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FIRST DIVISION

[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.

DECISION
PARDO, J.:

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.
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 Paraaque 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.
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 Rayneras 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 victims own
negligence.
The dispositive portion of the lower courts 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 Rayneras 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:

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

(b) P20,000.00 as attorneys 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 Rayneras 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.
In this petition, the heirs of Reynaldo Raynera contend that the appellate court erred in: (1)
overturning the trial courts finding that respondents negligent operation of the Isuzu truck was the
proximate cause of the victims death; (2) applying the doctrine of last clear chance; (3) setting aside
the trial courts 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 Rayneras 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.
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 vehicles 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.[27] Virgilio 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 victims 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.
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.
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.
Davide, Jr., C.J. (Chairman), Melo, and Kapunan, JJ., concur.
Ynares-Santiago, J., no part.
THIRD DIVISION

STEPHEN CANG and GEORGE G.R. No. 163078


NARDO y JOSOL,
Petitioners, Present:

CORONA, J.,
Chairperson,
CHICO-NAZARIO,
- versus - VELASCO, JR.,
NACHURA, and
PERALTA, JJ.

Promulgated:
HERMINIA CULLEN,
Respondent. November 25, 2009

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

DECISION

NACHURA, J.:

Before this Court is a Petition for Review under Rule 45 of the Rules of Court assailing the
Decision[1] dated December 2, 2002 and the Resolution[2]dated February 23, 2004 of the Court of
Appeals (CA) in CA-G.R. CV No. 69841. In the assailed Decision, the CA reversed and set aside
the Decision[3] of the Regional Trial Court (RTC) of Cebu, Branch 22, in Civil Case No. CEB-
20504, an action for damages.

The claim for damages was precipitated by a vehicular accident involving a taxicab bearing Plate
No. GVG-672, owned by petitioner Stephen Cang and driven by petitioner George Nardo, and a
motorcycle owned by respondent Herminia Cullen and driven by Guillermo Saycon.

On October 29, 1996, at about 3:10 p.m., Saycon was driving the Honda motorcycle, with
Plate No. LLC-A-4589, along P. del Rosario Street, Cebu City, occupying the middle portion of
the outer lane. The taxi, on the other hand, was traveling on the inner lane and slightly behind,
but to the left of, the motorcycle. Respondent alleged that between Sikatuna and D. Jakosalem
Streets, the taxi veered to the right and sideswiped the motorcycle, then attempted to speed away.
Peace officers near the scene flagged down the taxi. As a result of the collision, Saycon was
seriously injured.[4]
Petitioners, meanwhile, claimed that it was the motorcycle that bumped into the taxi. Nardo
narrated that he was driving the taxi on the inner lane (near the center island) along P. del Rosario
St., moving towards the intersection of D. Jakosalem St. When the caution signal of the traffic
light flashed, he immediately slowed down. It was at that point that the motorcycle bumped into
the taxis rear.[5]

Respondent, as employer, out of compassion, paid all of Saycons hospital and medical
expenses amounting to P185,091.00.[6] She also alleged that due to the injuries Saycon sustained,
he was unable to work. For humanitarian reasons, respondent had given Saycon an amount
equivalent to his wages from October 31, 1996 to May 30, 1997. She also gave Saycon P2,000.00
per month from June 1997 until he was able to return to work.[7]

On July 3, 1997, respondent filed a Complaint for damages against petitioners praying that
judgment be rendered ordering the latter to pay, jointly and severally, P205,091.00 in actual
damages; P2,000.00 per month from June 1997 up to the time Saycon would be able to return to
work, with 6% per annum interest from the date of extrajudicial demand; P50,000.00 as
exemplary damages; 20% of the total amount by way of attorneys fees; P10,000.00 as acceptance
fee; P500.00 per court appearance, as appearance fee; P20,000.00 as litigation expenses; and the
cost of the suit.[8]

Petitioner Cang filed a Motion to Dismiss contending that the complaint violated
Presidential Decree No. 1508, or the Katarungang Pambarangay Law. The motion was dismissed
on September 24, 1997.[9]

Subsequently, petitioners filed their Answer with Counterclaims. Cang averred that Nardo
was not driving the taxi as the formers employee, but that Nardo was leasing the taxi from
him.[10] Petitioners also claimed that Nardo did not sideswipe the motorcycle driven by Saycon,
nor did the latter speed away after the incident. They maintained that, at the time of the impact,
Nardos taxi was on its proper lane and that it was the motorcycle that veered into Nardos lane and
bumped the taxi.[11] Further, they alleged that after the impact, Nardo drove the taxi backward to
where Saycon and the motorcycle were slumped on the road. He then alighted from the taxi.
Meanwhile, two traffic enforcers had crossed the street. After examining Saycons injuries, one of
the enforcers ordered Nardo to bring the former to a hospital. Nardo hesitated for a moment
because he wanted the enforcers to make a sketch of the accident first, to show the exact positions
of the vehicles at the time of the accident. However, he was prevailed upon by the traffic enforcers
to bring Saycon to the hospital. Hence, it was not true that Nardo attempted to speed away from
the scene of the accident. Petitioner Cang also claimed that Saycon was driving the motorcycle
without any protective headgear and that the latter was not authorized to drive the motorcycle
since he only had a students permit.[12] Petitioner Cang prayed that the complaint be dismissed
for lack of merit, for lack of cause of action and for lack of legal capacity. He also prayed for the
award of P50,000.00 as moral damages, P20,000.00 as exemplary damages, P10,000.00 as
acceptance fee, P30,000.00 as attorneys fees, P20,000.00 as litigation expenses, and P1,000.00
per court appearance.[13]

After trial, the RTC ruled in petitioners favor. In its Decision[14] dated January 31, 2000,
the trial court disposed:

WHEREFORE, based upon the foregoing, judgment is hereby rendered in favor of the
defendants. Plaintiffs (sic) complaint is hereby dismissed.

Defendants counterclaims are likewise denied.

No pronouncement as to costs.

SO ORDERED.[15]

Respondent appealed the RTC Decision to the CA. On December 2, 2002, the CA
promulgated the assailed Decision,[16] reversing the RTC Decision, to wit:

WHEREFORE, premises considered, the appealed decision dated January 31, 2000 of the
Regional Trial Court of Cebu, Branch 22 is hereby REVERSED and SET ASIDE. Defendants-
appellees are hereby ordered to pay plaintiff-appellant, jointly and severally[,] the following:

1.) The sum of P166,197.08 as actual damages which were incurred for the hospitalization and
other medical expenses of plaintiff-appellants driver Guillermo Saycon; and

`2.) The sum of P20,000.00 as exemplary damages.

SO ORDERED.[17]

Petitioners are now before this Court on Petition for Review seeking the reversal of the CA
Decision and its Resolution denying their Motion for Reconsideration. They argue that the CA
erred in reversing the judgment rendered by the trial court; in giving credence to the eyewitness
testimony of Ike Aldemita, that petitioner Nardo had overtaken the motorcycle driven by Saycon
and, therefore, was the negligent party; and in awarding damages to respondent.[18]

The petition is meritorious.

We note that the present Petition raises questions of fact. Whether a person is negligent or
not is a question of fact which we cannot ordinarily pass upon in a petition for review
on certiorari, as our jurisdiction is limited to reviewing errors of law.[19]
However, although findings of fact of the CA are generally conclusive on this Court, this
rule admits of the following exceptions:[20]

(1) the factual findings of the Court of Appeals and the trial court are contradictory;

(2) the findings are grounded entirely on speculation, surmises or conjectures;

(3) the inference made by the Court of Appeals from its findings of fact is mainly mistaken,
absurd or impossible;

(4) there is grave abuse of discretion in the appreciation of facts;

(5) the appellate court, in making its findings, goes beyond the issues of the case and such
findings are contrary to the admissions of both appellant and appellee;

(6) the judgment of the Court of Appeals is premised on a misapprehension of facts;

(7) the Court of Appeals fails to notice certain relevant facts which, if properly considered,
will justify a different conclusion; and

(8) the findings of fact of the Court of Appeals are contrary to those of the trial
court or are mere conclusions without citation of specific evidence, or where the facts set forth by
the petitioner are not disputed by respondent, or where the findings of fact of the Court of Appeals
are premised on the absence of evidence but are contradicted by the evidence on record.

Thus, when there are conflicting findings of fact by the CA on one hand and by the trial
court on the other, as in this case,[21] the Court may give due course to petitions raising factual
issues by way of exception and only in the presence of extremely meritorious circumstances.[22]

Contrary to the CAs ruling, we find that the RTC correctly disregarded Aldemitas
testimony. Between the RTC and the CA, it is the formers assessment of the witnesses credibility
that should control.[23]

The trial court gave little credence to Aldemitas testimony, upon its finding that:

On the other hand, multicab driver Aldemita contended that he saw everything. He said
that the motorcycle and the taxi overtook him. He told the court during his testimony that the
motorcycle was ahead of the taxi. He further said that the motorcycle was nearer him (TSN,
February 13, 1998, Savellon, p. 4). The court finds him inconsistent. If both were ahead of him
and the motorcycle was ahead of the taxi, then, the motorcycle could not be nearer him. Because
if the motorcycle was indeed nearer him, then, it could not have been ahead of the taxi. But rather,
the taxi was ahead of the motorcycle. But in a later testimony, he said that they were beside each
other (TSN, Feb. 12, 1998, Savellon, p. 17).

He also said that both tried to pass the lane which would fit only two vehicles. He told the
court that both vehicles were running fast at a speed of more than 30 kph when the motorcycle was
hit by the taxi. It would seem to the court that both vehicles were racing each other. Aldemita
further said that in trying to pass the motorcycle, the taxi hit the left handle bar of the motorcycle.
The handle bar was twisted and the motorcycle fell down to the left side. But if the taxi was indeed
to the left of the motorcycle and if it really swerved to the right and hit the motorcycle the law of
force would tell us that the motorcycle would fall to the right after impact. It is the most logical
direction for the motorcycle to fall. If the taxi was indeed traveling at a fast speed when it hit the
motorcycle, the impact would not have only caused a mere twisted handle and the motorcycle
would not have only fallen on its side as claimed by Aldemita. High speed impact would have
caused the motorcycle and its driver greater damage and would have dislocated them much farther
away than where it fell in this case.

He claimed that he was more or less ten (10) meters from the site of the accident when it
happened (TSN, Feb. 12, 1998, p. 12). The court can, therefore, say that he was also quite far from
the scene of the accident and could not be that certain as to what really happened.

Aldemita also said that he signaled the taxi driver to stop (TSN, Feb. 12, 1998, Savellon,
p. 6). However, later when asked, he said he signaled the policeman to stop the taxi driver or not
(sic). He also claimed that he was near (sic) the motorcyclist than the policemen. He further
claimed that he was there at the scene of the accident to help but later said he never saw the driver
of the taxi (TSN, Feb. 12, 1998, Savellon, p. 17). The court finds this highly unusual for somebody
who claimed to be at the scene of the accident not to see the driver who came out of his vehicle to
reason out with the responding enforcers. He said he was the one who removed the motorcycle
which pinned its driver and then helped carried (sic) the driver to the taxi as told by the policeman
(TSN, Feb. 12, 1998, Savellon p. 7). But later, he said that somebody took his place in carrying
the victim because there were already many people (TSN, Feb. 12, 1998, Savellon, p. 17). x x x.

xxxx

The court also cannot fail to notice the uncontroverted allegation of Nardo during his
testimony that Aldemita was not the person (the multicab driver) he saw during the time of the
accident. He claimed that the person who testified in court last February 12, 1998, was not the
driver of the multicab who was at the scene of the accident that fateful night (sic) of October 29,
1996 (TSN, Aug. 24, 1998, Pieras, p. 12). Allegations and claims like this when not countered and
disproved would certainly cast doubt on the credibility of the subject person and consequently, on
his testimonies, too.

Based on the points, the court cannot help but find Aldemitas testimony as uncertain and
filled with so many inconsistencies. They contradicted with each other at many instances. The
court believes in either of the two possibilities -- Aldemita did not really actually and exactly see
the whole incident or he was lying through his teeth. Thus, the court cannot give so much weight
to his testimony.[24]

The CA failed to refute the trial courts detailed analysis of the events leading to the accident
and what transpired thereafter. It merely said that the lower court should have considered
Aldemitas eyewitness testimony.[25] The CA based its findings of the accident only on Aldemitas
account. It failed to consider all the other testimonial and documentary evidence analyzed by the
trial court, which substantially controverted Aldemitas testimony.

In contrast, the trial court found Nardo more credible on the witness stand. Thus:
During his testimonies, Nardo appeared to be consistent, sincere and certain in his
statements. He appeared to be acknowledgeable (sic) in his work as a driver. He conveyed a
definite degree of credibility when he testified. The Court has decided to give more appreciation
to his testimonies.[26]

We are inclined to give greater weight to the trial courts assessment of the two witnesses.

The findings of the trial court on the credibility of witnesses are accorded great weight and
respect even considered as conclusive and binding on this Court[27] since the trial judge had the
unique opportunity to observe the witness firsthand and note his demeanor, conduct and attitude
under grueling examination.[28] Only the trial judge can observe the furtive glance, blush of
conscious shame, hesitation, flippant or sneering tone, calmness, sigh of a witness, or his scant or
full realization of an oath all of which are useful aids for an accurate determination of a witness
honesty and sincerity.[29] He can thus be expected to determine with reasonable discretion which
testimony is acceptable and which witness is worthy of belief.[30]

Absent any showing that the trial courts calibration of the credibility of the witnesses was
flawed, we are bound by its assessment.[31] This Court will sustain such findings unless it can be
shown that the trial court ignored,[32] overlooked, misunderstood,[33] misappreciated,[34] or
misapplied[35] substantial facts and circumstances, which, if considered, would materially affect
the result of the case.[36]

We find no such circumstances in this case. The trial courts meticulous and dispassionate
analysis of the facts of the case is noteworthy. It succeeded in presenting a clear and logical
picture of the events even as it admitted that the resolution of the case was made more difficult
by the inefficiencies, indifference, ineptitude, and dishonesty of the local law enforcers, and the
litigants,[37] which left the court without an official sketch of the accident,[38] with no photographs
or any other proof of the damage to the respondents motorcycle, [39] with an altered police
report,[40] and with the baffling matter of the victims drivers license being issued two days after
the accident took place when the victim was supposed to be in the hospital. [41]

These handicaps notwithstanding, the trial court methodically related in detail all the
testimonial and documentary evidence presented, and made the most rational analysis of what
truly happened on the day of the incident.

The trial court categorically found that it was not the taxi that bumped the motorcycle. It
concluded that based on the evidence presented before the court, it was the motorcycle that
bumped the taxi.[42] It also found that at the time of the accident, Saycon, the driver of the
motorcycle, did not have a license but only had a student drivers permit. Further, Saycon was not
wearing the proper protective headgear and was speeding.[43] Hence, the trial court concluded:
It was really pitiful that Saycon suffered for what he did. But then, he has only himself to
blame for his sad plight. He had been careless in driving the motorcycle without a helmet. For
speeding. (sic) For driving alone with only a student permit. (sic) For causing the accident. (sic) If
the driver was found violating traffic rules, a legal presumption that he was negligent arises.[44]

Section 30 of Republic Act No. 4136, or the Land Transportation and Traffic Code,
provides:

Sec. 30. Student-drivers permit Upon proper application and the payment of the fee
prescribed in accordance with law, the Director or his deputies may issue student-drivers permits,
valid for one year to persons not under sixteen years of age, who desire to learn to operate motor
vehicles.

A student-driver who fails in the examination on a professional or non-professional license


shall continue as a student-driver and shall not be allowed to take another examination at least one
month thereafter. No student-driver shall operate a motor vehicle, unless possessed of a valid
student-drivers permit and accompanied by a duly licensed driver.

The licensed driver duly accredited by the Bureau, acting as instructor to the student driver,
shall be equally responsible and liable as the latter for any violation of the provisions of this Act
and for any injury or damage done by the motor vehicle on account or as a result of its operation
by a student-driver under his direction.[45]

Saycon was in clear violation of this provision at the time of the accident. Corollarily, Article
2185 of the Civil Code states:

Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.

The Civil Code characterizes negligence as the omission of that diligence required by the
nature of the obligation and corresponds with the circumstances of the persons, of the time and
of the place.[46] Negligence, as it is commonly understood, is conduct that creates an undue risk
of harm to others. It is the failure to observe that degree of care, precaution and vigilance that the
circumstances justly demand.[47] It is the omission to do something which a reasonable man,
guided by considerations that ordinarily regulate the conduct of human affairs, would do, or doing
something that a prudent and reasonable man would not do.[48]
To determine whether there is negligence in a given situation, this Court laid down this
test: Did 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, the person is guilty of
negligence.[49]

Based on the foregoing test, we can conclude that Saycon was negligent. In the first place, he
should not have been driving alone. The law clearly requires that the holder of a student-drivers
permit should be accompanied by a duly licensed driver when operating a motor vehicle. Further,
there is the matter of not wearing a helmet and the fact that he was speeding. All these prove that
he was negligent.

Under Article 2179 of the Civil Code,


[w]hen the plaintiffs 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 defendants lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded.

The trial court gave more credence to Nardos version of the accident that he was on his
proper lane, that he was not speeding, and that it was the motorcycle that bumped into his taxi.
The trial court established that the accident was caused wholly by Saycons negligence. It held
that the injuries and damages suffered by plaintiff (respondent) and Saycon were not due to the
acts of defendants (petitioners) but due to their own negligence and recklessness.[50]

Considering that Saycon was the negligent party, he would not have been entitled to recover
damages from petitioners had he instituted his own action. Consequently, respondent, as his
employer, would likewise not be entitled to claim for damages.

Further militating against respondents claim is the fact that she herself was negligent in the
selection and supervision of her employee. Article 2180 of the Civil Code states:

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

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

Guardians are liable for damages caused by the minors or incapacitated persons who are
under their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are employed
or on the occasion of their functions.

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

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

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices, so long as they remain in their custody.

The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to prevent
damage.[51]

When an employee causes damage due to his own negligence while performing his own
duties, there arises the juris tantum presumption that his employer is negligent, rebuttable only
by proof of observance of the diligence of a good father of a family.[52] Thus, in the selection of
prospective employees, employers are required to examine them as to their qualifications,
experience and service records. With respect to the supervision of employees, employers must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for breaches thereof. These facts must be shown by concrete proof, including
documentary evidence.[53]

The fact that Saycon was driving alone with only a students permit is, to our minds, proof
enough that Cullen was negligent either she did not know that he only had a students permit or
she allowed him to drive alone knowing this deficiency. Whichever way we look at it, we arrive
at the same conclusion: that she failed to exercise the due diligence required of her as an employer
in supervising her employee. Thus, the trial court properly denied her claim for damages. One
who seeks equity and justice must come to this Court with clean hands.[54]

In sum, we hold that the trial court correctly found that it was Saycon who caused the
accident and, as such, he cannot recover indemnity for his injury. On the other hand, respondent,
as Saycons employer, was also negligent and failed to exercise the degree of diligence required
in supervising her employee. Consequently, she cannot recover from petitioners what she had
paid for the treatment of her employees injuries.

WHEREFORE, the foregoing premises considered, the Petition is GRANTED. The


Decision dated December 2, 2002 and the Resolution dated February 23, 2004 of the Court of
Appeals in CA-G.R. CV No. 69841 are REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Cebu, Branch 22, in Civil Case No. CEB-20504 is
hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.
SECOND DIVISION

GOVERNMENT SERVICE G.R. No. 170414


INSURANCE SYSTEM,
Petitioner,

- versus -

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG, and
MICHAEL GALVEZ,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x

PHILIPPINE AIRLINES, INC., G.R. No. 170418


ROGELIO CASIO, and
RUEL ISAAC,
Petitioners,

- versus -

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG and
MICHAEL GALVEZ,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
AIR TRANSPORTATION OFFICE, G.R. No. 170460
DANILO ALZOLA, and
ERNESTO* LIM, Present:
Petitioners,
CARPIO, J., Chairperson,
PERALTA,
- versus - ABAD,
PEREZ,** and
MENDOZA, JJ.

PACIFIC AIRWAYS CORPORATION,


ELY BUNGABONG, and
MICHAEL GALVEZ,
Respondents,

GOVERNMENT SERVICE Promulgated:


INSURANCE SYSTEM,
Intervenor. August 25, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION
CARPIO, J.:

The Case

Before the Court are three consolidated petitions for review[1] of the 28 October 2004
Decision[2] and the 15 November 2005 Resolution[3] of the Court of Appeals in CA-G.R. CV No.
73214. The 28 October 2004 Decision affirmed the 27 July 2001 Decision[4] of the Regional Trial
Court (Branch 112) of Pasay City. The 15 November 2005 Resolution modified the 28 October
2004 Decision of the Court of Appeals.

The Antecedent Facts


On 2 April 1996, at around 6:45 p.m., the Twin Otter aircraft of Philippine Airways Corporation
(PAC) arrived at the Manila International Airport[5] from El Nido, Palawan.[6] In command of the
aircraft was Ely B. Bungabong.[7] With Bungabong in the cockpit was Michael F. Galvez as co-
pilot.[8]

Upon touchdown, the Twin Otter taxied along the runway and proceeded to the Soriano Hangar
to disembark its passengers.[9] After the last passenger disembarked, PACs pilots started the
engine of the Twin Otter in order to proceed to the PAC Hangar located at the other end of the
airport.[10] At around 7:18 p.m., Galvez contacted ground control to ask for clearance to taxi to
taxiway delta.[11] Rogelio Lim, ground traffic controller on duty at the Air Transportation Office
(ATO), issued the clearance on condition that he be contacted again upon reaching taxiway delta
intersection.[12]

PACs pilots then proceeded to taxi to taxiway delta at about 7:19 and 19 seconds.[13] Upon
reaching the intersection of taxiway delta, Galvez repeated the request to taxi to taxiway delta,
which request was granted.[14] Upon reaching fox 1, Galvez requested clearance to make a right
turn to fox 1 and to cross runway 13 in order to proceed to fox 1 bravo.[15] ATO granted the
request.[16] At this point, the Twin Otter was still 350 meters away from runway 13.[17]Upon
reaching runway 13, PACs pilots did not make a full stop at the holding point to request
clearance right before crossing runway 13.[18] Without such clearance, PACs pilots proceeded to
cross runway 13.

Meanwhile, the Philippine Airlines (PAL) Boeing 737, manned by pilots Rogelio Casio and Ruel
Isaac, was preparing for take-off along runway 13. The PAL pilots requested clearance to push
and start[19] on runway 13. Ernesto Linog, Jr., air traffic controller on duty at the ATO issued the
clearance.[20] Subsequently, at 7:20 and 18 seconds, Linog, Jr. gave PALs Boeing 737 clearance
to take off.[21] Pilots Casio and Isaac then proceeded with the take-off procedure.[22] While
already on take-off roll, Casio caught a glimpse of the Twin Otter on the left side of the Boeing
737 about to cross runway 13.[23]

While the Twin Otter was halfway through runway 13, Galvez noticed the Boeing 737 and told
Bungabong that an airplane was approaching them from the right side.[24] Bungabong then
said, Diyos ko po and gave full power to the Twin Otter.[25] The PAL pilots attempted to abort
the take-off by reversing the thrust of the aircraft.[26] However, the Boeing 737 still collided with
the Twin Otter.[27]

The Boeing 737 dragged the Twin Otter about 100 meters away.[28] When the Twin Otter
stopped, PACs pilots ran away from the aircraft for fear it might explode.[29] While observing the
Twin Otter from a safe distance, they saw passengers running down from the Boeing
737.[30] When PACs pilots returned to the aircraft to get their personal belongings, they saw that
the Twin Otter was a total wreck.[31]

At 7:21 and 2 seconds on that fateful evening, the PAL pilots informed ATOs control tower that
they had hit another aircraft, referring to the Twin Otter.[32]Bungabong suffered sprain on his
shoulder while Galvez had laceration on his left thumb.[33] An ambulance brought the two pilots
to Makati Medical Center where they were treated for serious and slight physical injuries.[34]

On 7 May 1996, PAC, Bungabong, and Galvez filed in the Regional Trial Court (Branch 112) of
Pasay City a complaint[35] for sum of money and damages against PAL, Casio, Isaac, ATO, Lim,
Linog, Jr., and ATOs traffic control supervisor, Danilo Alzola. The Government Service Insurance
System (GSIS), as insurer of the Boeing 737 that figured in the collision, intervened.
The Ruling of the Trial Court

The trial court ruled that the proximate cause of the collision was the negligence of Alzola, Lim,
and Linog, Jr., as ATOs traffic control supervisor, ground traffic controller, and air traffic
controller, respectively, at the time of the collision. The trial court further held that the direct
cause of the collision was the negligence ofCasio and Isaac, as the pilots of the Boeing 737 that
collided with the Twin Otter. The decretal portion of the trial courts decision reads:

PREMISES CONSIDERED, judgment is hereby rendered ordering defendants Philippine Air Lines and its
pilots, Rogelio Casio and Ruel Isaac, and Air Transportation Office and its comptrollers, Danilo Alzola,
Rogelio Lim and Ernesto Linog, Jr., jointly and severally, to pay:

a) Plaintiff Pacific Airways Corporation the amount of Php15,000,000.00 and the further amount of
Php100,000.00 a day from April 2, 1996 until it is fully reimbursed for the value of its RP-C1154 plane,
as actual damages, and the amount of Php3,000,000.00, as exemplary damages, and the amount of
Php1,000,000.00, as and for attorneys fees and expenses of litigation;

b) Plaintiffs Ely B. Bongabong[36] and Michael F. Galvez, the amount of Php5,000.00 each, as actual
damages; the amount of Php500,000.00, as and for moral damages; Php500,000.00 as and for
exemplary damages, and the amount of Php50,000.00, as and for attorneys fees;

c) Defendants are, likewise, ordered to pay, jointly and severally, to plaintiffs the costs of this suit.

SO ORDERED.[37]

PAL, Casio, Isaac, GSIS, ATO, Alzola, Lim, and Linog, Jr., all appealed the trial courts Decision to
the Court of Appeals.

The Ruling of the Court of Appeals

The Court of Appeals found that the trial court did not commit any reversible error. In its 28
October 2004 decision, the Court of Appeals affirmed in toto the decision of the trial court, thus:
WHEREFORE, the instant appeal is hereby DISMISSED. The decision of the Regional Trial Court, Branch
112, Pasay City dated July 27, 2001 is hereby AFFIRMED in toto.

SO ORDERED.[38]

PAL, Casio, Isaac, GSIS, ATO, Alzola, Lim, and Linog, Jr., filed their respective motions for
reconsideration. The appellate court denied for lack of merit all the motions for reconsideration
except the one filed by Linog, Jr.

The Court of Appeals gave weight to the 20 March 2003 Decision[39] on appeal of the RTC (Branch
108) of Pasay City in Criminal Case No. 02-1979 acquitting Linog, Jr., who was convicted in the
original Decision together with Alzola and Lim, of reckless imprudence resulting in damage to
property with serious and slight physical injuries in connection with the collision. Since Alzola
and Lim did not appeal, the judgment of conviction against them became final. Alzola and Lim
were sentenced to arresto mayor or imprisonment for two (2) months.[40]

The Court of Appeals reasoned that since the trial court in the criminal case has ruled that Linog,
Jr. was not negligent, then the act from which the civil liability might arise did not exist. In its 15
November 2005 Resolution, the Court of Appeals decreed:

WHEREFORE, the decision subject of the motions for reconsideration is MODIFIED in that the case
against defendant-appellant ERNESTO LINOG, JR. is dismissed. The decision is AFFIRMED in all other
respects.

SO ORDERED.[41]

Hence, the instant consolidated petitions for review.

In G.R. No. 170418, petitioners PAL, Casio, and Isaac argue that the Court of Appeals should have
applied the emergency rule instead of the last clear chance doctrine. Petitioners claim that even
if the PAL pilots were negligent, PAL had exercised due diligence in the selection and supervision
of its pilots. Petitionerscontend that the Court of Appeals awarded damages without any specific
supporting proof as required by law. Petitioners also claim that the Court of Appeals should have
awarded their counterclaim for damages.

In G.R. No. 170414, petitioner GSIS points out that PACs pilots were the ones guilty of negligence
as they violated the Rules of the Air, which provide that right of way belongs to the aircraft on
take-off roll and the aircraft on the right side of another. GSIS stresses that such negligence was
the proximate cause of the collision. GSIS posits that PAC, Bungabong, and Galvez should be
held solidarily liable to pay GSIS the cost of repairing the insured aircraft.

In G.R. No. 170460, petitioners ATO, Alzola, and Lim call our attention to the fact that PAC was
a mere lessee, not the owner of the Twin Otter. They argue that PAC, as mere lessee, was not
the real party-in-interest in the complaint seeking recovery for damages sustained by the Twin
Otter. Petitioners maintain thatground and air traffic clearances were the joint responsibility of
ATO and the pilots-in-command. Petitioners aver that Bungabong and Galvez were negligent
inasking for clearance to cross an active runway while still 350 meters away from the runway.
Petitioners claim that PAL had the right of way and that PACs pilots had the last clear chance to
prevent the collision.

The Issue

The sole issue for resolution is who among the parties is liable for negligence under the
circumstances.

The Courts Ruling


The petitions are meritorious.

In a petition for review under Rule 45, only questions of law may be raised. This rule, however,
admits of certain exceptions as when the judgment of the Court of Appeals is premised on a
misapprehension of facts or the Court of Appeals fails to notice certain relevant facts which, if
properly considered, will justify a different conclusion.[42]
After thoroughly going over the evidence on record in this case, we are unable to sustain the
finding of fact and legal conclusion of the Court of Appeals.

To ascertain who among the parties is liable for negligence, we must refer to the applicable rules
governing the specific traffic management of aircrafts at an airport. The Rules of the Air[43] of
the Air Transportation Office apply to all aircrafts registered in the Philippines.[44] The Boeing
737 and the Twin Otter in this case were both registered in the Philippines. Both are thus subject
to the Rules of the Air. In case of danger of collision between two aircrafts, the Rules of the Air
state:

2.2.4.7 Surface Movement of Aircraft. In case of danger of collision between two aircrafts taxiing on
the maneuvering area of an aerodrome, the following shall apply:

a) When two aircrafts are approaching head on, or approximately so, each shall stop or where
practicable, alter its course to the right so as to keep well clear.

b) When two aircrafts are on a converging course, the one which has the other on its right shall give
way.[45] (Emphasis supplied)

In this case, however, the Boeing 737 and the Twin Otter were not both taxiing at the time of
the collision. Only the Twin Otter was taxiing. The Boeing 737 was already on take-off roll. The
Rules of the Air provide:

2.2.4.6 Taking Off. An aircraft taxiing on the maneuvering area of an aerodrome shall give way to
aircraft taking off or about to take off.[46] (Emphasis supplied)

Therefore, PALs aircraft had the right of way at the time of collision, not simply because it was
on the right side of PACs aircraft, but more significantly, because it was taking off or about to
take off.

PACs Pilots

For disregarding PALs right of way, PACs pilots were grossly negligent. Gross negligence is one
that is characterized by the want of even slight care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but willfully and intentionally with a conscious
indifference to consequences insofar as other persons may be affected.[47]

We find it hard to believe that PACs pilots did not see the Boeing 737 when they looked to the
left and to the right before approaching the runway. It was a clear summer evening in April and
the Boeing 737, only 200 meters away, had its inboard lights, outboard lights, taxi lights, and
logo lights on before and during the actual take-off roll.[48] The only plausible explanation why
PACs pilots did not see the Boeing 737 was that they did not really look to the left and to the
right before crossing the active runway.
Records show that PACs pilots, while still 350 meters away, prematurely requested clearance to
cross the active runway.[49] ATO points out that PACs pilots should have made a full stop at the
holding point to ask for updated clearance right before crossing the active runway.[50] Had PACs
pilots done so, ATO would by then be in a position to determine if there was an aircraft on a
take-off roll at the runway. The collision would not have happened.

ATO, Alzola, Lim, and Linog, Jr.

The Rules of Air Control govern airplane traffic management and clearance at the then Manila
International Airport. It contains several provisions indicating that airplane traffic management
and clearance are not the sole responsibility of ATO and its traffic controllers, but of the pilots-
in-command of aircrafts as well. The Rules of Air Control state:

1.3 The pilot-in-command of an aircraft shall, whether manipulating the controls or not, be
responsible for the operation of the aircraft in accordance with the rules of the air, except that he may
depart from these rules in circumstances that render such departure absolutely necessary in the
interest of safety. (Emphasis supplied)

1.5 The pilot-in-command of an aircraft shall have final authority as to the disposition of the aircraft
while he is in command.[51] (Emphasis supplied)

3.1 Clearances are based solely on expediting and separating aircraft and do not constitute authority
to violate any applicable regulations for promoting safety of flight operations or for any other
purpose. (Emphasis supplied)

xxxx

If an air traffic control clearance is not suitable to the pilot-in-command of an aircraft, he may
request, and, if practicable, obtain an amended clearance. [52](Emphasis supplied)
10.1.5 Clearances issued by controllers relate to traffic and aerodrome conditions only and do
not relieve a pilot of any responsibility whatsoever in connection with a possible violation of
applicable rules and regulations.[53] (Emphasis supplied)

Therefore, even if ATO gave both PALs pilots and PACs pilots clearance to take off and clearance
to cross runway 13, respectively, it remained the primary responsibility of the pilots-in-
command to see to it that the respective clearances given were suitable. Since the pilots-in-
command have the final authority as to the disposition of the aircraft, they cannot, in case a
collision occurs, pass the blame to ATO for issuing clearances that turn out to be unsuitable.

The clearance to cross runway 13, premature as it was, was not an absolute license for PACs
pilots to recklessly maneuver the Twin Otter across an active runway. PACs pilots should have
stopped first at the holding point to ask for clearance to cross the active runway. It was wrong
for them to have relied on a prematurely requested clearance which was issued while they were
still 350 meters away. Their defense, that it did not matter whether the clearance was
premature or not as long as the clearance was actually granted,[54] only reveals their poor
judgment and gross negligence in the performance of their duties.

On the other hand, evidence on record shows that the air traffic controller properly issued the
clearance to take off to the Boeing 737. Nothing on record indicates any irregularity in the
issuance of the clearance. In fact, the trial court, in the criminal case for reckless imprudence
resulting in damage to property with serious and slight physical injuries in connection with the
collision, ruled that air traffic controller Linog, Jr. was not negligent. The Court of Appeals, in its
15 November 2005 Resolution, absolved Linog, Jr. of civil liability for damages based on his
acquittal in the criminal case.

