1. G.R. No. L-8034 November 18, 1955 CORNELIA A. DE GILLACO, ET AL., vs.

MANILA RAILROAD COMPANY

The Manila Railroad Company has appealed from a judgment of the Court of First Instance of Laguna sentencing it to pay P4,000
damages to the appellees herein, the widow and children of the late Tomas Gillaco, shot by an employee of the Company in April,
1946.

The judgment was rendered upon the following stipulation of facts:

That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the plaintiff, was a passenger in
the early morning train of the Manila Railroad Company from Calamba, Laguna to Manila;

That when the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila Railroad Company
assigned in the Manila-San Fernando, La Union Line, happened to be in said station waiting for the same train which would
take him to Tutuban Station, where he was going to report for duty;

That Emilio Devesa had a long standing personal grudge against Tomas Gillaco, same dating back during the Japanese
occupation;

That because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him by the Manila Railroad
Company for his use as such train guard, upon seeing him inside the train coach;

That Tomas Gillaco died as a result of the would which he sustained from the shot fired by Devesa.

It is also undisputed that Devesa was convicted with homicide by final judgment of the Court of Appeals.

Appellant's contention is that, on the foregoing facts, no liability attaches to it as employer of the killer, Emilio Devesa; that it is not
responsible subsidiary ex delicto, under Art. 103 of the Revised Penal Code, because the crime was not committed while the slayer
was in the actual performance of his ordinary duties and service; nor is it responsible ex contractu, since the complaint did not aver
sufficient facts to establish such liability, and no negligence on appellant's party was shown. The Court below held the Railroad
company responsible on the ground that a contract of transportation implies protection of the passengers against acts of personal
violence by the agents or employees of the carrier.

There can be no quarrel with the principle that a passenger is entitled to protection from personal violence by the carrier or its agents
or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination. But under the
law of the case, this responsibility extends only to those that the carrier could foresee or avoid through the exercise of the degree of
car and diligence required of it.

Discussing the basis of a carrier's liability under the old Civil Code of 1889 (which was in force in 1946, when Gillaco was shot) this
Court said in Lasam vs. Smith (45 Phil., 657):

In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendant's liability, if
any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf &
Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably and
exhaustively discussed in various other cases that nothing further need here be said upon that subject. (See
Cangco vs. Manila Railroad Co., 38 Phil., 768; Manila Railroad vs. Compañia Transatlantica and Atlantic, Gulf & Pacific
Co., 38 Phil., 875; De Guia vs.Manila Electric Railroad & Light Co., 40 Phil., 706). It is sufficient to reiterate that the source
of the defendant's legal liability is the contract of carriage; that by entering into that contract he bound himself to carry the
plaintiff safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that
the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows:

"No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception
of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability."

The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge nurtured against the latter since the Japanese
occupation) was entirely unforeseeable by the Manila Railroad Co. The latter had no means to ascertain or anticipate that the two
would meet, nor could it reasonably foresee every personal rancor that might exist between each one of its many employees and any
one of the thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso fortuito" within the
definition of article 105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and pursuant
to established doctrine, the resulting breach of appellant's contract of safe carriage with the late Tomas Gillaco was excused thereby.

No doubt that a common carrier is held to a very high degree of care and diligence in the protection of its passengers; but,
considering the vast and complex activities of modern rail transportation, to require of appellant that it should guard against all
possible misunderstanding between each and every one of its employees and every passenger that might chance to ride in its
conveyances at any time, strikes us as demanding diligence beyond what human care and foresight can provide.

The lower Court and the appellees both relied on the American authorities that particularly hold carriers to be insurers of the safety
of their passengers against willful assault and intentional ill treatment on the part of their servants, it being immaterial that the act
should be one of private retribution on the part of the servant, impelled by personal malice toward the passenger (10 Am. Jur. 108;
Ed. Note to Gassenheimer vs. Wester R. Co. 40 LRA (NS), p. 999, et seq.) But as can be inferred from the previous jurisprudence of
this Court , the Civil Code of 1889 did not impose such absolute liability (Lasam vs. Smith, supra). The liability of a carrier as an
insurer was not recognized in this jurisdiction (Government vs. Inchausti & Co., 40 Phil., 219; Oriental Comm. Co. vs. Naviera
Filipina, 38 Off. Gaz., 1020).

Another very important consideration that must be borne in mind is that, when the crime took place, the guard Devesa had no duties
to discharge in connection with the transportation of the deceased from Calamba to Manila. The stipulation of facts is clear that when
Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco
Station awaiting transportation to Tutuban, the starting point of the train that he was engaged to guard. In fact, his tour of duty was to
start at 9:00 a.m., two hoursafter the commission of the crime. Devesa was therefore under no obligation to safeguard the passenger
of the Calamba-Manila train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The position of
Devesa at the time was that of another would be passenger, a stranger also awaiting transportation, and not that of an employee
assigned to discharge any of the duties that the Railroad had assumed by its contract with the deceased. As a result, Devesa's assault
cannot be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier. We agree with the
position taken by the Supreme Court of Texas in a similar case, where it held:

The only good reason for making the carrier responsible for the misconduct of the servant perpetrated in his own interest,
and not in that of his employer, or otherwise within the scope of his employment, is that the servant is clothed with the
delegated authority, and charge with the duty by the carrier, to execute his undertaking with the passenger. And it cannot be
said, we think, that there is any such delegation to the employees at a station with reference to passenger embarking at
another or traveling on the train. Of course, we are speaking only of the principle which holds a carrier responsible for wrong
done to passenger by servants acting in their own interest, and not in that of the employer. That principle is not the ordinary
rule, respondent superior, by which the employer is held responsible only for act or omissions of the employee in the scope
of his employment; but the only reason in our opinion for a broader liability arises from the fact that the servant, in
mistreating the passenger wholly for some private purpose of his own, in the very act, violates the contractual obligation of
the employer for the performance of which he has put the employee in his place. The reason does not exist where the
employee who committed the assault was never in a position in which it became his duty to his employer to represent him in
discharging any duty of the latter toward the passenger. The proposition that the carrier clothes every employee engaged in
the transportation business with the comprehensive duty of protecting every passenger with whom he may in any way come
in contact, and hereby makes himself liable for every assault commited by such servant, without regard to the inquiry
whether or not the passenger has come within the sphere of duty of that servant as indicated by the employment, is regarded
as not only not sustained by the authorities, but as being unsound and oppressive both to the employer and the employee.
(Houston & T. C. R. Co. vs. Bush, 32 LRA (NS), p. 1205.)

Wherefore, the judgment appealed from is reversed and the complaint ordered dismissed, without cost. So ordered.

2. G.R. No. L-22272 June 26, 1967 ANTONIA MARANAN vs. PASCUAL PEREZ, ET AL.,

Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed
and killed by the driver, Simeon Valenzuela.

Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas. Found guilty, he was sentenced to suffer
imprisonment and to indemnify the heirs of the deceased in the sum of P6,000. Appeal from said conviction was taken to the Court
of Appeals.1äwphï1.ñët

On December 6 1961, while appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's mother, filed an action in the
Court of First Instance of Batangas to recover damages from Perez and Valenzuela for the death of her son. Defendants asserted that
the deceased was killed in self-defense, since he first assaulted the driver by stabbing him from behind. Defendant Perez further
claimed that the death was a caso fortuito for which the carrier was not liable.

The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against defendant Perez. The claim against
defendant Valenzuela was dismissed. From this ruling, both plaintiff and defendant Perez appealed to this Court, the former asking
for more damages and the latter insisting on non-liability. Subsequently, the Court of Appeals affirmed the judgment of conviction
earlier mentioned, during the pendency of the herein appeal, and on May 19, 1964, final judgment was entered therein. (Rollo, p. 33).

Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that the carrier is under no
absolute liability for assaults of its employees upon the passengers. The attendant facts and controlling law of that case and the one at
bar are very different however. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty
employee. As this Court there found:

x x x when the crime took place, the guard Devesa had no duties to discharge in connection with the transportation of the
deceased from Calamba to Manila. The stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa was
assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportation to Tutuban,
the starting point of the train that he was engaged to guard. In fact, his tour of duty was to start at 9:00 two hours after the
commission of the crime. Devesa was therefore under no obligation to safeguard the passengers of the Calamba-Manila
train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The position of Devesa at the
time was that of another would be passenger, a stranger also awaiting transportation, and not that of an employee assigned to
discharge any of the duties that the Railroad had assumed by its contract with the deceased. As a result, Devesa's assault can
not be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier. . . . (Emphasis
supplied)

Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had
entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case, the killing of the passenger here took
place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties.

Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not
impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed by
their employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from
liability. It is true that Art. 1105 of the old Civil Code on fortuitous events has been substantially reproduced in Art. 1174 of the Civil
Code of the Philippines but both articles clearly remove from their exempting effect the case where the law expressly provides for
liability in spite of the occurrence of force majeure. And herein significantly lies the statutory difference between the old and present
Civil Codes, in the backdrop of the factual situation before Us, which further accounts for a different result in theGillaco case.
Unlike the old Civil Code, the new Civil Code of the Philippines expressly makes the common carrier liable for intentional assaults
committed by its employees upon its passengers, by the wording of Art. 1759 which categorically states that

Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's
employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the
common carriers.

The Civil Code provisions on the subject of Common Carriers1 are new and were taken from Anglo-American Law.2 There, the basis
of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or
(2) the principle that it is the carrier's implied duty to transport the passenger safely.3

Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his authority
and duty. It is not sufficient that the act be within the course of employment only.4

Under the second view, upheld by the majority and also by the later cases, it is enough that the assault happens within the course of
the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's
orders.5 The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its
own employees.6

As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on the second view. At least
three very cogent reasons underlie this rule. As explained in Texas Midland R.R. v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390,
and Haver v. Central Railroad Co., 43 LRA 84, 85: (1) the special undertaking of the carrier requires that it furnish its passenger that
full measure of protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from violence and
insults at the hands of strangers and other passengers, but above all, from the acts of the carrier's own servants charged with the
passenger's safety; (2) said liability of the carrier for the servant's violation of duty to passengers, is the result of the formers
confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of
protecting the passenger with the utmost care prescribed by law; and (3) as between the carrier and the passenger, the former must
bear the risk of wrongful acts or negligence of the carrier's employees against passengers, since it, and not the passengers, has power
to select and remove them.

Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical
competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior, moral
fibers, and social attitude.

Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the defendant carrier liable pursuant
to Art. 1759 of the Civil Code. The dismissal of the claim against the defendant driver was also correct. Plaintiff's action was
predicated on breach of contract of carriage7 and the cab driver was not a party thereto. His civil liability is covered in the criminal
case wherein he was convicted by final judgment.

In connection with the award of damages, the court a quo granted only P3,000 to plaintiff-appellant. This is the minimum
compensatory damages amount recoverable under Art. 1764 in connection with Art. 2206 of the Civil Code when a breach of
contract results in the passenger's death. As has been the policy followed by this Court, this minimal award should be increased to
P6,000. As to other alleged actual damages, the lower court's finding that plaintiff's evidence thereon was not convincing,8 should not
be disturbed. Still, Arts. 2206 and 1764 awardmoral damages in addition to compensatory damages, to the parents of the passenger
killed to compensate for the mental anguish they suffered. A claim therefor, having been properly made, it becomes the court's duty
to award moral damages.9 Plaintiff demands P5,000 as moral damages; however, in the circumstances, We consider P3,000 moral
damages, in addition to the P6,000 damages afore-stated, as sufficient. Interest upon such damages are also due to plaintiff-
appellant. 10

Wherefore, with the modification increasing the award of actual damages in plaintiff's favor to P6,000, plus P3,000.00 moral
damages, with legal interest on both from the filing of the complaint on December 6, 1961 until the whole amount is paid, the
judgment appealed from is affirmed in all other respects. No costs. So ordered.

