
MONTH and ONE (1) DAY of arresto mayor.

Accused is further ordered to pay complainant Mrs. Sheila Seyan the

amount of P51,000.00 for the total destruction of the Toyota Tamaraw
Jeepney and P110,000.00 for indemnification of hospital and medical
expenses, and to pay the cost of the suit.

SO ORDERED. 8

Petitioner appealed to the Court of Appeals. On May 31, 1999, the CA

dismissed the appeal and affirmed with modification the trial court's decision,
thus:

WHEREFORE, the instant appeal is hereby DISMISSED. Accordingly, the

appealed decision is hereby AFFIRMED with modification as to the
penalty imposed upon the accused who is hereby sentenced to suffer
imprisonment of FOUR (4) MONTHS of arresto mayor.
 SO ORDERED. 9

Petitioner filed a motion for reconsideration, but it was denied. Hence, the
instant petition, wherein petitioner raises the issue of:

WHETHER OR NOT THE FINDINGS OF RESPONDENT COURT OF

APPEALS ARE SUPPORTED BY THE EVIDENCE OR BASED ON A
MISAPPREHENSION OF FACTS RESULTING IN A MANIFESTLY
MISTAKEN INFERENCE SPECIFICALLY ON WHAT WAS THE
PROXIMATE CAUSE OF THE ACCIDENT AND WHOSE ACT WAS IT. 10

Petitioner claims innocence and seeks acquittal. He contends that in this case we
should relax the rule that only legal questions can be raised in a petition for
review under Rule 45 of the Rules of Court. According to him, the Court of
Appeals misapprehended the facts, and erred in its conclusion as to the
proximate cause of the collision. He insists that the Court of Appeals erred when
it found him negligent for occupying the lane of the Tamaraw jeepney, and then
failing to return to his original lane at the safest and earliest opportunity.

Petitioner further contends that the CA failed to consider that he already

relayed his intention to go back to his lane by flashing the pick-up's right signal
light. He submits that at that moment Iran, the driver of the Tamaraw, had no
more reason to swerve to his left. Had Iran not swerved to the left, according to
petitioner, the collision would have been avoided. It was Iran who was clearly
negligent, says petitioner. Citing our ruling in McKee v. Intermediate Appellate
Court, 11 petitioner avers that although his act of occupying the Tamaraw's lane
was the initial act in the chain of events, Iran's swerving to the left after
petitioner flashed his right turn signal, constituted a sufficient intervening event,
which proximately caused the eventual injuries and damages to private
complainant.
Petitioner also claims that the Court of Appeals erred when it found that the
pick-up approached the Tamaraw at a fast speed. He maintains that this was
not borne by the evidence on record.

The Office of the Solicitor General, as counsel for the state, counters that the
Court of Appeals did not err in convicting the accused, now petitioner herein.
Petitioner's negligence was the proximate cause of the accident, according to the
OSG, for the following reasons: First, petitioner for no justifiable reason occupied
the opposite lane. Second, while on the wrong lane, petitioner was driving the
ISUZU pick-up fast, and he returned to his own lane only at the last minute.
This left Iran, the driver of the Tamaraw, with no opportunity to reflect on the
safest way to avoid the accident. Iran's swerving to the left was his reaction to
petitioner's wrongful act, which appropriately calls for the application of the
emergency rule. The rationale of this rule is that a person who is confronted
with a sudden emergency might have no time for thought, and he must make a
prompt decision based largely upon impulse or instinct. Thus, he cannot be held
to the same standard of conduct as one who had an opportunity to reflect, even
though it later appears that he made the wrong decision. Clearly, under the
emergency rule petitioner cannot shift the blame to Iran, concludes the OSG.

As to petitioner's claim that there was no evidence showing that the pick-up
was running very fast, the OSG avers that this is rebutted by the testimony of
Seyan and Iran who both testified that petitioner drove the pick-up at a fast
speed when it encroached on their lane immediately before the collision.

Did the Court of Appeals err in finding that the action of petitioner, Rogelio
Engada, was the proximate cause of the collision? This is the crux of the present
petition.

In our view, petitioner's attempt to pin the blame on Edwin Iran, the driver of
the Tamaraw, for the vehicular collision is unfounded. Iran swerved to the left
only to avoid petitioner's pick-up, which was already on a head to head position
going against Iran's Tamaraw jeepney immediately before the vehicles collided.
This fact has been established by the evidence on record. No convincing proof
was adduced by petitioner that the driver of the Tamaraw, Iran, could have
avoided a head-on collision.