While Alzola and Lim, as found by the trial court in the criminal case for reckless imprudence,
may have been negligent in the performance of their functions, such negligence is only
contributory.[55] Their contributory negligence arises from their granting the premature request
of PACs pilots for clearance to cross runway 13 while the Twin Otter was still 350 meters away
from runway 13. However, as explained earlier, the granting of their premature request for
clearance did not relieve PACs pilots from complying with the Rules of the Air.
PALs Pilots

Records show that PALs pilots timely requested clearance to take off. Linog, Jr., ATOs air traffic
controller, duly issued the clearance to take off.[56] Under the Rules of the Air, PALs aircraft being
on take-off roll undisputedly had the right of way.[57] Further, the Rules of Air Control provide:

2.2.4.1 The aircraft that has the right of way shall maintain its heading and speed, x x x. [58] (Emphasis
supplied)

Thus, even if Casio noticed from the corner of his eye a small airplane taxiing on the left side
and approaching halfway of fox 1,[59] it was fairly reasonable for PALs pilots to assume that they
may proceed with the take-off because the taxiing aircraft would naturally respect their right of
way and not venture to cross the active runway while the Boeing 737 was on take-off roll.

Applicable by analogy is the case of Santos v. BLTB,[60] where the Court applied the principle that
a motorist who is properly proceeding on his own side of the highway, even after he sees an
approaching motorist coming toward him on the wrong side, is generally entitled to assume that
the other motorist will return to his proper lane of traffic.

Proximate Cause

After assiduously studying the records of this case and carefully weighing the arguments of the
parties, we are convinced that the immediate and proximate case of the collision is the gross
negligence of PACs pilots. Proximate cause is defined as that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury, and
without which the result would not have occurred.[61] In this case, the fact that PACs pilots
disregarded PALs right of way and did not ask for updated clearance right before crossing an
active runway was the proximate cause of the collision. Were it not for such gross negligence
on the part of PACs pilots, the collision would not have happened.

The Civil Code provides that when a plaintiffs own negligence is the immediate and proximate
cause of his injury, he cannot recover damages.
Art. 2179. When the plaintiffs 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 defendants lack of due care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded. (Emphasis supplied)

Under the law and prevailing jurisprudence,[62] PAC and its pilots, whose own gross negligence
was the immediate and proximate cause of their own injuries, must bear the cost of such
injuries. They cannot recover damages. Civil Case No. 96-0565 for sum of money and damages,
which PAC, Bungabong, and Galvez filed against PAL, Casio, Isaac, ATO, Alzola, Lim, and Linog,
Jr. should have been dismissed for lack of legal basis.

PALs Counterclaims

We find supported by law and evidence on record PALs counterclaim for actual or compensatory
damages but only in the amount of US$548,819.93[63]representing lease charges during the
period the Boeing 737 was not flying. The said amount cannot be claimed against the insurance
policy covering the Boeing 737. In this connection, the Civil Code provides:
Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the insurance
company for the injury or loss arising out of the wrong or breach of contract complained of, the
insurance company shall be subrogated to the rights of the insured against the wrongdoer or the
person who has violated the contract. If the amount paid by the insurance company does not fully
cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss or injury. (Emphasis supplied)

Under the law, GSIS, as insurer subrogee of PALs right to claim actual or compensatory damages
in connection with the repair of the damaged Boeing 737, is entitled to reimbursement for the
amount it advanced. GSIS claims reimbursement for the amount of US$2,775,366.84.[64] In
support of its claim, GSIS presented statements of account, check vouchers, and
invoices[65] proving payment for the repair of the Boeing 737 in the total amount of
US$2,775,366.84. We find the claim fully supported by evidence on record and thus we resolve
to grant the same.

With regard to PALs other counterclaims, settled is the rule that the award of moral and
exemplary damages as well as attorneys fees is discretionary based on the facts and
circumstances of each case. The actual losses sustained by the aggrieved parties and the gravity
of the injuries must be considered in arriving at reasonable levels.[66] Understandably, Casio and
Isaac suffered sleepless nights and were temporarily unable to work after the collision. They are
thus entitled to moral damages as well as exemplary damages considering that PACs pilots acted
with gross negligence.[67] Attorneys fees are generally not recoverable except when exemplary
damages are awarded[68] as in this case. We thus deem the amounts of P100,000 in moral
damages, P100,000 in exemplary damages, and P50,000 in attorneys fees to be in accordance
with prevailing jurisprudence and appropriate given the circumstances.

WHEREFORE, we GRANT the petitions. We SET ASIDE the 28 October 2004 Decision and the 15
November 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 73214 affirming in toto the
27 July 2001 Decision of the Regional Trial Court (Branch 112) of Pasay City. However,
we SUSTAIN the dismissal of the case against Ernesto Linog, Jr.

Civil Case No. 96-0565 for sum of money and damages, filed by Pacific Airways Corporation
(PAC), Ely B. Bungabong, and Michael F. Galvez, is DISMISSEDfor lack of legal basis.

Pacific Airways Corporation, Ely B. Bungabong, and Michael F. Galvez are ORDERED to solidarily
pay:

(1) Philippine Airlines, Inc. actual or compensatory damages in the amount of


US$548,819.93;
(2) Rogelio Casio and Ruel Isaac individually moral damages in the amount of P100,000,
exemplary damages in the amount of P100,000, and attorneys fees in the amount
of P50,000; and
(3) the Government Service Insurance System, as insurer subrogee of Philippine
Airlines, actual or compensatory damages in the amount ofUS$2,775,366.84.

No pronouncement as to costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-57079 September 29, 1989

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


vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA ESTEBAN, respondents.

REGALADO, J.:

This case had its inception in an action for damages instituted in the former Court of First Instance of Negros
Occidental 1 by private respondent spouses against petitioner Philippine Long Distance Telephone Company (PLDT,
for brevity) for the injuries they sustained in the evening of July 30, 1968 when their jeep ran over a mound of earth
and fell into an open trench, an excavation allegedly undertaken by PLDT for the installation of its underground
conduit system. The complaint alleged that respondent Antonio Esteban failed to notice the open trench which was
left uncovered because of the creeping darkness and the lack of any warning light or signs. As a result of the
accident, respondent Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent
scar on her cheek, while the respondent husband suffered cut lips. In addition, the windshield of the jeep was
shattered.2

PLDT, in its answer, denies liability on the contention that the injuries sustained by respondent spouses were the
result of their own negligence and that the entity which should be held responsible, if at all, is L.R. Barte and
Company (Barte, for short), an independent contractor which undertook the construction of the manhole and the
conduit system.3 Accordingly, PLDT filed a third-party complaint against Barte alleging that, under the terms of their
agreement, PLDT should in no manner be answerable for any accident or injuries arising from the negligence or
carelessness of Barte or any of its employees.4 In answer thereto, Barte claimed that it was not aware nor was it
notified of the accident involving respondent spouses and that it had complied with the terms of its contract with
PLDT by installing the necessary and appropriate standard signs in the vicinity of the work site, with barricades at
both ends of the excavation and with red lights at night along the excavated area to warn the traveling public of the
presence of excavations.5

On October 1, 1974, the trial court rendered a decision in favor of private respondents, the decretal part of which
reads:

IN VIEW OF THE FOREGOING considerations the defendant Philippine Long Distance Telephone
Company is hereby ordered (A) to pay the plaintiff Gloria Esteban the sum of P20,000.00 as moral
damages and P5,000.00 exemplary damages; to plaintiff Antonio Esteban the sum of P2,000.00 as
moral damages and P500.00 as exemplary damages, with legal rate of interest from the date of the
filing of the complaint until fully paid. The defendant is hereby ordered to pay the plaintiff the sum of
P3,000.00 as attorney's fees.

(B) The third-party defendant is hereby ordered to reimburse whatever amount the defendant-third
party plaintiff has paid to the plaintiff. With costs against the defendant. 6

From this decision both PLDT and private respondents appealed, the latter appealing only as to the amount of
damages. Third-party defendant Barte did not appeal.

On September 25, 1979, the Special Second Division of the Court of Appeals rendered a decision in said appealed
case, with Justice Corazon Juliano Agrava as ponente, reversing the decision of the lower court and dismissing the
complaint of respondent spouses. It held that respondent Esteban spouses were negligent and consequently
absolved petitioner PLDT from the claim for damages.7 A copy of this decision was received by private respondents
on October 10, 1979. 8 On October 25, 1979, said respondents filed a motion for reconsideration dated October 24,
1979. 9 On January 24, 1980, the Special Ninth Division of the Court of Appeals denied said motion for
reconsideration.10 This resolution was received by respondent spouses on February 22, 1980.11

On February 29, 1980, respondent Court of Appeals received private respondents' motion for leave of court to file a
second motion for reconsideration, dated February 27, 1980. 12 On March 11, 1980, respondent court, in a resolution
likewise penned by Justice Agrava, allowed respondents to file a second motion for reconsideration, within ten (10)
days from notice thereof. 13 Said resolution was received by private respondents on April 1, 1980 but prior thereto,
private respondents had already filed their second motion for reconsideration on March 7, 1980. 14

On April 30,1980 petitioner PLDT filed an opposition to and/or motion to dismiss said second motion for
reconsideration. 15 The Court of Appeals, in view of the divergent opinions on the resolution of the second motion for
reconsideration, designated two additional justices to form a division of five.16 On September 3, 1980, said division of
five promulgated its resolution, penned by Justice Mariano A. Zosa, setting aside the decision dated September 25,
1979, as well as the resolution dated, January 24,1980, and affirming in toto the decision of the lower court.17

On September 19, 1980, petitioner PLDT filed a motion to set aside and/or for reconsideration of the resolution of
September 3, 1980, contending that the second motion for reconsideration of private respondent spouses was filed
out of time and that the decision of September 25, 1979 penned by Justice Agrava was already final. It further
submitted therein that the relationship of Barte and petitioner PLDT should be viewed in the light of the contract
between them and, under the independent contractor rule, PLDT is not liable for the acts of an independent
contractor.18 On May 11, 1981, respondent Court of Appeals promulgated its resolution denying said motion to set
aside and/or for reconsideration and affirming in toto the decision of the lower court dated October 1, 1974. 19

Coming to this Court on a petition for review on certiorari, petitioner assigns the following errors:

1. Respondent Court of Appeals erred in not denying private respondents' second motion for reconsideration on the
ground that the decision of the Special Second Division, dated September 25, 1979, and the resolution of the
Special Ninth Division, dated January 24, 1980, are already final, and on the additional ground that said second
motion for reconsideration is pro forma.

2. Respondent court erred in reversing the aforesaid decision and resolution and in misapplying the independent
contractor rule in holding PLDT liable to respondent Esteban spouses.

A convenient resume of the relevant proceedings in the respondent court, as shown by the records and admitted by
both parties, may be graphically presented as follows:

(a) September 25, 1979, a decision was rendered by the Court of Appeals with Justice Agrava
asponente;

(b) October 10, 1979, a copy of said decision was received by private respondents;

(c) October 25, 1979, a motion for reconsideration was filed by private respondents;

(d) January 24, 1980, a resolution was issued denying said motion for reconsideration;

(e) February 22, 1980, a copy of said denial resolution was received by private respondents;

(f) February 29, 1980, a motion for leave to file a second motion for reconsideration was filed by
private respondents

(g) March 7, 1980, a second motion for reconsideration was filed by private respondents;

(h) March 11, 1980, a resolution was issued allowing respondents to file a second motion for
reconsideration within ten (10) days from receipt; and
(i) September 3, 1980, a resolution was issued, penned by Justice Zosa, reversing the original
decision dated September 25, 1979 and setting aside the resolution dated January 24, 1980.

From the foregoing chronology, we are convinced that both the motion for leave to file a second motion for
reconsideration and, consequently, said second motion for reconsideration itself were filed out of time.

Section 1, Rule 52 of the Rules of Court, which had procedural governance at the time, provided that a second
motion for reconsideration may be presented within fifteen (15) days from notice of the order or judgment deducting
the time in which the first motion has been pending. 20 Private respondents having filed their first motion for
reconsideration on the last day of the reglementary period of fifteen (15) days within which to do so, they had only
one (1) day from receipt of the order denying said motion to file, with leave of court, a second motion for
reconsideration. 21 In the present case, after their receipt on February 22, 1980 of the resolution denying their first
motion for reconsideration, private respondents had two remedial options. On February 23, 1980, the remaining one
(1) day of the aforesaid reglementary period, they could have filed a motion for leave of court to file a second motion
for reconsideration, conceivably with a prayer for the extension of the period within which to do so. On the other
hand, they could have appealed through a petition for review on certiorari to this Court within fifteen (15) days from
February 23, 1980. 22 Instead, they filed a motion for leave to file a second motion 'for reconsideration on February
29, 1980, and said second motion for reconsideration on March 7, 1980, both of which motions were by then time-
barred.

Consequently, after the expiration on February 24, 1980 of the original fifteen (15) day period, the running of which
was suspended during the pendency of the first motion for reconsideration, the Court of Appeals could no longer
validly take further proceedings on the merits of the case, much less to alter, modify or reconsider its aforesaid
decision and/or resolution. The filing of the motion for leave to file a second motion for reconsideration by herein
respondents on February 29, 1980 and the subsequent filing of the motion itself on March 7, 1980, after the
expiration of the reglementary period to file the same, produced no legal effects. Only a motion for re-hearing or
reconsideration filed in time shall stay the final order or judgment sought to be re-examined. 23

The consequential result is that the resolution of respondent court of March 11, 1980 granting private respondents'
aforesaid motion for leave and, giving them an extension of ten (10) days to file a second motion for reconsideration,
is null and void. The period for filing a second motion for reconsideration had already expired when private
respondents sought leave to file the same, and respondent court no longer had the power to entertain or grant the
said motion. The aforesaid extension of ten (10) days for private respondents to file their second motion for
reconsideration was of no legal consequence since it was given when there was no more period to extend. It is an
elementary rule that an application for extension of time must be filed prior to the expiration of the period sought to
be extended. 24 Necessarily, the discretion of respondent court to grant said extension for filing a second motion for
reconsideration is conditioned upon the timeliness of the motion seeking the same.

No appeal having been taken seasonably, the respondent court's decision, dated September 25, 1979, became final
and executory on March 9, 1980. The subsequent resolutions of respondent court, dated March 11, 1980 and
September 3, 1980, allowing private respondents to file a second motion for reconsideration and reversing the
original decision are null and void and cannot disturb the finality of the judgment nor restore jurisdiction to
respondent court. This is but in line with the accepted rule that once a decision has become final and executory it is
removed from the power and jurisdiction of the court which rendered it to further alter or amend, much less revoke
it.25 The decision rendered anew is null and void.26 The court's inherent power to correct its own errors should be
exercised before the finality of the decision or order sought to be corrected, otherwise litigation will be endless and
no question could be considered finally settled. Although the granting or denial of a motion for reconsideration
involves the exercise of discretion,27 the same should not be exercised whimsically, capriciously or arbitrarily, but
prudently in conformity with law, justice, reason and equity.28

Prescinding from the aforesaid procedural lapses into the substantive merits of the case, we find no error in the
findings of the respondent court in its original decision that the accident which befell private respondents was due to
the lack of diligence of respondent Antonio Esteban and was not imputable to negligent omission on the part of
petitioner PLDT. Such findings were reached after an exhaustive assessment and evaluation of the evidence on
record, as evidenced by the respondent court's resolution of January 24, 1980 which we quote with approval:

First. Plaintiff's jeep was running along the inside lane of Lacson Street. If it had remained on that
inside lane, it would not have hit the ACCIDENT MOUND.
Exhibit B shows, through the tiremarks, that the ACCIDENT MOUND was hit by the jeep swerving
from the left that is, swerving from the inside lane. What caused the swerving is not disclosed; but,
as the cause of the accident, defendant cannot be made liable for the damages suffered by plaintiffs.
The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving
of the jeep from the inside lane. That may explain plaintiff-husband's insistence that he did not see
the ACCIDENT MOUND for which reason he ran into it.

Second. That plaintiff's jeep was on the inside lane before it swerved to hit the ACCIDENT MOUND
could have been corroborated by a picture showing Lacson Street to the south of the ACCIDENT
MOUND.

It has been stated that the ditches along Lacson Street had already been covered except the 3 or 4
meters where the ACCIDENT MOUND was located. Exhibit B-1 shows that the ditches on Lacson
Street north of the ACCIDENT MOUND had already been covered, but not in such a way as to allow
the outer lane to be freely and conveniently passable to vehicles. The situation could have been
worse to the south of the ACCIDENT MOUND for which reason no picture of the ACCIDENT
MOUND facing south was taken.

Third. Plaintiff's jeep was not running at 25 kilometers an hour as plaintiff-husband claimed. At that
speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep
would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks in Exhibit
B. The jeep must have been running quite fast. If the jeep had been braked at 25 kilometers an hour,
plaintiff's would not have been thrown against the windshield and they would not have suffered their
injuries.

Fourth. If the accident did not happen because the jeep was running quite fast on the inside lane and
for some reason or other it had to swerve suddenly to the right and had to climb over the ACCIDENT
MOUND, then plaintiff-husband had not exercised the diligence of a good father of a family to avoid
the accident. With the drizzle, he should not have run on dim lights, but should have put on his
regular lights which should have made him see the ACCIDENT MOUND in time. If he was running
on the outside lane at 25 kilometers an hour, even on dim lights, his failure to see the ACCIDENT
MOUND in time to brake the car was negligence on his part. The ACCIDENT MOUND was relatively
big and visible, being 2 to 3 feet high and 1-1/2 feet wide. If he did not see the ACCIDENT MOUND
in time, he would not have seen any warning sign either. He knew of the existence and location of
the ACCIDENT MOUND, having seen it many previous times. With ordinary precaution, he should
have driven his jeep on the night of the accident so as to avoid hitting the ACCIDENT MOUND.29

The above findings clearly show that the negligence of respondent Antonio Esteban was not only contributory to his
injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining
factors, and thereby precludes their right to recover damages.30 The perils of the road were known to, hence
appreciated and assumed by, private respondents. By exercising reasonable care and prudence, respondent
Antonio Esteban could have avoided the injurious consequences of his act, even assuming arguendo that there was
some alleged negligence on the part of petitioner.

The presence of warning signs could not have completely prevented the accident; the only purpose of said signs
was to inform and warn the public of the presence of excavations on the site. The private respondents already knew
of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep of
respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards
the accident mound. As opined in some quarters, the omission to perform a duty, such as the placing of warning
signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act
would have prevented the injury.31 It is basic that private respondents cannot charge PLDT for their injuries where
their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm and necessity
that one should exercise a reasonable degree of caution for his own protection. Furthermore, respondent Antonio
Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes
to petitioner PLDT. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of
the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger,
hence he is solely responsible for the consequences of his imprudence.
Moreover, we also sustain the findings of respondent Court of Appeals in its original decision that there was
insufficient evidence to prove any negligence on the part of PLDT. We have for consideration only the self-serving
testimony of respondent Antonio Esteban and the unverified photograph of merely a portion of the scene of the
accident. The absence of a police report of the incident and the non-submission of a medical report from the hospital
where private respondents were allegedly treated have not even been satisfactorily explained.

As aptly observed by respondent court in its aforecited extended resolution of January 24, 1980 —

(a) There was no third party eyewitness of the accident. As to how the accident occurred, the Court
can only rely on the testimonial evidence of plaintiffs themselves, and such evidence should be very
carefully evaluated, with defendant, as the party being charged, being given the benefit of any doubt.
Definitely without ascribing the same motivation to plaintiffs, another person could have deliberately
engineered a similar accident in the hope and expectation that the Court can grant him substantial
moral and exemplary damages from the big corporation that defendant is. The statement is made
only to stress the disadvantageous position of defendant which would have extreme difficulty in
contesting such person's claim. If there were no witness or record available from the police
department of Bacolod, defendant would not be able to determine for itself which of the conflicting
testimonies of plaintiffs is correct as to the report or non-report of the accident to the police
department.32

A person claiming damages for the negligence of another has the burden of proving the existence of such fault or
negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent
evidence.33 Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the
existence of the same if contested, otherwise his action must fail.

WHEREFORE, the resolutions of respondent Court of Appeals, dated March 11, 1980 and September 3,1980, are
hereby SET ASIDE. Its original decision, promulgated on September 25,1979, is hereby REINSTATED and
AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 188363 February 27, 2013

ALLIED BANKING CORPORATION, Petitioner,


vs.
BANK OF THE PHILIPPINE ISLANDS, Respondents.

DECISION

VILLARAMA, JR., J.:

A collecting bank is guilty of contributory negligence when it accepted for deposit a post-dated check
notwithstanding that said check had been cleared by the drawee bank which failed to return the check within the 24-
hour reglementary period.

Petitioner Allied Banking Corporation appeals the Decision1 dated March 19, 2009 of the Court of Appeals (CA) in
CA-G.R. SP No. 97604 which set aside the Decision2 dated December 13, 2005 of the Regional Trial Court (RTC) of
Makati City, Branch 57 in Civil Case No. 05-418.

The factual antecedents:

On October 10, 2002, a check in the amount of ₱1,000,000.00 payable to "Mateo Mgt. Group International" (MMGI)
was presented for deposit and accepted at petitioner's Kawit Branch. The check, post-dated "Oct. 9, 2003", was
drawn against the account of Marciano Silva, Jr. (Silva) with respondent Bank of the Philippine Islands (BPI) Bel-Air
Branch. Upon receipt, petitioner sent the check for clearing to respondent through the Philippine Clearing House
Corporation (PCHC).3

The check was cleared by respondent and petitioner credited the account of MMGI with ₱1,000,000.00. On October
22, 2002, MMGI’s account was closed and all the funds therein were withdrawn. A month later, Silva discovered the
debit of ₱1,000,000.00 from his account. In response to Silva’s complaint, respondent credited his account with the
aforesaid sum.4

On March 21, 2003, respondent returned a photocopy of the check to petitioner for the reason: "Postdated."
Petitioner, however, refused to accept and sent back to respondent a photocopy of the check. Thereafter, the check,
or more accurately, the Charge Slip, was tossed several times from petitioner to respondent, and back to petitioner,
until on May 6, 2003, respondent requested the PCHC to take custody of the check. Acting on the request, PCHC
directed the respondent to deliver the original check and informed it of PCHC’s authority under Clearing House
Operating Memo (CHOM) No. 279 dated 06 September 1996 to split 50/50 the amount of the check subject of a
"Ping-Pong" controversy which shall be implemented thru the issuance of Debit Adjustment Tickets against the
outward demands of the banks involved. PCHC likewise encouraged respondent to submit the controversy for
resolution thru the PCHC Arbitration Mechanism.5

However, it was petitioner who filed a complaint6 before the Arbitration Committee, asserting that respondent should
solely bear the entire face value of the check due to its negligence in failing to return the check to petitioner within
the 24-hour reglementary period as provided in Section 20.17 of the Clearing House Rules and Regulations8(CHRR)
2000. Petitioner prayed that respondent be ordered to reimburse the sum of ₱500,000.00 with 12% interest per
annum, and to pay attorney’s fees and other arbitration expenses.

In its Answer with Counterclaims,9 respondent charged petitioner with gross negligence for accepting the post-dated
check in the first place. It contended that petitioner’s admitted negligence was the sole and proximate cause of the
loss.
On December 8, 2004, the Arbitration Committee rendered its Decision10 in favor of petitioner and against the
respondent. First, it ruled that the situation of the parties does not involve a "Ping-Pong" controversy since the
subject check was neither returned within the reglementary time or through the PCHC return window, nor coursed
through the clearing facilities of the PCHC.

As to respondent’s direct presentation of a photocopy of the subject check, it was declared to be without legal basis
because Section 21.111 of the CHRR 2000 does not apply to post-dated checks. The Arbitration Committee further
noted that respondent not only failed to return the check within the 24-hour reglementary period, it also failed to
institute any formal complaint within the contemplation of Section 20.312 and it appears that respondent was already
contented with the 50-50 split initially implemented by the PCHC. Finding both parties negligent in the performance
of their duties, the Committee applied the doctrine of "Last Clear Chance" and ruled that the loss should be
shouldered by respondent alone, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Allied Banking Corporation
and against defendant Bank of the Philippine Islands, ordering the latter to pay the former the following:

(a) The sum of ₱500,000.00, plus interest thereon at the rate of 12% per annum counted from the date of
filing of the complaint;

(b) Attorney’s fees in the amount of ₱25,000.00;

(c) The sum of ₱2,090.00 as and by way of reimbursement of filing fees, plus the cost of suit.

SO ORDERED.13

Respondent filed a motion for reconsideration14 but it was denied by the PCHC Board of Directors under Board
Resolution No. 10-200515 dated April 22, 2005. The Board pointed out that what actually transpired was a "ping-
pong" "not of a check but of a Charge Slip (CS) enclosed in a carrier envelope that went back and forth through the
clearing system in apparent reaction by [petitioner] to the wrongful return via the PCHC clearing system."
Respondent’s conduct was held as a "gross and unmistakably deliberate violation" of Section 20.2,16 in relation to
Section 20.1(e) of the CHRR 2000.17

On May 13, 2005, respondent filed a petition for review18 in the RTC claiming that PCHC erred in constricting the
return of a post-dated check to Section 20.1, overlooking the fact that Section 20.3 is also applicable which provision
necessarily contemplates defects that are referred to in Section 20.1 as both sections are subsumed under the
general provision (Section 20) on the return of regular items. Respondent also argued that assuming it to be liable,
the PCHC erred in holding it solely responsible and should bear entirely the consequent loss considering that while
respondent may have the "last" opportunity in proximity, it was petitioner which had the longest, fairest and clearest
chance to discover the mistake and avoid the happening of the loss. Lastly, respondent assailed the award of
attorney’s fees, arguing that PCHC’s perception of "malice" against it and misuse of the clearing machinery is clearly
baseless and unfounded.

In its Decision dated December 13, 2005, the RTC affirmed with modification the Arbitration Committee’s decision
by deleting the award of attorney’s fees. The RTC found no merit in respondent’s stance that through inadvertence it
failed to discover that the check was post-dated and that confirmation within 24 hours is often "elusive if not outright
impossible" because a drawee bank receives hundreds if not thousands of checks in an ordinary clearing day. Thus:

Petitioner admitted par. 4 in its Answer with Counterclaim and in its Memorandum, further adding that upon receipt
of the subject check "through inadvertence", it did not notice that the check was postdated, hence, petitioner did not
return the same to respondent."

These contradict petitioner’s belated contention that it discovered the defect only after the lapse of the reglementary
period. What the evidence on record discloses is that petitioner received the check on October 10, 2002, that it was
promptly sent for clearing, that through inadvertence, it did not notice that the check was postdated. Petitioner did
not even state when it discovered the defect in the subject check.
Likewise, petitioner’s contention that its discovery of the defect was a non-issue in view of the admissions made in
its Answer is unavailing. The Court has noted the fact that the PCHC Arbitration Committee conducted a clarificatory
hearing during which petitioner admitted that its standard operating procedure as regards confirmation of checks
was not followed. No less than petitioner’s witness admitted that BPI tried to call up the drawer of the check, as their
procedure dictates when it comes to checks in large amounts. However, having initially failed to contact the drawer,
no follow up calls were made nor other actions taken. Despite these, petitioner cleared the check. Having admitted
making said calls, it is simply impossible for petitioner to have missed the fact that the check was
postdated.19 (Emphasis supplied)

With the denial of its motion for partial reconsideration, respondent elevated the case to the CA by filing a petition for
review under Rule 42 of the 1997 Rules of Civil Procedure, as amended.

By Decision dated March 19, 2009, the CA set aside the RTC judgment and ruled for a 60-40 sharing of the loss as
it found petitioner guilty of contributory negligence in accepting what is clearly a post-dated check. The CA found
that petitioner’s failure to notice the irregularity on the face of the check was a breach of its duty to the public and a
telling sign of its lack of due diligence in handling checks coursed through it. While the CA conceded that the drawee
bank has a bigger responsibility in the clearing of checks, it declared that the presenting bank cannot take lightly its
obligation to make sure that only valid checks are introduced into the clearing system. According to the CA,
considerations of public policy and substantial justice will be served by allocating the damage on a 60-40 ratio, as it
thus decreed:

WHEREFORE, the decision of the Regional Trial Court of Makati City (Branch 57) dated December 13, 2005 is
ANNULLED and SET ASIDE and judgment is rendered ordering petitioner to pay respondent Allied Banking
Corporation the sum of ₱100,000.00 plus interest thereon at the rate of 6% from July 10, 2003, which shall become
12% per annum from finality hereof, until fully paid, aside from costs.

SO ORDERED.20

Its motion for reconsideration having been denied by the CA, petitioner is now before the Court seeking a partial
reversal of the CA’s decision and affirmance of the December 13, 2005 Decision of the RTC.

Essentially, the two issues for resolution are: (1) whether the doctrine of last clear chance applies in this case; and
(2) whether the 60-40 apportionment of loss ordered by the CA was justified.

As well established by the records, both petitioner and respondent were admittedly negligent in the encashment of a
check post-dated one year from its presentment.

Petitioner argues that the CA should have sustained PCHC’s finding that despite the antecedent negligence of
petitioner in accepting the postdated check for deposit, respondent, by exercising reasonable care and prudence,
might have avoided injurious consequences had it not negligently cleared the check in question. It pointed out that in
applying the doctrine of last clear chance, the PCHC cited the case of Philippine Bank of Commerce v. Court of
Appeals21 which ruled that assuming the bank’s depositor, private respondent, was negligent in entrusting cash to a
dishonest employee, thus providing the latter with the opportunity to defraud the company, it cannot be denied that
petitioner bank had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing
their self-imposed validation procedure.

Petitioner underscores respondent’s failure to observe clearing house rules and its own standard operating
procedure which, the PCHC said constitute further negligence so much so that respondent should be solely liable
for the loss. Specifically, respondent failed to return the subject check within the 24-hour reglementary period under
Section 20.1 and to institute any formal complaint within the contemplation of Section 20.3 of the CHRR 2000. The
PCHC likewise faulted respondent for not making follow-up calls or taking any other action after it initially attempted,
without success, to contact by telephone the drawer of the check, and clearing the check despite such lack of
confirmation from its depositor in violation of its own standard procedure for checks involving large amounts.

The doctrine of last clear chance, 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.22The
doctrine necessarily assumes negligence on the part of the defendant and contributory negligence on the part of the
plaintiff, and does not apply except upon that assumption.23 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.24Moreover, in
situations where the doctrine has been applied, it was defendant’s failure to exercise such ordinary care, having the
last clear chance to avoid loss or injury, which was the proximate cause of the occurrence of such loss or injury.25

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

What petitioner omitted to mention is that in the cited case of Philippine Bank of Commerce v. Court of
Appeals,26while the Court found petitioner bank as the culpable party under the doctrine of last clear chance since it
had, thru its teller, the last opportunity to avert the injury incurred by its client simply by faithfully observing its own
validation procedure, it nevertheless ruled that the plaintiff depositor (private respondent) must share in the loss on
account of its contributory negligence. Thus:

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 under Article 2179 of the New Civil Code, to wit:

"x x x. 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 ₱25,000.00
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.27 (Italics in the original;
emphasis supplied)

In another earlier case,28 the Court refused to hold petitioner bank solely liable for the loss notwithstanding the
finding that the proximate cause of the loss was due to its negligence. Since the employees of private respondent
bank were likewise found negligent, its claim for damages is subject to mitigation by the courts. Thus:

Both banks were negligent in the selection and supervision of their employees resulting in the encashment of the
forged checks by an impostor. Both banks were not able to overcome the presumption of negligence in the selection
and supervision of their employees. It was the gross negligence of the employees of both banks which resulted in
the fraud and the subsequent loss. While it is true that petitioner BPI’s negligence may have been the
proximate cause of the loss, respondent CBC’s negligence contributed equally to the success of the
impostor in encashing the proceeds of the forged checks. Under these circumstances, we apply Article 2179 of
the Civil Code to the effect that while respondent CBC may recover its losses, such losses are subject to mitigation
by the courts. x x x

Considering the comparative negligence of the two (2) banks, we rule that the demands of substantial justice are
satisfied by allocating the loss of ₱2,413,215.16 and the costs of the arbitration proceedings in the amount of
₱7,250.00 and the costs of litigation on a 60-40 ratio. Conformably with this ruling, no interests and attorney’s fees
can be awarded to either of the parties.29 (Emphasis supplied)
Apportionment of damages between parties who are both negligent was followed in subsequent cases involving
banking transactions notwithstanding the court’s finding that one of them had the last clear opportunity to avoid the
occurrence of the loss.

In Bank of America NT & SA v. Philippine Racing Club,30 the Court ruled:

In the case at bar, petitioner cannot evade responsibility for the loss by attributing negligence on the part of
respondent because, even if we concur that the latter was indeed negligent in pre-signing blank checks, the former
had the last clear chance to avoid the loss. To reiterate, petitioner’s own operations manager admitted that they
could have called up the client for verification or confirmation before honoring the dubious checks. Verily, petitioner
had the final opportunity to avert the injury that befell the respondent. x x x Petitioner’s negligence has been
undoubtedly established and, thus, pursuant to Art. 1170 of the NCC, it must suffer the consequence of said
negligence.