3. G.R. No. 52159 December 22, 1989

JOSE PILAPIL vs. HON. CA and ALATCO TRANSPORTATION COMPANY, INC.,

This is a petition to review on certiorari the decision* rendered by the Court of Appeals dated 19 October 1979 in CA-G.R. No.
57354-R entitled "Jose Pilapil, plaintiff-appellee versus Alatco Transportation Co., Inc., defendant-appellant," which reversed and set
aside the judgment of the Court of First Instance of Camarines Sur in Civil Case No. 7230 ordering respondent transportation
company to pay to petitioner damages in the total sum of sixteen thousand three hundred pesos (P 16,300.00).

The record discloses the following facts:

Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus bearing No. 409 at San Nicolas, Iriga City
on 16 September 1971 at about 6:00 P.M. While said bus No. 409 was in due course negotiating the distance between Iriga City and
Naga City, upon reaching the vicinity of the cemetery of the Municipality of Baao, Camarines Sur, on the way to Naga City, an
unidentified man, a bystander along said national highway, hurled a stone at the left side of the bus, which hit petitioner above his
left eye. Private respondent's personnel lost no time in bringing the petitioner to the provincial hospital in Naga City where he was
confined and treated.

Considering that the sight of his left eye was impaired, petitioner was taken to Dr. Malabanan of Iriga City where he was treated for
another week. Since there was no improvement in his left eye's vision, petitioner went to V. Luna Hospital, Quezon City where he
was treated by Dr. Capulong. Despite the treatment accorded to him by Dr. Capulong, petitioner lost partially his left eye's vision and
sustained a permanent scar above the left eye.

Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur, Branch I an action for recovery of damages
sustained as a result of the stone-throwing incident. After trial, the court a quo rendered judgment with the following dispositive part:

Wherefore, judgment is hereby entered:

 1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the sum of P 10,000.00,
Philippine Currency, representing actual and material damages for causing a permanent scar on the
face and injuring the eye-sight of the plaintiff;

2. Ordering further defendant transportation company to pay the sum of P 5,000.00, Philippine
Currency, to the plaintiff as moral and exemplary damages;

3. Ordering furthermore, defendant transportation company to reimburse plaintiff the sum of P

300.00 for his medical expenses and attorney's fees in the sum of P 1,000.00, Philippine Currency;
and

4. To pay the costs.

SO ORDERED 1

From the judgment, private respondent appealed to the Court of Appeals where the appeal was docketed as CA-G.R. No. 57354R.
On 19 October 1979, the Court of Appeals, in a Special Division of Five, rendered judgment reversing and setting aside the judgment
of the court a quo.

Hence the present petition.

In seeking a reversal of the decision of the Court of Appeals, petitioner contends that said court has decided the issue not in accord
with law. Specifically, petitioner argues that the nature of the business of a transportation company requires the assumption of certain
risks, and the stoning of the bus by a stranger resulting in injury to petitioner-passenger is one such risk from which the common
carrier may not exempt itself from liability.

We do not agree.

In consideration of the right granted to it by the public to engage in the business of transporting passengers and goods, a common
carrier does not give its consent to become an insurer of any and all risks to passengers and goods. It merely undertakes to perform
certain duties to the public as the law imposes, and holds itself liable for any breach thereof.

Under Article 1733 of the Civil Code, common carriers are required to observe extraordinary diligence for the safety of the
passenger transported by them, according to all the circumstances of each case. The requirement of extraordinary diligence imposed
upon common carriers is restated in Article 1755: "A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances." Further, in
case of death of or injuries to passengers, the law presumes said common carriers to be at fault or to have acted negligently. 2

While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a
presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passengers. 3

Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of passengers by
common carriers to only such as human care and foresight can provide. what constitutes compliance with said duty is adjudged with
due regard to all the circumstances.

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier when its passenger
is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the negligence on the former, because
the presumption stands in the place of evidence. Being a mere presumption, however, the same is rebuttable by proof that the
common carrier had exercised extraordinary diligence as required by law in the performance of its contractual obligation, or that the
injury suffered by the passenger was solely due to a fortuitous event. 4

In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the recklessness of drivers and
operators of common carriers in the conduct of their business.

Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer of the passenger's
safety, but that its liability for personal injuries sustained by its passenger rests upon its negligence, its failure to exercise the degree
of diligence that the law requires. 5
Petitioner contends that respondent common carrier failed to rebut the presumption of negligence against it by proof on its part that it
exercised extraordinary diligence for the safety of its passengers.

We do not agree.

First, as stated earlier, the presumption of fault or negligence against the carrier is only a disputable presumption. It gives in where
contrary facts are established proving either that the carrier had exercised the degree of diligence required by law or the injury
suffered by the passenger was due to a fortuitous event. Where, as in the instant case, the injury sustained by the petitioner was in no
way due to any defect in the means of transport or in the method of transporting or to the negligent or willful acts of private
respondent's employees, and therefore involving no issue of negligence in its duty to provide safe and suitable cars as well as
competent employees, with the injury arising wholly from causes created by strangers over which the carrier had no control or even
knowledge or could not have prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. To rule
otherwise would make the common carrier the insurer of the absolute safety of its passengers which is not the intention of the
lawmakers.

Second, while as a general rule, common carriers are bound to exercise extraordinary diligence in the safe transport of their
passengers, it would seem that this is not the standard by which its liability is to be determined when intervening acts of strangers is
to be determined directly cause the injury, while the contract of carriage Article 1763 governs:

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.

Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not accord the latter a
cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the
carrier's employees to prevent the tort from being committed when the same could have been foreseen and prevented by them.
Further, under the same provision, it is to be noted that when the violation of the contract is due to the willful acts of strangers, as in
the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a
good father of a family.

Petitioner has charged respondent carrier of negligence on the ground that the injury complained of could have been prevented by the
common carrier if something like mesh-work grills had covered the windows of its bus.

We do not agree.

Although the suggested precaution could have prevented the injury complained of, the rule of ordinary care and prudence is not so
exacting as to require one charged with its exercise to take doubtful or unreasonable precautions to guard against unlawful acts of
strangers. The carrier is not charged with the duty of providing or maintaining vehicles as to absolutely prevent any and all injuries to
passengers. Where the carrier uses cars of the most approved type, in general use by others engaged in the same occupation, and
exercises a high degree of care in maintaining them in suitable condition, the carrier cannot be charged with negligence in this
respect. 6

Finally, petitioner contends that it is to the greater interest of the State if a carrier were made liable for such stone-throwing incidents
rather than have the bus riding public lose confidence in the transportation system.

Sad to say, we are not in a position to so hold; such a policy would be better left to the consideration of Congress which is
empowered to enact laws to protect the public from the increasing risks and dangers of lawlessness in society.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

4. G.R. No. 85691 July 31, 1990 BACHELOR EXPRESS, INCORPORATED, and CRESENCIO RIVERA,
vs. CA (Sixth Division), RICARDO BETER, SERGIA BETER, TEOFILO RAUTRAUT and ZOETERA RAUTRAUT

This is a petition for review of the decision of the Court of Appeals which reversed and set aside the order of the Regional Trial
Court, Branch I, Butuan City dismissing the private respondents' complaint for collection of "a sum of money" and finding the
petitioners solidarily liable for damages in the total amount of One Hundred Twenty Thousand Pesos (P120,000.00). The petitioners
also question the appellate court's resolution denying a motion for reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by Cresencio Rivera was the situs of a stampede which
resulted in the death of passengers Ornominio Beter and Narcisa Rautraut.

The evidence shows that the bus came from Davao City on its way to Cagayan de Oro City passing Butuan City; that while at Tabon-
Tabon, Butuan City, the bus picked up a passenger; that about fifteen (15) minutes later, a passenger at the rear portion suddenly
stabbed a PC soldier which caused commotion and panic among the passengers; that when the bus stopped, passengers Ornominio
Beter and Narcisa Rautraut were found lying down the road, the former already dead as a result of head injuries and the latter also
suffering from severe injuries which caused her death later. The passenger assailant alighted from the bus and ran toward the bushes
but was killed by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein (Ricardo
Beter and Sergia Beter are the parents of Ornominio while Teofilo Rautraut and Zoetera [should be Zotera] Rautraut are the parents
of Narcisa) filed a complaint for "sum of money" against Bachelor Express, Inc. its alleged owner Samson Yasay and the driver
Rivera.

In their answer, the petitioners denied liability for the death of Ornominio Beter and Narcisa Rautraut. They alleged that ... the driver
was able to transport his passengers safely to their respective places of destination except Ornominio Beter and Narcisa Rautraut who
jumped off the bus without the knowledge and consent, much less, the fault of the driver and conductor and the defendants in this
case; the defendant corporation had exercised due diligence in the choice of its employees to avoid as much as possible accidents; the
incident on August 1, 1980 was not a traffic accident or vehicular accident; it was an incident or event very much beyond the control
of the defendants; defendants were not parties to the incident complained of as it was an act of a third party who is not in any way
connected with the defendants and of which the latter have no control and supervision; ..." (Rollo, pp. 112-113).i•t•c-aüsl

After due trial, the trial court issued an order dated August 8, 1985 dismissing the complaint.

Upon appeal however, the trial court's decision was reversed and set aside. The dispositive portion of the decision of the Court of
Appeals states:

WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE and a new one entered finding the
appellees jointly and solidarily liable to pay the plaintiffs-appellants the following amounts:

1) To the heirs of Ornominio Beter, the amount of Seventy Five Thousand Pesos (P75,000.00) in loss of earnings
and support, moral damages, straight death indemnity and attorney's fees; and,

2) To the heirs of Narcisa Rautraut, the amount of Forty Five Thousand Pesos (P45,000.00) for straight death
indemnity, moral damages and attorney's fees. Costs against appellees. (Rollo, pp. 71-72)

The petitioners now pose the following questions

What was the proximate cause of the whole incident? Why were the passengers on board the bus panicked (sic) and
why were they shoving one another? Why did Narcisa Rautraut and Ornominio Beter jump off from the running
bus?

The petitioners opine that answers to these questions are material to arrive at "a fair, just and equitable judgment." (Rollo, p. 5) They
claim that the assailed decision is based on a misapprehension of facts and its conclusion is grounded on speculation, surmises or
conjectures.

As regards the proximate cause of the death of Ornominio Beter and Narcisa Rautraut, the petitioners maintain that it was the act of
the passenger who ran amuck and stabbed another passenger of the bus. They contend that the stabbing incident triggered off the
commotion and panic among the passengers who pushed one another and that presumably out of fear and moved by that human
instinct of self-preservation Beter and Rautraut jumped off the bus while the bus was still running resulting in their untimely death."
(Rollo, p. 6) Under these circumstances, the petitioners asseverate that they were not negligent in the performance of their duties and
that the incident was completely and absolutely attributable to a third person, the passenger who ran amuck, for without his criminal
act, Beter and Rautraut could not have been subjected to fear and shock which compelled them to jump off the running bus. They
argue that they should not be made liable for damages arising from acts of third persons over whom they have no control or
supervision.

Furthermore, the petitioners maintain that the driver of the bus, before, during and after the incident was driving cautiously giving
due regard to traffic rules, laws and regulations. The petitioners also argue that they are not insurers of their passengers as ruled by
the trial court.
The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of carriage. The applicable provisions of
law under the New Civil Code are as follows:

ART. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both by land, water, or air, for compensation, offering their services to the
public.

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.

xxx xxx xxx

ART. 1755. 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.

ART. 1756. In case of death of 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.

There is no question that Bachelor Express, Inc. is a common carrier. Hence, from the nature of its business and for reasons of public
policy Bachelor Express, Inc. is bound to carry its 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.

In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to petitioner Bachelor Express, Inc.
and, while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to Article 1756 of the Civil
Code, petitioner Bachelor Express, Inc. is presumed to have acted negligently unless it can prove that it had observed extraordinary
diligence in accordance with Articles 1733 and 1755 of the New Civil Code.

Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its posture that the death of the said passengers was
caused by a third person who was beyond its control and supervision. In effect, the petitioner, in order to overcome the presumption
of fault or negligence under the law, states that the vehicular incident resulting in the death of passengers Beter and Rautraut was
caused by force majeure or caso fortuito over which the common carrier did not have any control.

Article 1174 of the present Civil Code states:

Except in cases expressly specified by law, or when it is otherwise declared by stipulations, or when the nature of the
obligation requires the assumption of risk, no person shall be responsible for those events which could not be
foreseen, or which though foreseen, were inevitable.

The above-mentioned provision was substantially copied from Article 1105 of the old Civil Code which states"

No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the
exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes
liability.

In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined "events" which cannot be foreseen and which, having been foreseen,
are inevitable in the following manner:

... The Spanish authorities regard the language employed as an effort to define the term 'caso fortuito' and hold that
the two expressions are synonymous. (Manresa Comentarios al Codigo Civil Español, vol. 8, pp. 88 et seq.;
Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)

The antecedent to Article 1105 is found in Law II, Title 33, Partida 7, which defines caso fortuito as 'occasion que
acaese por aventura de que non se puede ante ver. E son estos, derrivamientos de casas e fuego que enciende a so
ora, e quebrantamiento de navio, fuerca de ladrones' (An event that takes place by incident and could not have been
foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers ...)
 Escriche defines caso fortuito as an unexpected event or act of God which could neither be foreseen nor resisted,
such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by
unforeseen accidents and other occurrences of a similar nature.

In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Española says: 'In a legal sense and,
consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The
cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation,
must be independent of the human will. (2) 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. (3) The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from
any participation in the aggravation of the injury resulting to the creditor. (5) Enciclopedia Juridica Española, 309)

As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor
or of his employees, is an essential element of a caso fortuito. ...

The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the
passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by
passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus
is within the context of force majeure.

However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that the accident
was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from
such accident. Thus, as early as 1912, we ruled:

From all the foregoing, it is concluded that the defendant is not liable for the loss and damage of the goods shipped
on the lorcha Pilar by the Chinaman, Ong Bien Sip, inasmuch as such loss and damage were the result of a fortuitous
event or force majeure, and there was no negligence or lack of care and diligence on the part of the defendant
company or its agents. (Tan Chiong Sian v. Inchausti & Co., 22 Phil. 152 [1912]; Emphasis supplied).

This principle was reiterated in a more recent case, Batangas Laguna Tayabas Co. v. Intermediate Appellate Court (167 SCRA 379
[1988]), wherein we ruled:

... [F]or their defense of force majeure or act of God to prosper the accident must be due to natural causes
and exclusively without human intervention. (Emphasis supplied)

Therefore, the next question to be determined is whether or not the petitioner's common carrier observed extraordinary diligence to
safeguard the lives of its passengers.

In this regard the trial court and the appellate court arrived at conflicting factual findings.

The trial court found the following facts:

The parties presented conflicting evidence as to how the two deceased Narcisa Rautruat and Ornominio Beter met
their deaths.

However, from the evidence adduced by the plaintiffs, the Court could not see why the two deceased could have
fallen off the bus when their own witnesses testified that when the commotion ensued inside the bus, the passengers
pushed and shoved each other towards the door apparently in order to get off from the bus through the door. But the
passengers also could not pass through the door because according to the evidence the door was locked.

On the other hand, the Court is inclined to give credence to the evidence adduced by the defendants that when the
commotion ensued inside the bus, the two deceased panicked and, in state of shock and fear, they jumped off from
the bus by passing through the window.

It is the prevailing rule and settled jurisprudence that transportation companies are not insurers of their passengers.
The evidence on record does not show that defendants' personnel were negligent in their duties. The defendants'
personnel have every right to accept passengers absent any manifestation of violence or drunkenness. If and when
 such passengers harm other passengers without the knowledge of the transportation company's personnel, the latter
should not be faulted. (Rollo, pp. 46-47)

A thorough examination of the records, however, show that there are material facts ignored by the trial court which were discussed
by the appellate court to arrive at a different conclusion. These circumstances show that the petitioner common carrier was negligent
in the provision of safety precautions so that its passengers may be transported safely to their destinations. The appellate court states:

A critical eye must be accorded the lower court's conclusions of fact in its tersely written ratio decidendi. The lower
court concluded that the door of the bus was closed; secondly, the passengers, specifically the two deceased, jumped
out of the window. The lower court therefore concluded that the defendant common carrier is not liable for the death
of the said passengers which it implicitly attributed to the unforeseen acts of the unidentified passenger who went
amuck.

There is nothing in the record to support the conclusion that the solitary door of the bus was locked as to prevent the
passengers from passing through. Leonila Cullano, testifying for the defense, clearly stated that the conductor
opened the door when the passengers were shouting that the bus stop while they were in a state of panic. Sergia
Beter categorically stated that she actually saw her son fall from the bus as the door was forced open by the force of
the onrushing passengers.

Pedro Collango, on the other hand, testified that he shut the door after the last passenger had boarded the bus. But he
had quite conveniently neglected to say that when the passengers had panicked, he himself panicked and had gone to
open the door. Portions of the testimony of Leonila Cullano, quoted below, are illuminating:

xxx xxx xxx

Q When you said the conductor opened the door, the door at the front or rear portion of the bus?--A Front door.

Q And these two persons whom you said alighted, where did they pass, the fron(t) door or rear door?--A Front door.

Q What happened after there was a commotion at the rear portion of the bus?--A When the commotion occurred, I
stood up and I noticed that there was a passenger who was sounded (sic). The conductor panicked because the
passengers were shouting 'stop, stop'. The conductor opened the bus.'

Accordingly, there is no reason to believe that the deceased passengers jumped from the window when it was
entirely possible for them to have alighted through the door. The lower court's reliance on the testimony of Pedro
Collango, as the conductor and employee of the common carrier, is unjustified, in the light of the clear testimony of
Leonila Cullano as the sole uninterested eyewitness of the entire episode. Instead we find Pedro Collango's
testimony to be infused by bias and fraught with inconsistencies, if not notably unreliable for lack of veracity. On
direct examination, he testified:

xxx xxx xxx

Q So what happened to the passengers inside your bus?--A Some of the passengers jumped out of the window.

COURT:--Q While the bus was in motion?--A Yes, your Honor, but the speed was slow because we have just picked
up a passenger.

Atty. Gambe:

Q You said that at the time of the incident the bus was running slow because you have just picked up a passenger.
Can you estimate what was your speed at that time?

Atty. Calo: No basis, your Honor, he is neither a driver nor a conductor.

COURT:

Let the witness answer. Estimate only, the conductor experienced.

 Witness: --Not less than 30 to 40 miles.

COURT: Kilometers or miles?--A Miles.

Atty. Gambe: Q That is only your estimate by your experience?--A Yes, sir, estimate.

(Tsn., pp. 4-5, Oct. 17, 1983).

At such speed of not less than 30 to 40 miles ..., or about 48 to 65 kilometers per hour, the speed of the bus could
scarcely be considered slow considering that according to Collango himself, the bus had just come from a full stop
after picking a passenger (Tsn, p. 4, Id.) and that the bus was still on its second or third gear (Tsn., p. 12, Id.).

In the light of the foregoing, the negligence of the common carrier, through its employees, consisted of the lack of
extraordinary diligence required of common carriers, in exercising vigilance and utmost care of the safety of its
passengers, exemplified by the driver's belated stop and the reckless opening of the doors of the bus while the same
was travelling at an appreciably fast speed. At the same time, the common carrier itself acknowledged, through its
administrative officer, Benjamin Granada, that the bus was commissioned to travel and take on passengers and the
public at large, while equipped with only a solitary door for a bus its size and loading capacity, in contravention of
rules and regulations provided for under the Land Transportation and Traffic Code (RA 4136 as amended.) (Rollo,
pp. 23-26)

Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the
commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus
was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not
properly equipped with doors in accordance with law-it is clear that the petitioners have failed to overcome the presumption of fault
and negligence found in the law governing common carriers.

The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the failure of the
petitioners to prove that the deaths of the two passengers were exclusively due to force majeureand not to the failure of the
petitioners to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. (See
Batangas Laguna Tayabas Co. v. Intermediate Appellate Court,supra).

The petitioners also contend that the private respondents failed to show to the court that they are the parents of Ornominio Beter and
Narcisa Rautraut respectively and therefore have no legal personality to sue the petitioners. This argument deserves scant
consideration. We find this argument a belated attempt on the part of the petitioners to avoid liability for the deaths of Beter and
Rautraut. The private respondents were Identified as the parents of the victims by witnesses during the trial and the trial court
recognized them as such. The trial court dismissed the complaint solely on the ground that the petitioners were not negligent.

Finally, the amount of damages awarded to the heirs of Beter and Rautraut by the appellate court is supported by the evidence. The
appellate court stated:

Ornominio Beter was 32 years of age at the time of his death, single, in good health and rendering support and
service to his mother. As far as Narcisa Rautraut is concerned, the only evidence adduced is to the effect that at her
death, she was 23 years of age, in good health and without visible means of support.

In accordance with Art. 1764 in conjunction with Art. 2206 of the Civil Code, and established jurisprudence, several
factors may be considered in determining the award of damages, namely: 1) life expectancy (considering the state of
health of the deceased and the mortality tables are deemed conclusive) and loss of earning capacity; (2) pecuniary
loss, loss of support and service; and (3) moral and mental suffering (Alcantara, et al. v. Surro, et al., 93 Phil. 470).

In the case of People v. Daniel (No. L-66551, April 25, 1985, 136 SCRA 92, at page 104), the High Tribunal,
reiterating the rule in Villa Rey Transit, Inc. v. Court of Appeals (31 SCRA 511), stated that the amount of loss of
earring capacity is based mainly on two factors, namely, (1) the number of years on the basis of which the damages
shall be computed; and (2) the rate at which the losses sustained by the heirs should be fixed.

As the formula adopted in the case of Davila v. Philippine Air Lines, 49 SCRA 497, at the age of 30 one's normal
life expectancy is 33-1/3 years based on the American Expectancy Table of Mortality (2/3 x 80-32).i•t•c-aüsl By
taking into account the pace and nature of the life of a carpenter, it is reasonable to make allowances for these
 circumstances and reduce the life expectancy of the deceased Ornominio Beter to 25 years (People v. Daniel, supra).
To fix the rate of losses it must be noted that Art. 2206 refers to gross earnings less necessary living expenses of the
deceased, in other words, only net earnings are to be considered (People v. Daniel, supra; Villa Rey Transit, Inc. v.
Court of Appeals,supra).

Applying the foregoing rules with respect to Ornominio Beter, it is both just and reasonable, considering his social
standing and position, to fix the deductible, living and incidental expenses at the sum of Four Hundred Pesos
(P400.00) a month, or Four Thousand Eight Hundred Pesos (P4,800.00) annually. As to his income, considering the
irregular nature of the work of a daily wage carpenter which is seasonal, it is safe to assume that he shall have work
for twenty (20) days a month at Twenty Five Pesos (P150,000.00) for twenty five years. Deducting therefrom his
necessary expenses, his heirs would be entitled to Thirty Thousand Pesos (P30,000.00) representing loss of support
and service (P150,000.00 less P120,000.00). In addition, his heirs are entitled to Thirty Thousand Pesos
(P30,000.00) as straight death indemnity pursuant to Article 2206 (People v. Daniel, supra). For damages for their
moral and mental anguish, his heirs are entitled to the reasonable sum of P10,000.00 as an exception to the general
rule against moral damages in case of breach of contract rule Art. 2200 (Necesito v. Paras, 104 Phil. 75). As
attorney's fees, Beter's heirs are entitled to P5,000.00. All in all, the plaintiff-appellants Ricardo and Sergia Beter as
heirs of their son Ornominio are entitled to an indemnity of Seventy Five Thousand Pesos (P75,000.00).