We note that petitioner admitted his Isuzu pick-up intruded into the lane of the
Tamaraw jeepney. Prosecution witness Nelson Alobin, one of those who went to
the scene of the incident immediately, testified that when he arrived at the
place where the collision took place, he saw the pick-up positioned diagonally at
the center of the road. 12 Its head was towards the direction of Barotac Nuevo
and the rear tires were just a few inches beyond the center of the
lane. 13 Moving backwards facing Barotac Nuevo, at two arms length away from
the pick-up, Alobin also saw a tire mark, 12 inches long and located at the left
side of the center line going to the right side. 14

The above circumstance corroborates the testimony of both Seyan and Iran that,
immediately before the collision, the pick-up was not on its proper lane but on
the other lane (the left lane rather than the right) directly on collision course
with the Tamaraw jeepney. The tire mark reveals the short distance between
the two vehicles when the ISUZU pick-up attempted to return to its proper
lane.

It is a settled rule 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 he should not proceed if he cannot do so in safety. 15 This
rule is consistent with Section 41, paragraph (a) of R.A. 4136 as amended,
otherwise known as TheLand Transportation and Traffic Code, which provides:

Sec. 41. Restrictions on overtaking and passing. — (a) The driver of a

vehicle shall not drive to the left side of the center line of a highway in
overtaking or passing another vehicle proceeding in the same direction,
unless such left side is clearly visible and is free of oncoming traffic for a
sufficient distance ahead to permit such overtaking or passing to be made
in safety.
In the present case, there was only a distance of 30 meters from the Tamaraw
jeepney when the Isuzu pick-up abandoned its lane and swerved to the left of
the center line. 16 In addition, petitioner was running at a fast clip while
traversing this lane. This was testified to by Seyan and Iran, unrebutted by
petitioner. The resulting damage to the Tamaraw jeepney, at the point where
the head and chassis were separated from the body, bolsters this conclusion that
petitioner was speeding. In our view, petitioner was negligent in several ways,
and his negligence was the proximate cause of the collision. In abandoning his
lane, he did not see to it first that the opposite lane was free of oncoming traffic
and was available for a safe passage. Further, after seeing the Tamaraw jeepney
ahead, petitioner did not slow down, contrary to the rule set in Batangas
Laguna Tayabas Bus Co. v. IAC, 17 thus:

. . . [O]r if, after attempting to pass, the driver of the overtaking vehicle
finds that he cannot make the passage in safety, the latter must slacken
his speed so as to avoid the danger of a collision, even bringing his car to
a stop if necessary.

For failing to observe the duty of diligence and care imposed on drivers of
vehicles abandoning their lane, petitioner must be held liable.

Iran could not be faulted when in his attempt to avoid the pick-up, he swerved
to his left. Petitioner's acts had put Iran in an emergency situation which forced
him to act quickly. 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. 18

Petitioner tries to extricate himself from liability by invoking the doctrine of last
clear chance. He avers that between him and Iran, the latter had the last clear
chance to avoid the collision, hence Iran must be held liable.
The doctrine of last clear chance states that a person who has the last clear
chance or opportunity of avoiding an accident, notwithstanding the negligent
acts of his opponent, is considered in law solely responsible for the consequences
of the accident. 19 But as already stated on this point, no convincing evidence
was adduced by petitioner to support his invocation of the abovecited doctrine.
Instead, what has been shown is the presence of an emergency and the proper
application of the emergency rule. Petitioner's act of swerving to the Tamaraw's
lane at a distance of 30 meters from it and driving the Isuzu pick-up at a fast
speed as it approached the Tamaraw, denied Iran time and opportunity to
ponder the situation at all. There was no clear chance to speak of. Accordingly,
the Court of Appeals did not err in holding petitioner responsible for the
vehicular collision and the resulting damages, including the injuries suffered by
Mrs. Sheila Seyan and the total loss of the Tamaraw jeepney. It also did not err
in imposing on petitioner the sentence of four (4) months of arresto mayor. 20

WHEREFORE, the instant petition is DENIED for lack of merit. The assailed
decision of the Court of Appeals in CA-G.R. CR No. 18358 is AFFIRMED. Costs
against petitioner. AcISTE

SO ORDERED.

||| (Engada v. Court of Appeals, G.R. No. 140698, [June 20, 2003], 452 PHIL
587-597)