In the interest of fairness, however, we believe it is proper to consider respondent’s own negligence to
mitigate petitioner’s liability. Article 2179 of the Civil Code provides:
1âwphi1

xxxx

Explaining this provision in Lambert v. Heirs of Ray Castillon, the Court held:

"The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury
should not be entitled to recover damages in full but must bear the consequences of his own negligence. The
defendant must thus be held liable only for the damages actually caused by his negligence. xxx xxx xxx"

xxxx

Following established jurisprudential precedents, we believe the allocation of sixty percent (60%) of the actual
damages involved in this case (represented by the amount of the checks with legal interest) to petitioner is proper
under the premises. Respondent should, in light of its contributory negligence, bear forty percent (40%) of its
own loss.31 (Emphasis supplied)

In Philippine National Bank v. F.F. Cruz and Co., Inc.,32 the Court made a similar disposition, thus:

Given the foregoing, we find no reversible error in the findings of the appellate court that PNB was negligent in the
handling of FFCCI’s combo account, specifically, with respect to PNB’s failure to detect the forgeries in the subject
applications for manager’s check which could have prevented the loss. x x x PNB failed to meet the high standard of
diligence required by the circumstances to prevent the fraud. In Philippine Bank of Commerce v. Court of
Appeals and The Consolidated Bank & Trust Corporation v. Court of Appeals, where the bank’s negligence is the
proximate cause of the loss and the depositor is guilty of contributory negligence, we allocated the damages
between the bank and the depositor on a 60-40 ratio. We apply the same ruling in this case considering that, as
shown above, PNB’s negligence is the proximate cause of the loss while the issue as to FFCCI’s contributory
negligence has been settled with finality in G.R. No. 173278. Thus, the appellate court properly adjudged PNB to
bear the greater part of the loss consistent with these rulings.33

"Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection."34 Admittedly,
petitioner’s acceptance of the subject check for deposit despite the one year postdate written on its face was a clear
violation of established banking regulations and practices. In such instances, payment should be refused by the
drawee bank and returned through the PCHC within the 24-hour reglementary period. As aptly observed by the CA,
petitioner’s failure to comply with this basic policy regarding post-dated checks was "a telling sign of its lack of due
diligence in handling checks coursed through it."35

It bears stressing that "the diligence required of banks is more than that of a Roman paterfamilias or a good father of
a family. The highest degree of diligence is expected,"36 considering the nature of the banking business that is
imbued with public interest. While it is true that respondent's liability for its negligent clearing of the check is greater,
petitioner cannot take lightly its own violation of the long-standing rule against encashment of post-dated checks and
the injurious consequences of allowing such checks into the clearing system.

Petitioner repeatedly harps on respondent's transgression of clearing house rules when the latter resorted to direct
presentment way beyond the reglementary period but glosses over its own negligent act that clearly fell short of the
conduct expected of it as a collecting bank. Petitioner must bear the consequences of its omission to exercise
extraordinary diligence in scrutinizing checks presented by its depositors.

Assessing the facts and in the light of the cited precedents, the Court thus finds no error committed by the CA in
allocating the resulting loss from the wrongful encashment of the subject check on a 60-40 ratio.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated March 19, 2009 of the Court of
Appeals in CA-G.R. SP No. 97604 is hereby AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
[Syllabus]

FIRST DIVISION

[G.R. No. 115024. February 7, 1996]

MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI


and ALEXANDER COMMERCIAL, INC., respondents.

[G.R. No. 117944. February 7, 1996]

RICHARD LI, petitioner, vs. COURT OF APPEALS and MA. LOURDES


VALENZUELA, respondents.

DECISION
KAPUNAN, J.:

These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from
an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of Quezon
City for injuries sustained by her in a vehicular accident in the early morning of June 24, 1990. The
facts found by the trial court are succinctly summarized by the Court of Appeals below:

This is an action to recover damages based on quasi-delict, for serious physical injuries sustained in
a vehicular accident.

Plaintiffs version of the accident is as follows: At around 2:00 in the morning of June 24, 1990,
plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No.
FFU 542 from her restaurant at Marcos highway to her home at Palanza Street, Araneta Avenue.
She was travelling along Aurora Blvd. with a companion, Cecilia Ramon, heading towards the
direction of Manila. Before reaching A. Lake Street, she noticed something wrong with her tires;
she stopped at a lighted place where there were people, to verify whether she had a flat tire and to
solicit help if needed. Having been told by the people present that her rear right tire was flat and
that she cannot reach her home in that cars condition, she parked along the sidewalk, about 1 feet
away, put on her emergency lights, alighted from the car, and went to the rear to open the trunk.
She was standing at the left side of the rear of her car pointing to the tools to a man who will help
her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by defendant
Richard Li and registered in the name of defendant Alexander Commercial, Inc. Because of the
impact plaintiff was thrown against the windshield of the car of the defendant, which was
destroyed, and then fell to the ground. She was pulled out from under defendants car. Plaintiffs left
leg was severed up to the middle of her thigh, with only some skin and sucle connected to the rest
of the body. She was brought to the UERM MedicalMemorial Center where she was found to have
a traumatic amputation, leg, left up to distal thigh (above knee). She was confined in the hospital
for twenty (20) days and was eventually fitted with an artificial leg. The expenses for the hospital
confinement (P 120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants
from the car insurance.

In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary
damages in the amount of P100,000.00 and other medical and related expenses amounting to a total
of P180,000.00, including loss of expected earnings.

Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph;
considering that it was raining, visibility was affected and the road was wet. Traffic was light. He
testified that he was driving along the inner portion of the right lane of Aurora Blvd. towards the
direction of Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street,
San Juan, with a car coming from the opposite direction, travelling at 80 kph, with full bright lights.
Temporarily blinded, he instinctively swerved to the right to avoid colliding with the oncoming
vehicle, and bumped plaintiffs car, which he did not see because it was midnight blue in color, with
no parking lights or early warning device, and the area was poorly lighted. He alleged in his
defense that the left rear portion of plaintiffs car was protruding as it was then at a standstill
diagonally on the outer portion of the right lane towards Araneta Avenue (par. 18, Answer). He
confirmed the testimony of plaintiffs witness that after being bumped the car of the plaintiff
swerved to the right and hit another car parked on the sidewalk. Defendants counterclaimed for
damages, alleging that plaintiff was reckless or negligent, as she was not a licensed driver.

The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the
sketch of the three cars involved in the accident, testified that the plaintiffs car was near the
sidewalk; this witness did not remember whether the hazard lights of plaintiffs car were on, and did
not notice if there was an early warning device; there was a street light at the corner of Aurora
Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e. things can be seen (p. 16,
tsn, Oct. 28, 1991).

A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car and
opened the trunk compartment, defendants car came approaching very fast ten meters from the
scene; the car was zigzagging. The rear left side of plaintiffs car was bumped by the front right
portion of defendants car; as a consequence, the plaintiffs car swerved to the right and hit the
parked car on the sidewalk. Plaintiff was thrown to the windshield of defendants car, which was
destroyed, and landed under the car. He stated that defendant was under the influence of liquor as
he could smell it very well (pp. 43, 79, tsn., June 17, 1991).

After trial, the lower court sustained the plaintiffs submissions and found defendant Richard Li guilty
of gross negligence and liable for damages under Article 2176 of the Civil Code. The trial court likewise
held Alexander Commercial, Inc., Lis employer, jointly and severally liable for damages pursuant to
Article 2180. It ordered the defendants to jointly and severally pay the following amounts:

1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a


result of her severed left leg;

2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiffs Bistro
La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a month,
as unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990 until the
date of this judgment; and (c) P30,000.00, a month, for unrealized profits in plaintiffs two (2)
beauty salons from July, 1990 until the date of this decision;

3. P1,000,000.00, in moral damages;

4. P50,000.00, as exemplary damages,

5. P60,000.00, as reasonable attorneys fees; and

6. Costs.

As a result of the trial courts decision, defendants filed an Omnibus Motion for New Trial and for
Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li), tending
to show that the point of impact, as depicted by the pieces of glass/debris from the parties cars,
appeared to be at the center of the right lane of Aurora Blvd. The trial court denied the motion.
Defendants forthwith filed an appeal with the respondent Court of Appeals. In a Decision
rendered March 30, 1994, the Court of Appeals found that there was ample basis from the evidence of
record for the trial courts finding that the plaintiffs car was properly parked at the right, beside the
sidewalk when it was bumped by defendants car.[1] Dismissing the defendants argument that the
plaintiffs car was improperly parked, almost at the center of the road, the respondent court noted that
evidence which was supposed to prove that the car was at or near center of the right lane was never
presented during the trial of the case.[2] The respondent court furthermore observed that:

Defendant Lis testimony that he was driving at a safe speed of 55 km./hour is self serving; it was
not corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was
outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of
June 24, 1990 when his attention was caught by a beautiful lady (referring to the plaintiff) alighting
from her car and opening the trunk compartment; he noticed the car of Richard Li approaching very
fast ten (10) meters away from the scene; defendants car was zigzagging, although there were no
holes and hazards on the street, and bumped the leg of the plaintiff who was thrown against the
windshield of defendants car, causing its destruction. He came to the rescue of the plaintiff, who
was pulled out from under defendants car and was able to say hurting words to Richard Li because
he noticed that the latter was under the influence of liquor, because he could smell it very well (p.
36, et. seq., tsn, June 17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in the
1970s, but did not know either plaintiff or defendant Li before the accident.

In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the
plaintiff, the Court of Appeals, in its decision, however, absolved the Lis employer, Alexander
Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the amount of
moral damages to P500,000.00. Finding justification for exemplary damages, the respondent court
allowed an award of P50,000.00 for the same, in addition to costs, attorneys fees and the other
damages. The Court of Appeals, likewise, dismissed the defendants counterclaims.[3]
Consequently, both parties assail the respondent courts decision by filing two separate petitions
before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for
damages because the proximate cause of the accident was Ma. Lourdes Valenzuelas own negligence.
Alternatively, he argues that in the event that this Court finds him negligent, such negligence ought to
be mitigated by the contributory negligence of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent courts
decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car driven
by Richard Li and insofar as it reduces the amount of the actual and moral damages awarded by the
trial court.[4]
As the issues are intimately related, both petitions are hereby consolidated. It is plainly evident that
the petition for review in G.R. No. 117944 raises no substantial questions of law. What it, in effect,
attempts to have this Court review are factual findings of the trial court, as sustained by the Court of
Appeals finding Richard Li grossly negligent in driving the Mitsubishi Lancer provided by his company
in the early morning hours of June 24, 1990. This we will not do. As a general rule, findings of fact of
the Court of Appeals are binding and conclusive upon us, and this Court will not normally disturb such
factual findings unless the findings of fact of the said court are palpably unsupported by the evidence
on record or unless the judgment itself is based on a misapprehension of facts.[5]
In the first place, Valenzuelas version of the incident was fully corroborated by an uninterested
witness, Rogelio Rodriguez, the owner-operator of an establishment located just across the scene of
the accident. On trial, he testified that he observed a car being driven at a very fast speed, racing
towards the general direction of Araneta Avenue.[6] Rodriguez further added that he was standing in
front of his establishment, just ten to twenty feet away from the scene of the accident, when he saw the
car hit Valenzuela, hurtling her against the windshield of the defendants Mitsubishi Lancer, from where
she eventually fell under the defendants car. Spontaneously reacting to the incident, he crossed the
street, noting that a man reeking with the smell of liquor had alighted from the offending vehicle in order
to survey the incident.[7] Equally important, Rodriguez declared that he observed Valenzuelas car
parked parallel and very near the sidewalk,[8] contrary to Lis allegation that Valenzuelas car was close
to the center of the right lane. We agree that as between Lis self-serving asseverations and the
observations of a witness who did not even know the accident victim personally and who immediately
gave a statement of the incident similar to his testimony to the investigator immediately after the
incident, the latters testimony deserves greater weight. As the court emphasized:

The issue is one of credibility and from Our own examination of the transcript, We are not prepared
to set aside the trial courts reliance on the testimony of Rodriguez negating defendants assertion
that he was driving at a safe speed. While Rodriguez drives only a motorcycle, his perception of
speed is not necessarily impaired. He was subjected to cross-examination and no attempt was made
to question his competence or the accuracy of his statement that defendant was driving very fast.
This was the same statement he gave to the police investigator after the incident, as told to a
newspaper report (Exh. P). We see no compelling basis for disregarding his testimony.

The alleged inconsistencies in Rodriguez testimony are not borne out by an examination of the
testimony. Rodriguez testified that the scene of the accident was across the street where his
beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not state
that the accident transpired immediately in front of his establishment. The ownership of the
Lambingan sa Kambingan is not material; the business is registered in the name of his mother, but
he explained that he owns the establishment (p. 5, tsn., June 20, 1991).

Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on the night the
accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that there was
a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn., Oct. 20, 1991).

With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a heavy
rain and the rain has stopped and he was outside his establishment at the time the accident
transpired (pp. 64-65, tsn., June 17, 1991). This was consistent with plaintiffs testimony that it was
no longer raining when she left Bistro La Conga (pp. 10-11, tsn., April 29, 1991). It was defendant
Li who stated that it was raining all the way in an attempt to explain why he was travelling at
only 50-55 kph. (p. 11, tsn., Oct. 14, 1991). As to the testimony of Pfc. Ramos that it was raining,
he arrived at the scene only in response to a telephone call after the accident had transpired (pp. 9-
10, tsn, Oct. 28, 1991). We find no substantial inconsistencies in Rodriguezs testimony that would
impair the essential integrity of his testimony or reflect on his honesty. We are compelled to affirm
the trial courts acceptance of the testimony of said eyewitness.

Against the unassailable testimony of witness Rodriguez we note that Lis testimony was peppered
with so many inconsistencies leading us to conclude that his version of the accident was merely adroitly
crafted to provide a version, obviously self-serving, which would exculpate him from any and all liability
in the incident. Against Valenzuelas corroborated claims, his allegations were neither backed up by
other witnesses nor by the circumstances proven in the course of trial. He claimed that he was driving
merely at a speed of 55 kph. when out of nowhere he saw a dark maroon lancer right in front of him,
which was (the) plaintiffs car. He alleged that upon seeing this sudden apparition he put on his brakes
to no avail as the road was slippery.[9]
One will have to suspend disbelief in order to give credence to Lis disingenuous and patently self-
serving asseverations. The average motorist alert to road conditions will have no difficulty applying the
brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility of the street, and
the road conditions on a principal metropolitan thoroughfare like Aurora Boulevard, Li would have had
ample time to react to the changing conditions of the road if he were alert - as every driver should be -
to those conditions. Driving exacts a more than usual toll on the senses. Physiological fight or
flight[10] mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol,
exhaustion, drowsiness, etc.[11] Lis failure to react in a manner which would have avoided the accident
could therefore have been only due to either or both of the two factors: 1) that he was driving at a very
fast speed as testified by Rodriquez; and 2) that he was under the influence of alcohol. [12] Either factor
working independently would have diminished his responsiveness to road conditions, since normally
he would have slowed down prior to reaching Valenzuelas car, rather than be in a situation forcing him
to suddenly apply his brakes. As the trial court noted (quoted with approval by respondent court):

Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the
incident, he said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon
lancer right in front of him, which was plaintiffs car, indicating, again, thereby that, indeed, he was
driving very fast, oblivious of his surroundings and the road ahead of him, because if he was not,
then he could not have missed noticing at a still far distance the parked car of the plaintiff at the
right side near the sidewalk which had its emergency lights on, thereby avoiding forcefully
bumping at the plaintiff who was then standing at the left rear edge of her car.

Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw
the plaintiffs car in front of him, but that it failed as the road was wet and slippery, this goes to
show again, that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise, he
could have easily completely stopped his car, thereby avoiding the bumping of the plaintiff,
notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he was running slow,
as he claimed, at only about 55 kilometers per hour, then, inspite of the wet and slippery road, he
could have avoided hitting the plaintiff by the mere expedient or applying his brakes at the proper
time and distance.
It could not be true, therefore, as he now claims during his testimony, which is contrary to what he
told the police immediately after the accident and is, therefore, more believable, that he did not
actually step on his brakes, but simply swerved a little to the right when he saw the on-coming car
with glaring headlights, from the opposite direction, in order to avoid it.

For, had this been what he did, he would not have bumped the car of the plaintiff which was
properly parked at the right beside the sidewalk. And, it was not even necessary for him to swerve a
little to the right in order to safely avoid a collision with the on-coming car, considering that Aurora
Blvd. is a double lane avenue separated at the center by a dotted white paint, and there is plenty of
space for both cars, since her car was running at the right lane going towards Manila and the on-
coming car was also on its right lane going to Cubao.[13]

Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi
Lancer, the next question for us to determine is whether or not Valenzuela was likewise guilty of
contributory negligence in parking her car alongside Aurora Boulevard, which entire area Li points out,
is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to
the harm he has suffered, which falls below the standard to which he is required to conform for his own
protection. [14] Based on the foregoing definition, the standard or act to which, according to petitioner Li,
Valenzuela ought to have conformed for her own protection was not to park at all at any point of Aurora
Boulevard, a no parking zone. We cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted with an
emergency is not to be held up to the standard of conduct normally applied to an individual who is in
no such situation. The law takes stock of impulses of humanity when placed in threatening or dangerous
situations and does not require the same standard of thoughtful and reflective care from persons
confronted by unusual and oftentimes threatening conditions. [15] Under the emergency rule adopted by
this Court in Gan vs Court of Appeals,[16] an individual who suddenly finds himself in a situation of danger
and is required to act without much time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon
reflection may appear to be a better solution, unless the emergency was brought by his own
negligence.[17]
Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong
lane to avoid hitting two children suddenly darting into the street, we held, in Mc Kee vs. Intermediate
Appellate Court,[18] that the driver therein, Jose Koh, adopted the best means possible in the given
situation to avoid hitting the children. Using the emergency rule the court concluded that Koh, in spite
of the fact that he was in the wrong lane when the collision with an oncoming truck occurred, was not
guilty of negligence.[19]
While the emergency rule applies to those cases in which reflective thought, or the opportunity to
adequately weigh a threatening situation is absent, the conduct which is required of an individual in
such cases is dictated not exclusively by the suddenness of the event which absolutely negates
thoughtful care, but by the over-all nature of the circumstances. A woman driving a vehicle suddenly
crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient
for her to do so and which is not a hazard to other motorists. She is not expected to run the entire
boulevard in search for a parking zone or turn on a dark Street or alley where she would likely find no
one to help her. It would be hazardous for her not to stop and assess the emergency (simply because
the entire length of Aurora Boulevard is a no-parking zone) because the hobbling vehicle would be both
a threat to her safety and to other motorists. In the instant case, Valenzuela, upon reaching that portion
of Aurora Boulevard close to A. Lake St., noticed that she had a flat tire. To avoid putting herself and
other motorists in danger, she did what was best under the situation. As narrated by respondent court:

She stopped at a lighted place where there were people, to verify whether she had a flat tire and to
solicit help if needed. Having been told by the people present that her rear right tire was flat and
that she cannot reach her home she parked along the sidewalk, about 1 feet away, behind a Toyota
Corona Car.[20] In fact, respondent court noted, Pfc. Felix Ramos, the investigator on the scene of the
accident confirmed that Valenzuelas car was parked very close to the sidewalk.[21] The sketch which
he prepared after the incident showed Valenzuelas car partly straddling the sidewalk, clear and at a
convenient distance from motorists passing the right lane of Aurora Boulevard. This fact was itself
corroborated by the testimony of witness Rodriguez.[22]

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

[U]nder present day traffic conditions, any driver of an automobile must be prepared for the sudden
appearance of obstacles and persons on the highway, and of other vehicles at intersections, such as
one who sees a child on the curb may be required to anticipate its sudden dash into the street, and
his failure to act properly when they appear may be found to amount to negligence. [26]

Lis obvious unpreparedness to cope with the situation confronting him on the night of the accident
was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Lis employer. In denying
liability on the part of Alexander Commercial, the respondent court held that:

There is no evidence, not even defendant Lis testimony, that the visit was in connection with
official matters. His functions as assistant manager sometimes required him to perform work
outside the office as he has to visit buyers and company clients, but he admitted that on the night of
the accident he came from BF Homes Paraaque he did not have business from the company (pp.
25-26, tsn, Sept. 23, 1991). The use ofthe company car was partly required by the nature of his
work, but the privilege of using it for non-official business is a benefit, apparently referring to the
fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his employees in the discharge of
their respective duties, the basis of which liability is not respondeat superior, but the relationship
of pater familias, which theory bases the liability of the master ultimately on his own negligence
and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer
may be held liable for the negligence of his employee, the act or omission which caused damage
must have occurred while an employee was in the actual performance of his assigned tasks or
duties (Francis High School vs. Court of Appeals, 194 SCRA 341). In defining an employers
liability for the acts done within the scope of the employees assigned tasks, the Supreme Court has
held that this includes any act done by an employee, in furtherance of the interests of the employer
or for the account of the employer at the time of the infliction of the injury or damage (Filamer
Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637). An employer is expected to
impose upon its employees the necessary discipline called for in the performance of any act
indispensable to the business and beneficial to their employer (at p. 645).

In light of the foregoing, We are unable to sustain the trial courts finding that since defendant Li
was authorized by the company to use the company car either officially or socially or even bring it
home, he can be considered as using the company car in the service of his employer or on the
occasion of his functions. Driving the company car was not among his functions as assistant
manager; using it for non-official purposes would appear to be a fringe benefit, one of the perks
attached to his position. But to impose liability upon the employer under Article 2180 of the Civil
Code, earlier quoted, there must be a showing that the damage was caused by their employees in
the service of the employer or on the occasion of their functions. There is no evidence that Richard
Li was at the time of the accident performing any act in furtherance of the companys business or its
interests, or at least for its benefit. The imposition of solidary liability against defendant Alexander
Commercial Corporation must therefore fail.[27]

We agree with the respondent court that the relationship in question is not based on the principle
of respondeat superior, which holds the master liable for acts of the servant, but that of pater familias, in
which the liability ultimately falls upon the employer, for his failure to exercise the diligence of a good
father of the family in the selection and supervision of his employees. It is up to this point, however,
that our agreement with the respondent court ends. Utilizing the bonus pater familias standard
expressed in Article 2180 of the Civil Code,[28] we are of the opinion that Lis employer, Alexander
Commercial, Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals[29] upon which respondent court has
placed undue reliance, dealt with the subject of a school and its teachers supervision of students during
an extracurricular activity. These cases now fall under the provision on special parental authority found
in Art. 218 of the Family Code which generally encompasses all authorized school activities, whether
inside or outside school premises.
Second, the employers primary liability under the concept of pater familias embodied by Art. 2180
(in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is relieved
on a showing that he exercised the diligence of a good father of the family in the selection and
supervision of its employees. Once evidence is introduced showing that the employer exercised the
required amount of care in selecting its employees, half of the employers burden is overcome. The
question of diligent supervision, however, depends on the circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its
employee during the performance of the latters assigned tasks would be enough to relieve him of the
liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer is not
expected to exercise supervision over either the employees private activities or during the performance
of tasks either unsanctioned by the former or unrelated to the employees tasks. The case at bench
presents a situation of a different character, involving a practice utilized by large companies with either
their employees of managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with courtesy
vehicles. These company cars are either wholly owned and maintained by the company itself or are
subject to various plans through which employees eventually acquire their vehicles after a given period
of service, or after paying a token amount. Many companies provide liberal car plans to enable their
managerial or other employees of rank to purchase cars, which, given the cost of vehicles these days,
they would not otherwise be able to purchase on their own.
Under the first example, the company actually owns and maintains the car up to the point of
turnover of ownership to the employee; in the second example, the car is really owned and maintained
by the employee himself. In furnishing vehicles to such employees, are companies totally absolved of
responsibility when an accident involving a company-issued car occurs during private use after normal
office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan, require
rigorous tests of road worthiness from their agents prior to turning over the car (subject of company
maintenance) to their representatives. In other words, like a good father of a family, they entrust the
company vehicle only after they are satisfied that the employee to whom the car has been given full
use of the said company car for company or private purposes will not be a threat or menace to himself,
the company or to others. When a company gives full use and enjoyment of a company car to its
employee, it in effect guarantees that it is, like every good father, satisfied that its employee will use
the privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of using a
company-issued car. For large companies other than those cited in the example of the preceding
paragraph, the privilege serves important business purposes either related to the image of success an
entity intends to present to its clients and to the public in general, or for practical and utilitarian reasons
- to enable its managerial and other employees of rank or its sales agents to reach clients conveniently.
In most cases, providing a company car serves both purposes. Since important business transactions
and decisions may occur at all hours in all sorts of situations and under all kinds of guises, the provision
for the unlimited use of a company car therefore principally serves the business and goodwill of a
company and only incidentally the private purposes of the individual who actually uses the car, the
managerial employee or company sales agent. As such, in providing for a company car for business
use and/or for the purpose of furthering the companys image, a company owes a responsibility to the
public to see to it that the managerial or other employees to whom it entrusts virtually unlimited use of
a company issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony
before the trial court, he admitted that his functions as Assistant Manager did not require him to
scrupulously keep normal office hours as he was required quite often to perform work outside the office,
visiting prospective buyers and contacting and meeting with company clients. [30] These meetings,
clearly, were not strictly confined to routine hours because, as a managerial employee tasked with the
job of representing his company with its clients, meetings with clients were both social as well as work-
related functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled both
Li - as well as the corporation - to put up the front of a highly successful entity, increasing the latters
goodwill before its clientele. It also facilitated meeting between Li and its clients by providing the former
with a convenient mode of travel.
Moreover, Lis claim that he happened to be on the road on the night of the accident because he
was coming from a social visit with an officemate in Paraaque was a bare allegation which was never
corroborated in the court below. It was obviously self-serving. Assuming he really came from his
officemates place, the same could give rise to speculation that he and his officemate had just been
from a work-related function, or they were together to discuss sales and other work related strategies.
In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it exercised the
care and diligence of a good father of the family in entrusting its company car to Li. No allegations were
made as to whether or not the company took the steps necessary to determine or ascertain the driving
proficiency and history of Li, to whom it gave full and unlimited use of a company car.[31] Not having
been able to overcome the burden of demonstrating that it should be absolved of liability for entrusting
its company car to Li, said company, based on the principle of bonus pater familias, ought to be jointly
and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela during the
accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent court,
except as to the amount of moral damages. In the case of moral damages, while the said damages are
not intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless be
commensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in
moral damages from an amount of P 1,000,000.00 to P500,000.00 by the Court of Appeals was not
justified considering the nature of the resulting damage and the predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left
lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be
deprived of the full ambulatory functions of her left extremity, even with the use of state of the art
prosthetic technology. Well beyond the period of hospitalization (which was paid for by Li), she will be
required to undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the
process of healing.
These adjustments entail costs, prosthetic replacements and months of physical and occupational
rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be replaced and re-
adjusted to changes in the size of her lower limb effected by the biological changes of middle-age,
menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to be
adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels
observed in the bones of all post-menopausal women. In other words, the damage done to her would
not only be permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The replacements,
changes, and adjustments will require corresponding adjustive physical and occupational therapy. All
of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting damage
because it would be highly speculative to estimate the amount of psychological pain, damage and injury
which goes with the sudden severing of a vital portion of the human body. A prosthetic device, however
technologically advanced, will only allow a reasonable amount of functional restoration of the motor
functions of the lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness,
psychological injury, mental and physical pain are inestimable.
As the amount of moral damages are subject to this Courts discretion, we are of the opinion that
the amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and nature
of the injury -. physical and psychological - suffered by Valenzuela as a result of Lis grossly negligent
driving of his Mitsubishi Lancer in the early morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the court of Appeals is modified with
the effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.
Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Vitug., J., see concurring opinion.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-65295 March 10, 1987

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,


vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.

FELICIANO, J:

In the early morning of 15 November 1975 — at about 1:30 a.m. — private respondent Leonardo Dionisio was on
his way home — he lived in 1214-B Zamora Street, Bangkal, Makati — from a cocktails-and-dinner meeting with his
boss, the general manager of a marketing corporation. During the cocktails phase of the evening, Dionisio had taken
"a shot or two" of liquor. Dionisio was driving his Volkswagen car and had just crossed the intersection of General
Lacuna and General Santos Streets at Bangkal, Makati, not far from his home, and was proceeding down General
Lacuna Street, when his car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and
thereupon he saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump truck, owned by and
registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"), was parked on the right hand side of
General Lacuna Street (i.e., on the right hand side of a person facing in the same direction toward which Dionisio's
car was proceeding), facing the oncoming traffic. The dump truck was parked askew (not parallel to the street curb)
in such a manner as to stick out onto the street, partly blocking the way of oncoming traffic. There were no lights nor
any so-called "early warning" reflector devices set anywhere near the dump truck, front or rear. The dump truck had
earlier that evening been driven home by petitioner Armando U. Carbonel, its regular driver, with the permission of
his employer Phoenix, in view of work scheduled to be carried out early the following morning, Dionisio claimed that
he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into the dump
truck. As a result of the collision, Dionisio suffered some physical injuries including some permanent facial scars, a
"nervous breakdown" and loss of two gold bridge dentures.

Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically claiming that the
legal and proximate cause of his injuries was the negligent manner in which Carbonel had parked the dump truck
entrusted to him by his employer Phoenix. Phoenix and Carbonel, on the other hand, countered that the proximate
cause of Dionisio's injuries was his own recklessness in driving fast at the time of the accident, while under the
influence of liquor, without his headlights on and without a curfew pass. Phoenix also sought to establish that it had
exercised due rare in the selection and supervision of the dump truck driver.

The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and ordered the latter:

(1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and the replacement
of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected income for
plaintiff brought about the accident in controversy and which is the result of the negligence of the
defendants;

(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages for the
unexpected and sudden withdrawal of plaintiff from his lifetime career as a marketing man; mental
anguish, wounded feeling, serious anxiety, social humiliation, besmirched reputation, feeling of
economic insecurity, and the untold sorrows and frustration in life experienced by plaintiff and his
family since the accident in controversy up to the present time;
(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the wanton disregard
of defendants to settle amicably this case with the plaintiff before the filing of this case in court for a
smaller amount.

(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for attorney's fees; and

(6) The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No. 65476 affirmed the
decision of the trial court but modified the award of damages to the following extent:

1. The award of P15,000.00 as compensatory damages was reduced


to P6,460.71, the latter being the only amount that the appellate court found the
plaintiff to have proved as actually sustained by him;

2. The award of P150,000.00 as loss of expected income was reduced


to P100,000.00, basically because Dionisio had voluntarily resigned his job such that,
in the opinion of the appellate court, his loss of income "was not solely attributable to
the accident in question;" and

3. The award of P100,000.00 as moral damages was held by the appellate court as
excessive and unconscionable and hence reduced to P50,000.00.

The award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees


and costs remained untouched.

This decision of the Intermediate Appellate Court is now before us on a petition for review.

Both the trial court and the appellate court had made fairly explicit findings of fact relating to the manner in which the
dump truck was parked along General Lacuna Street on the basis of which both courts drew the inference that there
was negligence on the part of Carbonel, the dump truck driver, and that this negligence was the proximate cause of
the accident and Dionisio's injuries. We note, however, that both courts failed to pass upon the defense raised by
Carbonel and Phoenix that the true legal and proximate cause of the accident was not the way in which the dump
truck had been parked but rather the reckless way in which Dionisio had driven his car that night when he smashed
into the dump truck. The Intermediate Appellate Court in its questioned decision casually conceded that Dionisio
was "in some way, negligent" but apparently failed to see the relevance of Dionisio's negligence and made no
further mention of it. We have examined the record both before the trial court and the Intermediate Appellate Court
and we find that both parties had placed into the record sufficient evidence on the basis of which the trial court and
the appellate court could have and should have made findings of fact relating to the alleged reckless manner in
which Dionisio drove his car that night. The petitioners Phoenix and Carbonel contend that if there was negligence
in the manner in which the dump truck was parked, that negligence was merely a "passive and static condition" and
that private respondent Dionisio's recklessness constituted an intervening, efficient cause determinative of the
accident and the injuries he sustained. The need to administer substantial justice as between the parties in this
case, without having to remand it back to the trial court after eleven years, compels us to address directly the
contention put forward by the petitioners and to examine for ourselves the record pertaining to Dionisio's alleged
negligence which must bear upon the liability, or extent of liability, of Phoenix and Carbonel.

There are four factual issues that need to be looked into: (a) whether or not private respondent Dionisio had a
curfew pass valid and effective for that eventful night; (b) whether Dionisio was driving fast or speeding just before
the collision with the dump truck; (c) whether Dionisio had purposely turned off his car's headlights before contact
with the dump truck or whether those headlights accidentally malfunctioned moments before the collision; and (d)
whether Dionisio was intoxicated at the time of the accident.

As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the person of Dionisio
immediately after the accident nor was any found in his car. Phoenix's evidence here consisted of the testimony of
Patrolman Cuyno who had taken Dionisio, unconscious, to the Makati Medical Center for emergency treatment
immediately after the accident. At the Makati Medical Center, a nurse took off Dionisio's clothes and examined them
along with the contents of pockets together with Patrolman Cuyno. 1 Private respondent Dionisio was not able to produce any curfew
pass during the trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also offered a certification (dated two years after
the accident) issued by one Major Benjamin N. Libarnes of the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando, Pampanga, which was said
to have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to the effect that private respondent Dionisio had a valid curfew
pass. This certification did not, however, specify any pass serial number or date or period of effectivity of the supposed curfew pass. We find that private
respondent Dionisio was unable to prove possession of a valid curfew pass during the night of the accident and that the preponderance of evidence shows that he
did not have such a pass during that night. The relevance of possession or non-possession of a curfew pass that night lies in the light it tends to shed on the other
related issues: whether Dionisio was speeding home and whether he had indeed purposely put out his headlights before the accident, in order to avoid detection
and possibly arrest by the police in the nearby police station for travelling after the onset of curfew without a valid curfew pass.

On the second issue — whether or not Dionisio was speeding home that night — both the trial court and the
appellate court were completely silent.

The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene of the accident
almost immediately after it occurred, the police station where he was based being barely 200 meters away.
Patrolman Cuyno testified that people who had gathered at the scene of the accident told him that Dionisio's car
was "moving fast" and did not have its headlights on. 2 Dionisio, on the other hand, claimed that he was travelling at
a moderate speed at 30 kilometers per hour and had just crossed the intersection of General Santos and General
Lacuna Streets and had started to accelerate when his headlights failed just before the collision took place. 3

Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag within any of the
recognized exceptions to the hearsay rule since the facts he testified to were not acquired by him through official
information and had not been given by the informants pursuant to any duty to do so. Private respondent's objection
fails to take account of the fact that the testimony of Patrolman Cuyno is admissible not under the official records
exception to the hearsay rule 4 but rather as part of the res gestae. 5 Testimonial evidence under this exception to
the hearsay rule consists of excited utterances made on the occasion of an occurrence or event sufficiently startling
in nature so as to render inoperative the normal reflective thought processes of the observer and hence made as a
spontaneous reaction to the occurrence or event, and not the result of reflective thought. 6

We think that an automobile speeding down a street and suddenly smashing into a stationary object in the dead of
night is a sufficiently startling event as to evoke spontaneous, rather than reflective, reactions from observers who
happened to be around at that time. The testimony of Patrolman Cuyno was therefore admissible as part of the res
gestae and should have been considered by the trial court. Clearly, substantial weight should have been ascribed to
such testimony, even though it did not, as it could not, have purported to describe quantitatively the precise velocity
at winch Dionisio was travelling just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his headlights accidentally
malfunctioned, just moments before the accident. The Intermediate Appellate Court expressly found that the
headlights of Dionisio's car went off as he crossed the intersection but was non-committal as to why they did so. It is
the petitioners' contention that Dionisio purposely shut off his headlights even before he reached the intersection so
as not to be detected by the police in the police precinct which he (being a resident in the area) knew was not far
away from the intersection. We believe that the petitioners' theory is a more credible explanation than that offered by
private respondent Dionisio — i.e., that he had his headlights on but that, at the crucial moment, these had in some
mysterious if convenient way malfunctioned and gone off, although he succeeded in switching his lights on again at
"bright" split seconds before contact with the dump truck.