In the case of Narcisa Rautraut, her heirs are entitled to a straight death indemnity of Thirty Thousand Pesos
(P30,000.00), to moral damages in the amount of Ten Thousand Pesos (P10,000.00) and Five Thousand Pesos
(P5,000.00) as attorney's fees, or a total of Forty Five Thousand Pesos (P45,000.00) as total indemnity for her death
in the absence of any evidence that she had visible means of support. (Rollo, pp. 30-31)

WHEREFORE, the instant petition is DISMISSED. The questioned decision dated May 19, 1988 and the resolution dated August 1,
1988 of the Court of Appeals are AFFIRMED.

5. G.R. No. L-23733 October 31, 1969 HERMINIO L. NOCUM vs. LAGUNA TAYABAS BUS COMPANY

Appeal of the Laguna Tayabas Bus Co., defendant in the Court below, from a judgment of the said court (Court of First Instance of
Batangas) in its Civil Case No. 834, wherein appellee Herminio L. Nocum was plaintiff, sentencing appellant to pay appellee the
sum of P1,351.00 for actual damages and P500.00 as attorney's fees with legal interest from the filing of the complaint plus costs.
Appellee, who was a passenger in appellant's Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna,
was injured as a consequence of the explosion of firecrackers, contained in a box, loaded in said bus and declared to its conductor as
containing clothes and miscellaneous items by a co-passenger. The findings of fact of the trial court are not assailed. The appeal is
purely on legal questions.

Appellee has not filed any brief. All that We have before Us is appellant's brief with the following assignment of errors:

1.BASED ON THE FACTS THE LOWER COURT FOUND AS ESTABLISHED, IT ERRED AS A MATTER OF LAW
IN NOT ABSOLVING APPELLANT FROM LIABILITY RESULTING FROM THE EXPLOSION OF FIRECRACKERS
CONTAINED IN A PACKAGE, THE CONTENTS OF WHICH WERE MISREPRESENTED BY A PASSENGER.

II.THE LOWER COURT ERRED, AS A MATTER OF LAW, IN AWARDING DAMAGES WITH LEGAL INTEREST
IN FAVOR OF THE APPELLEE.

III.THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT, WITH COSTS AGAINST THE
APPELLEE.

Upon consideration of the points raised and discussed by appellant, We find the appeal to be well taken.

The main basis of the trial court's decision is that appellant did not observe the extraordinary or utmost diligence of a very cautious
person required by the following articles of the Civil Code:

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to
all the circumstances of each case.
 Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

ART. 1755. 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.

ART 1756. In case of death of 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.

Analyzing the evidence presented by the parties, His Honor found:

According to Severino Andaya, a witness for the plaintiff, a man with a box went up the baggage compartment of the bus
where he already was and said box was placed under the seat. They left Azcarraga at about 11:30 in the morning and when
the explosion occurred, he was thrown out. PC investigation report states that thirty seven (37) passengers were injured
(Exhibits "O" and "2").

The bus conductor, Sancho Mendoza, testified that the box belonged to a passenger whose name he does not know and who
told him that it contained miscellaneous items and clothes. He helped the owner in loading the baggage which weighed about
twelve (12) kilos and because of company regulation, he charged him for it twenty-five centavos (P0.25). From its
appearance there was no indication at all that the contents were explosives or firecrackers. Neither did he open the box
because he just relied on the word of the owner.

Dispatcher Nicolas Cornista of defendant company corroborrated the testimony of Mendoza and he said, among other things,
that he was present when the box was loaded in the truck and the owner agreed to pay its fare. He added that they were not
authorized to open the baggages of passengers because instruction from the management was to call the police if there were
packages containing articles which were against regulations.

xxx xxx xxx

There is no question that Bus No. 120 was road worthy when it left its Manila Terminal for Lucena that morning of
December 5, 1960. The injuries suffered by the plaintiff were not due to mechanical defects but to the explosion of
firecrackers inside the bus which was loaded by a co-passenger.

... Turning to the present case, it is quite clear that extraordinary or utmost diligence of a very cautious person was not
observed by the defendant company. The service manual, exhibits "3" and "3-A," prohibits the employees to allow
explosives, such as dynamite and firecrackers to be transported on its buses. To implement this particular rule for 'the safety
of passengers, it was therefore incumbent upon the employees of the company to make the proper inspection of all the
baggages which are carried by the passengers.

But then, can it not be said that the breach of the contract was due to fortuitous event? The Supreme Court in the case of
Lasam vs. Smith, 45 Phil. 657, quoted Escriche's definition of caso fortuito as "an unexpected event or act of God which
could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsions,
insurrections, destructions of buildings by unforeseen accidents and other occurrences of a similar nature." In other words,
the cause of the unexpected event must be independent of the will of man or something which cannot be avoided. This
cannot be said of the instant case. If proper and rigid inspection were observed by the defendant, the contents of the box
could have been discovered and the accident avoided. Refusal by the passenger to have the package opened was no excuse
because, as stated by Dispatcher Cornista, employees should call the police if there were packages containing articles against
company regulations. Neither was failure by employees of defendant company to detect the contents of the packages of
passengers because like the rationale in the Necesito vs. Paras case (supra), a passenger has neither choice nor control in the
exercise of their discretion in determining what are inside the package of co-passengers which may eventually prove fatal.

We cannot agree. No doubt, the views of His Honor do seem to be in line with the reasons that the Code Commission had for
incorporating the above-quoted provisions in its draft of the Civil Code. Indeed, in approving the said draft, Congress must have
concurred with the Commission that by requiring the highest degree of diligence from common carriers in the safe transport of their
passengers and by creating a presumption of negligence against them, the recklessness of their drivers which is a common sight even
in crowded areas and, particularly, on the highways throughout the country may, somehow, if not in a large measure, be curbed. We
are not convinced, however, that the exacting criterion of said provisions has not been met by appellant in the circumstances of this
particular case.
It is undisputed that before the box containing the firecrackers were allowed to be loaded in the bus by the conductor, inquiry was
made with the passenger carrying the same as to what was in it, since its "opening ... was folded and tied with abaca." (Decision p.
16, Record on Appeal.) According to His Honor, "if proper and rigid inspection were observed by the defendant, the contents of the
box could have been discovered and the accident avoided. Refusal by the passenger to have the package opened was no excuse
because, as stated by Dispatcher Cornista, employees should call the police if there were packages containing articles against
company regulations." That may be true, but it is Our considered opinion that the law does not require as much. Article 1733 is not
as unbending as His Honor has held, for it reasonably qualifies the extraordinary diligence required of common carriers for the safety
of the passengers transported by them to be "according to all the circumstances of each case." In fact, Article 1755 repeats this same
qualification: "A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard for all the circumstances."

In this particular case before Us, it must be considered that while it is true the passengers of appellant's bus should not be made to
suffer for something over which they had no control, as enunciated in the decision of this Court cited by His Honor,1 fairness
demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the reliance that should be
reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be presumed that a passenger
will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly
considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he
protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry
may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible, but beyond this,
constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by the service
manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had already
declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally
protected domain. Police officers acting without judicial authority secured in the manner provided by law are not beyond the pale of
constitutional inhibitions designed to protect individual human rights and liberties. Withal, what must be importantly considered here
is not so much the infringement of the fundamental sacred rights of the particular passenger herein involved, but the constant threat
any contrary ruling would pose on the right of privacy of all passengers of all common carriers, considering how easily the duty to
inspect can be made an excuse for mischief and abuse. Of course, when there are sufficient indications that the representations of the
passenger regarding the nature of his baggage may not be true, in the interest of the common safety of all, the assistance of the police
authorities may be solicited, not necessarily to force the passenger to open his baggage, but to conduct the needed investigation
consistent with the rules of propriety and, above all, the constitutional rights of the passenger. It is in this sense that the mentioned
service manual issued by appellant to its conductors must be understood.

Decisions in other jurisdictions cited by appellant in its brief, evidently because of the paucity of local precedents squarely in point,
emphasize that there is need, as We hold here, for evidence of circumstances indicating cause or causes for apprehension that the
passenger's baggage is dangerous and that it is failure of the common carrier's employee to act in the face of such evidence that
constitutes the cornerstone of the common carrier's liability in cases similar to the present one.

The principle that must control the servants of the carrier in a case like the one before us is correctly stated in the opinion in
the case of Clarke v. Louisville & N.R. Co. 20 Ky L. Rep. 839, 49 S.W. 1120. In that case Clarke was a passenger on the
defendant's train. Another passenger took a quantity of gasoline into the same coach in which Clarke was riding. It ignited
and exploded, by reason of which he was severely injured. The trial court peremptorily instructed the jury to find for the
defendant. In the opinion, affirming the judgment, it is said: "It may be stated briefly, in assuming the liability of a railroad
to its passengers for injury done by another passenger, only where the conduct of this passenger had been such before the
injury as to induce a reasonably prudent and vigilant conductor to believe that there was reasonable ground to apprehend
violence and danger to the other passengers, and in that case asserting it to be the duty of the conductor of the railroad train
to use all reasonable means to prevent such injury, and if he neglects this reasonable duty, and injury is done, that then the
company is responsible; that otherwise the railroad is not responsible."

The opinion quotes with approval from the case of Gulf, C. & S. F. R. Co. vs. Shields, 9 Tex. Civ. App. 652, 29 S. W. 652,
in which case the plaintiff was injured by alcohol which had been carried upon the train by another passenger. In the opinion
in that case it is said: "It was but a short period of time after the alcohol was spilt when it was set on fire and the accident
occurred, and it was not shown that appellant's employees knew that the jug contained alcohol. In fact, it is not shown that
the conductor or any other employee knew that Harris had a jug with him until it fell out of the sack, though the conductor
had collected ... (his) fare, and doubtless knew that he had the sack on the seat with him. ... It cannot be successfully denied
that Harris had the right as a passenger to carry baggage on the train, and that he had a right to carry it in a sack if he chose to
do so. We think it is equally clear that, in the absence of some intimation or circumstance indicating that the sack contained
something dangerous to other passengers, it was not the duty of appellant's conductor or any other employee to open the sack
and examine its contents." Quinn v. Louisville & N. R. Co. 98 Ky. 231, 32 S. W. 742; Wood v. Louisville & N. R. Co. 101
 Ky. 703, 42 S. W. 349; Louisville & N. R. Co. v. Vincent, 29 Ky. L. Rep. 1049, 96 S. W. 898; Louisville & N. R. Co. v.
Renfro, 142 Ky. 590, 33 L. R. A. (N. S.) 133, 135 S. W. 266.2 (Emphasis supplied)

Explosive or Dangerous Contents. — A carrier is ordinarily not liable for injuries to passengers from fires or explosions
caused by articles brought into its conveyances by other passengers, in the absence of any evidence that the carrier, through
its employees, was aware of the nature of the article or had any reason to anticipate danger therefrom. (Bogard v. Illinois C.
R Co. 144 Ky. 649, 139 S. W. 855, 36 L. R. A.[N. S.] 337; Clarke v. Louisville & N. R. Co. 101 Ky. 34, 39 S. W. 840, 36 L.
R. A. 123 [explosion of can of gasoline]; East Indian R. Co. v. Mukerjee [1901] A. C. [Eng.] 396, 3 B. R. C. 420 — P. C.
[explosion of fireworks]; Annotation: 37 L. R. A. [N. S.] 725.)3

Appellant further invokes Article 1174 of the Civil Code which relieves all obligors, including, of course, common carriers like
appellant, from the consequence of fortuitous events. The court a quo held that "the breach of contract (in this case) was not due to
fortuitous event and that, therefore, the defendant is liable in damages." Since We hold that appellant has succeeded in rebutting the
presumption of negligence by showing that it has exercised extraordinary diligence for the safety of its passengers, "according to the
circumstances of the (each) case", We deem it unnecessary to rule whether or not there was any fortuitous event in this case.