A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The evidence here
consisted of the testimony of Patrolman Cuyno to the effect that private respondent Dionisio smelled of liquor at the
time he was taken from his smashed car and brought to the Makati Medical Center in an unconscious
condition. 7This testimony has to be taken in conjunction with the admission of Dionisio that he had taken "a shot or
two" of liquor before dinner with his boss that night. We do not believe that this evidence is sufficient to show that
Dionisio was so heavily under the influence of liquor as to constitute his driving a motor vehicle per se an act of
reckless imprudence. 8 There simply is not enough evidence to show how much liquor he had in fact taken and the
effects of that upon his physical faculties or upon his judgment or mental alertness. We are also aware that "one
shot or two" of hard liquor may affect different people differently.

The conclusion we draw from the factual circumstances outlined above is that private respondent Dionisio was
negligent the night of the accident. He was hurrying home that night and driving faster than he should have been.
Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets
and thus did not see the dump truck that was parked askew and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the legal and
proximate cause of the accident and of Dionisio's injuries was the wrongful — or negligent manner in which the
dump truck was parked in other words, the negligence of petitioner Carbonel. That there was a reasonable
relationship between petitioner Carbonel's negligence on the one hand and the accident and respondent's injuries
on the other hand, is quite clear. Put in a slightly different manner, the collision of Dionisio's car with the dump truck
was a natural and foreseeable consequence of the truck driver's negligence.

The petitioners, however, urge that the truck driver's negligence was merely a "passive and static condition" and that
private respondent Dionisio's negligence was an "efficient intervening cause and that consequently Dionisio's
negligence must be regarded as the legal and proximate cause of the accident rather than the earlier negligence of
Carbonel. We note that the petitioners' arguments are drawn from a reading of some of the older cases in various
jurisdictions in the United States but we are unable to persuade ourselves that these arguments have any validity for
our jurisdiction. We note, firstly, that even in the United States, the distinctions between "cause" and "condition"
which the 'petitioners would have us adopt have already been "almost entirely discredited." Professors and Keeton
make this quite clear:

Cause and condition. Many courts have sought to distinguish between the active "cause" of the harm
and the existing "conditions" upon which that cause operated. If the defendant has created only a
passive static condition which made the damage possible, the defendant is said not to be liable. But
so far as the fact of causation is concerned, in the sense of necessary antecedents which have
played an important part in producing the result it is quite impossible to distinguish between active
forces and passive situations, particularly since, as is invariably the case, the latter are the result of
other active forces which have gone before. The defendant who spills gasoline about the premises
creates a "condition," but the act may be culpable because of the danger of fire. When a spark
ignites the gasoline, the condition has done quite as much to bring about the fire as the spark; and
since that is the very risk which the defendant has created, the defendant will not escape
responsibility. Even the lapse of a considerable time during which the "condition" remains static will
not necessarily affect liability; one who digs a trench in the highway may still be liable to another who
fans into it a month afterward. "Cause" and "condition" still find occasional mention in the decisions;
but the distinction is now almost entirely discredited. So far as it has any validity at all, it must refer to
the type of case where the forces set in operation by the defendant have come to rest in a position of
apparent safety, and some new force intervenes. But even in such cases, it is not the distinction
between "cause" and "condition" which is important but the nature of the risk and the character of the
intervening cause. 9

We believe, secondly, that the truck driver's negligence far from being a "passive and static condition" was rather an
indispensable and efficient cause. The collision between the dump truck and the private respondent's car would in
an probability not have occurred had the dump truck not been parked askew without any warning lights or reflector
devices. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down
General Lacuna Street and for having so created this risk, the truck driver must be held responsible. In our view,
Dionisio's negligence, although later in point of time than the truck driver's negligence and therefore closer to the
accident, was not an efficient intervening or independent cause. What the Petitioners describe as an "intervening
cause" was no more than a foreseeable consequent manner which the truck driver had parked the dump truck. In
other words, the petitioner truck driver owed a duty to private respondent Dionisio and others similarly situated not to
impose upon them the very risk the truck driver had created. Dionisio's negligence was not of an independent and
overpowering nature as to cut, as it were, the chain of causation in fact between the improper parking of the dump
truck and the accident, nor to sever the juris vinculum of liability. It is helpful to quote once more from Professor and
Keeton:

Foreseeable Intervening Causes. If the intervening cause is one which in ordinary human
experience is reasonably to be anticipated or one which the defendant has reason to anticipate
under the particular circumstances, the defendant may be negligence among other reasons,
because of failure to guard against it; or the defendant may be negligent only for that reason. Thus
one who sets a fire may be required to foresee that an ordinary, usual and customary wind arising
later wig spread it beyond the defendant's own property, and therefore to take precautions to prevent
that event. The person who leaves the combustible or explosive material exposed in a public place
may foresee the risk of fire from some independent source. ... In all of these cases there is an
intervening cause combining with the defendant's conduct to produce the result and in each case the
defendant's negligence consists in failure to protect the plaintiff against that very risk.

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

Thus it has been held that a defendant will be required to anticipate the usual weather of the vicinity,
including all ordinary forces of nature such as usual wind or rain, or snow or frost or fog or even
lightning; that one who leaves an obstruction on the road or a railroad track should foresee that a
vehicle or a train will run into it; ...

The risk created by the defendant may include the intervention of the foreseeable negligence of
others. ... [The standard of reasonable conduct may require the defendant to protect the plaintiff
against 'that occasional negligence which is one of the ordinary incidents of human life, and
therefore to be anticipated.' Thus, a defendant who blocks the sidewalk and forces the plaintiff to
walk in a street where the plaintiff will be exposed to the risks of heavy traffic becomes liable when
the plaintiff is run down by a car, even though the car is negligently driven; and one who parks an
automobile on the highway without lights at night is not relieved of responsibility when another
negligently drives into it. --- 10

We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and proximate
cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent Dionisio may
recover damages though such damages are subject to mitigation by the courts (Article 2179, Civil Code of the
Philippines).

Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory here of petitioners
is that while the petitioner truck driver was negligent, private respondent Dionisio had the "last clear chance" of
avoiding the accident and hence his injuries, and that Dionisio having failed to take that "last clear chance" must
bear his own injuries alone. The last clear chance doctrine of the common law was imported into our jurisdiction
by Picart vs. Smith 11 but it is a matter for debate whether, or to what extent, it has found its way into the Civil Code of the Philippines. The historical
function of that doctrine in the common law was to mitigate the harshness of another common law doctrine or rule that of contributory negligence. 12 The common
law rule of contributory negligence prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff's negligence was relatively minor as
compared with the wrongful act or omission of the defendant. 13 The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who
had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. 14 Accordingly, it is difficult to see what
role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code of the Philippines. 15

Is there perhaps a general concept of "last clear chance" that may be extracted from its common law matrix and
utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not believe so. Under Article
2179, the task of a court, in technical terms, is to determine whose negligence — the plaintiff's or the defendant's —
was the legal or proximate cause of the injury. That task is not simply or even primarily an exercise in chronology or
physics, as the petitioners seem to imply by the use of terms like "last" or "intervening" or "immediate." The relative
location in the continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the
relevant factors that may be taken into account. Of more fundamental importance are the nature of the negligent act
or omission of each party and the character and gravity of the risks created by such act or omission for the rest of
the community. The petitioners urge that the truck driver (and therefore his employer) should be absolved from
responsibility for his own prior negligence because the unfortunate plaintiff failed to act with that increased diligence
which had become necessary to avoid the peril precisely created by the truck driver's own wrongful act or omission.
To accept this proposition is to come too close to wiping out the fundamental principle of law that a man must
respond for the forseeable consequences of his own negligent act or omission. Our law on quasi-delicts seeks to
reduce the risks and burdens of living in society and to allocate them among the members of society. To accept the
petitioners' pro-position must tend to weaken the very bonds of society.

Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his employer
Phoenix 16in supervising its employees properly and adequately. The respondent appellate court in effect found, correctly in our opinion, that Phoenix was not
able to overcome this presumption of negligence. The circumstance that Phoenix had allowed its truck driver to bring the dump truck to his home whenever there
was work to be done early the following morning, when coupled with the failure to show any effort on the part of Phoenix to supervise the manner in which the
dump truck is parked when away from company premises, is an affirmative showing of culpa in vigilando on the part of Phoenix.
Turning to the award of damages and taking into account the comparative negligence of private respondent Dionisio
on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we believe that the demands of substantial justice are
satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of
P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to
be paid by petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs
shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the
reduced award of damages made by the respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate amount of
compensatory damages, loss of expected income and moral damages private respondent Dionisio is entitled to by
20% of such amount. Costs against the petitioners.

SO ORDERED.
Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

NATIONAL POWER G.R. No. 165969


CORPORATION,
Petitioner, Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

Promulgated:
HEIRS OF NOBLE CASIONAN,
Respondents. November 27, 2008

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

DECISION

REYES, R.T., J.:

PETITIONING power company pleads for mitigation of awarded damages on ground of


contributory negligence. But is the victim in this case partly to blame for his electrocution and
eventual demise?

This is a review on certiorari of the Decision[1] of the Court of Appeals (CA) which found the
National Power Corporation (NPC) liable for damages for the death of Noble Casionan due to
electrocution from the companys high tension transmission lines.
The Facts

The facts, as found by the trial court are as follows:

Respondents are the parents of Noble Casionan, 19 years old at the time of the incident
that claimed his life on June 27, 1995. He would have turned 20 years of age on November 9 of
that year. Noble was originally from Cervantes, Ilocos Sur. He worked as a pocket miner in
Dalicno, Ampucao, Itogon, Benguet.

A trail leading to Sangilo, Itogon, existed in Dalicno and this trail was regularly used by
members of the community. Sometime in the 1970s, petitioner NPC installed high-tension
electrical transmission lines of 69 kilovolts (KV) traversing the trail. Eventually, some of the
transmission lines sagged and dangled reducing their distance from the ground to only about
eight to ten feet. This posed a great threat to passersby who were exposed to the danger of
electrocution especially during the wet season.

As early as 1991, the leaders of Ampucao, Itogon made verbal and written requests for
NPC to institute safety measures to protect users of the trail from their high tension
wires. On June 18, 1991 and February 11, 1993, Pablo and Pedro Ngaosie, elders of the
community, wrote Engr. Paterno Banayot, Area Manager of NPC, to make immediate and
appropriate repairs of the high tension wires. They reiterated the danger it posed to small-scale
miners especially during the wet season. They related an incident where one boy was nearly
electrocuted.

In a letter dated March 1, 1995, Engr. Banayot informed Itogon Mayor Cresencio Pacalso
that NPC had installed nine additional poles on their Beckel-Philex 60 KV line. They likewise
identified a possible rerouting scheme with an estimated total cost of 1.7 million pesos to
improve the distance from its deteriorating lines to the ground.

On June 27, 1995, Noble and his co-pocket miner, Melchor Jimenez, were at Dalicno. They
cut two bamboo poles for their pocket mining. One was 18 to 19 feet long and the other was 14
feet long. Each man carried one pole horizontally on his shoulder: Noble carried the shorter pole
while Melchor carried the longer pole. Noble walked ahead as both passed through the trail
underneath the NPC high tension transmission lines on their way to their work place.

As Noble was going uphill and turning left on a curve, the tip of the bamboo pole he was
carrying touched one of the dangling high tension wires. Melchor, who was walking behind him,
narrated that he heard a buzzing sound when the tip of Nobles pole touched the wire for only
about one or two seconds. Thereafter, he saw Noble fall to the ground. Melchor rushed to Noble
and shook him but the latter was already dead. Their co-workers heard Melchors shout for help
and together they brought the body of Noble to their camp.

A post-mortem examination by Dra. Ignacia Reyes Ciriaco, Municipal Health Officer of


Itogon, Benguet, determined the cause of death to be cardiac arrest, secondary to ventricular
fibulation, secondary to electrocution.[2] She also observed a small burned area in the middle
right finger of the victim.

Police investigators who visited the site of the incident confirmed that
portions of the high tension wires above the trail hung very low, just about
eight to ten feet above the ground. They noted that the residents, school children, and pocket
miners usually used the trail and had to pass directly underneath the wires. The trail was the
only viable way since the other side was a precipice. In addition, they did not see any danger
warning signs installed in the trail.

The elders and leaders of the community, through Mayor Cresencio Pacalso, informed
the General Manager of NPC in Itogon of the incident. After learning of the electrocution, NPC
repaired the dangling and sagging transmission lines and put up warning signs around the area.

Consequently, the heirs of the deceased Noble filed a claim for damages against the NPC
before the Regional Trial Court (RTC) in Benguet. In its answer, NPC denied being negligent in
maintaining the safety of the high tension transmission lines. It averred that there were danger
and warning signs installed but these were stolen by children. Excavations were also made to
increase the necessary clearance from the ground to about 17 to 18 feet but some towers or
poles sank due to pocket mining in the area.
At the trial, NPC witnesses testified that the cause of death could not have been
electrocution because the victim did not suffer extensive burns despite the strong 69 KV carried
by the transmission lines. NPC argued that if Noble did die by electrocution, it was due to his
own negligence. The company counter-claimed for attorneys fees and cost of litigation.

RTC Disposition

On February 17, 1998, the RTC decided in favor of respondents. The fallo of its decision
reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant
NPC as follows:

1. Declaring defendant NPC guilty of Negligence (Quasi-Delict) in connection with the death of
Noble Casionan;

2. Ordering NPC as a consequence of its negligence, to pay the plaintiffs Jose and Linda Casionan,
as heirs of the deceased, Noble Casionan, the following Damages:

a. P50,000.00 as indemnity for the death of their son Noble Casionan;

b. P100,000.00 as moral damages;

c. P50,000.00 as exemplary damages;

d. P52,277.50 as actual damages incurred for the expenses of burial and wake in
connection with the death of Noble Casionan;

e. P720,000.00 as the loss of unearned income; and

f. P20,000.00 as attorneys fees and the cost of suit; and

3. Dismissing the counter claim of the NPC for lack of merit.[3]


The RTC gave more credence to the testimony of witnesses for respondents than those
of NPC who were not actually present at the time of the incident. The trial court observed that
witnesses for NPC were biased witnesses because they were all employed by the company,
except for the witness from the Department of Environment and Natural Resources
(DENR). The RTC found:

Melchor Jimenez was very vivid in his account. He declared that he and Noble Casionan cut two
bamboo poles, one 14 feet and the other about 18 feet. The shorter bamboo pole was carried by Noble
Casionan and the longer bamboo pole was carried by him. And they walked along the trail underneath
the transmission lines. He was following Noble Casionan. And when they were going uphill in the trail and
Noble Casionan was to turn left in a curve, the bamboo pole of Casionan swung around and its tip at the
back touched for one or two seconds or for a split moment the transmission line that was dangling and a
buzzing sound was heard. And Casionan immediately fell dead and simply stopped breathing. What better
account would there be than this? Melchor Jimenez was an eye witness as to how it all
happened.[4] (Emphasis added)

The RTC ruled that the negligence of NPC in maintaining the high-tension wires was
established by preponderance of evidence. On this score, the RTCopined:

2. On the matter of whether plaintiffs have a cause of action against defendant NPC, obviously,
they would have. x x x This negligence of the NPC was well established and cannot be denied because
previous to this incident, the attention of NPC has already been called by several requests and demands in
1991, 1993 and 1995 by elders and leaders of the community in the area to the fact that their transmission
lines were dangling and sagging and the clearance thereof from the line to the ground was only 8 to 10
feet and not within the standard clearance of 18 to 20 feet but no safety measures were taken. They did
not even put danger and warning signs so as to warn persons passing underneath.[5] (Emphasis added)

Disagreeing with the ruling of the trial court, NPC elevated the case to the CA. In its appeal, it
argued that the RTC erred in ruling that NPC was liable for Nobles
death. Further, even assuming that Noble died of electrocution, the RTC erred in not finding
that he was guilty of contributory negligence and in awarding excessive damages.

CA Disposition
On June 30, 2004, the CA promulgated its decision, disposing as follows:

WHEREFORE, the appealed Decision is hereby AFFIRMED, with the MODIFICATION that the
amount of moral damages is REDUCED to Fifty Thousand Pesos (P50,000.00); and the award of attorneys
fees in the sum of Twenty Thousand Pesos (P20,000.00) is DELETED.[6]

The CA sustained the findings of fact of the trial court but reduced the award of moral damages
from P100,000.00 to P50,000.00. The CA further disallowed the award of attorneys fees
because the reason for the award was not expressly stated in the body of the decision.

Issues

The following issues are presented for Our consideration: (i) Whether the award for damages
should be deleted in view of the contributory negligence of the victim; and (ii) Whether the
award for unearned income, exemplary, and moral damages should be deleted for lack of
factual and legal bases.[7]

Our Ruling

That the victim Noble died from being electrocuted by the high-tension transmission
wires of petitioner is not contested by petitioner. We are, however, asked to delete or mitigate
the damages awarded by the trial and appellate courts in view of what petitioner alleges to be
contributory negligence on the part of the victim.

As a rule, only questions of law may be entertained on appeal by certiorari under Rule 45. The
finding of negligence on the part of petitioner by the trial court and affirmed by the CA is a
question of fact which We cannot pass upon since it would entail going into factual matters on
which the finding of negligence was based.[8] Corollary to this, the finding by both courts of the
lack of contributory negligence on the part of the victim is a factual issue which is deemed
conclusive upon this Court absent any compelling reason for Us to rule otherwise.
But even if We walk the extra mile, the finding of liability on the part of petitioner must
stay.

Petitioner contends that the mere presence of the high tension wires above the trail did
not cause the victims death. Instead, it was Nobles negligent carrying of the bamboo pole that
caused his death. It insists that Noble was negligent when he allowed the bamboo pole he was
carrying to touch the high tension wires. This is especially true because other people traversing
the trail have not been similarly electrocuted.

Petitioners contentions are absurd.

The sagging high tension wires were an accident waiting to happen. As established during
trial, the lines were sagging around 8 to 10 feet in violation of the required distance of 18 to 20
feet. If the transmission lines were properly maintained by petitioner, the bamboo pole carried
by Noble would not have touched the wires. He would not have been electrocuted.

Petitioner cannot excuse itself from its failure to properly maintain the wires by
attributing negligence to the victim. In Ma-ao Sugar Central Co., Inc. v. Court of Appeals,[9] this
Court held that the responsibility of maintaining the rails for the purpose of preventing
derailment accidents belonged to the company.The company should not have been negligent in
ascertaining that the rails were fully connected than to wait until a life was lost due to an
accident. Said the Court:

In this petition, the respondent court is faulted for finding the petitioner guilty of negligence
notwithstanding its defense of due diligence under Article 2176 of the Civil Code and for disallowing the
deductions made by the trial court.

Investigation of the accident revealed that the derailment of the locomotive was caused by
protruding rails which had come loose because they were not connected and fixed in place by fish
plates. Fish plates are described as strips of iron 8" to 12" long and 3 " thick which are attached to the rails
by 4 bolts, two on each side, to keep the rails aligned. Although they could be removed only with special
equipment, the fish plates that should have kept the rails aligned could not be found at the scene of the
accident.

There is no question that the maintenance of the rails, for the purpose, inter alia, of preventing
derailments, was the responsibility of the petitioner, and that this responsibility was not
discharged. According to Jose Reyes, its own witness, who was in charge of the control and supervision of
its train operations, cases of derailment in the milling district were frequent and there were even times
when such derailments were reported every hour. The petitioner should therefore have taken more
prudent steps to prevent such accidents instead of waiting until a life was finally lost because of its
negligence.[10]

Moreover, We find no contributory negligence on Nobles part.

Negligence is the failure to observe, for the protection of the interest of another person,
that degree of care, precaution, and vigilance which the circumstances justly demand, whereby
such other person suffers injury.[11] On the other hand, contributory negligence is conduct on
the part of the injured party, contributing as a legal cause to the harm he has suffered, which
falls below the standard which he is required to conform for his own protection.[12] There is
contributory negligence when the partys act showed lack of ordinary care and foresight that
such act could cause him harm or put his life in danger.[13] It is an act or omission amounting to
want of ordinary care on the part of the person injured which, concurring with the defendants
negligence, is the proximate cause of the injury.[14]

The underlying precept on contributory negligence is that a plaintiff who is partly


responsible for his own injury should not be entitled to recover damages in full but must bear
the consequences of his own negligence.[15] If indeed there was contributory negligence on the
part of the victim, then it is proper to reduce the award for
damages. This is in consonance with the Civil Code provision that liability will be mitigated in
consideration of the contributory negligence of the injured party. Article 2179 of the Civil Code
is explicit on this score:

When the plaintiffs 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 defendants lack of due care, the plaintiff may recover damages, but the courts shall
mitigate the damages to be awarded.

In Ma-ao Sugar Central, it was held that to hold a person as having contributed to his
injuries, it must be shown that he performed an act that brought about his injuries in disregard
of warnings or signs on an impending danger to health and body. This Court held then that the
victim was not guilty of contributory negligence as there was no showing that the caboose
where he was riding was a dangerous place and that he recklessly dared to stay there despite
warnings or signs of impending danger.[16]
In this case, the trail where Noble was electrocuted was regularly used by members of the
community. There were no warning signs to inform passersby of the impending danger to their
lives should they accidentally touch the high tension wires. Also, the trail was the only viable
way from Dalicon to Itogon. Hence, Noble should not be faulted for simply doing what was
ordinary routine to other workers in the area.

Petitioner further faults the victim in engaging in pocket mining, which is prohibited by the DENR
in the area.

In Aonuevo v. Court of Appeals,[17] this Court ruled that the violation of a statute is not
sufficient to hold that the violation was the proximate cause of the injury, unless the very injury
that happened was precisely what was intended to be prevented by the statute. In said case,
the allegation of contributory negligence on the part of the injured party who violated traffic
regulations when he failed to register his bicycle or install safety gadgets thereon was struck
down. We quote:

x x x The bare fact that Villagracia was violating a municipal ordinance at the time of the accident
may have sufficiently established some degree of negligence on his part, but such negligence is without
legal consequence unless it is shown that it was a contributing cause of the injury. If anything at all, it is
but indicative of Villagracias failure in fulfilling his obligation to the municipal government, which would
then be the proper party to initiate corrective action as a result. But such failure alone is not
determinative of Villagracias negligence in relation to the accident. Negligence is relative or comparative,
dependent upon the situation of the parties and the degree of care and vigilance which the particular
circumstances reasonably require. To determine if Villagracia was negligent, it is not sufficient to rely
solely on the violations of the municipal ordinance, but imperative to examine Villagracias behavior in
relation to the contemporaneous circumstances of the accident.

xxxx

Under American case law, the failures imputed on Villagracia are


not grievous enough so as to negate monetary relief. In the absence of statutory requirement, one is not
negligent as a matter of law for failing to equip a horn, bell, or other warning devise onto a bicycle. In
most cases, the absence of proper lights on a bicycle does not constitute negligence as a matter of law
but is a question for the jury whether the absence of proper lights played a causal part in producing a
collision with a motorist. The absence of proper lights on a bicycle at night, as required by statute or
ordinance, may constitute negligence barring or diminishing recovery if the bicyclist is struck by a motorist
as long as the absence of such lights was a proximate cause of the collision; however, the absence of such
lights will not preclude or diminish recovery if the scene of the accident was well illuminated by street
lights, if substitute lights were present which clearly rendered the bicyclist visible, if the motorist saw the
bicycle in spite of the absence of lights thereon, or if the motorist would have been unable to see the bicycle
even if it had been equipped with lights. A bicycle equipped with defective or ineffective brakes may
support a finding of negligence barring or diminishing recovery by an injured bicyclist where such
condition was a contributing cause of the accident.

The above doctrines reveal a common thread. The failure of the bicycle owner to comply with
accepted safety practices, whether or not imposed by ordinance or statute, is not sufficient to negate or
mitigate recovery unless a causal connection is established between such failure and the injury
sustained. The principle likewise finds affirmation in Sanitary Steam, wherein we declared that the
violation of a traffic statute must be shown as the proximate cause of the injury, or that it substantially
contributed thereto. Aonuevo had the burden of clearly proving that the alleged negligence of Villagracia
was the proximate or contributory cause of the latters injury.[18](Emphasis added)

That the pocket miners were unlicensed was not a justification for petitioner to leave their
transmission lines dangling. We quote with approval the observation of the RTC on this matter:

The claim of NPC that the pocket miners have no right to operate within the area of Dalicno,
Itogon, Benguet as there was no permit issued by DENR is beside the point. The fact is that there were
not only pocket miners but also there were many residents in the area of Dalicno, Ampucao, Itogon,
Benguet using the trail. These residents were using this trail underneath the transmission lines x x x. They
were using this trail even before the transmission lines were installed in the 1970s by NPC. The pocket
miners, although they have no permit to do pocket mining in the area, are also human beings who have
to eke out a living in the only way they know how. The fact that they were not issued a permit by the DENR
to do pocket mining is no justification for NPC to simply leave their transmission lines dangling or hanging
8 to 10 feet above the ground posing danger to the life and limb of everyone in said community. x x
x[19] (Emphasis added)

In sum, the victim was not guilty of contributory negligence. Hence, petitioner is not
entitled to a mitigation of its liability.

II

We now determine the propriety of the awards for loss of unearned income, moral, and
exemplary damages.

From the testimony of the victims mother, it was duly established during trial that he was
earning P3,000.00 a month. To determine the compensable amount of lost earnings, We
consider (1) the number of years for which the victim would otherwise have lived (life
expectancy); and (2) the rate of loss sustained by the heirs of the
deceased. Life expectancy is computed by applying the formula (2/3 x [80 - age at death])
adopted in the American Expectancy Table of Mortality or the
Actuarial Combined Experience Table of Mortality. The second factor is computed by
multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less
expenses necessary in the creation of such earnings or income and less living and other
incidental expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross
earnings. Thus, the formula used by this Court in computing loss of earning capacity is: Net
Earning Capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and
necessary living expenses)].[20]

We sustain the trial court computation of unearned income of the victim:

x x x the loss of his unearned income can be computed as follows: two-thirds of 80 years, minus
20 years, times P36,000.00 per year, equals P1,440,000.00. This is because Noble Casionan, at the time of
his death, was 20 years old and was healthy and strong. And, therefore, his life expectancy would normally
reach up to 80 years old in accordance with the above formula illustrated in the aforesaid cases. Thus,
Noble Casionan had 60 more years life expectancy since he was 20 years old at the time of his death
on June 27, 1995. Two-thirds of 60 years times P36,000.00 since he was earning about P3,000.00 a month
of P36,000.00 a year would be P1,440,000.00.

However, in determining the unearned income, the basic concern is to determine the damages sustained
by the heirs or dependents of the deceased Casionan. And here, the damages consist not of the full
amount of his earnings but the support they would have received from the deceased had he not died as
a consequence of the unlawful act of the NPC. x x x The amount recoverable is not the loss of the entire
earnings but the loss of that portion of the earnings which the heirs would have received as
support.Hence, from the amount of P1,440,000.00, a reasonable amount for the necessary expenses of
Noble Casionan had he lived would be deducted. Following the ruling in People v. Quilaton, 205 SCRA 279,
the Court deems that 50 percent of the gross earnings of the deceased of P1,440,000.00 should be
deducted for his necessary expenses had he lived, thus leaving the other half of about P720,000.00 as the
net earnings that would have gone for the support of his heirs. This is the unearned income of which the
heirs were deprived of.[21]

In quasi delicts, exemplary damages are awarded where the offender was guilty of gross
negligence.[22] Gross negligence has been defined to be the want or absence of even slight care
or diligence as to amount to a reckless disregard of the safety of person or property. It evinces
a thoughtless disregard of consequences without exerting any effort to avoid them.[23]
Petitioner demonstrated its disregard for the safety of the members of the community of
Dalicno who used the trail regularly when it failed to address the sagging high tension wires
despite numerous previous requests and warnings. It only exerted efforts to rectify the danger
it posed after a death from electrocution already occurred. Gross negligence was thus apparent,
warranting the award of exemplary damages.

As to the award of moral damages, We sustain the CA reduction of the award. Moral
damages are designed to compensate the claimant for actual injury suffered and not to impose
a penalty on the wrongdoer. It is not meant to enrich the complainant but to enable the injured
party to obtain means to obviate the moral suffering experience. Trial courts should guard
against the award of exorbitant damages lest they be accused of prejudice or corruption in their
decision making.[24] We find that the CA correctly reduced the award from P100,000.00
to P50,000.00.

As for the award for attorneys fees, well-settled is the rule that the reason for the award
must be discussed in the text of the courts decision and not only in the dispositive
portion.[25] Except for the fallo, a discussion on the reason for the award for attorneys fees was
not included by the RTC in its decision. The CA thus correctly disallowed it on appeal.

WHREFORE, the petition is DENIED and the appealed decision of the Court of
Appeals AFFIRMED.

SO ORDERED.
SECOND DIVISION

G.R. No. 121413 January 29, 2001

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK OF ASIA AND


AMERICA),petitioner,
vs.
COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK, N.A., respondents.

G.R. No. 121479 January 29, 2001

FORD PHILIPPINES, INC., petitioner-plaintiff,


vs.
COURT OF APPEALS and CITIBANK, N.A. and PHILIPPINE COMMERCIAL INTERNATIONAL
BANK, respondents.

G.R. No. 128604 January 29, 2001

FORD PHILIPPINES, INC., petitioner,


vs.
CITIBANK, N.A., PHILIPPINE COMMERCIAL INTERNATIONAL BANK and COURT OF APPEALS, respondents.

QUISUMBING, J.:

These consolidated petitions involve several fraudulently negotiated checks.

The original actions a quo were instituted by Ford Philippines to recover from the drawee bank, CITIBANK, N.A.
(Citibank) and collecting bank, Philippine Commercial International Bank (PCIBank) [formerly Insular Bank of Asia
and America], the value of several checks payable to the Commissioner of Internal Revenue, which were embezzled
allegedly by an organized syndicate. 1âwphi1.nêt

G.R. Nos. 121413 and 121479 are twin petitions for review of the March 27, 1995 Decision1 of the Court of Appeals
in CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. Citibank, N.A. and Insular Bank of Asia and America
(now Philipppine Commercial International Bank), and the August 8, 1995 Resolution,2 ordering the collecting bank,
Philippine Commercial International Bank, to pay the amount of Citibank Check No. SN-04867.

In G.R. No. 128604, petitioner Ford Philippines assails the October 15, 1996 Decision3 of the Court of Appeals and
its March 5, 1997 Resolution4 in CA-G.R. No. 28430 entitled "Ford Philippines, Inc. vs. Citibank, N.A. and Philippine
Commercial International Bank," affirming in toto the judgment of the trial court holding the defendant drawee bank,
Citibank, N.A., solely liable to pay the amount of P12,163,298.10 as damages for the misapplied proceeds of the
plaintiff's Citibanl Check Numbers SN-10597 and 16508.
I. G.R. Nos. 121413 and 121479

The stipulated facts submitted by the parties as accepted by the Court of Appeals are as follows:

"On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-04867 in the amount of
P4,746,114.41, in favor of the Commissioner of Internal Revenue as payment of plaintiff;s percentage or
manufacturer's sales taxes for the third quarter of 1977.

The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was subsequently cleared
at the Central Bank. Upon presentment with the defendant Citibank, the proceeds of the check was paid to
IBAA as collecting or depository bank.

The proceeds of the same Citibank check of the plaintiff was never paid to or received by the payee thereof,
the Commissioner of Internal Revenue.

As a consequence, upon demand of the Bureau and/or Commissioner of Internal Revenue, the plaintiff was
compelled to make a second payment to the Bureau of Internal Revenue of its percentage/manufacturers'
sales taxes for the third quarter of 1977 and that said second payment of plaintiff in the amount of
P4,746,114.41 was duly received by the Bureau of Internal Revenue.

It is further admitted by defendant Citibank that during the time of the transactions in question, plaintiff had
been maintaining a checking account with defendant Citibank; that Citibank Check No. SN-04867 which was
drawn and issued by the plaintiff in favor of the Commissioner of Internal Revenue was a crossed check in
that, on its face were two parallel lines and written in between said lines was the phrase "Payee's Account
Only"; and that defendant Citibank paid the full face value of the check in the amount of P4,746,114.41 to
the defendant IBAA.

It has been duly established that for the payment of plaintiff's percentage tax for the last quarter of 1977, the
Bureau of Internal Revenue issued Revenue Tax Receipt No. 18747002, dated October 20, 1977,
designating therein in Muntinlupa, Metro Manila, as the authorized agent bank of Metrobanl, Alabang branch
to receive the tax payment of the plaintiff.

On December 19, 1977, plaintiff's Citibank Check No. SN-04867, together with the Revenue Tax Receipt
No. 18747002, was deposited with defendant IBAA, through its Ermita Branch. The latter accepted the
check and sent it to the Central Clearing House for clearing on the samd day, with the indorsement at the
back "all prior indorsements and/or lack of indorsements guaranteed." Thereafter, defendant IBAA
presented the check for payment to defendant Citibank on same date, December 19, 1977, and the latter
paid the face value of the check in the amount of P4,746,114.41. Consequently, the amount of
P4,746,114.41 was debited in plaintiff's account with the defendant Citibank and the check was returned to
the plaintiff.

Upon verification, plaintiff discovered that its Citibank Check No. SN-04867 in the amount of P4,746,114.41
was not paid to the Commissioner of Internal Revenue. Hence, in separate letters dated October 26, 1979,
addressed to the defendants, the plaintiff notified the latter that in case it will be re-assessed by the BIR for
the payment of the taxes covered by the said checks, then plaintiff shall hold the defendants liable for
reimbursement of the face value of the same. Both defendants denied liability and refused to pay.