ACCORDINGLY, the appealed judgment of the trial court is reversed and the case is dismissed, without costs.

6. G.R. No. 122039 May 31, 2000 VICENTE CALALAS vs. CA, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA

This is a petition for review on certiorari of the decision 1 of the Court of Appeals, dated March 31, 1991, reversing the contrary
decision of the Regional Trial Court, Branch 36, Dumaguete City, and awarding damages instead to private respondent Eliza
Jujeurche Sunga as plaintiff in an action for breach of contract of carriage.

The facts, as found by the Court of Appeals, are as follows:

At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a college freshman majoring in
Physical Education at the Siliman University, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the
jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the
back of the door at the rear end of the vehicle.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the
vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned
by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. She sustained a fracture of the "distal
third of the left tibia-fibula with severe necrosis of the underlying skin." Closed reduction of the fracture, long leg circular casting,
and case wedging were done under sedation. Her confinement in the hospital lasted from August 23 to September 7, 1989. Her
attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would remain on a cast for a period of three months
and would have to ambulate in crutches during said period.

On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former
in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint
against Francisco Salva, the owner of the Isuzu truck.

The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it was the
driver of the Isuzu truck who was responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by
Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver Verena jointly
liable to Calalas for the damage to his jeepney.

On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's cause of action was based
on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence required under the Civil Code.
The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. The
dispositive portion of its decision reads:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and another one is entered
ordering defendant-appellee Vicente Calalas to pay plaintiff-appellant:

(1) P50,000.00 as actual and compensatory damages; (2) P50,000.00 as moral damages; (3) P10,000.00 as attorney's
fees; and (4) P1,000.00 as expenses of litigation; and (5) to pay the costs. SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the proximate cause
of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its
passengers. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner further assails
the award of moral damages to Sunga on the ground that it is not supported by evidence.

The petition has no merit.

The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner of the truck liable for quasi-
delict ignores the fact that she was never a party to that case and, therefore, the principle ofres judicata does not apply.

Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether Salva and
his driver Verena were liable for quasi-delict for the damage caused to petitioner's jeepney. On the other hand, the issue in this case
is whether petitioner is liable on his contract of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra
contractual, has as its source the negligence of the tortfeasor. The second, breach of contract or culpa contractual, is premised upon
the negligence in the performance of a contractual obligation.

Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in
breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this
case the common carrier, failed to transport his passenger safely to his destination. 2 In case of death or injuries to passengers, Art.
1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they
prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to
the common carrier the burden of proof.

There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the
damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the
jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-
delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation
between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate
the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those
respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence
in cases of death or injury to passengers. It provides:

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1746,
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755
and 1756.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances.

Art. 1756. In case of death of 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 by articles 1733
and 1755.

In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the duty of
petitioner to prove that he had to observe extraordinary diligence in the care of his passengers.

Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost diligence of
very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. Several factors
militate against petitioner's contention.

First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being exposed about two meters from
the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. This is a violation of the R.A. No.
4136, as amended, or the Land Transportation and Traffic Code, which provides:
 Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a manner as to obstruct or impede
the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct
the free passage of other vehicles on the highway.

Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating capacity of the jeepney, a violation
of §32(a) of the same law. It provides:

Exceeding registered capacity. — No person operating any motor vehicle shall allow more passengers or more
freight or cargo in his vehicle than its registered capacity.

The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other passengers were
exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for the injury
sustained by Sunga, but also, the evidence shows he was actually negligent in transporting passengers.

We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension seat" amounted to an implied
assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas should not be compensated
merely because those passengers assumed a greater risk of drowning by boarding an overloaded ferry. This is also true of petitioner's
contention that the jeepney being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an event which
could not be foreseen, or which, though foreseen, was inevitable. 3 This requires that the following requirements be present: (a) the
cause of the breach is independent of the debtor's will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render
it impossible for the debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take part in causing the injury to
the
creditor. 4 Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway.

Finally, petitioner challenges the award of moral damages alleging that it is excessive and without basis in law. We find this
contention well taken.

In awarding moral damages, the Court of Appeals stated:

Plaintiff-appellant at the time of the accident was a first-year college student in that school year 1989-1990 at the
Silliman University, majoring in Physical Education. Because of the injury, she was not able to enroll in the second
semester of that school year. She testified that she had no more intention of continuing with her schooling, because
she could not walk and decided not to pursue her degree, major in Physical Education "because of my leg which has
a defect already."

Plaintiff-appellant likewise testified that even while she was under confinement, she cried in pain because of her
injured left foot. As a result of her injury, the Orthopedic Surgeon also certified that she has "residual bowing of the
fracture side." She likewise decided not to further pursue Physical Education as her major subject, because "my left
leg . . . has a defect already."

Those are her physical pains and moral sufferings, the inevitable bedfellows of the injuries that she suffered. Under
Article 2219 of the Civil Code, she is entitled to recover moral damages in the sum of P50,000.00, which is fair, just
and reasonable.

As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the
items enumerated under Art. 2219 of the Civil Code. 5 As an exception, such damages are recoverable: (1) in cases in which the
mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases
in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220. 6

In this case, there is no legal basis for awarding moral damages since there was no factual finding by the appellate court that
petitioner acted in bad faith in the performance of the contract of carriage. Sunga's contention that petitioner's admission in open
court that the driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed as an admission of bad faith.
The fact that it was the driver of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to
the plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at fault for the accident.

WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution, dated September 11, 1995, are
AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED.
7. G.R. No. 85331 August 25, 1989 KAPALARAN BUS LINE vs. ANGEL CORONADO, LOPE GRAJERA, DIONISIO
SHINYO, and THE COURT OF APPEALS,

Petitioner Kapalaran Bus Line ("Kapalaran") seeks the reversal or modification of the Court of Appeals' decision in CA G.R. CV No.
12476 and the absolution of petitioner from all liability arising from the collision between one of petitioner's buses and a jeepney
owned by respondent Coronado, driven by respondent Grajera and in which jeepney respondent Shinyo was a passenger.

The facts of this case as found by the trial court and adopted by the Court of Appeals, are summarized in the trial court's decision and
quoted in the Court of Appeals' own judgment in the following terms:

The accident happened on the National Highway at 10:30 A.M. on August 2, 1982. The jeepney driven by Lope
Grajera was then corning from Pila, Laguna on its way towards the direction of Sta. Cruz, traversing the old
highway. As it reached the intersection where there is a traffic sign 'yield,' it stopped and cautiously treated the
intersection as a "Thru Stop' street, which it is not. The KBL bus was on its way from Sta. Cruz, Laguna, driven by
its regular driver Virgilio Llamoso, on its way towards Manila. The regular itinerary of the KBL bus is through the
town proper of Pila, Laguna, but at times it avoids this if a bus is already fully loaded with passengers and can no
longer accommodate additional passengers. As the KBL bus neared the intersection, Virgilio Llamoso inquired from
his conductor if they could still accommodate passengers and learning that they were already full, he decided to
bypass Pila and instead, to proceed along the national highway. Virgilio Llamoso admitted that there was another
motor vehicle ahead of him.

The general rule is that the vehicle on the national highway has the right-of-way as against a feeder road. Another
general rule is that the vehicle coming from the right has the right-of-way over the vehicle coming from the left. The
general rules on right-of-way may be invoked only if both vehicles approach the intersection at almost the same
time. In the case at bar, both roads are national roads. Also, the KBL bus was still far from the intersection when the
jeepney reached the same. As testified to by Atty. Conrado L. Manicad who was driving a Mustang car coming from
the direction of Sta. Cruz and proceeding towards the direction of Manila, he stopped at the intersection to give way
to the jeepney driven by Grajera. Behind Manicad were two vehicles, a car of his client and another car. A Laguna
Transit bus had just entered the town of Pila ahead of Atty. Manicad.

The sketch marked Exhibit 'E' indicates very clearly that the jeepney had already traversed the intersection when it
met the KBL bus head-on. It is also obvious that the point of impact was on the right lane of the highway which is
the lane properly belonging to the jeepney. As testified to by Lope Grajera, the KBL bus ignored the stopped
vehicles of Atty. Manicad and the other vehicles behind Atty. Manicad and overtook both vehicles at the
intersection, therefore, causing the accident.

Judging from the testimony of Atty. Conrado L. Manicad and the sketch (Exhibit 'E'), the sequence of events shows
that the first vehicle to arrive at the intersection was the jeepney. Seeing that the road was clear, the jeepney which
had stopped at the intersection began to move forward, and for his part, Atty. Manicad stopped his car at the
intersection to give way to the jeepney. At about this time, the KBL bus was approaching the intersection and its
driver was engaged in determining from his conductor if they would still pass through the town proper of Pila. Upon
learning that they were already full, he turned his attention to the road and found the stopped vehicles at the
intersection with the jeepney trying to cross the intersection. The KBL bus had no more room within which to stop
without slamming into the rear of the vehicle behind the car of Atty. Manicad. The KBL driver chose to gamble on
proceeding on its way, unfortunately, the jeepney driven by Grajera, which had the right-of-way, was about to cross
the center of the highway and was directly on the path of the KBL bus. The gamble made by Llamoso did not pay
off. The impact indicates that the KBL bus was travelling at a fast rate of speed because, after the collision, it did not
stop; it travelled for another 50 meters and stopped only when it hit an electric post (pp. 3-4, Decision; pp. 166167,
Record). 1

On 14 September 1982, Kapalaran, apparently believing that the best defense was offense, filed a complaint for damage to property
and physical injuries through reckless imprudence against respondents Angel Coronado and Lope Grajera in the Regional Trial
Court, Branch 27, Sta. Cruz, Laguna. Respondents answered with their own claims (counter-claims) for damages. A third-party
complaint and/or a complaint for intervention was also filed in the same case against Kapalaran by jeepney passenger Dionisio
Shinyo.

On 15 October 1986, after trial, the trial court rendered a judgment in favor of private respondents and ordering Kapalaran
 (a) to pay Angel Coronado the sum of P40,000.00 as compensation for the totally wrecked jeepney, plus the sum of
P5,000.00 as attorney's fees and litigation expenses, and

(b) to Dionisio Shinyo the sum of P35,000.00 representing the expenses incurred by said intervenor for his treatment
including his car-hire, the further sum of P30,000.00 representing the expenses said defendant will incur for his
second operation to remove the intramedulary nail from his femur, the additional sum of P50,000.00 to serve as
moral damages for the pain and suffering inflicted on said defendant, plus the sum of P10,000.00 in the concept of
exemplary damages to serve as a deterrent to others who, like the plaintiff, may be minded to induce accident
victims to perjure themselves in a sworn statement, and the sum of P15,000.00 as attorney's fees and litigation
expenses.

From the above judgment, Kapalaran appealed to the Court of Appeals assailing the trial court's findings on the issue of fault and the
award of damages. The Court of Appeals, on 28 June 1988, affirmed the decision of the trial court but modified the award of
damages by setting aside the grant of exemplary damages as well as the award of attomey's fee and litigation expenses made to
Dionisio Shinyo. 2

This decision of the Court of Appeals is now before us on a Petition for Review, a motion for reconsideration by Kapalaran having
been denied by that court on 13 October 1988.

Kapalaran assails the findings of fact of the Regional Trial Court and of the Court of Appeals, and insists before this Court that
respondent Grajera, driver of the jeepney, was at fault and not the driver of Kapalaran's bus. It must be remembered that it is not the
function of this Court to analyze and weigh evidence presented by the parties all over again and that our jurisdiction is in principle
limited to reviewing errors of law that might have been committed by the Court of Appeals. Kapalaran has made no compelling
showing of any misapprehension of facts on the part of the Court of Appeals that would require us to review and overturn the factual
findings of that court. On the contrary, examination of the record shows that not only are the conclusions of fact of the Court of
Appeals and the trial court on who — the bus driver or the jeepney driver — had acted negligently and was at fault in the collision of
their vehicles, amply supported by the evidence of record, but also that Kapalaran's bus driver was grossly negligent and had acted
wantonly and in obvious disregard of the applicable rules on safety on the highway.

Kapalaran's driver had become aware that some vehicles ahead of the bus and travelling in the same direction had already stopped at
the intersection obviously to give way either to pedestrians or to another vehicle about to enter the intersection. The bus driver, who
was driving at a speed too high to be safe and proper at or near an intersection on the highway, and in any case too high to be able to
slow down and stop behind the cars which had preceded it and which had stopped at the intersection, chose to swerve to the left lane
and overtake such preceding vehicles, entered the intersection and directly smashed into the jeepney within the intersection.
Immediately before the collision, the bus driver was actually violating the following traffic rules and regulations, among others, in
the Land Transportation and Traffic Code, Republic Act No. 4136, as amended:

Sec. 35. Restriction as to speed. — (a) Any person driving a motor vehicle on a highway shall drive the same at a
careful and prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the
width of the highway, and or any other condition then and there existing; and no person shall drive any motor
vehicle upon a highway at such a speed as to endanger the life, limb and property of any person, nor at a speed
greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead.

xxx xxx xxx

Sec. 41. Restrictions on overtaking and passing. _1 (a) The driver of a vehicle shall not drive to the left side of the
center line of a highway in overtaking or passing another vehicle, proceeding in the same direction, unless such left
side is clearly visible, and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or
passing to be made in safety.

xxx xxx xxx

(c) The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same direction, at any
railway grade crossing, or at any intersection of highways, unless such intersection or crossing is controlled by
traffic signal, or unless permitted to do so by a watchman or a peace officer, except on a highway having two or
more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another
vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking or passing, upon the
right, another vehicle which is making or about to make a left turn.
 xxx xxx xxx

(Emphasis supplied)

Thus, a legal presumption arose that the bus driver was negligent 3 a presumption Kapalaran was unable to overthrow.

Petitioner's contention that the jeepney should have stopped before entering the "Y-intersection" because of the possibility that
another vehicle behind the cars which had stopped might not similarly stop and might swerve to the left to proceed to the highway en
route to Manila, is more ingenious than substantial. It also offers illustration of the familiar litigation tactic of shifting blame from
one's own shoulders to those of the other party. But the jeepney driver, seeing the cars closest to the intersection on the opposite side
of the highway come to a stop to give way to him, had the right to assume that other vehicles further away and behind the stopped
cars would similarly come to a stop and not seek illegally to overtake the stopped vehicles and come careening into the intersection
at an unsafe speed. 4 Petitioner's bus was still relatively far away from the intersection when the jeepney entered the same; the bus
collided head on into the jeepney because the bus had been going at an excessively high velocity immediately before and at the time
of overtaking the stopped cars, and so caught the jeepney within the intersection. It was also the responsibility of the bus driver to see
to it, when it overtook the two (2) cars ahead which had stopped at the intersection, that the left lane of the road within the
intersection and beyond was clear. The point of impact was on the left side of the intersection (the light lane so far as concerns the
jeepney coming from the opposite side), which was precisely the lane or side on which the jeepney had a right to be.

Petitioner Kapalaran also assails the award of moral damages against itself, upon the ground that its own bus driver, third-party
defendant, was apparently not held liable by the trial court . 5 Hence, Kapalaran argues that there was no justification for holding it,
the employer, liable for damages, considering that such liability was premised upon the bus driver's negligence and that petitioner "as
mere employer" was not guilty of such negligence or imprudence. 6 This contention in thoroughly unpersuasive. The patent and gross
negligence on the part of the petitioner Kapalaran's driver raised the legal presumption that Kapalaran as employer was guilty of
negligence either in the selection or in the supervision of its bus driver, 7 Where the employer is held liable for damages, it has of
course a right of recourse against its own negligent employee. If petitioner Kapalaran was interested in maintaining its right of
recourse against or reimbursement from its own driver, 8 it should have appealled from that portion of the trial court's decision which
had failed to hold the bus driver is not "merely subsidiary," and is not limited to cases where the employee "cannot pay his liability"
nor are private respondents compelled frist to proceed against the bus driver. The liability of the employer under Article 2180 of the
Civil Code is direct and immediate; it is not conditioned upon prior recourse against the negligent employee and a prior showing of
the insolvency of such employee. 9 So far as the record shows, petitioner Kapalaran was unable to rebut the presumption of
negligence on its own part. The award of moral damages against petitioner Kapalaran is not only entirely in order; it is also quite
modest consideirng Dionisio Shinyo's death during the pendency of this petition, a death hastened by, if not directly due to, the
grievous injuries sustained by him in the violent collision.

The Court of Appeals deleted the award of exemplary damages which the trial court had granted in order "to serve as a deterrent to
others who, like the plaintiff [Kapalaran], may be minded to induce accident victims to perjure themselves in a sworn statement."
The Court of Appeals held that htere was no basis for this award of exemplary damages, stating that it was not "such a reprehensible
act to try to gather witnesses for one's cause" and that there was no evidence of use of "presure or influence" to induce the accident
victims to perjure themselves While that might have been so, both the trial court and the Court of Appeals overlook another and far
more compelling basis for the award of exemplary damages against petitioner Kapalaran in this case. There is no question that
petitioner's bus driver was grossly and very probably criminally negligent in his reckless disregard of the rights of other vehicles and
their pasangers and of pedestrian as well The Court is entitled to take judicial notice of the gross negligence and the appalling
disregard of the physical safety and property of others so commonly exhibited today by the drivers of passanger bussses and similar
vehicles on our highways. The law requires petitioner as common carrier to exercise extraordinary diligence incarrying and
transporting their passanger safely "as far as human care and foresight can proved, using the utmost diligence of very cautious
persons, with due regard for all circumstances." 10 In requiring the highest possible degree of diligence from common carriers and
creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers. 11 While the
immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of cargo carried by a
common carrier, they are not only persons that the law seeks to benefit. For if common carriers carefully observed the statutory
standard of extraordinary diligence in respect of of their own passengers, they cannot help but simultaneously benefit pedestrians and
the owners and passengers of other vehicles who are equally entitled to the safe and convenient use of our roads and
highways. 12 The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not) and the destruction
of property (whether freight or not) on our highways by buses, the very size and power of which seem often to inflame the minds of
their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in cases of quasi-delicts "if
the defendant acted with gross negligence." Thus we believe that the award of exemplary damages by the trial court was quite
proper, although granted for the wrong reason, and should not only be restored but augmented in the present case. The Court is aware
that respondent Shinyo did not file a separate petition for review to set aside that portion of the Court of Appeals'decision which
deleted the grant by the trial court of exemplary damages. It is settled, however, that issues which must be resolved if substantial
justice is to be rendered to the parties, may and should be considered and decided by this Court even if those issues had not been
explicitly raised by the party affected. 13 In the instant case, it is not only the demands of substantial justice but also the compelling
considerations of public policy noted above, which impel us to the conclusion that the trial court's award of exemplary damages was
erroneously deleted and must be restored and brought more nearly to the level which public policy and substantial justice require.

In much the same vein, we believe that the award by the trial court of P15,000.00 as attorney's fees and litigation expenses, deleted
by the Court of Appeals, should similarly be restored, being both authorized by law 14 and demanded by substantial justice in the
instant case.

WHEREFORE, the Petition for Review on certiorari is DENIED for lack of merit and the Decision of the Court of Appeals is hereby
AFFIRMED, except (1) that the award of exemplary damages to Dionisio Shinyo shall be restored and increased from P10,000.00 to
P25,000.00, and (2) that the grant of attorney's fees and litigation expenses in the sum of P15,000.00 to Dionisio Shinyo shall
similarly be restored. Costs against petitioner.

8. G.R. No. L-50076 September 14, 1990 NORBERTO QUISUMBING, SR., and GUNTHER LOEFFLER vs COURT OF
APPEALS and PHILIPPINE AIR LINES, INC.

Having met with no success in the Court of First Instance of Rizal and in the Court of Appeals, the petitioners are now in this Court
in a third and final attempt to recover from the Philippine Airlines, Inc. (hereafter, simply PAL) the value of jewelry, other valuables
and money taken from them by four (4) armed robbers on board one of the latter's airplanes while on a flight from Mactan City to
Manila, as well as moral and exemplary damages, attorney's fees and expenses of litigation.

The petitioners accept the correctness of the basic facts adopted by the Court of Appeals from the judgment of the Court of First
Instance, to wit: 1

1. . . . Norberto Quisumbing, Sr. and Gunther Leoffler were among the of ... (PAL's) Fokker 'Friendship' PIC-536
plane in its flight of November 6,1968 which left Mactan City at about 7:30 in the evening with Manila for its
destination.

2. After the plane had taken off, Florencio O. Villarin, a Senior NBI Agent who was also a passenger of the said
plane, noticed a certain 'Zaldy,' a suspect in the killing of Judge Valdez, seated at the front seat near the door leading
to the cockpit of the plane. A check by Villarin with the passenger's ticket in the possession of flight Stewardess
Annie Bontigao, who was seated at the last seat right row, revealed that 'Zaldy' had used the name 'Cardente,' one of
his aliases known to Villarin. Villarin also came to know from the stewardess that 'Zaldy' had three companions on
board the plane."

3. Villarin then scribbled a note addressed to the pilot of the plane requesting the latter to contact NBI duty agents in
Manila for the said agents to ask the Director of the NBI to send about six NBI agents to meet the plane because the
suspect in the killing of Judge Valdez was on board (Exh. 'G'). The said note was handed by Villarin to the
stewardess who in tum gave the same to the pilot.

4. After receiving the note, which was about 15 minutes after take off, the pilot of the plane, Capt. Luis Bonnevie,
Jr., came out of the cockpit and sat beside Villarin at the rear portion of the plane and explained that he could not
send the message because it would be heard by all ground aircraft stations. Villarin, however, told the pilot of the
danger of commission of violent acts on board the plane by the notorious 'Zaldy' and his three companions.

5. While the pilot and Villarin were talking, 'Zaldy' and one of his companions walked to the rear and stood behind
them. Capt. Bonnevie then stood up and went back to the cockpit. 'Zaldy' and his companions returned to their seats,
but after a few minutes they moved back to the rear throwing ugly looks at Villarin who, sensing danger, stood up
and went back to his original seat across the aisle on the second to the last seat near the window. 'Zaldy and his
companion likewise went back to their respective seats in front.

6. Soon thereafter an exchange of gunshots ensued between Villarin and 'Zaldy' and the latter's companions. 'Zaldy'
announced to the passengers and the pilots in the cockpit that it was a hold-up and ordered the pilot not to send any
SOS. The hold-uppers divested passengers of their belongings.

7. Specifically, ... Norberto Quisumbing, Sr. was divested of jewelries and cash in the total amount of P18,650.00
out of which recoveries were made amounting to P4,550.00. . . Gunther Leoffler was divested of a wrist watch, cash
 and a wallet in the total of P1,700.00. As a result of the incident ... Quisumbing, Sr.suffered shock, because a gun
had been pointed at him by one of the holduppers.