In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue addressed to the
plaintiff - supposed to be Exhibit "D", the latter was officially informed, among others, that its check in the
amount of P4, 746,114.41 was not paid to the government or its authorized agent and instead encashed by
unauthorized persons, hence, plaintiff has to pay the said amount within fifteen days from receipt of the
letter. Upon advice of the plaintiff's lawyers, plaintiff on March 11, 1982, paid to the Bureau of Internal
Revenue, the amount of P4,746,114.41, representing payment of plaintiff's percentage tax for the third
quarter of 1977.
As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made for the second
time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983 its original complaint before this
Court.

On December 24, 1985, defendant IBAA was merged with the Philippine Commercial International Bank
(PCI Bank) with the latter as the surviving entity.

Defendant Citibank maintains that; the payment it made of plaintiff's Citibank Check No. SN-04867 in the
amount of P4,746,114.41 "was in due course"; it merely relied on the clearing stamp of the
depository/collecting bank, the defendant IBAA that "all prior indorsements and/or lack of indorsements
guaranteed"; and the proximate cause of plaintiff's injury is the gross negligence of defendant IBAA in
indorsing the plaintiff's Citibank check in question.

It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check No. SN-048867
was paid to defendant IBAA as collecting bank, plaintiff was maintaining a checking account with defendant
Citibank."5

Although it was not among the stipulated facts, an investigation by the National Bureau of Investigation (NBI)
revealed that Citibank Check No. SN-04867 was recalled by Godofredo Rivera, the General Ledger Accountant of
Ford. He purportedly needed to hold back the check because there was an error in the computation of the tax due to
the Bureau of Internal Revenue (BIR). With Rivera's instruction, PCIBank replaced the check with two of its own
Manager's Checks (MCs). Alleged members of a syndicate later deposited the two MCs with the Pacific Banking
Corporation.

Ford, with leave of court, filed a third-party complaint before the trial court impleading Pacific Banking Corporation
(PBC) and Godofredo Rivera, as third party defendants. But the court dismissed the complaint against PBC for lack
of cause of action. The course likewise dismissed the third-party complaint against Godofredo Rivera because he
could not be served with summons as the NBI declared him as a "fugitive from justice".

On June 15, 1989, the trial court rendered its decision, as follows:

"Premises considered, judgment is hereby rendered as follows:

"1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and severally, to pay the
plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's Citibank Check No.
SN-04867, with interest thereon at the legal rate starting January 20, 1983, the date when the
original complaint was filed until the amount is fully paid, plus costs;

"2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now PCI Bank) to
reimburse defendant Citibank for whatever amount the latter has paid or may pay to the plaintiff in
accordance with next preceding paragraph;

"3. The counterclaims asserted by the defendants against the plaintiff, as well as that asserted by
the cross-defendant against the cross-claimant are dismissed, for lack of merits; and

"4. With costs against the defendants.

SO ORDERED."6

Not satisfied with the said decision, both defendants, Citibank and PCIBank, elevated their respective petitions for
review on certiorari to the Courts of Appeals. On March 27, 1995, the appellate court issued its judgment as follows:

"WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision with modifications.

The court hereby renderes judgment:


1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant Citibank N.A. is
concerned;

2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of P4,746,114.41
representing the face value of plaintiff's Citibank Check No. SN-04867, with interest thereon at the
legal rate starting January 20, 1983, the date when the original complaint was filed until the amount
is fully paid;

3. Dismissing the counterclaims asserted by the defendants against the plaintiff as well as that
asserted by the cross-defendant against the cross-claimant, for lack of merits.

Costs against the defendant IBAA (now PCI Bank).

IT IS SO ORDERED."7

PCI Bank moved to reconsider the above-quoted decision of the Court of Appeals, while Ford filed a "Motion for
Partial Reconsideration." Both motions were denied for lack of merit.

Separately, PCIBank and Ford filed before this Court, petitions for review by certiorari under Rule 45.

In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution of the Twelfth Division of the Court
of Appeals contending that it merely acted on the instruction of Ford and such casue of action had already
prescribed.

PCIBank sets forth the following issues for consideration:

I. Did the respondent court err when, after finding that the petitioner acted on the check drawn by
respondent Ford on the said respondent's instructions, it nevertheless found the petitioner liable to the said
respondent for the full amount of the said check.

II. Did the respondent court err when it did not find prescription in favor of the petitioner.8

In a counter move, Ford filed its petition docketed as G.R. No. 121479, questioning the same decision and
resolution of the Court of Appeals, and praying for the reinstatement in toto of the decision of the trial court which
found both PCIBank and Citibank jointly and severally liable for the loss.

In G.R. No. 121479, appellant Ford presents the following propositions for consideration:

I. Respondent Citibank is liable to petitioner Ford considering that:

1. As drawee bank, respondent Citibank owes to petitioner Ford, as the drawer of the subject check
and a depositor of respondent Citibank, an absolute and contractual duty to pay the proceeds of the
subject check only to the payee thereof, the Commissioner of Internal Revenue.

2. Respondent Citibank failed to observe its duty as banker with respect to the subject check, which
was crossed and payable to "Payee's Account Only."

3. Respondent Citibank raises an issue for the first time on appeal; thus the same should not be
considered by the Honorable Court.

4. As correctly held by the trial court, there is no evidence of gross negligence on the part of
petitioner Ford.9

II. PCI Bank is liable to petitioner Ford considering that:


1. There were no instructions from petitioner Ford to deliver the proceeds of the subject check to a
person other than the payee named therein, the Commissioner of the Bureau of Internal Revenue;
thus, PCIBank's only obligation is to deliver the proceeds to the Commissioner of the Bureau of
Internal Revenue.10

2. PCIBank which affixed its indorsement on the subject check ("All prior indorsement and/or lack of
indorsement guaranteed"), is liable as collecting bank.11

3. PCIBank is barred from raising issues of fact in the instant proceedings.12

4. Petitioner Ford's cause of action had not prescribed.13

II. G.R. No. 128604

The same sysndicate apparently embezzled the proceeds of checks intended, this time, to settle Ford's percentage
taxes appertaining to the second quarter of 1978 and the first quarter of 1979.

The facts as narrated by the Court of Appeals are as follows:

Ford drew Citibank Check No. SN-10597 on July 19, 1978 in the amount of P5,851,706.37 representing the
percentage tax due for the second quarter of 1978 payable to the Commissioner of Internal Revenue. A BIR
Revenue Tax Receipt No. 28645385 was issued for the said purpose.

On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of P6,311,591.73, representing
the payment of percentage tax for the first quarter of 1979 and payable to the Commissioner of Internal Revenue.
Again a BIR Revenue Tax Receipt No. A-1697160 was issued for the said purpose.

Both checks were "crossed checks" and contain two diagonal lines on its upper corner between, which were written
the words "payable to the payee's account only."

The checks never reached the payee, CIR. Thus, in a letter dated February 28, 1980, the BIR, Region 4-B,
demanded for the said tax payments the corresponding periods above-mentioned.

As far as the BIR is concernced, the said two BIR Revenue Tax Receipts were considered "fake and spurious". This
anomaly was confirmed by the NBI upon the initiative of the BIR. The findings forced Ford to pay the BIR a new,
while an action was filed against Citibank and PCIBank for the recovery of the amount of Citibank Check Numbers
SN-10597 and 16508.

The Regional Trial Court of Makati, Branch 57, which tried the case, made its findings on the modus operandi of the
syndicate, as follows:

"A certain Mr. Godofredo Rivera was employed by the plaintiff FORD as its General Ledger Accountant. As
such, he prepared the plaintiff's check marked Ex. 'A' [Citibank Check No. Sn-10597] for payment to the BIR.
Instead, however, fo delivering the same of the payee, he passed on the check to a co-conspirator named
Remberto Castro who was a pro-manager of the San Andres Branch of PCIB.* In connivance with one
Winston Dulay, Castro himself subsequently opened a Checking Account in the name of a fictitious person
denominated as 'Reynaldo reyes' in the Meralco Branch of PCIBank where Dulay works as Assistant
Manager.

After an initial deposit of P100.00 to validate the account, Castro deposited a worthless Bank of America
Check in exactly the same amount as the first FORD check (Exh. "A", P5,851,706.37) while this worthless
check was coursed through PCIB's main office enroute to the Central Bank for clearing, replaced this
worthless check with FORD's Exhibit 'A' and accordingly tampered the accompanying documents to cover
the replacement. As a result, Exhibit 'A' was cleared by defendant CITIBANK, and the fictitious deposit
account of 'Reynaldo Reyes' was credited at the PCIB Meralco Branch with the total amount of the FORD
check Exhibit 'A'. The same method was again utilized by the syndicate in profiting from Exh. 'B' [Citibank
Check No. SN-16508] which was subsequently pilfered by Alexis Marindo, Rivera's Assistant at FORD.
From this 'Reynaldo Reyes' account, Castro drew various checks distributing the sahres of the other
participating conspirators namely (1) CRISANTO BERNABE, the mastermind who formulated the method for
the embezzlement; (2) RODOLFO R. DE LEON a customs broker who negotiated the initial contact between
Bernabe, FORD's Godofredo Rivera and PCIB's Remberto Castro; (3) JUAN VASTILLO who assisted de
Leon in the initial arrangements; (4) GODOFREDO RIVERA, FORD's accountant who passed on the first
check (Exhibit "A") to Castro; (5) REMERTO CASTRO, PCIB's pro-manager at San Andres who performed
the switching of checks in the clearing process and opened the fictitious Reynaldo Reyes account at the
PCIB Meralco Branch; (6) WINSTON DULAY, PCIB's Assistant Manager at its Meralco Branch, who
assisted Castro in switching the checks in the clearing process and facilitated the opening of the fictitious
Reynaldo Reyes' bank account; (7) ALEXIS MARINDO, Rivera's Assistant at FORD, who gave the second
check (Exh. "B") to Castro; (8) ELEUTERIO JIMENEZ, BIR Collection Agent who provided the fake and
spurious revenue tax receipts to make it appear that the BIR had received FORD's tax payments.

Several other persons and entities were utilized by the syndicate as conduits in the disbursements of the
proceeds of the two checks, but like the aforementioned participants in the conspiracy, have not been
impleaded in the present case. The manner by which the said funds were distributed among them are
traceable from the record of checks drawn against the original "Reynaldo Reyes" account and indubitably
identify the parties who illegally benefited therefrom and readily indicate in what amounts they did so."14

On December 9, 1988, Regional Trial Court of Makati, Branch 57, held drawee-bank, Citibank, liable for the value of
the two checks while adsolving PCIBank from any liability, disposing as follows:

"WHEREFORE, judgment is hereby rendered sentencing defendant CITIBANK to reimburse plaintiff FORD
the total amount of P12,163,298.10 prayed for in its complaint, with 6% interest thereon from date of first
written demand until full payment, plus P300,000.00 attorney's fees and expenses litigation, and to pay the
defendant, PCIB (on its counterclaim to crossclaim) the sum of P300,000.00 as attorney's fees and costs of
litigation, and pay the costs.

SO ORDERED."15

Both Ford and Citibank appealed to the Court of Appeals which affirmed, in toto, the decision of the trial court.
Hence, this petition.

Petitioner Ford prays that judgment be rendered setting aside the portion of the Court of Appeals decision and its
resolution dated March 5, 1997, with respect to the dismissal of the complaint against PCIBank and holding Citibank
solely responsible for the proceeds of Citibank Check Numbers SN-10597 and 16508 for P5,851,706.73 and
P6,311,591.73 respectively.

Ford avers that the Court of Appeals erred in dismissing the complaint against defendant PCIBank considering that:

I. Defendant PCIBank was clearly negligent when it failed to exercise the diligence required to be exercised
by it as a banking insitution.

II. Defendant PCIBank clearly failed to observe the diligence required in the selection and supervision of its
officers and employees.

III. Defendant PCIBank was, due to its negligence, clearly liable for the loss or damage resulting to the
plaintiff Ford as a consequence of the substitution of the check consistent with Section 5 of Central Bank
Circular No. 580 series of 1977.

IV. Assuming arguedo that defedant PCIBank did not accept, endorse or negotiate in due course the subject
checks, it is liable, under Article 2154 of the Civil Code, to return the money which it admits having received,
and which was credited to it its Central bank account.16

The main issue presented for our consideration by these petitions could be simplified as follows: Has petitioner Ford
the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks
intended as payment to the Commissioner of Internal Revenue? Or has Ford's cause of action already prescribed?
Note that in these cases, the checks were drawn against the drawee bank, but the title of the person negotiating the
same was allegedly defective because the instrument was obtained by fraud and unlawful means, and the proceeds
of the checks were not remitted to the payee. It was established that instead of paying the checks to the CIR, for the
settlement of the approprite quarterly percentage taxes of Ford, the checks were diverted and encashed for the
eventual distribution among the mmbers of the syndicate. As to the unlawful negotiation of the check the applicable
law is Section 55 of the Negotiable Instruments Law (NIL), which provides:

"When title defective -- The title of a person who negotiates an instrument is defective within the meaning of
this Act when he obtained the instrument, or any signature thereto, by fraud, duress, or fore and fear, or
other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith or under
such circumstances as amount to a fraud."

Pursuant to this provision, it is vital to show that the negotiation is made by the perpetator in breach of faith
amounting to fraud. The person negotiating the checks must have gone beyond the authority given by his principal.
If the principal could prove that there was no negligence in the performance of his duties, he may set up the
personal defense to escape liability and recover from other parties who. Though their own negligence, alowed the
commission of the crime.

In this case, we note that the direct perpetrators of the offense, namely the embezzlers belonging to a syndicate, are
now fugitives from justice. They have, even if temporarily, escaped liability for the embezzlement of millions of
pesos. We are thus left only with the task of determining who of the present parties before us must bear the burden
of loss of these millions. It all boils down to thequestion of liability based on the degree of negligence among the
parties concerned.

Foremost, we must resolve whether the injured party, Ford, is guilty of the "imputed contributory negligence" that
would defeat its claim for reimbursement, bearing ing mind that its employees, Godofredo Rivera and Alexis
Marindo, were among the members of the syndicate.

Citibank points out that Ford allowed its very own employee, Godofredo Rivera, to negotiate the checks to his co-
conspirators, instead of delivering them to the designated authorized collecting bank (Metrobank-Alabang) of the
payee, CIR. Citibank bewails the fact that Ford was remiss in the supervision and control of its own employees,
inasmuch as it only discovered the syndicate's activities through the information given by the payee of the checks
after an unreasonable period of time.

PCIBank also blames Ford of negligence when it allegedly authorized Godofredo Rivera to divert the proceeds of
Citibank Check No. SN-04867, instead of using it to pay the BIR. As to the subsequent run-around of unds of
Citibank Check Nos. SN-10597 and 16508, PCIBank claims that the proximate cause of the damge to Ford lies in its
own officers and employees who carried out the fradulent schemes and the transactions. These circumstances were
not checked by other officers of the company including its comptroller or internal auditor. PCIBank contends that the
inaction of Ford despite the enormity of the amount involved was a sheer negligence and stated that, as between
two innocent persons, one of whom must suffer the consequences of a breach of trust, the one who made it
possible, by his act of negligence, must bear the loss.

For its part, Ford denies any negligence in the performance of its duties. It avers that there was no evidence
presented before the trial court showing lack of diligence on the part of Ford. And, citing the case of Gempesaw vs.
Court of Appeals,17 Ford argues that even if there was a finding therein that the drawer was negligent, the drawee
bank was still ordered to pay damages.

Furthermore, Ford contends the Godofredo rivera was not authorized to make any representation in its behalf,
specifically, to divert the proceeds of the checks. It adds that Citibank raised the issue of imputed negligence against
Ford for the first time on appeal. Thus, it should not be considered by this Court.

On this point, jurisprudence regarding the imputed negligence of employer in a master-servant relationship is
instructive. Since a master may be held for his servant's wrongful act, the law imputes to the master the act of the
servant, and if that act is negligent or wrongful and proximately results in injury to a third person, the negligence or
wrongful conduct is the negligence or wrongful conduct of the master, for which he is liable.18 The general rule is
that if the master is injured by the negligence of a third person and by the concuring contributory negligence of his
own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against
the third person, asuming, of course that the contributory negligence was the proximate cause of the injury of
which complaint is made.19

Accordingly, we need to determine whether or not the action of Godofredo Rivera, Ford's General Ledger
Accountant, and/or Alexis Marindo, his assistant, was the proximate cause of the loss or damage. AS defined,
proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause
produces the injury and without the result would not have occurred.20

It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate, in
our view, their actions were not the proximate cause of encashing the checks payable to the CIR. The degree of
Ford's negligence, if any, could not be characterized as the proximate cause of the injury to the parties.

The Board of Directors of Ford, we note, did not confirm the request of Godofredo Rivera to recall Citibank Check
No. SN-04867. Rivera's instruction to replace the said check with PCIBank's Manager's Check was not in
theordinary course of business which could have prompted PCIBank to validate the same.

As to the preparation of Citibank Checks Nos. SN-10597 and 16508, it was established that these checks were
made payable to the CIR. Both were crossed checks. These checks were apparently turned around by Ford's
emploees, who were acting on their own personal capacity.

Given these circumstances, the mere fact that the forgery was committed by a drawer-payor's confidential employee
or agent, who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged
paper upon the bank, does notentitle the bank toshift the loss to the drawer-payor, in the absence of some
circumstance raising estoppel against the drawer.21 This rule likewise applies to the checks fraudulently negotiated
or diverted by the confidential employees who hold them in their possession.

With respect to the negligence of PCIBank in the payment of the three checks involved, separately, the trial courts
found variations between the negotiation of Citibank Check No. SN-04867 and the misapplication of total proceeds
of Checks SN-10597 and 16508. Therefore, we have to scrutinize, separately, PCIBank's share of negligence when
the syndicate achieved its ultimate agenda of stealing the proceeds of these checks.

G.R. Nos. 121413 and 121479

Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was coursed through the
ordinary banking transaction, sent to Central Clearing with the indorsement at the back "all prior indorsements
and/or lack of indorsements guaranteed," and was presented to Citibank for payment. Thereafter PCIBank, instead
of remitting the proceeds to the CIR, prepared two of its Manager's checks and enabled the syndicate to encash the
same.

On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank
employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly
authorized, showed lack of care and prudence required in the circumstances.

Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As
an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the
payor or its agent. As aptly stated by the trial court, to wit:

"xxx. Since the questioned crossed check was deposited with IBAA [now PCIBank], which claimed to be a
depository/collecting bank of BIR, it has the responsibility to make sure that the check in question is
deposited in Payee's account only.

xxx xxx xxx

As agent of the BIR (the payee of the check), defendant IBAA should receive instructions only from its
principal BIR and not from any other person especially so when that person is not known to the defendant. It
is very imprudent on the part of the defendant IBAA to just rely on the alleged telephone call of the one
Godofredo Rivera and in his signature considering that the plaintiff is not a client of the defendant IBAA."
It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which
it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent.22 A bank which
receives such paper for collection is the agent of the payee or holder.23

Even considering arguendo, that the diversion of the amount of a check payable to the collecting bank in behalf of
the designated payee may be allowed, still such diversion must be properly authorized by the payor. Otherwise
stated, the diversion can be justified only by proof of authority from the drawer, or that the drawer has clothed his
agent with apparent authority to receive the proceeds of such check.

Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned checks stating that
ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS GURANTEED should render PCIBank liable
because it made it pass through the clearing house and therefore Citibank had no other option but to pay it. Thus,
Citibank had no other option but to pay it. Thus, Citibank assets that the proximate cause of Ford's injury is the
gross negligence of PCIBank. Since the questione dcrossed check was deposited with PCIBank, which claimed to
be a depository/collecting bank of the BIR, it had the responsibility to make sure that the check in questions is
deposited in Payee's account only.

Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be
deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the
check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to
scruninize the check and to know its depositors before it could make the clearing indorsement "all prior
indorsements and/or lack of indorsement guaranteed".

In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation,24 we ruled:

"Anent petitioner's liability on said instruments, this court is in full accord with the ruling of the PCHC's Board
of Directors that:

'In presenting the checks for clearing and for payment, the defendant made an express guarantee on the
validity of "all prior endorsements." Thus, stamped at the back of the checks are the defedant's clear
warranty: ALL PRIOR ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED. Without
such warranty, plaintiff would not have paid on the checks.'

No amount of legal jargon can reverse the clear meaning of defendant's warranty. As the warranty has
proven to be false and inaccurate, the defendant is liable for any damage arising out of the falsity of its
representation."25

Lastly, banking business requires that the one who first cashes and negotiates the check must take some
percautions to learn whether or not it is genuine. And if the one cashing the check through indifference or othe
circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the
check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person
negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon
another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to
them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to
the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the
collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the
checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon
from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the
drawee bank. The latter may recover from the holder the money paid on the check.26

Having established that the collecting bank's negligence is the proximate cause of the loss, we conclude that
PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No. SN-04867.

G.R. No. 128604


The trial court and the Court of Appeals found that PCIBank had no official act in the ordinary course of business
that would attribute to it the case of the embezzlement of Citibank Check Numbers SN-10597 and 16508, because
PCIBank did not actually receive nor hold the two Ford checks at all. The trial court held, thus:

"Neither is there any proof that defendant PCIBank contributed any official or conscious participation in the
process of the embezzlement. This Court is convinced that the switching operation (involving the checks
while in transit for "clearing") were the clandestine or hidden actuations performed by the members of the
syndicate in their own personl, covert and private capacity and done without the knowledge of the defendant
PCIBank…"27

In this case, there was no evidence presented confirming the conscious particiapation of PCIBank in the
embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and
declarations of its officers or agents within the course and scope of their employment.28 A bank will be held liable for
the negligence of its officers or agents when acting within the course and scope of their employment. It may be
liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element.
In this case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched by a
syndicate in which its own management employees had particiapted.

The pro-manager of San Andres Branch of PCIBank, Remberto Castro, received Citibank Check Numbers SN-
10597 and 16508. He passed the checks to a co-conspirator, an Assistant Manager of PCIBank's Meralco Branch,
who helped Castro open a Checking account of a fictitious person named "Reynaldo Reyes." Castro deposited a
worthless Bank of America Check in exactly the same amount of Ford checks. The syndicate tampered with the
checks and succeeded in replacing the worthless checks and the eventual encashment of Citibank Check Nos. SN
10597 and 16508. The PCIBank Ptro-manager, Castro, and his co-conspirator Assistant Manager apparently
performed their activities using facilities in their official capacity or authority but for their personal and private gain or
benefit.

A bank holding out its officers and agents as worthy of confidence will not be permitted to profit by the frauds these
officers or agents were enabled to perpetrate in the apparent course of their employment; nor will t be permitted to
shirk its responsibility for such frauds, even though no benefit may accrue to the bank therefrom. For the general
rule is that a bank is liable for the fraudulent acts or representations of an officer or agent acting within the course
and apparent scope of his employment or authority.29 And if an officer or employee of a bank, in his official capacity,
receives money to satisfy an evidence of indebetedness lodged with his bank for collection, the bank is liable for his
misappropriation of such sum.30

Moreover, as correctly pointed out by Ford, Section 531 of Central Bank Circular No. 580, Series of 1977 provides
that any theft affecting items in transit for clearing, shall be for the account of sending bank, which in this case is
PCIBank.

But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.

The evidence on record shows that Citibank as drawee bank was likewise negligent in the performance of its duties.
Citibank failed to establish that its payment of Ford's checjs were made in due course and legally in order. In its
defense, Citibank claims the genuineness and due execution of said checks, considering that Citibank (1) has no
knowledge of any informity in the issuance of the checks in question (2) coupled by the fact that said checks were
sufficiently funded and (3) the endorsement of the Payee or lack thereof was guaranteed by PCI Bank (formerly
IBAA), thus, it has the obligation to honor and pay the same.

For its part, Ford contends that Citibank as the drawee bank owes to Ford an absolute and contractual duty to pay
the proceeds of the subject check only to the payee thereof, the CIR. Citing Section 6232 of the Negotiable
Instruments Law, Ford argues that by accepting the instrument, the acceptro which is Citibank engages that it will
pay according to the tenor of its acceptance, and that it will pay only to the payee, (the CIR), considering the fact
that here the check was crossed with annotation "Payees Account Only."

As ruled by the Court of Appeals, Citibank must likewise answer for the damages incurred by Ford on Citibank
Checks Numbers SN 10597 and 16508, because of the contractual relationship existing between the two. Citibank,
as the drawee bank breached its contractual obligation with Ford and such degree of culpability contributed to the
damage caused to the latter. On this score, we agree with the respondent court's ruling.
Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before paying the amount of the
proceeds thereof to the collecting bank of the BIR. One thing is clear from the record: the clearing stamps at the
back of Citibank Check Nos. SN 10597 and 16508 do not bear any initials. Citibank failed to notice and verify the
absence of the clearing stamps. Had this been duly examined, the switching of the worthless checks to Citibank
Check Nos. 10597 and 16508 would have been discovered in time. For this reason, Citibank had indeed failed to
perform what was incumbent upon it, which is to ensure that the amount of the checks should be paid only to its
designated payee. The fact that the drawee bank did not discover the irregularity seasonably, in our view, consitutes
negligence in carrying out the bank's duty to its depositors. 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.33

Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and Citibank failed in
their respective obligations and both were negligent in the selection and supervision of their employees resulting in
the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable
for the loss of the proceeds of said checks issued by Ford in favor of the CIR.

Time and again, we have stressed that banking business is so impressed with public interest where the trust and
confidence of the public in general is of paramount umportance such that the appropriate standard of diligence must
be very high, if not the highest, degree of diligence.34 A bank's liability as obligor is not merely vicarious but primary,
wherein the defense of exercise of due diligence in the selection and supervision of its employees is of no
moment.35

Banks handle daily transactions involving millions of pesos.36 By the very nature of their work the degree of
responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary
clerks and employees.37 Banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.38

On the issue of prescription, PCIBank claims that the action of Ford had prescribed because of its inability to seek
judicial relief seasonably, considering that the alleged negligent act took place prior to December 19, 1977 but the
relief was sought only in 1983, or seven years thereafter.

The statute of limitations begins to run when the bank gives the depositor notice of the payment, which is ordinarily
when the check is returned to the alleged drawer as a voucher with a statement of his account,39 and an action upon
a check is ordinarily governed by the statutory period applicable to instruments in writing.40

Our laws on the matter provide that the action upon a written contract must be brought within ten year from the time
the right of action accrues.41 hence, the reckoning time for the prescriptive period begins when the instrument was
issued and the corresponding check was returned by the bank to its depositor (normally a month thereafter).
Applying the same rule, the cause of action for the recovery of the proceeds of Citibank Check No. SN 04867 would
normally be a month after December 19, 1977, when Citibank paid the face value of the check in the amount of
P4,746,114.41. Since the original complaint for the cause of action was filed on January 20, 1984, barely six years
had lapsed. Thus, we conclude that Ford's cause of action to recover the amount of Citibank Check No. SN 04867
was seasonably filed within the period provided by law.

Finally, we also find thet Ford is not completely blameless in its failure to detect the fraud. Failure on the part of the
depositor to examine its passbook, statements of account, and cancelled checks and to give notice within a
reasonable time (or as required by statute) of any discrepancy which it may in the exercise of due care and diligence
find therein, serves to mitigate the banks' liability by reducing the award of interest from twelve percent (12%) to six
percent (6%) per annum. As provided in Article 1172 of the Civil Code of the Philippines, respondibility arising from
negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by
the courts, according to the circumstances. In quasi-delicts, the contributory negligence of the plaintiff shall reduce
the damages that he may recover.42

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 25017
are AFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, id declared solely responsible for the
loss of the proceeds of Citibank Check No SN 04867 in the amount P4,746,114.41, which shall be paid together
with six percent (6%) interest thereon to Ford Philippines Inc. from the date when the original complaint was filed
until said amount is fully paid.
However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430 are MODIFIED as follows:
PCIBank and Citibank are adjudged liable for and must share the loss, (concerning the proceeds of Citibank Check
Numbers SN 10597 and 16508 totalling P12,163,298.10) on a fifty-fifty ratio, and each bank is ORDERED to pay
Ford Philippines Inc. P6,081,649.05, with six percent (6%) interest thereon, from the date the complaint was filed
until full payment of said amount.
1âwphi 1.nêt

Costs against Philippine Commercial International Bank and Citibank N.A.

SO ORDERED.
THIRD DIVISION

LAMBERT S. RAMOS, G.R. No. 184905


Petitioner,
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura, and
Peralta, JJ.
C.O.L. REALTY CORPORATION,
Respondent. Promulgated:

August 28, 2009


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

DECISION

YNARES-SANTIAGO, J.:

The issue for resolution is whether petitioner can be held solidarily liable with his driver,
Rodel Ilustrisimo, to pay respondent C.O.L. Realty the amount of P51,994.80 as actual damages
suffered in a vehicular collision.

The facts, as found by the appellate court, are as follows:


On or about 10:40 oclock in the morning of 8 March 2004, along Katipunan (Avenue), corner Rajah
Matanda (Street), Quezon City, a vehicular accident took place between a Toyota Altis Sedan bearing Plate
Number XDN 210, owned by petitioner C.O.L. Realty Corporation, and driven by Aquilino Larin (Aquilino),
and a Ford Expedition, owned by x x x Lambert Ramos (Ramos) and driven by Rodel Ilustrisimo (Rodel),
with Plate Number LSR 917. A passenger of the sedan, one Estela Maliwat (Estela) sustained injuries. She
was immediately rushed to the hospital for treatment.

(C.O.L. Realty) averred that its driver, Aquilino, was slowly driving the Toyota Altis car at a speed
of five to ten kilometers per hour along Rajah Matanda Street and has just crossed the center lane of
Katipunan Avenue when (Ramos) Ford Espedition violently rammed against the cars right rear door and
fender. With the force of the impact, the sedan turned 180 degrees towards the direction where it came
from.

Upon investigation, the Office of the City Prosecutor of Quezon City found probable cause to indict
Rodel, the driver of the Ford Expedition, for Reckless Imprudence Resulting in Damage to Property. In the
meantime, petitioner demanded from respondent reimbursement for the expenses incurred in the repair
of its car and the hospitalization of Estela in the aggregate amount of P103,989.60. The demand fell on
deaf ears prompting (C.O.L. Realty) to file a Complaint for Damages based on quasi-delict before the
Metropolitan Trial Court of Metro Manila (MeTC), Quezon City, docketed as Civil Case No. 33277, and
subsequently raffled to Branch 42.

As could well be expected, (Ramos) denied liability for damages insisting that it was the negligence
of Aquilino, (C.O.L. Realtys) driver, which was the proximate cause of the accident. (Ramos) maintained
that the sedan car crossed Katipunan Avenue from Rajah Matanda Street despite the concrete barriers
placed thereon prohibiting vehicles to pass through the intersection.

(Ramos) further claimed that he was not in the vehicle when the mishap occurred. He asserted
that he exercised the diligence of a good father of a family in the selection and supervision of his driver,
Rodel.

Weighing the respective evidence of the parties, the MeTC rendered the Decision dated 1 March
2006 exculpating (Ramos) from liability, thus:

WHEREFORE, the instant case is DISMISSED for lack of merit. The Counterclaims
of the defendant are likewise DISMISSED for lack of sufficient factual and legal basis.

SO ORDERED.

The aforesaid judgment did not sit well with (C.O.L. Realty) so that he (sic) appealed the same
before the RTC of Quezon City, raffled to Branch 215, which rendered the assailed Decision dated 5
September 2006, affirming the MeTCs Decision. (C.O.L. Realtys) Motion for Reconsideration met the same
fate as it was denied by the RTC in its Order dated 5 June 2007.[1]

C.O.L. Realty appealed to the Court of Appeals which affirmed the view that Aquilino was
negligent in crossing Katipunan Avenue from Rajah Matanda Street since, as per Certification of
the Metropolitan Manila Development Authority (MMDA) dated November 30, 2004, such act
is specifically prohibited. Thus:

This is to certify that as per records found and available in this office the crossing of vehicles
at Katipunan Avenue from Rajah Matanda Street to Blue Ridge Subdivision, Quezon City has (sic) not
allowed since January 2004 up to the present in view of the ongoing road construction at the
area.[2] (Emphasis supplied)

Barricades were precisely placed along the intersection of Katipunan Avenue and Rajah
Matanda Street in order to prevent motorists from crossing Katipunan Avenue. Nonetheless,
Aquilino crossed Katipunan Avenue through certain portions of the barricade which were
broken, thus violating the MMDA rule.[3]

However, the Court of Appeals likewise noted that at the time of the collision, Ramos
vehicle was moving at high speed in a busy area that was then the subject of an ongoing
construction (the Katipunan Avenue-Boni Serrano Avenue underpass), then smashed into the
rear door and fender of the passengers side of Aquilinos car, sending it spinning in a 180-degree
turn.[4] It therefore found the driver Rodel guilty of contributory negligence for driving the Ford
Expedition at high speed along a busy intersection.

Thus, on May 28, 2008, the appellate court rendered the assailed Decision,[5] the
dispositive portion of which reads, as follows:

WHEREFORE, the Decision dated 5 September 2006 of the Regional Trial Court of Quezon City,
Branch 215 is hereby MODIFIED in that respondent Lambert Ramos is held solidarily liable with Rodel
Ilustrisimo to pay petitioner C.O.L. Realty Corporation the amount of P51,994.80 as actual damages.
Petitioner C.O.L. Realty Corporations claim for exemplary damages, attorneys fees and cost of suit are
DISMISSED for lack of merit.

SO ORDERED.
Petitioner filed a Motion for Reconsideration but it was denied. Hence, the instant
petition, which raises the following sole issue:

THE COURT OF APPEALS DECISION IS CONTRARY TO LAW AND JURISPRUDENCE, AND THE
EVIDENCE TO SUPPORT AND JUSTIFY THE SAME IS INSUFFICIENT.

We resolve to GRANT the petition.

There is no doubt in the appellate courts mind that Aquilinos violation of the MMDA
prohibition against crossing Katipunan Avenue from Rajah Matanda Street was the proximate
cause of the accident. Respondent does not dispute this; in its Comment to the instant petition,
it even conceded that petitioner was guilty of mere contributory negligence.[6]

Thus, the Court of Appeals acknowledged that:

The Certification dated 30 November 2004 of the Metropolitan Manila Development Authority
(MMDA) evidently disproved (C.O.L. Realtys) barefaced assertion that its driver, Aquilino, was not to be
blamed for the accident

TO WHOM IT MAY CONCERN:

This is to certify that as per records found and available in this office the crossing
of vehicles at Katipunan Avenue from Rajah Matanda Street to Blue Ridge
Subdivision, Quezon City has (sic) not allowed since January 2004 up to the present in
view of the ongoing road construction at the area.