8. Upon landing at the Manila International Airport. 'Zaldy' and his three companions succeeded in escaping.

Demands were thereafter made on PAL by Quisumbing and Loeffler "to indemnify ... (them) on their aforesaid loss, but ... (PAL)
refused ... (averring that) it is not liable to (them) in law or in fact." 2

Contending that the "aforesaid loss is a result of breach of ... (PAL's) contractual obligation to carry ... (them) and their belongings
and effects to their Manila destination without loss or damage, and constitutes a serious dereliction of ... (PAL's) legal duty to
exercise extraordinary diligence in the vigilance over the same." , Quisumbing and Loeffler brought suit against PAL in the Court of
First Instance of Rizal, as stated in this opinion's opening paragraph, to recover the value of the property lost by them to the robbers
as well as moral and exemplary damages, attorney's fees and expenses of litigation. 3 The plaintiffs declared that their suit was
instituted "... pursuant to Civil Code articles 1754, 998, 2000 and 2001 and on the ground that in relation to said Civil Code article
2001 the complained-of act of the armed robbers is not a force majeure, as the 'use of arms' or 'irresistible force' was not taken
advantage of by said armed robbers in gaining entrance to defendant's ill-fated plane in questions. And, with respect to said Civil
Code article 1998, it is not essential that the lost effects and belongings of plaintiffs were actually delivered to defendant's plane
personnel or that the latter were notified thereof (De los Santos v. Tamn Khey, [CA] 58 O.G. 7693)." 4

PAL filed answer denying liability, alleging inter alia that the robbery during the flight and after the aircraft was forcibly landed at
the Manila Airport did indeed constitute force majeure, and neither of the plaintiffs had notified PAL "or its crew or employees that
they were in possession of cash, German marks and valuable jewelries and watches" or surrendered said items to "the crew or
personnel on board the aircraft." 5

After trial, the Court of First Instance rendered judgment 'dismissing plaintiffs' complaint with costs against ... (them)." 6 The Court
opined that since the plaintiffs "did not notify defendant or its employees that they were in possession of the cash, jewelries, and the
wallet they are now claiming," the very provision of law invoked by them, Article 1998 of the Civil Code, denies them any recourse
against PAL. The Court also pointed out that-

... while it is true that the use of gems was not taken advantage of by the robbers in gaining entrance to defendant's
ill-fated plane, the armed robbery that took place constitutes force majeure for which defendant is not liable because
the robbers were able to gain entrance to the plane with the guns they used already in their possession, which fact
could not have been prevented nor avoided by the defendant since it was not authorized to search its passengers for
firearms and deadly weapons as shown in Exhibits '6', '7', '8,' and '8-A.' As its robbery constitutes force majeure,
defendant is not liable.

The plaintiffs appealed to the Court of Appeals. 7 The Court affirmed the trial court's judgment. 8 It rejected the argument that "the
use of arms or ... irresistible force" referred to in Article 2001 constitutes force majeure only if resorted to gain entry into the
airplane, and not if it attends "the robbery itself." The Court ruled that under the facts, "the highjacking-robbery was force majeure,"
observing that —

... hijackers do not board an airplane through a blatant display of firepower and violent fury. Firearms, hand-
grenades, dynamite, and explosives are introduced into the airplane surreptitiously and with the utmost cunning and
stealth, although there is an occasional use of innocent hostages who will be coldly murdered unless a plane is given
to the hijackers' complete disposal. The objective of modern-day hijackers is to display the irresistible force
amounting to force majeure only when it is most effective and that is when the jetliner is winging its way at
Himalayan altitudes and ill-advised heroics by either crew or passengers would send the multi-million peso airplane
and the priceless lives of all its occupants into certain death and destruction. ...

The Appellate Court also ruled that in light of the evidence PAL could not be faulted for want of diligence, particularly for failing "to
take positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians from carrying firearms on
board aircrafts;" and that "the absence of coded transmissions, the amateurish behaviour of the pilot in dealing with the NBI agent,
the allegedly open cockpit door, and the failure to return to Mactan, in the light of the circumstances of the case ..., were not
negligent acts sufficient to overcome the force majeure nature of the armed robbery." In fact, the Court went on to says, 9

... it is illusive to assume that had these precautions been taken, the hijacking or the robbery would not have
succeeded. The mandatory use of the most sophisticated electronic detection devices and magnetometers, the
imposition of severe penalties, the development of screening procedures, the compilation of hijacker behavioural
 profiles, the assignment of sky marshals, and the weight of outraged world opinion may have minimized hijackings
but all these have proved ineffective against truly determined hijackers. World experience shows that if a group of
armed hijackers want to take over a plane in flight, they can elude the latest combined government and airline
industry measures. And as our own experience in Zamboanga City illustrates, the use of force to overcome hijackers,
results in the death and injury of innocent passengers and crew members. We are not in the least bit suggesting that
the Philippine Airlines should not do everything humanly possible to protect passengers from hijackers' acts. We
merely state that where the defendant has faithfully complied with the requirements of government agencies and
adhered to the established procedures and precautions of the airline industry at any particular time, its failure to take
certain steps that a passenger in hindsight believes should have been taken is not the negligence or misconduct which
mingles with force majeure as an active and cooperative cause.

Under the circumstance of the instant case, the acts of the airline and its crew cannot be faulted as negligence. The
hijackers had already shown their willingness to kill. One passenger was in fact killed and another survived gunshot
wounds. The lives of the rest of the passengers and crew were more important than their properties. Cooperation
with the hijackers until they released their hostages at the runway end near the South Superhighway was dictated by
the circumstances.

Insisting that the evidence demonstrates negligence on the part of the PAL crew "occurring before and exposing them to hijacking,"
Quisumbing and Loeffler have come up to this Court praying that the judgments of the trial Court and the Court of Appeals be
reversed and another rendered in their favor. Once again, the issue will be resolved against them.

A careful analysis of the record in relation to the memoranda and other pleadings of the parties, convinces this Court of the
correctness of the essential conclusion of both the trial and appellate courts that the evidence does indeed fail to prove any want of
diligence on the part of PAL, or that, more specifically, it had failed to comply with applicable regulations or universally accepted
and observed procedures to preclude hijacking; and that the particular acts singled out by the petitioners as supposedly demonstrative
of negligence were, in the light of the circumstances of the case, not in truth negligent acts "sufficient to overcome the force majeure
nature of the armed robbery." The Court quite agrees, too, with the Appellate Tribunal's wry observation that PAL's "failure to take
certain steps that a passenger in hindsight believes should have been taken is not the negligence or misconduct which mingles with
force majeure as an active and cooperative cause."

No success can therefore attend petitioners' appeal, not only because they wish to have a review and modification of factual
conclusions of the Court of Appeals, which established and uniformly observed axiom proscribes, 10 but also because those factual
conclusions have in this Court's view been correctly drawn from the proofs on record.

WHEREFORE, the petition is DENIED and the appealed Decision of the Court of Appeals is AFFIRMED, with costs against
petitioners.

9. G.R. No. L-65510 March 9, 1987 TEJA MARKETING AND/OR ANGEL JAUCIAN, vs. IAC

"'Ex pacto illicito' non oritur actio" (No action arises out of illicit bargain) is the time-honored maxim that must be applied to the
parties in the case at bar. Having entered into an illegal contract, neither can seek relief from the courts, and each must bear the
consequences of his acts." (Lita Enterprises vs. IAC, 129 SCRA 81.)

The factual background of this case is undisputed. The same is narrated by the respondent court in its now assailed decision, as
follows:

On May 9, 1975, the defendant bought from the plaintiff a motorcycle with complete accessories and a sidecar in the
total consideration of P8,000.00 as shown by Invoice No. 144 (Exh. "A"). Out of the total purchase price the
defendant gave a downpayment of P1,700.00 with a promise that he would pay plaintiff the balance within sixty
days. The defendant, however, failed to comply with his promise and so upon his own request, the period of paying
the balance was extended to one year in monthly installments until January 1976 when he stopped paying anymore.
The plaintiff made demands but just the same the defendant failed to comply with the same thus forcing the plaintiff
to consult a lawyer and file this action for his damage in the amount of P546.21 for attorney's fees and P100.00 for
expenses of litigation. The plaintiff also claims that as of February 20, 1978, the total account of the defendant was
already P2,731.06 as shown in a statement of account (Exhibit. "B"). This amount includes not only the balance of
P1,700.00 but an additional 12% interest per annum on the said balance from January 26, 1976 to February 27,
1978; a 2% service charge; and P 546.21 representing attorney's fees.
 In this particular transaction a chattel mortgage (Exhibit 1) was constituted as a security for the payment of the
balance of the purchase price. It has been the practice of financing firms that whenever there is a balance of the
purchase price the registration papers of the motor vehicle subject of the sale are not given to the buyer. The records
of the LTC show that the motorcycle sold to the defendant was first mortgaged to the Teja Marketing by Angel
Jaucian though the Teja Marketing and Angel Jaucian are one and the same, because it was made to appear that way
only as the defendant had no franchise of his own and he attached the unit to the plaintiff's MCH Line. The
agreement also of the parties here was for the plaintiff to undertake the yearly registration of the motorcycle with the
Land Transportation Commission. Pursuant to this agreement the defendant on February 22, 1976 gave the plaintiff
P90.00, the P8.00 would be for the mortgage fee and the P82.00 for the registration fee of the motorcycle. The
plaintiff, however failed to register the motorcycle on that year on the ground that the defendant failed to comply
with some requirements such as the payment of the insurance premiums and the bringing of the motorcycle to the
LTC for stenciling, the plaintiff saying that the defendant was hiding the motorcycle from him. Lastly, the plaintiff
explained also that though the ownership of the motorcycle was already transferred to the defendant the vehicle was
still mortgaged with the consent of the defendant to the Rural Bank of Camaligan for the reason that all motorcycle
purchased from the plaintiff on credit was rediscounted with the bank.

On his part the defendant did not dispute the sale and the outstanding balance of P1,700. 00 still payable to the
plaintiff. The defendant was persuaded to buy from the plaintiff the motorcycle with the side car because of the
condition that the plaintiff would be the one to register every year the motorcycle with the Land Transportation
Commission. In 1976, however, the plaintfff failed to register both the chattel mortgage and the motorcycle with the
LTC notwithstanding the fact that the defendant gave him P90.00 for mortgage fee and registration fee and had the
motorcycle insured with La Perla Compana de Seguros (Exhibit "6") as shown also by the Certificate of cover
(Exhibit "3"). Because of this failure of the plaintiff to comply with his obligation to register the motorcycle the
defendant suffered damages when he failed to claim any insurance indemnity which would amount to no less than
P15,000.00 for the more than two times that the motorcycle figured in accidents aside from the loss of the daily
income of P15.00 as boundary fee beginning October 1976 when the motorcycle was impounded by the LTC for not
being registered.

The defendant disputed the claim of the plaintiff that he was hiding from the plaintiff the motorcycle resulting in its
not being registered. The truth being that the motorcycle was being used for transporting passengers and it kept on
travelling from one place to another. The motor vehicle sold to him was mortgaged by the plaintiff with the Rural
Bank of Camaligan without his consent and knowledge and the defendant was not even given a copy of the
mortgage deed. The defendant claims that it is not true that the motorcycle was mortgaged because of re-discounting
for rediscounting is only true with Rural Banks and the Central Bank. The defendant puts the blame on the plaintiff
for not registering the motorcycle with the LTC and for not giving him the registration papers inspite of demands
made. Finally, the evidence of the defendant shows that because of the filing of this case he was forced to retain the
services of a lawyer for a fee on not less than P1,000.00.

xxx xxx xxx

... it also appears and the Court so finds that defendant purchased the motorcycle in question, particularly for the
purpose of engaging and using the same in the transportation business and for this purpose said trimobile unit was
attached to the plaintiffs transportation line who had the franchise, so much so that in the registration certificate,
the plaintiff appears to be the owner of the unit.Furthermore, it appears to have been agreed, further between the
plaintiff and the defendant, that plaintiff would undertake the yearly registration of the unit in question with the
LTC. Thus, for the registration of the unit for the year 1976, per agreement, the defendant gave to the plaintiff the
amount of P82.00 for its registration, as well as the insurance coverage of the unit.