This certification is issued upon request of the interested parties for whatever
legal purpose it may serve.

(C.O.L. Realty) admitted that there were barricades along the intersection of Katipunan
Avenue and Rajah Matanda Street. The barricades were placed thereon to caution drivers not to pass
through the intersecting roads. This prohibition stands even if, as (C.O.L. Realty) claimed, the barriers were
broken at that point creating a small gap through which any vehicle could pass. What is clear to Us is that
Aquilino recklessly ignored these barricades and drove through it. Without doubt, his negligence is
established by the fact that he violated a traffic regulation. This finds support in Article 2185 of the Civil
Code

Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic
regulation.

Accordingly, there ought to be no question on (C.O.L. Realtys) negligence which resulted in the
vehicular mishap.[7]

However, it also declared Ramos liable vicariously for Rodels contributory negligence in
driving the Ford Expedition at high speed along a busy intersection. On this score, the appellate
court made the following pronouncement:

As a professional driver, Rodel should have known that driving his vehicle at a high speed in a
major thoroughfare which was then subject of an on-going construction was a perilous act. He had no
regard to (sic) the safety of other vehicles on the road. Because of the impact of the collision, (Aquilinos)
sedan made a 180-degree turn as (Ramos) Ford Expedition careened and smashed into its rear door and
fender. We cannot exculpate Rodel from liability.

Having thus settled the contributory negligence of Rodel, this created a presumption of
negligence on the part of his employer, (Ramos). For the employer to avoid the solidary liability for a tort
committed by his employee, an employer must rebut the presumption by presenting adequate and
convincing proof that in the selection and supervision of his employee, he or she exercises the care and
diligence of a good father of a family. Employers must submit concrete proof, including documentary
evidence, that they complied with everything that was incumbent on them.

(Ramos) feebly attempts to escape vicarious liability by averring that Rodel was highly
recommended when he applied for the position of family driver by the Social Service Committee of his
parish. A certain Ramon Gomez, a member of the churchs livelihood program, testified that a background
investigation would have to be made before an applicant is recommended to the parishioners for
employment. (Ramos) supposedly tested Rodels driving skills before accepting him for the job. Rodel has
been his driver since 2001, and except for the mishap in 2004, he has not been involved in any road
accident.

Regrettably, (Ramos) evidence which consisted mainly of testimonial evidence remained


unsubstantiated and are thus, barren of significant weight. There is nothing on the records which would
support (Ramos) bare allegation of Rodels 10-year unblemished driving record. He failed to present
convincing proof that he went to the extent of verifying Rodels qualifications, safety record, and driving
history.
So too, (Ramos) did not bother to refute (C.O.L. Realtys) stance that his driver was texting with
his cellphone while running at a high speed and that the latter did not slow down albeit he knew that
Katipunan Avenue was then undergoing repairs and that the road was barricaded with barriers. The
presumption juris tantum that there was negligence in the selection of driver remains unrebutted. As the
employer of Rodel, (Ramos) is solidarily liable for the quasi-delict committed by the former.

Certainly, in the selection of prospective employees, employers are required to examine them as
to their qualifications, experience and service records. In the supervision of employees, the employer
must formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for the breach thereof. These, (Ramos) failed to do.[8]

Petitioner disagrees, arguing that since Aquilinos willful disregard of the MMDA
prohibition was the sole proximate cause of the accident, then respondent alone should suffer
the consequences of the accident and the damages it incurred. He argues:

20. It becomes apparent therefore that the only time a plaintiff, the respondent herein, can
recover damages is if its negligence was only contributory, and such contributory negligence was the
proximate cause of the accident. It has been clearly established in this case, however, that respondents
negligence was not merely contributory, but the sole proximate cause of the accident.

xxxx

22. As culled from the foregoing, respondent was the sole proximate cause of the accident.
Respondents vehicle should not have been in that position since crossing the said intersection was
prohibited. Were it not for the obvious negligence of respondents driver in crossing the intersection that
was prohibited, the accident would not have happened. The crossing of respondents vehicle in a
prohibited intersection unquestionably produced the injury, and without which the accident would not
have occurred. On the other hand, petitioners driver had the right to be where he was at the time of the
mishap. As correctly concluded by the RTC, the petitioners driver could not be expected to slacken his
speed while travelling along said intersection since nobody, in his right mind, would do the same.
Assuming, however, that petitioners driver was indeed guilty of any contributory negligence, such was
not the proximate cause of the accident considering that again, if respondents driver did not cross the
prohibited intersection, no accident would have happened. No imputation of any lack of care on
Ilustrisimos could thus be concluded. It is obvious then that petitioners driver was not guilty of any
negligence that would make petitioner vicariously liable for damages.

23. As the sole proximate cause of the accident was respondents own driver, respondent cannot
claim damages from petitioner.[9]
On the other hand, respondent in its Comment merely reiterated the appellate courts
findings and pronouncements, conceding that petitioner is guilty of mere contributory
negligence, and insisted on his vicarious liability as Rodels employer under Article 2184 of the
Civil Code.

Articles 2179 and 2185 of the Civil Code on quasi-delicts apply in this case, viz:

Article 2179. When the plaintiffs 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 defendants lack of due care, the plaintiff may recover damages,
but the courts shall mitigate the damages to be awarded.

Article 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.

If the master is injured by the negligence of a third person and by the concurring
contributory negligence of his own servant or agent, the latters negligence is imputed to his
superior and will defeat the superiors action against the third person, assuming of course
that the contributory negligence was the proximate cause of the injury of which complaint is
made.[10]

Applying the foregoing principles of law to the instant case, Aquilinos act of
crossing Katipunan Avenue via Rajah Matanda constitutes negligence because it was prohibited
by law. Moreover, it was the proximate cause of the accident, and thus precludes any recovery
for any damages suffered by respondent from the accident.

Proximate cause is defined as that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without which the result
would not have occurred. And more comprehensively, the proximate legal cause is that acting
first and producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal connection
with its immediate predecessor, the final event in the chain immediately effecting the injury as
a natural and probable result of the cause which first acted, under such circumstances that the
person responsible for the first event should, as an ordinary prudent and intelligent person,
have reasonable ground to expect at the moment of his act or default that an injury to some
person might probably result therefrom.[11]

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

Hence, we find it unnecessary to delve into the issue of Rodels contributory negligence,
since it cannot overcome or defeat Aquilinos recklessness which is the immediate and proximate
cause of the accident. Rodels contributory negligence has relevance only in the event that
Ramos seeks to recover from respondent whatever damages or injuries he may have suffered
as a result; it will have the effect of mitigating the award of damages in his favor. In other words,
an assertion of contributory negligence in this case would benefit only the petitioner; it could
not eliminate respondents liability for Aquilinos negligence which is the proximate result of the
accident.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated May
28, 2008 in CA-G.R. SP No. 99614 and its Resolution of October 13, 2008 are hereby REVERSED
and SET ASIDE. The Decision of the Regional Trial Court of Quezon City, Branch 215 dated
September 5, 2006 dismissing for lack of merit respondents complaint for damages is
hereby REINSTATED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-53401 November 6, 1989

THE ILOCOS NORTE ELECTRIC COMPANY, petitioner,


vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN JUAN LUIS, JANE JUAN YABES, VIRGINIA
JUAN CID, GLORIA JUAN CARAG, and PURISIMA JUAN, respondents.

Herman D. Coloma for petitioner.

Glicerio S. Ferrer for private respondents.

PARAS, J.:

Sought to be reversed in this petition is the Decision * of the respondent Court of Appeals' First Division, setting
aside the judgment of the then Court of First Instance (CFI) of Ilocos Norte, with the following dispositive portion:

WHEREFORE, the appealed judgment is hereby set aside and another rendered in its stead
whereby defendant is hereby sentenced to pay plaintiffs actual damages of P30,229.45;
compensatory damages of P50,000.00; exemplary damages of P10,000.00; attorney's fees of
P3,000.00; plus the costs of suit in both instances. (p. 27 Rollo)

Basically, this case involves a clash of evidence whereby both patties strive for the recognition of their respective
versions of the scenario from which the disputed claims originate. The respondent Court of Appeals (CA)
summarized the evidence of the parties as follows:

From the evidence of plaintiffs it appears that in the evening of June 28 until the early morning of
June 29, 1967 a strong typhoon by the code name "Gening" buffeted the province of Ilocos Norte,
bringing heavy rains and consequent flooding in its wake. Between 5:30 and 6:00 A.M. on June 29,
1967, after the typhoon had abated and when the floodwaters were beginning to recede the
deceased Isabel Lao Juan, fondly called Nana Belen, ventured out of the house of her son-in-law,
Antonio Yabes, on No. 19 Guerrero Street, Laoag City, and proceeded northward towards the
direction of the Five Sisters Emporium, of which she was the owner and proprietress, to look after
the merchandise therein that might have been damaged. Wading in waist-deep flood on Guerrero,
the deceased was followed by Aida Bulong, a Salesgirl at the Five Sisters Grocery, also owned by
the deceased, and by Linda Alonzo Estavillo, a ticket seller at the YJ Cinema, which was partly
owned by the deceased. Aida and Linda walked side by side at a distance of between 5 and 6
meters behind the deceased, Suddenly, the deceased screamed "Ay" and quickly sank into the
water. The two girls attempted to help, but fear dissuaded them from doing so because on the spot
where the deceased sank they saw an electric wire dangling from a post and moving in snake-like
fashion in the water. Upon their shouts for help, Ernesto dela Cruz came out of the house of Antonio
Yabes. Ernesto tried to go to the deceased, but at four meters away from her he turned back
shouting that the water was grounded. Aida and Linda prodded Ernesto to seek help from Antonio
Yabes at the YJ Cinema building which was four or five blocks away.

When Antonio Yabes was informed by Ernesto that his mother-in law had been electrocuted, he
acted immediately. With his wife Jane, together with Ernesto and one Joe Ros, Yabes passed by the
City Hall of Laoag to request the police to ask the people of defendant Ilocos Norte Electric
Company or INELCO to cut off the electric current. Then the party waded to the house on Guerrero
Street. The floodwater was receding and the lights inside the house were out indicating that the
electric current had been cut off in Guerrero. Yabes instructed his boys to fish for the body of the
deceased. The body was recovered about two meters from an electric post.

In another place, at about 4:00 A.M. on that fateful date, June 29, 1967, Engineer Antonio Juan,
Power Plant Engineer of the National Power Corporation at the Laoag Diesel-Electric Plant, noticed
certain fluctuations in their electric meter which indicated such abnormalities as grounded or short-
circuited lines. Between 6:00 and 6:30 A.M., he set out of the Laoag NPC Compound on an
inspection. On the way, he saw grounded and disconnected lines. Electric lines were hanging from
the posts to the ground. Since he could not see any INELCO lineman, he decided to go to the
INELCO Office at the Life Theatre on Rizal Street by way of Guerrero. As he turned right at the
intersection of Guerrero and Rizal, he saw an electric wire about 30 meters long strung across the
street "and the other end was seeming to play with the current of the water." (p. 64, TSN, Oct. 24,
1972) Finding the Office of the INELCO still closed, and seeing no lineman therein, he returned to
the NPC Compound.

At about 8:10 A.M., Engr. Juan went out of the compound again on another inspection trip. Having
learned of the death of Isabel Lao Juan, he passed by the house of the deceased at the corner of
Guerrero and M.H. del Pilar streets to which the body had been taken. Using the resuscitator which
was a standard equipment in his jeep and employing the skill he acquired from an in service training
on resuscitation, he tried to revive the deceased. His efforts proved futile. Rigor mortis was setting
in. On the left palm of the deceased, Engr. Juan noticed a hollow wound. Proceeding to the INELCO
Office, he met two linemen on the way. He told them about the grounded lines of the INELCO In the
afternoon of the same day, he went on a third inspection trip preparatory to the restoration of power.
The dangling wire he saw on Guerrero early in the morning of June 29, 1967 was no longer there.

Many people came to the house at the corner of Guerrero and M.H. del Pilar after learning that the
deceased had been electrocuted. Among the sympathizers was Dr. Jovencio Castro, Municipal
Health Officer of Sarrat, Ilocos Norte. Upon the request of the relatives of the deceased, Dr. Castro
examined the body at about 8:00 A.M. on June 29, 1967. The skin was grayish or, in medical
parlance, cyanotic, which indicated death by electrocution. On the left palm, the doctor found an
"electrically charged wound" (Exh. C-1: p. 101, TSN, Nov. 28, 1972) or a first degree burn. About the
base of the thumb on the left hand was a burned wound. (Exh. C-2, pp. 102-103, Ibid.) The
certificate of death prepared by Dr. Castro stated the cause of' death as ,'circulatory shock
electrocution" (Exh. I; p. 103, Ibid.).

In defense and exculpation, defendant presented the testimonies of its officers and employees,
namely, Conrado Asis, electric engineer; Loreto Abijero, collector-inspector; Fabico Abijero, lineman;
and Julio Agcaoili, president-manager of INELCO Through the testimonies of these witnesses,
defendant sought to prove that on and even before June 29, 1967 the electric service system of the
INELCO in the whole franchise area, including Area No. 9 which covered the residence of Antonio
Yabes at No. 18 Guerrero Street, did not suffer from any defect that might constitute a hazard to life
and property. The service lines, devices and other INELCO equipment in Area No. 9 had been
newly-installed prior to the date in question. As a public service operator and in line with its business
of supplying electric current to the public, defendant had installed safety devices to prevent and
avoid injuries to persons and damage to property in case of natural calamities such as floods,
typhoons, fire and others. Defendant had 12 linesmen charged with the duty of making a round-the-
clock check-up of the areas respectively assigned to them.

Defendant asserts that although a strong typhoon struck the province of Ilocos Norte on June 29,
1967, putting to streets of Laoag City under water, only a few known places in Laoag were reported
to have suffered damaged electric lines, namely, at the southern approach of the Marcos Bridge
which was washed away and where the INELCO lines and posts collapsed; in the eastern part near
the residence of the late Governor Simeon Mandac; in the far north near the defendant's power plant
at the corner of Segundo and Castro Streets, Laoag City and at the far northwest side, near the
premises of the Ilocos Norte National High School. Fabico Abijero, testified that in the early morning
before 6 o'clock on June 29, 1967 he passed by the intersection of Rizal and Guerrero Streets to
switch off the street lights in Area No. 9. He did not see any cut or broken wires in or near the
vicinity. What he saw were many people fishing out the body of Isabel Lao Juan.
A witness in the person of Dr. Antonio Briones was presented by the defense to show that the
deceased could not have died of electrocution Substantially, the testimony of the doctor is as
follows: Without an autopsy on the cadaver of the victim, no doctor, not even a medicolegal expert,
can speculate as to the real cause of death. Cyanosis could not have been found in the body of the
deceased three hours after her death, because cyanosis which means lack of oxygen circulating in
the blood and rendering the color of the skin purplish, appears only in a live person. The presence of
the elongated burn in the left palm of the deceased (Exhibits C-1 and C-2) is not sufficient to
establish her death by electrocution; since burns caused by electricity are more or less round in
shape and with points of entry and exit. Had the deceased held the lethal wire for a long time, the
laceration in her palm would have been bigger and the injury more massive. (CA Decision, pp. 18-
21, Rollo)

An action for damages in the aggregate amount of P250,000 was instituted by the heirs of the deceased with the
aforesaid CFI on June 24, 1968. In its Answer (Vide, Record on Appeal, p. 55, Rollo), petitioner advanced the
theory, as a special defense, that the deceased could have died simply either by drowning or by electrocution due to
negligence attributable only to herself and not to petitioner. In this regard, it was pointed out that the deceased,
without petitioner's knowledge, caused the installation of a burglar deterrent by connecting a wire from the main
house to the iron gate and fence of steel matting, thus, charging the latter with electric current whenever the switch
is on. Petitioner then conjectures that the switch to said burglar deterrent must have been left on, hence, causing the
deceased's electrocution when she tried to open her gate that early morning of June 29, 1967. After due trial, the
CFI found the facts in favor of petitioner and dismissed the complaint but awarded to the latter P25,000 in moral
damages and attorney's fees of P45,000. An appeal was filed with the CA which issued the controverted decision.

In this petition for review the petitioner assigns the following errors committed by the respondent CA:

1. The respondent Court of Appeals committed grave abuse of discretion and error in
considering the purely hearsay alleged declarations of Ernesto de la Cruz as part of
the res gestae.

2. The respondent Court of Appeals committed grave abuse of discretion and error in
holding that the strong typhoon "Gening" which struck Laoag City and Ilocos Norte
on June 29, 1967 and the flood and deluge it brought in its wake were not fortuitous
events and did not exonerate petitioner-company from liability for the death of Isabel
Lao Juan.

3. The respondent Court of Appeals gravely abused its discretion and erred in not
applying the legal principle of "assumption of risk" in the present case to bar private
respondents from collecting damages from petitioner company.

4. That the respondent Court of Appeals gravely erred and abused its discretion in
completely reversing the findings of fact of the trial court.

5. The findings of fact of the respondent Court of Appeals are reversible under the
recognized exceptions.

6. The trial court did not err in awarding moral damages and attorney's fees to
defendant corporation, now petitioner company.

7. Assuming arguendo that petitioner company may be held liable from the death of
the late Isabel Lao Juan, the damages granted by respondent Court of Appeals are
improper and exhorbitant. (Petitioners Memorandum, p. 133, Rollo)

Basically, three main issues are apparent: (1) whether or not the deceased died of electrocution; (2) whether or not
petitioner may be held liable for the deceased's death; and (3) whether or not the respondent CA's substitution of
the trial court's factual findings for its own was proper.
In considering the first issue, it is Our view that the same be resolved in the affirmative. By a preponderance of
evidence, private respondents were able to show that the deceased died of electrocution, a conclusion which can be
primarily derived from the photographed burnt wounds (Exhibits "C", "C-1", "C-2") on the left palm of the former.
Such wounds undoubtedly point to the fact that the deceased had clutched a live wire of the petitioner. This was
corroborated by the testimony of Dr. Jovencio Castro who actually examined the body of the deceased a few hours
after the death and described the said burnt wounds as a "first degree burn" (p. 144, TSN, December 11, 1972) and
that they were "electrically charged" (p. 102, TSN, November 28, 1972). Furthermore, witnesses Linda Alonzo
Estavillo and Aida Bulong added that after the deceased screamed "Ay" and sank into the water, they tried to render
some help but were overcome with fear by the sight of an electric wire dangling from an electric post, moving in the
water in a snake-like fashion (supra). The foregoing therefore justifies the respondent CA in concluding that "(t)he
nature of the wounds as described by the witnesses who saw them can lead to no other conclusion than that they
were "burns," and there was nothing else in the street where the victim was wading thru which could cause a burn
except the dangling live wire of defendant company" (CA Decision, p. 22, Rollo).

But in order to escape liability, petitioner ventures into the theory that the deceased was electrocuted, if such was
really the case when she tried to open her steel gate, which was electrically charged by an electric wire she herself
caused to install to serve as a burglar deterrent. Petitioner suggests that the switch to said burglar alarm was left on.
But this is mere speculation, not backed up with evidence. As required by the Rules, "each party must prove his own
affirmative allegations." (Rule 131, Sec. 1). Nevertheless, the CA significantly noted that "during the trial, this theory
was abandoned" by the petitioner (CA Decision, p. 23, Rollo).

Furthermore the CA properly applied the principle of res gestae. The CA said:

Linda Alonzo Estavillo, a ticket seller, and Aida Bulong, a salesgirl, were with the deceased during
that fateful morning of June 29, 1967. This Court has not been offered any sufficient reason to
discredit the testimonies of these two young ladies. They were one in the affirmation that the
deceased, while wading in the waist-deep flood on Guerrero Street five or six meters ahead of them,
suddenly screamed "Ay" and quickly sank into the water. When they approached the deceased to
help, they were stopped by the sight of an electric wire dangling from a post and moving in snake-
like fashion in the water. Ernesto dela Cruz also tried to approach the deceased, but he turned back
shouting that the water was grounded. These bits of evidence carry much weight. For the subject of
the testimonies was a startling occurrence, and the declarations may be considered part of the res
gestae. (CA Decision, p. 21, Rollo)

For the admission of the res gestae in evidence, the following requisites must be present: (1) that the principal act,
the res gestae, be a startling occurrence; (2) that the statements were made before the declarant had time to
contrive or devise; (3) that the statements made must concern the occurrence in question and its immediately
attending circumstances (People vs. Ner, 28 SCRA 1151; People vs. Balbas, 122 SCRA 959). We do not find any
abuse of discretion on the CA' part in view of the satisfaction of said requisites in the case at bar.

The statements made relative to the startling occurrence are admitted in evidence precisely as an exception to the
hearsay rule on the grounds of trustworthiness and necessity. "Trustworthiness" because the statements are made
instinctively (Wesley vs. State, 53 Ala. 182), and "necessity" because such natural and spontaneous utterances are
more convincing than the testimony of the same person on the stand (Mobile vs. Ascraft 48 Ala. 31). Therefore, the
fact that the declarant, Ernesto de la Cruz, was not presented to testify does not make the testimony of Linda Alonzo
Estavillo and Aida Bulong hearsay since the said declaration is part of the res gestae. Similarly, We considered part
of the res gestae a conversation between two accused immediately after commission of the crime as overheard by a
prosecution witness (People vs. Reyes, 82 Phil. 563).

While it may be true that, as petitioner argues (vide petitioner's Memorandum, p. 135, Rollo), Ernesto de la Cruz
was not an actual witness to the instant when the deceased sank into the waist-deep water, he acted upon the call
of help of Aida Bulong and Linda Alonzo Estavillo with the knowledge of, and immediately after, the sinking of the
deceased. In fact the startling event had not yet ceased when Ernesto de la Cruz entered the scene considering that
the victim remained submerged. Under such a circumstance, it is undeniable that a state of mind characterized by
nervous excitement had been triggered in Ernesto de la Cruz's being as anybody under the same contingency could
have experienced. As such, We cannot honestly exclude his shouts that the water was grounded from the res
gestae just because he did not actually see the sinking of the deceased nor hear her scream "Ay."
Neither can We dismiss the said declaration as a mere opinion of Ernesto de la Cruz. While We concede to the
submission that the statement must be one of facts rather than opinion, We cannot agree to the proposition that the
one made by him was a mere opinion. On the contrary, his shout was a translation of an actuality as perceived by
him through his sense of touch.

Finally, We do not agree that the taking of Ernesto de la Cruz' testimony was suppressed by the private
respondents, thus, is presumed to be adverse to them pursuant to Section 5(e), Rule 131. For the application of said
Rule as against a party to a case, it is necessary that the evidence alleged to be suppressed is available only to said
party (People vs. Tulale, L-7233, 18 May 1955, 97 Phil. 953). The presumption does not operate if the evidence in
question is equally available to both parties (StaplesHowe Printing Co. vs. Bldg. and Loan Assn., 36 Phil. 421). It is
clear from the records that petitioner could have called Ernesto de la Cruz to the witness stand. This, precisely, was
Linda Alonzo Estavillo's suggestion to petitioner's counsel when she testified on cross examination:

Q. And that Erning de la Cruz, how far did he reach from the gate of the house?

A. Well, you can ask that matter from him sir because he is here. (TSN, p. 30, 26 Sept. 1972)

The foregoing shows that petitioner had the opportunity to verify the declarations of Ernesto de la Cruz which, if truly
adverse to private respondent, would have helped its case. However, due to reasons known only to petitioner, the
opportunity was not taken.

Coming now to the second issue, We tip the scales in the private respondents' favor. The respondent CA acted
correctly in disposing the argument that petitioner be exonerated from liability since typhoons and floods are
fortuitous events. While it is true that typhoons and floods are considered Acts of God for which no person may be
held responsible, it was not said eventuality which directly caused the victim's death. It was through the intervention
of petitioner's negligence that death took place. We subscribe to the conclusions of the respondent CA when it
found:

On the issue whether or not the defendant incurred liability for the electrocution and consequent
death of the late Isabel Lao Juan, defendant called to the witness-stand its electrical engineer, chief
lineman, and lineman to show exercise of extraordinary diligence and to negate the charge of
negligence. The witnesses testified in a general way about their duties and the measures which
defendant usuallyadopts to prevent hazards to life and limb. From these testimonies, the lower court
found "that the electric lines and other equipment of defendant corporation were properly maintained
by a well-trained team of lineman, technicians and engineers working around the clock to insure that
these equipments were in excellent condition at all times." (P. 40, Record on Appeal) The finding of
the lower court, however, was based on what the defendant's employees were supposed to do, not
on what they actually did or failed to do on the date in question, and not on the occasion of
the emergency situation brought about by the typhoon.

The lower court made a mistake in assuming that defendant's employees worked around the clock
during the occurrence of the typhoon on the night of June 28 and until the early morning of June 29,
1967, Engr. Antonio Juan of the National Power Corporation affirmed that when he first set out on an
inspection trip between 6:00 and 6:30 A.M. on June 29, 1967, he saw grounded and disconnected
electric lines of the defendant but he saw no INELCO lineman. The INELCO Office at the Life theatre
on Rizal Street was still closed. (pp. 63-64, TSN, Oct. 24, 1972) Even the witnesses of defendant
contradict the finding of the lower court. Conrado Asis, defendant's electrical engineer, testified that
he conducted a general inspection of the franchise area of the INELCO only on June 30, 1967, the
day following the typhoon. The reason he gave for the delay was that all their vehicles were
submerged. (p. 337, TSN, July 20, 1973) According to Asis, he arrived at his office at 8:00 A.M.
on June 30 and after briefing his men on what to do they started out. (p. 338, lbid) One or two days
after the typhoon, the INELCO people heard "rumors that someone was electrocuted" so he sent
one of his men to the place but his man reported back that there was no damaged wire. (p. 385, Id.)
Loreto Abijero, chief lineman of defendant, corroborated Engr. Juan. He testified that at about 8:00
A.M. on June 29, 1967 Engr. Juan came to the INELCO plant and asked the INELCO people to
inspect their lines. He went with Engr. Juan and their inspection lasted from 8:00 A.M. to 12:00 noon.
(pp. 460, 465, TSN, Jan. 28, 1975) Fabico Abijero lineman of defendant, testified that at about 6:00
on June 29, 1967 the typhoon ceased. At that time, he was at the main building of the Divine Word
College of Laoag where he had taken his family for refuge. (pp. 510-511, Ibid.)

In times of calamities such as the one which occurred in Laoag City on the night of June 28 until the
early hours of June 29, 1967, extraordinary diligence requires a supplier of electricity to be
in constant vigil to prevent or avoid any probable incident that might imperil life or limb. The evidence
does not show that defendant did that. On the contrary, evidence discloses that there were no men
(linemen or otherwise) policing the area, nor even manning its office. (CA Decision, pp. 24-25, Rollo)

Indeed, under the circumstances of the case, petitioner was negligent in seeing to it that no harm is done to the
general public"... considering that electricity is an agency, subtle and deadly, the measure of care required of
electric companies must be commensurate with or proportionate to the danger. The duty of exercising this high
degree of diligence and care extends to every place where persons have a right to be" (Astudillo vs. Manila Electric,
55 Phil. 427). The negligence of petitioner having been shown, it may not now absolve itself from liability by arguing
that the victim's death was solely due to a fortuitous event. "When an act of God combines or concurs with the
negligence of the defendant to produce an injury, the defendant is liable if the injury would not have resulted but for
his own negligent conduct or omission" (38 Am. Jur., p. 649).

Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds no application in the case at bar. It is
imperative to note the surrounding circumstances which impelled the deceased to leave the comforts of a roof and
brave the subsiding typhoon. As testified by Linda Alonzo Estavillo (see TSN, p. 5, 26 Sept. 1972) and Aida Bulong
(see TSN, p. 43, 26 Sept. 1972), the deceased, accompanied by the former two, were on their way to the latter's
grocery store "to see to it that the goods were not flooded." As such, shall We punish her for exercising her right to
protect her property from the floods by imputing upon her the unfavorable presumption that she assumed the risk of
personal injury? Definitely not. For it has been held that a person is excused from the force of the rule, that when he
voluntarily assents to a known danger he must abide by the consequences, if an emergency is found to exist or if
the life or property of another is in peril (65A C.S.C. Negligence(174(5), p. 301), or when he seeks to rescue his
endangered property (Harper and James, "The Law of Torts." Little, Brown and Co., 1956, v. 2, p. 1167). Clearly, an
emergency was at hand as the deceased's property, a source of her livelihood, was faced with an impending loss.
Furthermore, the deceased, at the time the fatal incident occurred, was at a place where she had a right to be
without regard to petitioner's consent as she was on her way to protect her merchandise. Hence, private
respondents, as heirs, may not be barred from recovering damages as a result of the death caused by petitioner's
negligence (ibid., p. 1165, 1166).

But petitioner assails the CA for having abused its discretion in completely reversing the trial court's findings of fact,
pointing to the testimonies of three of its employees its electrical engineer, collector-inspector, lineman, and
president-manager to the effect that it had exercised the degree of diligence required of it in keeping its electric lines
free from defects that may imperil life and limb. Likewise, the said employees of petitioner categorically disowned
the fatal wires as they appear in two photographs taken on the afternoon of June 29, 1967 (Exhs. "D" and "E"),
suggesting that said wires were just hooked to the electric post (petitioner's Memorandum, p. 170, Rollo). However,
as the CA properly held, "(t)he finding of the lower court ... was based on what the defendant's employees were
supposed to do, not on what they actually did or failed to do on the date in question, and not on the occasion of
the emergency situation brought about by the typhoon" (CA Decision, p. 25, Rollo). And as found by the CA, which
We have already reiterated above, petitioner was in fact negligent. In a like manner, petitioner's denial of ownership
of the several wires cannot stand the logical conclusion reached by the CA when it held that "(t)he nature of the
wounds as described by the witnesses who saw them can lead to no other conclusion than that they were 'burns',
and there was nothing else in the street where the victim was wading thru which could cause a burn except the
dangling live wire of defendant company" (supra).

"When a storm occurs that is liable to prostrate the wires, due care requires prompt efforts to discover and repair
broken lines" (Cooley on Torts, 4th ed., v. 3, p. 474). The fact is that when Engineer Antonio Juan of the National
Power Corporation set out in the early morning of June 29, 1967 on an inspection tour, he saw grounded and
disconnected lines hanging from posts to the ground but did not see any INELCO lineman either in the streets or at
the INELCO office (vide, CA Decision, supra). The foregoing shows that petitioner's duty to exercise extraordinary
diligence under the circumstance was not observed, confirming the negligence of petitioner. To aggravate matters,
the CA found:
. . .even before June 28 the people in Laoag were already alerted about the impending typhoon,
through radio announcements. Even the fire department of the city announced the coming of the big
flood. (pp. 532-534, TSN, March 13, 1975) At the INELCO irregularities in the flow of electric current
were noted because "amperes of the switch volts were moving". And yet, despite these danger
signals, INELCO had to wait for Engr. Juan to request that defendant's switch be cut off but the harm
was done. Asked why the delay, Loreto Abijero answered that he "was not the machine tender of the
electric plant to switch off the current." (pp. 467-468, Ibid.) How very characteristic of gross
inefficiency! (CA Decision, p. 26, Rollo)

From the preceding, We find that the CA did not abuse its discretion in reversing the trial court's findings but
tediously considered the factual circumstances at hand pursuant to its power to review questions of fact raised from
the decision of the Regional Trial Court, formerly the Court of First Instance (see sec. 9, BP 129).

In considering the liability of petitioner, the respondent CA awarded the following in private respondent's favor:
P30,229.45 in actual damages (i.e., P12,000 for the victim's death and P18,229.45 for funeral expenses); P50,000
in compensatory damages, computed in accordance with the formula set in the Villa-Rey Transit case (31 SCRA
511) with the base of P15,000 as average annual income of the deceased; P10,000 in exemplary damages; P3,000
attorney's fees; and costs of suit. Except for the award of P12,000 as compensation for the victim's death, We affirm
the respondent CA's award for damages and attorney's fees. Pusuant to recent jurisprudence (People vs.
Mananquil, 132 SCRA 196; People vs. Traya, 147 SCRA 381), We increase the said award of P12,000 to P30,000,
thus, increasing the total actual damages to P48,229.45.

The exclusion of moral damages and attorney's fees awarded by the lower court was properly made by the
respondent CA, the charge of malice and bad faith on the part of respondents in instituting his case being a mere
product of wishful thinking and speculation. Award of damages and attorney's fees is unwarranted where the action
was filed in good faith; there should be no penalty on the right to litigate (Espiritu vs. CA, 137 SCRA 50). If damage
results from a person's exercising his legal rights, it is damnum absque injuria (Auyong Hian vs. CTA, 59 SCRA
110).

WHEREFORE, the questioned decision of the respondent, except for the slight modification that actual damages be
increased to P48,229.45 is hereby AFFIRMED.

SO ORDERED.
SECOND DIVISION

[G.R. No. 159270. August 22, 2005]

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs. HON.


COURT OF APPEALS, RODRIGO ARNAIZ, REGINA LATAGAN, RICARDO
GENERALAO and PAMPANGA SUGAR DEVELOPMENT COMPANY, INC.,
CORPORATION, respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R.
CV No. 47699 affirming, with modification, the decision of the Regional Trial Court (RTC) of Manila in
Civil Case No. 93-64803.

The Antecedents

Pampanga Sugar Development Company, Inc. (PASUDECO) transports sugarcane from


Mabalacat and Magalang, Pampanga. When the Mount Pinatubo eruption of 1991 heavily damaged
the national bridges along Abacan-Angeles and Sapang Maragul via Magalang, Pampanga, it
requested permission from the Toll Regulatory Board (TRB) for its trucks to enter and pass through the
North Luzon Expressway (NLEX) via Dau-Sta. Ines from Mabalacat, and via Angeles from Magalang,
and exit at San Fernando going to its milling factory. [2] The TRB furnished the Philippine National
Construction Corporation (PNCC) (the franchisee that operates and maintains the toll facilities in the
North and South Luzon Toll Expressways) with a copy of the said request for it to comment thereon. [3]
On November 5, 1991, TRB and PASUDECO entered into a Memorandum of Agreement[4] (MOA),
where the latter was allowed to enter and pass through the NLEX on the following terms and conditions:
1. PASUDECO trucks should move in convoy;
2. Said trucks will stay on the right lane;
3. A vehicle with blinking lights should be assigned at the rear end of the convoy with a
sign which should read as follows: Caution: CONVOY AHEAD!!!;
4. Tollway safety measures should be properly observed;
5. Accidents or damages to the toll facilities arising out of any activity related to this
approval shall be the responsibility of PASUDECO;
6. PASUDECO shall be responsible in towing their stalled trucks immediately to avoid any
inconvenience to the other motorists;
7. This request will be in force only while the national bridges along Abacan-Angeles and
Sapang Maragul via Magalang remain impassable.
PASUDECO furnished the PNCC with a copy of the MOA.[5] In a Letter[6] dated October 22, 1992,
the PNCC informed PASUDECO that it interposed no objection to the MOA.
At around 2:30 a.m. on January 23, 1993, Alex Sendin, the PNCC security supervisor, and his co-
employees Eduardo Ducusin and Vicente Pascual were patrolling Km. 72 going north of the NLEX.
They saw a pile of sugarcane in the middle portion of the north and southbound lanes of the
road.[7] They placed lit cans with diesel oil in the north and southbound lanes, including lane dividers
with reflectorized markings, to warn motorists of the obstruction. Sendin, Ducusin and Pascual
proceeded to the PASUDECO office, believing that the pile of sugarcane belonged to it since it was the
only milling company in the area. They requested for a payloader or grader to clear the area. However,
Engineer Oscar Mallari, PASUDECOs equipment supervisor and transportation superintendent, told
them that no equipment operator was available as it was still very early. [8] Nonetheless, Mallari told
them that he would send someone to clear the affected area. Thereafter, Sendin and company went
back to Km. 72 and manned the traffic. At around 4:00 a.m., five (5) PASUDECO men arrived, and
started clearing the highway of the sugarcane. They stacked the sugarcane at the side of the road. The
men left the area at around 5:40 a.m., leaving a few flattened sugarcanes scattered on the road. As the
bulk of the sugarcanes had been piled and transferred along the roadside, Sendin thought there was
no longer a need to man the traffic. As dawn was already approaching, Sendin and company removed
the lighted cans and lane dividers.[9] Sendin went to his office in Sta. Rita, Guiguinto, Bulacan, and
made the necessary report.[10]
At about 6:30 a.m., Rodrigo S. Arnaiz, a certified mechanic and marketing manager of JETTY
Marketing, Inc.,[11] was driving his two-door Toyota Corolla with plate number FAG 961 along the NLEX
at about 65 kilometers per hour.[12] He was with his sister Regina Latagan, and his friend Ricardo
Generalao; they were on their way to Baguio to attend their grandmothers first death anniversary.[13] As
the vehicle ran over the scattered sugarcane, it flew out of control and turned turtle several times. The
accident threw the car about fifteen paces away from the scattered sugarcane.
Police Investigator Demetrio Arcilla investigated the matter and saw black and white sugarcanes
on the road, on both lanes, which appeared to be flattened.[14]
On March 4, 1993, Arnaiz, Latagan and Generalao filed a complaint [15] for damages against
PASUDECO and PNCC in the RTC of Manila, Branch 16. The case was docketed as Civil Case No.
93-64803. They alleged, inter alia, that through its negligence, PNCC failed to keep and maintain the
NLEX safe for motorists when it allowed PASUDECO trucks with uncovered and unsecured sugarcane
to pass through it; that PASUDECO negligently spilled sugarcanes on the NLEX, and PNCC failed to
put up emergency devices to sufficiently warn approaching motorists of the existence of such spillage;
and that the combined gross negligence of PASUDECO and PNCC was the direct and proximate cause
of the injuries sustained by Latagan and the damage to Arnaizs car. They prayed, thus:

WHEREFORE, it is respectfully prayed that, after due hearing, judgment be rendered for the
plaintiffs, ordering the defendants jointly and severally:

(a) To pay unto plaintiff Rodrigo Arnaiz the sum of P100,000.00 representing the value
of his car which was totally wrecked;

(b) to pay unto plaintiff Regina Latagan the sum of P100,000.00 by way of
reimbursement for medical expenses, the sum of P50,000.00 by way of moral
damages, and the sum of P30,000.00 by way of exemplary damages;

(c) To pay unto plaintiffs Rodrigo Arnaiz and Ricardo Generalao the sum of P5,000.00
by way of reimbursement for medical expenses; and

(d) To pay unto the plaintiffs the sum of P30,000.00 by way of attorneys fees; plus the
costs of suit.
Plaintiffs pray for other reliefs which the Honorable Court may find due them in the premises. [16]

In its Answer,[17] PNCC admitted that it was under contract to manage the North Luzon Expressway,
to keep it safe for motorists. It averred that the mishap was due to the unreasonable speed at which
Arnaizs car was running, causing it to turn turtle when it passed over some pieces of flattened
sugarcane. It claimed that the proximate cause of the mishap was PASUDECOs gross negligence in
spilling the sugarcane, and its failure to clear and mop up the area completely. It also alleged that
Arnaiz was guilty of contributory negligence in driving his car at such speed.
The PNCC interposed a compulsory counterclaim[18] against the plaintiffs and cross-
claim[19] against its co-defendant PASUDECO.
PASUDECO adduced evidence that aside from it, there were other sugarcane mills in the area, like
the ARCAM Sugar Central (formerly known as Pampanga Sugar Mills) and the Central Azucarrera de
Tarlac;[20] it was only through the expressway that a vehicle could access these three (3) sugar
centrals;[21] and PASUDECO was obligated to clear spillages whether the planters truck which caused
the spillage was bound for PASUDECO, ARCAM or Central Azucarera. [22]
On rebuttal, PNCC adduced evidence that only planters trucks with PSD markings were allowed to
use the tollway;[23] that all such trucks would surely enter the PASUDECO compound. Thus, the truck
which spilled sugarcane in January 1993 in Km. 72 was on its way to the PASUDECO compound. [24]
On November 11, 1994, the RTC rendered its decision[25] in favor of Latagan, dismissing that of
Arnaiz and Generalao for insufficiency of evidence. The case as against the PNCC was, likewise,
dismissed. The decretal portion of the decision reads:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:

I. ORDERING defendant PASUDECO:

1. To pay plaintiff Regina Latagan:

a. P25,000 = for actual damages


b. P15,000 = for moral damages
c. P10,000 = for attorneys fees
P50,000

2. To pay costs of suit.

II. The case is DISMISSED as to defendant PNCC. No pronouncement as to costs. Its


counterclaim is, likewise, DISMISSED.

III. The claims for damages of plaintiffs Rodrigo Arnaiz and Ricardo Generalao are hereby
DISMISSED for insufficiency of evidence.

SO ORDERED.[26]

Both the plaintiffs Arnaiz, Latagan and Generalao and defendant PASUDECO appealed the
decision to the CA. Since the plaintiffs failed to file their brief, the CA dismissed their appeal. [27]
Resolving PASUDECOs appeal, the CA rendered judgment on April 29, 2003, affirming the RTC
decision with modification. The appellate court ruled that Arnaiz was negligent in driving his car, but
that such negligence was merely contributory to the cause of the mishap, i.e., PASUDECOs failure to
properly supervise its men in clearing the affected area. Its supervisor, Mallari, admitted that he was at
his house while their men were clearing Km. 72. Thus, the appellate court held both PASUDECO and
PNCC, jointly and severally, liable to Latagan. The decretal portion of the decision reads:

WHEREFORE, premises considered, the assailed DECISION is hereby MODIFIED and judgment
is hereby rendered declaring PASUDECO and PNCC, jointly and solidarily, liable:

1. To pay plaintiff Regina Latagan:


a. P25,000 = for actual damages
b. P15,000 = for moral damages
c. P10,000 = for attorneys fees
2. To pay costs of suit.

SO ORDERED. [28]

The PNCC, now the petitioner, filed a petition for review on certiorari under Rule 45 of the Revised
Rules of Court, alleging that:

THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE


TRIAL COURT AND MAKING PETITIONER PNCC, JOINTLY AND [SOLIDARILY],
LIABLE WITH PRIVATE RESPONDENT PASUDECO.[29]

The petitioner asserts that the trial court was correct when it held that PASUDECO should be held
liable for the mishap, since it had assumed such responsibility based on the MOA between it and the
TRB. The petitioner relies on the trial courts finding that only PASUDECO was given a permit to pass
through the route.
The petitioner insists that the respondents failed to prove that it was negligent in the operation and
maintenance of the NLEX. It maintains that it had done its part in clearing the expressway of sugarcane
piles, and that there were no more piles of sugarcane along the road when its men left Km. 72; only a
few scattered sugarcanes flattened by the passing motorists were left. Any liability arising from any
mishap related to the spilled sugarcanes should be borne by PASUDECO, in accordance with the MOA
which provides that accidents or damages to the toll facilities arising out of any activity related to this
approval shall be the responsibility of PASUDECO.
The petitioner also argues that the respondents should bear the consequences of their own fault
or negligence, and that the proximate and immediate cause of the mishap in question was respondent
Arnaizs reckless imprudence or gross negligence.
The Court notes that the issues raised in the petition are factual in nature. Under Rule 45 of the
Rules of Court, only questions of law may be raised in this Court, and while there are exceptions to the
rule, no such exception is present in this case. On this ground alone, the petition is destined to fail. The
Court, however, has reviewed the records of the case, and finds that the petition is bereft of merit.
The petitioner is the grantee of a franchise, giving it the right, privilege and authority to construct,
operate and maintain toll facilities covering the expressways, collectively known as the
NLEX.[30] Concomitant thereto is its right to collect toll fees for the use of the said expressways and its
obligation to keep it safe for motorists.
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.[31] Article 2176 of the New Civil Code provides:

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

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.[32] It also refers to the conduct which creates
undue risk of harm to another, the failure to observe that degree of care, precaution and vigilance that
the circumstance justly demand, whereby that other person suffers injury.[33] The Court declared the
test by which to determine the existence of negligence in Picart v. Smith,[34] viz:

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 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: could a prudent man, in the position of the person
to whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of
the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to
take precautions to guard 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
provision, is always necessary before negligence can be held to exist. [35]
In the case at bar, it is clear that the petitioner failed to exercise the requisite diligence in maintaining
the NLEX safe for motorists. The lighted cans and lane dividers on the highway were removed even as
flattened sugarcanes lay scattered on the ground.[36] The highway was still wet from the juice and sap
of the flattened sugarcanes.[37] The petitioner should have foreseen that the wet condition of the
highway would endanger motorists passing by at night or in the wee hours of the morning.
The petitioner cannot escape liability under the MOA between PASUDECO and TRB, since
respondent Latagan was not a party thereto. We agree with the following ruling of the CA:

Both defendants, appellant PASUDECO and appellee PNCC, should be held liable. PNCC, in
charge of the maintenance of the expressway, has been negligent in the performance of its duties.
The obligation of PNCC should not be relegated to, by virtue of a private agreement, to other
parties.

PNCC declared the area free from obstruction since there were no piles of sugarcane, but evidence
shows there were still pieces of sugarcane stalks left flattened by motorists. There must be an
observance of that degree of care, precaution, and vigilance which the situation demands. There
should have been sufficient warning devices considering that there were scattered sugarcane stalks
still left along the tollway.

The records show, and as admitted by the parties, that Arnaizs car ran over scattered sugarcanes
spilled from a hauler truck.[38]

Moreover, the MOA refers to accidents or damages to the toll facilities. It does not cover damages
to property or injuries caused to motorists on the NLEX who are not privies to the MOA.
PASUDECOs negligence in transporting sugarcanes without proper harness/straps, and that of
PNCC in removing the emergency warning devices, were two successive negligent acts which were
the direct and proximate cause of Latagans injuries. As such, PASUDECO and PNCC are jointly and
severally liable. As the Court held in the vintage case of Sabido v. Custodio:[39]

According to the great weight of authority, where the concurrent or successive negligent acts or
omission of two or more persons, although acting independently of each other, are, in combination,
the direct and proximate cause of a single injury to a third person and it is impossible to determine
in what proportion each contributed to the injury, either is responsible for the whole injury, even
though his act alone might not have caused the entire injury, or the same damage might have
resulted from the acts of the other tort-feasor. ...

In Far Eastern Shipping Company v. Court of Appeals,[40] the Court declared that the liability of joint
tortfeasors is joint and solidary, to wit:

It may be said, as a general rule, that negligence in order to render a person liable need not be the
sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient
causes other than plaintiff's, is the proximate cause of the injury. Accordingly, where several causes
combine to produce injuries, a person is not relieved from liability because he is responsible for
only one of them, it being sufficient that the negligence of the person charged with injury is an
efficient cause without which the injury would not have resulted to as great an extent, and that such
cause is not attributable to the person injured. It is no defense to one of the concurrent tortfeasors
that the injury would not have resulted from his negligence alone, without the negligence or
wrongful acts of the other concurrent tortfeasors. Where several causes producing an injury are
concurrent and each is an efficient cause without which the injury would not have happened, the
injury may be attributed to all or any of the causes and recovery may be had against any or all of
the responsible persons although under the circumstances of the case, it may appear that one of
them was more culpable, and that the duty owed by them to the injured person was not the same.
No actor's negligence ceases to be a proximate cause merely because it does not exceed the
negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as
though his acts were the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two
or more persons, although acting independently, are in combination with the direct and proximate
cause of a single injury to a third person, it is impossible to determine in what proportion each
contributed to the injury and either of them is responsible for the whole injury. Where their
concurring negligence resulted in injury or damage to a third party, they become joint tortfeasors
and are solidarily liable for the resulting damage under Article 2194 of the Civil Code.
Thus, with PASUDECOs and the petitioners successive negligent acts, they are joint tortfeasors
who are solidarily liable for the resulting damage under Article 2194 of the New Civil Code.[41]
Anent respondent Arnaizs negligence in driving his car, both the trial court and the CA agreed that
it was only contributory, and considered the same in mitigating the award of damages in his favor as
provided under Article 2179[42] of the New Civil Code. Contributory negligence is conduct on the part of
the injured party, contributing as a legal cause to the harm he has suffered, which falls below the
standard to which he is required to conform for his own protection.[43] Even the petitioner itself described
Arnaizs negligence as contributory. In its Answer to the complaint filed with the trial court, the petitioner
asserted that the direct and proximate cause of the accident was the gross negligence of PASUDECO
personnel which resulted in the spillage of sugarcane and the apparent failure of the PASUDECO
workers to clear and mop up the area completely, coupled with the contributory negligence of Arnaiz in
driving his car at an unreasonable speed.[44] However, the petitioner changed its theory in the present
recourse, and now claims that the proximate and immediate cause of the mishap in question was the
reckless imprudence or gross negligence of respondent Arnaiz. [45] Such a change of theory cannot be
allowed. When a party adopts a certain theory in the trial court, he will not be permitted to change his
theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also
be offensive to the basic rules of fair play, justice and due process.[46]
IN LIGHT OF ALL THE FOREGOING, the present petition is hereby DENIED for lack of merit. The
Decision of the Court of Appeals in CA-G.R. CV No. 47699, dated April 29, 2003, is AFFIRMED. Costs
against the petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-15688 November 19, 1921

REMIGIO RODRIGUEZ, ET AL., plaintiffs-appellees,


vs.
THE MANILA RAILROAD COMPANY, defendant-appellant.

Orense & Vera for appellant.


Domingo Imperial for appellees.

STREET, J.:

This action was instituted jointly by Remigio Rodrigueza and three others in the Court of First Instance of the
Province of Albay to recover a sum of money of the Manila Railroad Company as damages resulting from a fire
kindled by sparks from a locomotive engine under the circumstances set out below. Upon hearing the cause upon
the complaint, answer and an agreed statement of facts, the trial judge rendered judgment against the defendant
company in favor of the plaintiffs and awarded to them the following sums respectively as damages, to wit, (1) to
Remigio Rodrigueza, P3,000; (2) to Domingo Gonzaga, P400; (3) to Cristina Luna, P300; and (4) to Perfecta
Losantas, P150; all with lawful interest from March 21, 1919. From this judgment the defendant appealed.

The facts as appearing from the agreed statement, in relation with the complaint, are to the effect that the defendant
Railroad Company operates a line through the district of Daraga in the municipality of Albay; that on January 29,
1918, as one of its trains passed over said line, a great quantity of sparks were emitted from the smokestack of the
locomotive, and fire was thereby communicated to four houses nearby belonging to the four plaintiffs respectively,
and the same were entirely consumed. All of these houses were of light construction with the exception of the house
of Remigio Rodrigueza, which was of strong materials, though the roof was covered with nipa and cogon. The fire
occurred immediately after the passage of the train, and a strong wind was blowing at the time. It does not appear
either in the complaint or in the agreed statement whose house caught fire first, though it is stated in the appellant's
brief that the fire was first communicated to the house of Remigio Rodrigueza, from whence it spread to the others.

In the fourth paragraph of the complaint — which is admitted to be true — it is alleged that the defendant Railroad
Company was conspicuously negligent in relation to the origin of said fire, in the following respects, namely, first, in
failing to exercise proper supervision over the employees in charge of the locomotive; secondly, in allowing the
locomotive which emitted these sparks to be operated without having the smokestack protected by some device for
arresting sparks; thirdly, in using in its locomotive upon this occasion Bataan coal, a fuel of known inferior quality
which, upon combustion, produces sparks in great quantity.

The sole ground upon which the defense is rested is that the house of Remigio Rodrigueza stood partly within the
limits of the land owned by the defendant company, though exactly how far away from the company's track does not
appear. It further appears that, after the railroad track was laid, the company notified Rodrigueza to get his house off
the land of the company and to remove it from its exposed position. Rodrigueza did not comply with this suggestion,
though he promised to put an iron roof on his house, which he never did. Instead, he changed the materials of the
main roof to nipa, leaving the kitchen and media-aguas covered with cogon. Upon this fact it is contended for the
defense that there was contributory negligence on the part of Remigio Rodrigueza in having his house partly on the
premises of the Railroad Company, and that for this reason the company is not liable. This position is in our opinion
untenable for the reasons which we shall proceed to state.

In the first place, it will be noted that the fact suggested as constituting a defense to this action could not in any view
of the case operate as a bar to recovery by the three plaintiffs other than Remigio Rodrigueza, even assuming that
the fire was first communicated to his house; for said three plaintiffs are in nowise implicated in the act which
supposedly constitutes the defense. In this connection it will be observed that the right of action of each of these
plaintiffs is totally distinct from that of his co-plaintiff, so much so that each might have sued separately, and the
defendant if it had seen fit to do so, might in this case have demurred successfully to the complaint for misjoinder of
parties plaintiff. The fact that the several rights of action of the different plaintiffs arose simultaneously out of one act
of the defendant is not sufficient of itself to require, or even permit, the joinder of such parties as coplaintiffs in a
single action (30 Cyc., 114) if objection had been made thereto. Domingo Gonzaga, Cristina Luna, and Perfecta
Losantas are therefore entitled to recover upon the admitted fact that this fire originated in the negligent acts of the
defendant; and the circumstance that the fire may have been communicated to their houses through the house of
Remegio Rodrigueza, instead of having been directly communicated from the locomotive, is immaterial. (See 38
Am. Dec., 64, 77; 1 11 R. C. L., 968-971; Kansas City, etc. Railroad Co. vs. Blaker, 64 L. R. A., 81 Pennsylvania
Railroad Co. vs. Hope, 80 Pa. St., 373; 21 Am. Rep. 100.)

With respect to the case of Remegio Rodrigueza it is to be inferred that his house stood upon this ground before the
Railroad Company laid its line over this course; and at any rate there is no proof that this plaintiff had unlawfully
intruded upon the railroad's property in the act of building his house. What really occurred undoubtedly is that the
company, upon making this extension, had acquired the land only, leaving the owner of the house free to remove it.
Hence he cannot be considered to have been a trespasser in the beginning. Rather, he was there at the sufferance
of the defendant company, and so long as his house remained in this exposed position, he undoubtedly assumed
the risk of any loss that might have resulted from fires occasioned by the defendant's locomotives if operated and
managed with ordinary care. But he cannot be held to have assumed the risk of any damage that might result from
the unlawful negligence acts of the defendant. Nobody is bound to anticipate and defend himself against the
possible negligence of another. Rather he has a right to assume that the other will use the care of the ordinary
prudent man. (Philadelphia and Reading Railroad Co. vs. Hendrickson, 80 Pa. St., 182; 21 Am. Rep., 97.)

In the situation now under consideration the proximate and only cause of the damage that occurred was the
negligent act of the defendant in causing this fire. The circumstance that Remigio Rodrigueza's house was partly on
the property of the defendant company and therefore in dangerous proximity to passing locomotives was an
antecedent condition that may in fact have made the disaster possible, but that circumstance cannot be imputed to
him as contributory negligence destructive of his right of action, because, first, that condition was not created by
himself; secondly, because his house remained on this ground by the toleration, and therefore with the consent of
the Railroad Company; and thirdly, because even supposing the house to be improperly there, this fact would not
justify the defendant in negligently destroying it. (Grand Trunk Railway of Canada vs. Richardson, 91 U. S., 454; 23
L. ed., 356; Norfolk etc. Ry. Co. vs. Perrow, 101 Va., 345, 350.) lawphil.net

The circumstance that the defendant company, upon planting its line near Remigio Rodrigueza's house, had
requested or directed him to remove it, did not convert his occupancy into a trespass, or impose upon him any
additional responsibility over and above what the law itself imposes in such situation. In this connection it must be
remembered that the company could at any time have removed said house in the exercise of the power of eminent
domain, but it elected not to do so.

Questions similar to that now before us have been under the consideration of American courts many times, and their
decisions are found to be uniformly favorable to recovery where the property destroyed has been placed in whole or
in part on the right of way of the railroad company with its express or implied consent. (L. R. Martin Timber
Co. vs.Great Northern Railway Co., 123 Minn., 423; Ann. Cas., 1915A, p. 496, note; Burroughs vs. Housatonic R.R.
Co., 15 Conn., 124; 38 Am. Dec., 64; 74; Southern Ry. Co. vs. Patterson, 105 Va. 6; 8 Ann. Cas., 44.) And the case
for the plaintiff is apparently stronger where the company constructs its line in proximity to a house already built and
fails to condemn it and remove it from its right of way.

From what has been said it is apparent that the judgment appealed from is in all respect in conformity with the law,
and the same is accordingly affirmed, with costs. So ordered.

Johnson, Araullo, Avanceña and Villamor, JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-2075 November 29, 1949

MARGARITA AFIALDA, plaintiff-appellant,


vs.
BASILIO HISOLE and FRANCISCO HISOLE, defendants-appellees.

Nicolas P. Nonato for appellant.


Gellada, Mirasol and Ravena for appellees.

REYES, J.:

This is an action for damages arising from injury caused by an animal. The complaint alleges that the now
deceased, Loreto Afialda, was employed by the defendant spouses as caretaker of their carabaos at a fixed
compensation; that while tending the animals he was, on March 21, 1947, gored by one of them and later died as a
consequence of his injuries; that the mishap was due neither to his own fault nor to force majeure; and that plaintiff
is his elder sister and heir depending upon him for support.

Before filing their answer, defendants moved for the dismissal of the complaint for lack of a cause of action, and the
motion having been granted by the lower court, plaintiff has taken this appeal.

Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which reads:

The possessor of an animal, or the one who uses the same, is liable for any damages it may cause, even if
such animal should escape from him or stray away.

This liability shall cease only in case, the damage should arise from force majeure or from the fault of the
person who may have suffered it.

The question presented is whether the owner of the animal is liable when damage is caused to its caretaker.

The lower court took the view that under the above-quoted provision of the Civil Code, the owner of an animal is
answerable only for damages caused to a stranger, and that for damage caused to the caretaker of the animal the
owner would be liable only if he had been negligent or at fault under article 1902 of the same code. Claiming that the
lower court was in error, counsel for plaintiff contends that the article 1905 does not distinguish between damage
caused to the caretaker and makes the owner liable whether or not he has been negligent or at fault. For authority
counsel cites the following opinion which Manresa quotes from a decision of the Spanish Supreme Court:

El articulo 1905 del codigo Civil no consienta otra interpretacion que la que, clara y evidentemente, se
deriva de sus terminos literales, bastando, segun el mismo, que un animal cause perjuicio para que nasca
la responsibilidad del dueno, aun no imputandose a este ninguna clase de culpa o negligencia, habida,sin
duda, cuenta por el lgislador de que tal concepto de dueno es suficiente para que arrastre las
consecuencias favorables o adversas de esta clase de propiedad, salvo la exception en el mismo
contenida. (12 Manresa, Commentaries on the Spanish CivilCode, 573.)

This opinion, however, appears to have been rendered in a case where an animal caused injury to a stranger or
third person. It is therefore no authority for a case like the present where the person injured was the caretaker of the
animal. The distinction is important. For the statute names the possessor or user of the animal as the person liable
for "any damages it may cause," and this for the obvious reason that the possessor or user has the custody and
control of the animal and is therefore the one in a position to prevent it from causing damage.
In the present case, the animal was in custody and under the control of the caretaker, who was paid for his work as
such. Obviously, it was the caretaker's business to try to prevent the animal from causing injury or damage to
anyone, including himself. And being injured by the animal under those circumstances, was one of the risks of the
occupation which he had voluntarily assumed and for which he must take the consequences.

In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries (Vol. 12, p. 578), the death of
an employee who was bitten by a feline which his master had asked him to take to his establishment was by said
tribunal declared to be "a veritable accident of labor" which should come under the labor laws rather than under
article 1905 of the Civil Code. The present action, however, is not brought under the Workmen's Compensation Act,
there being no allegation that, among other things, defendant's business, whatever that might be, had a gross
income of P20,000. As already stated, defendant's liability is made to rest on article 1905 of the Civil Code. but
action under that article is not tenable for the reasons already stated. On the other hand, if action is to be based on
article 1902 of the Civil Code, it is essential that there be fault or negligence on the part of the defendants as owners
of the animal that caused the damage. But the complaint contains no allegation on those points.

There being no reversible error in the order appealed from, the same is hereby affirmed, but without costs in view of
the financial situation of the appellant.

Moran, C.J., Ozaeta, Paras, Bengzon, Padilla, Tuason, Montemayor and Torres, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 1719 January 23, 1907

M. H., RAKES, plaintiff-appellee,


vs.
THE ATLANTIC, GULF AND PACIFIC COMPANY, defendant-appellant.

A. D. Gibbs for appellant.


F. G. Waite, & Thimas Kepner for appellee.

TRACEY, J.:

This is an action for damages. The plaintiff, one of a gang of eight negro laborers in the employment of the
defendant, was at work transporting iron rails from a barge in the harbor to the company's yard near the malecon in
Manila. Plaintiff claims that but one hand car was used in this work. The defendant has proved that there were two
immediately following one another, upon which were piled lengthwise seven rails, each weighing 560 pounds, so
that the ends of the rails lay upon two crosspieces or sills secured to the cars, but without side pieces or guards to
prevent them from slipping off. According to the testimony of the plaintiff, the men were either in the rear of the car
or at its sides. According to that defendant, some of them were also in front, hauling by a rope. At a certain spot at
or near the water's edge the track sagged, the tie broke, the car either canted or upset, the rails slid off and caught
the plaintiff, breaking his leg, which was afterwards amputated at about the knee.

This first point for the plaintiff to establish was that the accident happened through the negligence of the defendant.
The detailed description by the defendant's witnesses of the construction and quality of the track proves that if was
up to the general stranded of tramways of that character, the foundation consisting on land of blocks or crosspieces
of wood, by 8 inches thick and from 8 to 10 feet long laid, on the surface of the ground, upon which at a right angle
rested stringers of the same thickness, but from 24 to 30 feet in length. On the across the stringers the parallel with
the blocks were the ties to which the tracks were fastened. After the road reached the water's edge, the blocks or
crosspieces were replaced with pilling, capped by timbers extending from one side to the other. The tracks were
each about 2 feet wide and the two inside rails of the parallel tracks about 18 inches apart. It was admitted that there
were no side pieces or guards on the car; that where no ends of the rails of the track met each other and also where
the stringers joined, there were no fish plates. the defendant has not effectually overcome the plaintiff's proof that
the joints between the rails were immediately above the joints between the underlying stringers.

The cause of the sagging of the tracks and the breaking of the tie, which was the immediate occasion of the
accident, is not clear in the evidence, but is found by the trial court and is admitted in the briefs and in the argument
to have been the dislodging of the crosspiece or piling under the stringer by the water of the bay raised by a recent
typhoon. The superintendent of the company attributed it to the giving way of the block laid in the sand. No effort
was made to repair the injury at the time of the occurrence. According to plaintiffs witnesses, a depression of the
track, varying from one half inch to one inch and a half, was therafter apparent to the eye, and a fellow workman of
the plaintiff swears that the day before the accident he called the attention of McKenna, the foreman, to it and asked
by simply straightening out the crosspiece, resetting the block under the stringer and renewing the tie, but otherwise
leaving the very same timbers as before. It has not proven that the company inspected the track after the typhoon or
had any proper system of inspection.

In order to charge the defendant with negligence, it was necessary to show a breach of duty on its part in failing
either to properly secure the load on iron to vehicles transporting it, or to skillfully build the tramway or to maintain it
in proper condition, or to vigilantly inspect and repair the roadway as soon as the depression in it became visible. It
is upon the failure of the defendant to repair the weakened track, after notice of its condition, that the judge below
based his judgment.

This case presents many important matters for our decision, and first among them is the standard of duty which we
shall establish in our jurisprudence on the part of employees toward employees.
The lack or the harshness of legal rules on this subject has led many countries to enact designed to put these
relations on a fair basis in the form of compensation or liability laws or the institution of insurance. In the absence of
special legislation we find no difficulty in so applying the general principles of our law as to work out a just result.

Article 1092 of the Civil Code provides:

Civil obligations, arising from crimes or misdemeanors, shall be governed by the provisions of the Penal
Code.

And article 568 of the latter code provides:

He who shall execute through reckless negligence an act that if done with malice would constitute a grave
crime, shall be punished.

And article 590 provides that the following shall be punished:

4. Those who by simple imprudence or negligence, without committing any infraction of regulations, shall
cause an injury which, had malice intervened, would have constituted a crime or misdemeanor.

And finally by articles 19 and 20, the liability of owners and employers for the faults of their servants and
representatives is declared to be civil and subsidiary in its character.

It is contented by the defendant, as its first defense to the action, that the necessary conclusion from these collated
laws is that the remedy for injuries through negligence lies only in a criminal action in which the official criminally
responsible must be made primarily liable and his employer held only subsidiarily to him. According to this theory
the plaintiff should have procured the arrest of the representative of the company accountable for not repairing the
tract, and on his prosecution a suitable fine should have been imposed, payable primarily by him and secondarily by
his employer.

This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the Civil Code makes
obligations arising from faults or negligence not punished by the law, subject to the provisions of Chapter 11 of Title
XVI. Section 1902 of that chapter reads:

A person who by an act or omission causes damage to another when there is fault or negligence shall be
obliged to repair the damage so done.

SEC. 1903. The obligation imposed by the preceding article is demandable, not only for personal acts and
omissions, but also for those of the persons for whom they should be responsible.

The father, and on his death or incapacity, the mother, is liable for the damages caused by the minors who
live with them.

xxx xxx xxx

Owners or directors of an establishment or enterprise are equally liable for the damages caused by their
employees in the service of the branches in which the latter may be employed or in the performance of their
duties.

xxx xxx xxx

The liability referred to in this article shall cease when the persons mentioned therein prove that they
employed all the diligence of a good father of a family to avoid the damages.

As an answer to the argument urged in this particular action it may be sufficient to point out that nowhere in our
general statutes is the employer penalized for failure to provide or maintain safe appliances for his workmen. His
obligation therefore is one "not punished by the law " and falls under civil rather than criminal jurisprudence. But the
answer may be a broader one. We should be reluctant, under any conditions, to adopt a forced construction of these
scientific codes, such as is proposed by the defendant, that would rob some of these articles of effect, would shut
out litigants their will from the civil courts, would make the assertion of their rights dependent upon the selection for
prosecution of the proper criminal offender, and render recovery doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles had always stood alone, such a construction would be
unnecessary, but clear light is thrown upon their meaning by the provisions of the Law of Criminal Procedure of
Spain (Ley de Enjuiciamiento Criminal), which, though n ever in actual force in these Islands, was formerly given a
suppletory or explanatory effect. Under article 111 of this law, both classes of action, civil and criminal, might be
prosecuted jointly or separately, but while the penal action was pending the civil was suspended. According to
article 112, the penal action once started, the civil remedy should be sought therewith, unless it had been waived by
the party injured or been expressly reserved by him for civil proceedings for the future. If the civil action alone was
prosecuted, arising out of a crime that could be enforced by only on private complaint, the penal action thereunder
should be extinguished. These provisions are in harmony with those of articles 23 and 133 of our Penal Code on the
same subject.

An examination of this topic might be carried much further, but the citations of these articles suffices to show that the
civil liability was not intended to be merged in the criminal nor even to be suspended thereby, except as expressly
provided by law. Where an individual is civilly liable for a negligent act or omission, it is not required that the inured
party should seek out a third person criminally liable whose prosecution must be a condition precedent to the
enforcement of the civil right.

Under article 20 of the Penal Code the responsibility of an employer may be regarded as subsidiary in respect of
criminal actions against his employees only while they are process of prosecution, or in so far as they determinate
the existence of the criminal act from which liability arises, and his obligation under the civil law and its enforcement
in the civil courts is not barred thereby unless by election of the injured person. Inasmuch as no criminal in question,
the provisions of the Penal Code can not affect this action. This construction renders it unnecessary to finally
determine here whether this subsidiary civil liability in penal actions survived the laws that fully regulated it or has
been abrogated by the American civil and criminal procedure now in force in the Philippines.

The difficulty in construing the articles of the code above cited in this case appears from the briefs before us to have
arisen from the interpretation of the words of article 1093, "fault or negligence not punished by law," as applied to
the comprehensive definition of offenses in articles 568 and 590 of the Penal Code. It has been shown that the
liability of an employer arising out of his relation to his employee who is the offender is not to be regarded as derived
from negligence punished by the law, within the meaning of articles 1092 and 1093. More than this, however, it can
not be said to fall within the class of acts unpunished by the law, the consequences of which are regulated by
articles 1902 and 1903 of the Civil Code. The acts to which these articles are applicable are understood to be those
and growing out of preexisting duties of the parties to one another. But were relations already formed give rise to
duties, whether springing from contract or quasi contract, then breaches of those duties are subject to articles 1101,
1103, and 1104, of the same code. A typical application of the distinction may be found in the consequences of a
railway accident due to defective machinery supplied by the employer. His liability to his employee would arise out of
the contract of employment, that to the passengers out of the contract for passage. while that to that injured
bystander would originate in the negligent act itself. This distinction is thus clearly set forth by Manresa in his
commentary on article 1093.

We are with reference to such obligations, that culpa, or negligence, may be understood in two difference
senses; either as culpa, substantive and independent, which on account of its origin arises in an obligation
between two persons not formerly bound by any other obligation; or as an incident in the performance of an
obligation; or as already existed, which can not be presumed to exist without the other, and which increases
the liability arising from the already exiting obligation.

Of these two species of culpa the first one mentioned, existing by itself, may be also considered as a real
source of an independent obligation, and, as chapter 2, title 16 of this book of the code is devoted to it, it is
logical to presume that the reference contained in article 1093 is limited thereto and that it does not extend
to those provisions relating to the other species of culpa (negligence), the nature of which we will discuss
later. (Vol. 8, p. 29.)

And in his commentary on articles 1102 and 1104 he says that these two species of negligence may be somewhat
inexactly described as contractual and extra-contractual, the letter being the culpa aquiliana of the Roman law and
not entailing so strict an obligation as the former. This terminology is unreservedly accepted by Sanchez-Roman
(Derecho Civil, fourth section, Chapter XI, Article II, No. 12), and the principle stated is supported be decisions of the
supreme court of Spain, among them those of November 20, 1896 (80 Jurisprudencia Civil, No. 151), and June 27,
1894 (75 Jurisprudencia Civil, No. 182). The contract is one for hire and not one of mandate. (March 10, 1897, 81
Jurisprudencia Civil, No. 107.)

Spanish Jurisprudencia prior to the adoption of the Working Men's Accident Law of January 30, 1900, throws
uncertain light on the relation between master and workman. Moved by the quick industrial development of their
people, the courts of France early applied to the subject the principles common to the law of both countries, which
are lucidly discussed by the leading French commentators.

The original French theory, resting the responsibility of owners of industrial enterprises upon articles 1382, 1383,
and 1384 of the Code Napoleon, corresponding in scope to articles 1902 and 1903 of the Spanish Code, soon
yielded to the principle that the true basis is the contractual obligation of the employer and employee. (See 18
Dalloz, 196, Title Travail, 331.)

Later the hardships resulting from special exemptions inserted in contracts for employment led to the discovery of a
third basis for liability in an article of he French Code making the possessor of any object answerable for damage
done by it while in his charge. Our law having no counterpart of this article, applicable to every kind of object, we
need consider neither the theory growing out of it nor that of "professional risk" more recently imposed by express
legislation, but rather adopting the interpretation of our Civil Code above given, find a rule for this case in the
contractual obligation. This contractual obligation, implied from the relation and perhaps so inherent in its nature to
be invariable by the parties, binds the employer to provide safe appliances for the use of the employee, thus closely
corresponding to English and American Law. On these principles it was the duty of the defendant to build and to
maintain its track in reasonably sound condition, so as to protect its workingmen from unnecessary danger. It is
plain that in one respect or the other it failed in its duty, otherwise the accident could not have occurred;
consequently the negligence of the defendant is established.

Another contention of the defense is that the injury resulted to the plaintiff as a risk incident to his employment and,
as such, one assumed by him. It is evident that this can not be the case if the occurrence was due to the failure to
repair the track or to duly inspect, it for the employee is not presumed to have stipulated that the employer might
neglect his legal duty. Nor may it be excused upon the ground that the negligence leading to the accident was that
of a fellow-servant of the injured man. It is not apparent to us that the intervention of a third person can relieve the
defendant from the performance of its duty nor impose upon the plaintiff the consequences of an act or omission not
his own. Sua cuique culpa nocet. This doctrine, known as "the fellow-servant, rule," we are not disposed to
introduce into our jurisprudence. Adopted in England by Lord Abinger in the case of Prescott vs. Fowler (3 Meeson
& Welsby, 1) in 1837, it has since been effectually abrogated by "the Employers' Liability Acts" and the
"Compensation Law." The American States which applied it appear to be gradually getting rid of it; for instance, the
New York State legislature of 1906 did away with it in respect to railroad companies, and had in hand a scheme for
its total abolition. It has never found place in the civil law of continental Europe. (Dalloz, vol. 39, 1858, Title
Responsibilite, 630, and vol. 15, 1895, same title, 804. Also more recent instances in Fuzier-Herman, Title
Responsibilite Civile, 710.)

The French Cour de Cassation clearly laid down the contrary principle in its judgment of June 28, 1841, in the case
of Reygasse, and has since adhered to it.

The most controverted question in the case is that of the negligence of the plaintiff, contributing to the accident, to
what extent it existed in fact and what legal effect is to be given it. In two particulars is he charged with
carelessness:

First. That having noticed the depression in the track he continued his work; and

Second. That he walked on the ends of the ties at the side of the car instead of along the boards, either before or
behind it.

As to the first point, the depression in the track night indicate either a serious or a rival difficulty. There is nothing in
the evidence to show that the plaintiff did or could see the displaced timber underneath the sleeper. The claim that
he must have done so is a conclusion drawn from what is assumed to have been a probable condition of things not
before us, rather than a fair inference from the testimony. While the method of construction may have been known
to the men who had helped build the road, it was otherwise with the plaintiff who had worked at this job less than
two days. A man may easily walk along a railway without perceiving a displacement of the underlying timbers. The
foreman testified that he knew the state of the track on the day of the accident and that it was then in good
condition, and one Danridge, a witness for the defendant, working on the same job, swore that he never noticed the
depression in the track and never saw any bad place in it. The sagging of the track this plaintiff did perceive, but that
was reported in his hearing to the foreman who neither promised nor refused to repair it. His lack of caution in
continuing at his work after noticing the slight depression of the rail was not of so gross a nature as to constitute
negligence, barring his recovery under the severe American rule. On this point we accept the conclusion of the trial
judge who found as facts that "the plaintiff did not know the cause of the one rail being lower than then other" and "it
does not appear in this case that the plaintiff knew before the accident occurred that the stringers and rails joined in
the same place."

Were we not disposed to agree with these findings they would, nevertheless, be binding upon us, because not
"plainly and manifestly against the weight of evidence," as those words of section 497, paragraph 3 of the Code of
Civil Procedure were interpreted by the Supreme Court of the United States in the De la Rama case (201 U. S.,
303).

In respect of the second charge of negligence against the plaintiff, the judgment below is not so specific. While the
judge remarks that the evidence does not justify the finding that the car was pulled by means of a rope attached to
the front end or to the rails upon it, and further that the circumstances in evidence make it clear that the persons
necessary to operate the car could not walk upon the plank between the rails and that, therefore, it was necessary
for the employees moving it to get hold upon it as best they could, there is no specific finding upon the instruction
given by the defendant to its employees to walk only upon the planks, nor upon the necessity of the plaintiff putting
himself upon the ties at the side in order to get hold upon the car. Therefore the findings of the judge below leave
the conduct of the plaintiff in walking along the side of the loaded car, upon the open ties, over the depressed track,
free to our inquiry.

While the plaintiff and his witnesses swear that not only were they not forbidden to proceed in this way, but were
expressly directed by the foreman to do so, both the officers of the company and three of the workmen testify that
there was a general prohibition frequently made known to all the gang against walking by the side of the car, and the
foreman swears that he repeated the prohibition before the starting of this particular load. On this contradiction of
proof we think that the preponderance is in favor of the defendant's contention to the extent of the general order
being made known to the workmen. If so, the disobedience of the plaintiff in placing himself in danger contributed in
some degree to the injury as a proximate, although not as its primary cause. This conclusion presents sharply the
question, What effect is to be given such an act of contributory negligence? Does it defeat a recovery, according to
the American rule, or is it to be taken only in reduction of damages?

While a few of the American States have adopted to a greater or less extent the doctrine of comparative negligence,
allowing a recovery by a plaintiff whose own act contributed to his injury, provided his negligence was slight as
compared with that of the defendant, and some others have accepted the theory of proportional damages, reducing
the award to a plaintiff in proportion to his responsibility for the accident, yet the overwhelming weight of adjudication
establishes the principle in American jurisprudence that any negligence, however slight, on the part of the person
injured which is one of the causes proximately contributing to his injury, bars his recovery. (English and American
Encyclopedia of law, Titles "Comparative Negligence" and Contributory Negligence.")

In Grant Trunk Railway Company vs. Ives (144 U. S., 408, at page 429) the Supreme Court of the United States
thus authoritatively states the present rule of law:

Although the defendant's' negligence may have been the primary cause of the injury complained of, yet an
action for such injury can not be maintained if the proximate and immediate cause of the injury can be traced
to the want of ordinary care and caution in the person injured; subject to this qualification, which has grown
up in recent years (having been first enunciated in Davies vs. Mann, 10 M. & W., 546) that the contributory
negligence of the party injured will not defeat the action if it be shown that the defendant might, by the
exercise of reasonable care and prudence, have avoided the consequences of the injured party's
negligence.
There are may cases in the supreme court of Spain in which the defendant was exonerated, but when analyzed they
prove to have been decided either upon the point that he was not negligent or that the negligence of the plaintiff was
the immediate cause of the casualty or that the accident was due to casus fortuitus. Of the first class in the decision
of January 26, 1887 (38 Jurisprudencia Criminal, No. 70), in which a railway employee, standing on a car, was
thrown therefrom and killed by the shock following the backing up of the engine. It was held that the management of
the train and engine being in conformity with proper rules of the company, showed no fault on its part.

Of the second class are the decision of the 15th of January, the 19th of February, and the 7th of March, 1902, stated
in Alcubilla's Index of that year; and of the third class the decision of the 4th of June, 1888 (64 Jurisprudencia Civil,
No. 1), in which the breaking down of plaintiff's dam by the logs of the defendant impelled against it by the Tajo
River, was held due to a freshet as a fortuitous cause.

The decision of the 7th of March, 1902, on which stress has been laid, rested on two bases, one, that the defendant
was not negligent, because expressly relieved by royal order from the common obligation imposed by the police law
of maintaining a guard at the road crossing; the other, because the act of the deceased in driving over level ground
with unobstructed view in front of a train running at speed, with the engine whistle blowing was the determining
cause of the accident. It is plain that the train was doing nothing but what it had a right to do and that the only fault
lay with the injured man. His negligence was not contributory, it was sole, and was of such an efficient nature that
without it no catastrophe could have happened.

On the other hand, there are many cases reported in which it seems plain that the plaintiff sustaining damages was
not free from contributory negligence; for instance, the decision of the 14th of December, 1894 (76 Jurisprudencia
Civil, No. 134), in which the owner of a building was held liable for not furnishing protection to workmen engaged in
hanging out flags, when the latter must have perceived beforehand the danger attending the work.

None of those cases define the effect to be given the negligence of a plaintiff which contributed to his injury as one
of its causes, though not the principal one, and we are left to seek the theory of the civil law in the practice of other
countries.

In France in the case of Marquant, August 20, 1879, the cour de cassation held that the carelessness of the victim
did not civilly relieve the person without whose fault the accident could not have happened, but that the contributory
negligence of the injured man had the effect only of reducing the damages. The same principle was applied in the
case of Recullet, November 10, 1888. and that of Laugier of the 11th of November, 1896. (Fuzier-Herman,
Title Responsibilite Cirile, 411, 412.) Of like tenor are citations in Dalloz (vol. 18, 1806, Title Trail, 363, 364, and vol.
15, 1895, Title Responsibilite, 193, 198).

In the Canadian Province of Quebee, which has retained for the most part the French Civil Law, now embodied in a
code following the Code Napoleon, a practice in accord with that of France is laid down in many cases collected in
the annotations to article 1053 of the code edited by Beauchamps, 1904. One of these is Luttrell vs. Trottier,
reported in La Revue de Jurisprudence, volume 6, page 90, in which the court of Kings bench, otherwise known as
the court of appeals, the highest authority in the Dominion of Canada on points of French law, held that contributory
negligence did not exonerate the defendants whose fault had been the immediate cause of the accident, but entitled
him to a reduction of damages. Other similar cases in the provincial courts have been overruled by appellate
tribunals made up of common law judges drawn from other provinces, who have preferred to impose uniformally
throughout the Dominion the English theory of contributory negligence. Such decisions throw no light upon the
doctrines of the civil law. Elsewhere we find this practice embodied in legislation; for instance, section 2 of article
2398 of the Code of Portugal reads as follows:

If in the case of damage there was fault or negligence on the part of the person injured or in the part of some
one else, the indemnification shall be reduced in the first case, and in the second case it shall be
appropriated in proportion to such fault or negligence as provided in paragraphs 1 and 2 of section 2372.

And in article 1304 of the Austrian Code provides that the victim who is partly changeable with the accident shall
stand his damages in proportion to his fault, but when that proportion is incapable of ascertainment, he shall share
the liability equally with the person principally responsible. The principle of proportional damages appears to be also
adopted in article 51 of the Swiss Code. Even in the United States in admirality jurisdictions, whose principles are
derived from the civil law, common fault in cases of collision have been disposed of not on the ground of
contradictor negligence, but on that of equal loss, the fault of the one part being offset against that of the other.
(Ralli vs. Troop, 157 U. S. 386; 97.)

The damage of both being added together and the sum equally divided, a decree is entered in favor of the vessel
sustaining the greater loss against the other for the excess of her damages over one-half of the aggregate sum.
(The Manitoba, 122 U. S., 97)

Exceptional practice appears to prevail in maritime law in other jurisdictions. The Spanish Code of Commerce,
article 827, makes each vessel for its own damage when both are the fault; this provision restricted to a single class
of the maritime accidents, falls for short of a recognition of the principle of contributory negligence as understood in
American Law, with which, indeed, it has little in common. This is a plain from other articles of the same code; for
instance, article 829, referring to articles 826, 827, and 828, which provides: "In the cases above mentioned the civil
action of the owner against the person liable for the damage is reserved, as well as the criminal liability which may
appear."

The rule of the common law, a hard and fast one, not adjustable with respects of the faults of the parties, appears to
have grown out the original method of trial by jury, which rendered difficult a nice balancing of responsibilities and
which demanded an inflexible standard as a safeguard against too ready symphaty for the injured. It was assumed
that an exact measure of several concurring faults was unattainable.

The reason why, in cases of mutual concurring negligence, neither party can maintain an action against the
other, is, not the wrong of the one is set off against the wrong of the other; it that the law can not measure
how much of the damage suffered is attributable to the plaintiff's own fault. If he were allowed to recover, it
might be that he would obtain from the other party compensation for hiss own misconduct.
(Heil vs. Glanding, 42 Penn. St. Rep., 493, 499.)

The parties being mutually in fault, there can be no appointment of damages. The law has no scales to
determine in such cases whose wrongdoing weighed most in the compound that occasioned the mischief.
(Railroad vs. Norton, 24 Penn. St. 565, 469.)

Experience with jury trials in negligence cases has brought American courts to review to relax the vigor of the rule
by freely exercising the power of setting aside verdicts deemed excessive, through the device of granting new trials,
unless reduced damages are stipulated for, amounting to a partial revision of damages by the courts. It appears to
us that the control by the court of the subject matter may be secured on a moral logical basis and its judgment
adjusted with greater nicety to the merits of the litigants through the practice of offsetting their respective
responsibilities. In the civil law system the desirable end is not deemed beyond the capacity of its tribunals.

Whatever may prove to be the doctrine finally adopted in Spain or in other countries under the stress and counter
stress of novel schemers of legislation, we find the theory of damages laid down in the judgment the most consistent
with the history and the principals of our law in these Islands and with its logical development.

Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate
causes of the accident. The test is simple. Distinction must be between the accident and the injury, between the
event itself, without which there could have been no accident, and those acts of the victim not entering into it,
independent of it, but contributing under review was the displacement of the crosspiece or the failure to replace it.
this produced the event giving occasion for damages — that is, the shinking of the track and the sliding of the iron
rails. To this event, the act of the plaintiff in walking by the side of the car did not contribute, although it was an
element of the damage which came to himself. Had the crosspiece been out of place wholly or partly thorough his
act of omission of duty, the last would have been one of the determining causes of the event or accident, for which
he would have been responsible. Where he contributes to the principal occurrence, as one of its determining factors,
he can not recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover
the amount that the defendant responsible for the event should pay for such injury, less a sum deemed a suitable
equivalent for his own imprudence.

Accepting, though with some hesitation, the judgment of the trial court, fixing the damage incurred by the plaintiff at
5,000 pesos, the equivalent of 2,500 dollars, United States money, we deduct therefrom 2,500 pesos, the amount
fairly attributable to his negligence, and direct judgment to be entered in favor of the plaintiff for the resulting sum of
2,500 pesos, with cost of both instances, and ten days hereafter let the case be remanded to the court below for
proper action. So ordered.

Arellano, C.J. Torres and Mapa, JJ., concur.

Separate Opinions

WILLARD, J., dissenting:

The knowledge which the plaintiff had in regard to the condition of the track is indicated by his own evidence. He
testified, among other things, as follows:

Q. Now, describe the best you can the character of the track that ran from the place where you loaded
the irons from the barge up to the point where you unloaded them on the ground.

A. — Well, it was pretty bad character.

xxx xxx xxx

Q. And you were familiar with the track before that its construction?

A. Familiar with what?

Q. Well, you have described it here to the court.

A. Oh, yes; I knew the condition of the track.

Q. You knew its conditions as you have described it here at the time you were working around there?

A. Yes, sir.

xxx xxx xxx

Q. And while operating it from the side it was necessary for you to step from board to board on the
cross-ties which extended out over the stringers?

A. Yes, sir.

Q. And these were very of irregular shape, were they not?

A. They were in pretty bad condition.

xxx xxx xxx

Q. And it was not safe to walk along on the outside of these crosspieces?

A. It was safe if the car stayed on the track. We didn't try to hold the load on. We tried to hold the car
back, keep it from going too fast, because we knew the track was in bad condition just here, and going down
too fast we could be liable to run off most any time.

Q. You knew the track was in bad condition when you got hold?
A. Sure, it was in bad condition.

xxx xxx xxx

Q. And the accident took place at that point where you believed it to be so dangerous?

A. Yes, sir.

Q. But you knew it was dangerous?

A. Why certainly, anybody could see it; but a workingman had to work in those days or get arrested for a
vag here in Manila.

The court below, while it found that the plaintiff knew in a general way of the bad condition of the track, found that he
was not informed of the exact cause of the accident, namely, the washing away of the large crosspiece laid upon the
ground or placed upon the posts as the foundation upon which the stripers rested. This finding of fact to my mind is
plainly and manifestly against the weight of the evidence. Ellis, a witness for the plaintiff, testified that on the
morning of the accident he called the attention of McKenna, the foreman, to the defective condition of the track at
his precise point where the accident happened. His testimony in part is as follows:

A. I called Mr. McKenna. I showed him the track and told him I didn't think it was safe working, and that if
he didn't fix it he was liable to have an accident; I told him I thought if he put fish plates on it would it. He
said, you keep on fishing around here for fish plates and you will be fishing for another job the first thing you
know." He says, "You see to much."

xxx xxx xxx

Q. Who else was present at the time you had this conversation with Mr. McKenna?

A. Well, at that conversation as far as I can remember, we were all walking down the track and I know
that McCoy and Mr. Blakes was along at the time. I remember them two, but we were all walking down the
track in a bunch, but I disremember them.

xxx xxx xxx

Q. Was that the exact language that you used, that you wanted some fish plates put on?

A. No, sir: I told him to look at that track. I says get some fish plates. I says if there was any fish plates
we would fix that.

Q. What did the fish plates have to do with that?

A. It would have strengthened that joint.

Q. Why didn't you put the 8 by 8 which was washed crossways in place?

A. That would have been taken the raising of the track and digging out along this upright piece and then
putting it up again.

The plaintiff himself testified that he was present with Ellis at the time this conversation was had with McKenna. It
thus appears that on the morning in question the plaintiff and McKenna were standing directly over the place where
the accident happened later in the day. The accident was caused, as the court below found, by the washing away or
displacement of the large 8 by 8 piece of timber. This track was constructed as all other tracks are, all of it open
work, with no floor over the ties, and of course see the ground and the entire construction of the road, including
these large 8 by 8 pieces, the long stringers placed thereon, the ties placed on these stringers, and the rails placed
on the ties. The plaintiff himself must have seen that the 8 by 8 piece of timber was out of place.
If the testimony of the plaintiff's witnesses is to be believed, the displacement was more markedly apparent even
than it would appear from the testimony of the defendant's witnesses. According to the plaintiff's witnesses, the
water at high tide reached the place in question and these 8 by 8 pieces were therefore not laid upon the ground but
were placed upon posts driven into the ground, the height of the posts at this particular place being, according to the
testimony of the plaintiff's witnesses, from a foot to two feet and a half. As has been said, Ellis testified that the
reason why they did not put the 8 by 8 back in its place was because that would have required the raising up of the
track and digging out along this upright piece and then putting it up again.

It conclusively appears from the evidence that the plaintiff, before the accident happened, knew the exact condition
of the track and was informed and knew of the defect which caused the accident. There was no promise on the part
of McKenna to repair the track.

Under the circumstances the plaintiff was negligent in placing himself on the side of the car where he knew that he
would be injured by the falling of the rails from the car when they reached this point in the track where the two
stringers were without any support of their ends. He either should have refused to work at all or he should have
placed himself behind the car, on the other side of it, or in front of it, drawing it with a rope. He was guilty of
contributory negligence and is not entitled to recover.

It is, said however, that contributory negligence on the part of the plaintiff in a case like this is no defense under the
law in force in these Islands. To this proposition I can not agree. The liability of the defendant is based in the
majority opinion upon articles 1101 and 1103 of the Civil Code.

In order to impose such liability upon the defendant, it must appear that its negligence caused the accident. The
reason why contradictory negligence on the part of the plaintiff is a defense in this class of cases is that the
negligence of the defendant did not alone cause the accident. If nothing but that negligence had existed, the
accident would not have happened and, as I understand it, in every case in which contradictory negligence is a
defense it is made so because the negligence of the plaintiff is the cause of the accident, to this extent, that if the
plaintiff had not been negligent the accident would not have happened, although the defendant was also negligent.
In other words, the negligence of the defendant is not alone sufficient to cause the accident. It requires also the
negligence of the plaintiff.

There is, so far as I know, nothing in the Civil Code relating to contributory negligence. The rule of the Roman law
was: "Quod quis ex culap sua damnum sentit, no intelligitur damnum sentire." (Digest, book, 50, tit. 17, rule 203.)

The partidas contain the following provisions:

The just thing is that a man should suffer the damage which comes to him through his own fault, and that he
can not demand reparation therefor from another. (Law 25, tit. 5, partida 3.)

And they even said that when a man received an injury through his own acts, the grievance should be
against himself and not against another. (Law 2, tit. 7, partida 2.)

In several cases in the supreme court of Spain the fact has been negligence that the plaintiff was himself guilty of
negligence, as in the civil judgments of the 4th of June, 1888, and of the 20th of February, 1887, and in the criminal
judgments of the 20th of February 1888, the 90th of March, 1876, and the 6th of October, 1882. These cases do not
throw much light upon the subject. The judgment of the 7th of March, 1902 (93 Jurisprudencia Civil, 391), is,
however, directly in point. In that case the supreme court of Spain said:

According to the doctrine expressed in article 1902 of the Civil Code, fault or negligence is a source of
obligation when between such negligence and the injury thereby caused there exists the relation of cause
and effect; but in the injury caused should not be the result of acts or omissions of a third party, the latter
has no obligation to repair the same, even though such acts or omissions were imprudent or unlawful, and
much less when it is shown that the immediate cause of the injury was the negligence of the injured person
party himself.

Found the reasons above stated, and the court below having found that the death of the deceased was due
to his own imprudence, and not therefore due to the absence of a guard at the grade crossing where the
accident occurred, it seems clear that court in acquitting the railroad company of the complaint filed by the
widow did not violate the provisions of the aforesaid article of the Civil Code.

For the same reason, although the authority granted to the railroad company to open the grade crossing
without a special guard was nullified by the subsequent promulgation of the railroad police law and the
regulations for the execution of the same, the result would be identical, leaving one of the grounds upon
which the judgment of acquittal is based, to wit, that the accident was caused by the imprudence of the
injured party himself, unaffected.

It appears that the accident in this case took place at a grade crossing where, according to the claim of the plaintiff,
it was the duty of the railroad company to maintain husband was injured by a train at this crossing, his negligence
contributing to the injury according to the ruling of the court below. This judgment, then, amounts to a holding that a
contributory negligence is a defense according to the law of Spain. (See also judgment of the 21st of October, 1903,
vol. 96 p. 400, Jurisprudencia Civil.)

Although in the Civil Code there is no express provision upon the subject, in the Code of Commerce there is found a
distinct declaration upon it in reference to damages caused by collission at sea. Article 827 of the Code of
Commerce is as follows:

If both vessels may be blamed for the collission, each one shall for liable for his own damages, and both
shall jointly responsible for the loss and damages suffered to their cargoes.

That article is an express recognition of the fact that in collision cases contributory negligence is a defense,

I do not think that this court is justified in view of the Roman law, of the provisions of the Partidas, of the judgment of
March 7, 1902, of article 827 of the Code of Commerce, and in the absence of any declaration upon the subject in
the Civil Code, in saying that it was the intention rule announced in the majority opinion, a rule dimetrically opposed
to that put in force by the Code of Commerce.

The chief, is not the only, reason stated in the opinion for adopting the rule that contradictory negligence is not a
defense seems to be that such is the holding of the later French decisions.

As to whether, if any liability existed in this case, it would be necessary in accordance with the provisions of the
Penal Code, or primary, in accordance with the provision of the Civil Code, I express no opinion.

The judgment should, I think, be reversed and the defendant acquitted of the complaint.

Carson, J., concurs.


THIRD DIVISION

[G.R. No. 113003. October 17, 1997]

ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF


APPEALS, LENY TUMBOY, ARDEE TUMBOY and JASMIN
TUMBOY, respondents.

DECISION
ROMERO, J.:

In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether
or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that exempts
the carrier from liability for the death of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and
Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop
Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a
ravine around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-
year-old Tito Tumboy and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages and attorneys
fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio
Yobido, its driver, before the Regional Trial Court of Davao City. When the defendants therein filed their
answer to the complaint, they raised the affirmative defense of caso fortuito. They also filed a third-
party complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed
an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation
of facts.[1]
Upon a finding that the third party defendant was not liable under the insurance contract, the lower
court dismissed the third party complaint. No amicable settlement having been arrived at by the parties,
trial on the merits ensued.
The plaintiffs asserted that violation of the contract of carriage between them and the defendants
was brought about by the drivers failure to exercise the diligence required of the carrier in transporting
passengers safely to their place of destination. According to Leny Tumboy, the bus left Mangagoy at
3:00 oclock in the afternoon. The winding road it traversed was not cemented and was wet due to the
rain; it was rough with crushed rocks. The bus which was full of passengers had cargoes on top. Since
it was running fast, she cautioned the driver to slow down but he merely stared at her through the mirror.
At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into a ravine.
For their part, the defendants tried to establish that the accident was due to a fortuitous event.
Abundio Salce, who was the bus conductor when the incident happened, testified that the 42-seater
bus was not full as there were only 32 passengers, such that he himself managed to get a seat. He
added that the bus was running at a speed of 60 to 50 and that it was going slow because of the zigzag
road. He affirmed that the left front tire that exploded was a brand new tire that he mounted on the bus
on April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary, Minerva
Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was present
when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner
underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent
such test and submitted his professional drivers license and clearances from the barangay, the fiscal
and the police.
On August 29, 1991, the lower court rendered a decision [2] dismissing the action for lack of merit.
On the issue of whether or not the tire blowout was a caso fortuito, it found that the falling of the bus to
the cliff was a result of no other outside factor than the tire blow-out. It held that the ruling in the La
Mallorca and Pampanga Bus Co. v. De Jesus[3] that a tire blowout is a mechanical defect of the
conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to
a more thorough or rigid check-up before it took to the road that morning is inapplicable to this case. It
reasoned out that in said case, it was found that the blowout was caused by the established fact that
the inner tube of the left front tire was pressed between the inner circle of the left wheel and the rim
which had slipped out of the wheel. In this case, however, the cause of the explosion remains a mystery
until at present. As such, the court added, the tire blowout was a caso fortuito which is completely an
extraordinary circumstance independent of the will of the defendants who should be relieved of
whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to Article 1174 [4] of
the Civil Code.
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court the
following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the
defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article
1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v.
Fontanar,[5] and Necesito v. Paras.[6]
On August 23, 1993, the Court of Appeals rendered the Decision[7] reversing that of the lower court.
It held that:

To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-out,
if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable
event. On the other hand, there may have been adverse conditions on the road that were
unforeseeable and/or inevitable, which could make the blow-out a caso fortuito. The fact that the
cause of the blow-out was not known does not relieve the carrier of liability. Owing to the statutory
presumption of negligence against the carrier and its obligation to exercise the utmost diligence of
very cautious persons to carry the passenger safely as far as human care and foresight can provide,
it is the burden of the defendants to prove that the cause of the blow-out was a fortuitous event. It is
not incumbent upon the plaintiff to prove that the cause of the blow-out is not caso-fortuito.

Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants
burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the
carrier in the selection and use of its equipment, and the good repute of the manufacturer will not
necessarily relieve the carrier from liability.

Moreover, there is evidence that the bus was moving fast, and the road was wet and rough. The
driver could have explained that the blow-out that precipitated the accident that caused the death of
Toto Tumboy could not have been prevented even if he had exercised due care to avoid the same,
but he was not presented as witness.

The Court of Appeals thus disposed of the appeal as follows:

WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering
defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in
moral damages, and P7,000.00 for funeral and burial expenses.
SO ORDERED.

The defendants filed a motion for reconsideration of said decision which was denied on November
4, 1993 by the Court of Appeals. Hence, the instant petition asserting the position that the tire blowout
that caused the death of Tito Tumboy was a caso fortuito. Petitioners claim further that the Court of
Appeals, in ruling contrary to that of the lower court, misapprehended facts and, therefore, its findings
of fact cannot be considered final which shall bind this Court. Hence, they pray that this Court review
the facts of the case.
The Court did re-examine the facts and evidence in this case because of the inapplicability of the
established principle that the factual findings of the Court of Appeals are final and may not be reviewed
on appeal by this Court. This general principle is subject to exceptions such as the one present in this
case, namely, that the lower court and the Court of Appeals arrived at diverse factual
findings.[8] However, upon such re-examination, we found no reason to overturn the findings and
conclusions of the Court of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of
travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound
absolutely and at all events to carry them safely and without injury.[9] However, when a passenger is
injured or dies while travelling, the law presumes that the common carrier is negligent. Thus, the Civil
Code provides:

Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755.

Article 1755 provides that (a) common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances. Accordingly, in culpa contractual, once a passenger dies or is injured,
the carrier is presumed to have been at fault or to have acted negligently. This disputable presumption
may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed
by Articles 1733,[10] 1755 and 1756 of the Civil Code or that the death or injury of the passenger was
due to a fortuitous event.[11] Consequently, the court need not make an express finding of fault or
negligence on the part of the carrier to hold it responsible for damages sought by the passenger. [12]
In view of the foregoing, petitioners contention that they should be exempt from liability because
the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A
fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent
of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor.[13] As Article 1174 provides,
no person shall be responsible for a fortuitous event which could not be foreseen, or which, though
foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the
cause of injury or loss.[14]
Under the circumstances of this case, the explosion of the new tire may not be considered a
fortuitous event. There are human factors involved in the situation. The fact that the tire was new did
not imply that it was entirely free from manufacturing defects or that it was properly mounted on the
vehicle. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for
quality, resulting in the conclusion that it could not explode within five days use. Be that as it may, it is
settled that an accident caused either by defects in the automobile or through the negligence of its
driver is not a caso fortuito that would exempt the carrier from liability for damages. [15]
Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous
event alone. The common carrier must still prove that it was notnegligent in causing the death or injury
resulting from an accident.[16] This Court has had occasion to state:

While it may be true that the tire that blew-up was still good because the grooves of the tire were
still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence
was presented to show that the accident was due to adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden
blowing-up, therefore, could have been caused by too much air pressure injected into the tire
coupled by the fact that the jeepney was overloaded and speeding at the time of the accident. [17]

It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was
running at 60-50 kilometers per hour only or within the prescribed lawful speed limit. However, they
failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the
driver to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view
of the presumption of negligence of the carrier in the law. Coupled with this is the established condition
of the road rough, winding and wet due to the rain. It was incumbent upon the defense to establish that
it took precautionary measures considering partially dangerous condition of the road. As stated above,
proof that the tire was new and of good quality is not sufficient proof that it was not negligent. Petitioners
should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting
daily routinary check-ups of the vehicles parts. As the late Justice J.B.L. Reyes said:

It may be impracticable, as appellee argues, to require of carriers to test the strength of each and
every part of its vehicles before each trip; but we are of the opinion that a due regard for the carriers
obligations toward the traveling public demands adequate periodical tests to determine the
condition and strength of those vehicle portions the failure of which may endanger the safety of the
passengers. [18]

Having failed to discharge its duty to overthrow the presumption of negligence with clear and
convincing evidence, petitioners are hereby held liable for damages. Article 1764[19] in relation to Article
2206[20] of the Civil Code prescribes the amount of at least three thousand pesos as damages for the
death of a passenger. Under prevailing jurisprudence, the award of damages under Article 2206 has
been increased to fifty thousand pesos (P50,000.00).[21]
Moral damages are generally not recoverable in culpa contractual except when bad faith had been
proven. However, the same damages may be recovered when breach of contract of carriage results in
the death of a passenger,[22] as in this case. Exemplary damages, awarded by way of example or
correction for the public good when moral damages are awarded, [23] may likewise be recovered in
contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent
manner.[24] Because petitioners failed to exercise the extraordinary diligence required of a common
carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly. [25] As such,
private respondents shall be entitled to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the
modification that petitioners shall, in addition to the monetary awards therein, be liable for the award of
exemplary damages in the amount of P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.