Eventually, petitioner Teja Marketing and/or Angel Jaucian filed an action for "Sum of Money with Damages" against private
respondent Pedro N. Nale in the City Court of Naga City. The City Court rendered judgment in favor of petitioner, the dispositive
portion of which reads:

WHEREFORE, decision is hereby rendered dismissing the counterclaim and ordering the defendant to pay plaintiff
the sum of P1,700.00 representing the unpaid balance of the purchase price with legal rate of interest from the date
of the filing of the complaint until the same is fully paid; to pay plaintiff the sum of P546.21 as attorney's fees; to
pay plaintiff the sum of P200.00 as expenses of litigation; and to pay the costs.

SO ORDERED.
On appeal to the Court of First Instance of Camarines Sur, the decision was affirmed in toto. Private respondent filed a petition for
review with the Intermediate Appellate Court and on July 18, 1983 the said Court promulgated its decision, the pertinent portion of
which reads —

However, as the purchase of the motorcycle for operation as a trimobile under the franchise of the private respondent
Jaucian, pursuant to what is commonly known as the "kabit system", without the prior approval of the Board of
Transportation (formerly the Public Service Commission) was an illegal transaction involving the fictitious
registration of the motor vehicle in the name of the private respondent so that he may traffic with the privileges of
his franchise, or certificate of public convenience, to operate a tricycle service, the parties being in pari
delicto, neither of them may bring an action against the other to enforce their illegal contract [Art. 1412 (a), Civil
Code].

xxx xxx xxx

WHEREFORE, the decision under review is hereby set aside. The complaint of respondent Teja Marketing and/or
Angel Jaucian, as well as the counterclaim of petitioner Pedro Nale in Civil Case No. 1153 of the Court of First
Instance of Camarines Sur (formerly Civil Case No. 5856 of the City Court of Naga City) are dismissed. No
pronouncement as to costs.

SO ORDERED.

The decision is now before Us on a petition for review, petitioner Teja Marketing and/or Angel Jaucian presenting a lone assignment
of error — whether or not respondent court erred in applying the doctrine of "pari delicto."

We find the petition devoid of merit.

Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system" whereby a person who
has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise
for a fee. A certificate of public convenience is a special privilege conferred by the government. Abuse of this privilege by the
grantees thereof cannot be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft
and corruption in the government transportation offices.

Although not outrightly penalized as a criminal offense, the kabit system is invariably recognized as being contrary to public policy
and, therefore, void and in existent under Article 1409 of the Civil Code. It is a fundamental principle that the court will not aid
either party to enforce an illegal contract, but will leave both where it finds then. Upon this premise it would be error to accord the
parties relief from their predicament. Article 1412 of the Civil Code denies them such aid. It provides:

Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the
following rules shall be observed:

1. When the fault is on the part of both contracting parties, neither may recover that he has given by virtue of the
contract, or demand, the performance of the other's undertaking.

The defect of in existence of a contract is permanent and cannot be cured by ratification or by prescription. The mere lapse of time
cannot give efficacy to contracts that are null and void.

WHEREFORE, the petition is hereby dismissed for lack of merit. The assailed decision of the Intermediate Appellate Court (now the
Court of Appeals) is AFFIRMED. No costs.

10. G.R. No. L-20761 July 27, 1966 LA MALLORCA, vs. CA, MARIANO BELTRAN, ET AL.,

La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No. 23267-R, holding it liable for quasi-delict and
ordering it to pay to respondents Mariano Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus P400.00
as actual damages.

The facts of the case as found by the Court of Appeals, briefly are:
 On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with their minor daughters, namely,
Milagros, 13 years old, Raquel, about 4½ years old, and Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing
plate TPU No. 757 (1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga, bound for Anao,
Mexico, Pampanga. At the time, they were carrying with them four pieces of baggages containing their personal belonging.
The conductor of the bus, who happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A, B, &
C) covering the full fares of the plaintiff and their eldest child, Milagros. No fare was charged on Raquel and Fe, since both
were below the height at which fare is charged in accordance with the appellant's rules and regulations.

After about an hour's trip, the bus reached Anao whereat it stopped to allow the passengers bound therefor, among whom
were the plaintiffs and their children to get off. With respect to the group of the plaintiffs, Mariano Beltran, then carrying
some of their baggages, was the first to get down the bus, followed by his wife and his children. Mariano led his companions
to a shaded spot on the left pedestrians side of the road about four or five meters away from the vehicle. Afterwards, he
returned to the bus in controversy to get his other bayong, which he had left behind, but in so doing, his daughter Raquel
followed him, unnoticed by her father. While said Mariano Beltran was on the running board of the bus waiting for the
conductor to hand him his bayong which he left under one of its seats near the door, the bus, whose motor was not shut off
while unloading, suddenly started moving forward, evidently to resume its trip, notwithstanding the fact that the conductor
has not given the driver the customary signal to start, since said conductor was still attending to the baggage left behind by
Mariano Beltran. Incidentally, when the bus was again placed into a complete stop, it had travelled about ten meters from the
point where the plaintiffs had gotten off.

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running board without getting
his bayong from the conductor. He landed on the side of the road almost in front of the shaded place where he left his wife
and children. At that precise time, he saw people beginning to gather around the body of a child lying prostrate on the
ground, her skull crushed, and without life. The child was none other than his daughter Raquel, who was run over by the bus
in which she rode earlier together with her parents.

For the death of their said child, the plaintiffs commenced the present suit against the defendant seeking to recover from the
latter an aggregate amount of P16,000 to cover moral damages and actual damages sustained as a result thereof and
attorney's fees. After trial on the merits, the court below rendered the judgment in question.

On the basis of these facts, the trial court found defendant liable for breach of contract of carriage and sentenced it to pay P3,000.00
for the death of the child and P400.00 as compensatory damages representing burial expenses and costs.

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, for the reason that
when the child met her death, she was no longer a passenger of the bus involved in the incident and, therefore, the contract of
carriage had already terminated. Although the Court of Appeals sustained this theory, it nevertheless found the defendant-appellant
guilty of quasi-delict and held the latter liable for damages, for the negligence of its driver, in accordance with Article 2180 of the
Civil Code. And, the Court of Appeals did not only find the petitioner liable, but increased the damages awarded the plaintiffs-
appellees to P6,000.00, instead of P3,000.00 granted by the trial court.

In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding it liable for quasi-delict, considering that
respondents complaint was one for breach of contract, and (2) in raising the award of damages from P3,000.00 to P6,000.00 although
respondents did not appeal from the decision of the lower court.

Under the facts as found by the Court of Appeals, we have to sustain the judgement holding petitioner liable for damages for the
death of the child, Raquel Beltran. It may be pointed out that although it is true that respondent Mariano Beltran, his wife, and their
children (including the deceased child) had alighted from the bus at a place designated for disembarking or unloading of passengers,
it was also established that the father had to return to the vehicle (which was still at a stop) to get one of his bags or bayong that was
left under one of the seats of the bus. There can be no controversy that as far as the father is concerned, when he returned to the bus
for hisbayong which was not unloaded, the relation of passenger and carrier between him and the petitioner remained subsisting. For,
the relation of carrier and passenger does not necessarily cease where the latter, after alighting from the car, aids the carrier's servant
or employee in removing his baggage from the car.1 The issue to be determined here is whether as to the child, who was already led
by the father to a place about 5 meters away from the bus, the liability of the carrier for her safety under the contract of carriage also
persisted.

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the
carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable
time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule
is to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks along the station platform is
considered still a passenger.2 So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave
the company's premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and he
in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily
delayed and thus continues to be a passenger entitled as such to the protection of the railroad and company and its agents.3

In the present case, the father returned to the bus to get one of his baggages which was not unloaded when they alighted from the
bus. Raquel, the child that she was, must have followed the father. However, although the father was still on the running board of the
bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down
from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over and killed. In the
circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required
by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to
run the bus even before the bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the bus was not unreasonable and they are,
therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.

But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for the
negligence of its driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint,
which reads —

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs' daughter, was caused by the
negligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendants and their
agent, necessary to transport plaintiffs and their daughter safely as far as human care and foresight can provide in the
operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible with the other claim
under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other or not, to the end that the real matter in controversy may be
resolved and determined.4

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was alleged in the complaint
that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost diligence of a
very cautious person on the part of the defendants and their agent." This allegation was also proved when it was established during
the trial that the driver, even before receiving the proper signal from the conductor, and while there were still persons on the running
board of the bus and near it, started to run off the vehicle. The presentation of proof of the negligence of its employee gave rise to the
presumption that the defendant employer did not exercise the diligence of a good father of the family in the selection and supervision
of its employees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner
must be adjudged peculiarily liable for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be sustained.
Generally, the appellate court can only pass upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
did not appeal from that portion of the judgment of the trial court awarding them on P3,000.00 damages for the death of their
daughter. Neither does it appear that, as appellees in the Court of Appeals, plaintiffs have pointed out in their brief the inadequacy of
the award, or that the inclusion of the figure P3,000.00 was merely a clerical error, in order that the matter may be treated as an
exception to the general rule.5Herein petitioner's contention, therefore, that the Court of Appeals committed error in raising the
amount of the award for damages is, evidently, meritorious.1äwphï1.ñët

Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay to the respondents Mariano
Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel Beltran, and the amount of P400.00 as actual damages. No
costs in this instance. So ordered.

11. G.R. No. 98275 November 13, 1992 BA FINANCE CORPORATION vs. CA, RTC OF ANGELES CITY, BRANCH LVI,
CARLOS OCAMPO, INOCENCIO TURLA, SPOUSES MOISES AGAPITO and SOCORRO M. AGAPITO and NICOLAS
CRUZ,
The question of petitioner's responsibility for damages when on March 6, 1983, an accident occurred involving petitioner's Isuzu ten-
wheeler truck then driven by an employee of Lino Castro is the thrust of the petition for review on certiorari now before Us
considering that neither the driver nor Lino Castro appears to be connected with petitioner.

On October 13, 1988, the disputed decision in the suit below was rendered by the court of origin in this manner:

1. Ordering Rock B.A. and Rogelio Villar y Amare jointly and severally to pay the plaintiffs as follows:

a) To the plaintiff Carlos Ocampo — P121,650.00; b) To the plaintiff Moises Ocampo —

P298,500.00 c) To the plaintiff Nicolas Cruz — P154,740.00 d) To the plaintiff Inocencio Turla, Sr.
— 48,000.00

2. Dismissing the case against Lino Castro

3. Dismissing the third-party complaint against STRONGHOLD

4. Dismissing all the counterclaim of the defendants and third-party defendants.

5. Ordering ROCK to reimburse B.A. the total amount of P622,890.00 which the latter is adjudged to pay to the
plaintiffs. (p. 46, Rollo)

Respondent Court of Appeals affirmed the appealed disposition in toto through Justice Rasul, with Justices De Pano, Jr. and Imperial
concurring, on practically the same grounds arrived at by the court a quo (p. 28, Rollo). Efforts exerted towards re-evaluation of the
adverse were futile (p. 37, Rollo). Hence, the instant petition.

The lower court ascertained after due trial that Rogelio Villar y Amare, the driver of the Isuzu truck, was at fault when the mishap
occurred in as much as he was found guilty beyond reasonable doubt of reckless imprudence resulting in triple homicide with
multiple physical injuries with damage to property in a decision rendered on February 16, 1984 by the Presiding Judge of Branch 6
of the Regional Trial Court stationed at Malolos, Bulacan. Petitioner was adjudged liable for damages in as much as the truck was
registered in its name during the incident in question, following the doctrine laid down by this Court in Perez vs. Gutierrez (53
SCRA 149 [1973]) and Erezo, et al. vs. Jepte (102 Phil. 103 [1957]). In the same breadth, Rock Component Philippines, Inc. was
ordered to reimburse petitioner for any amount that the latter may be adjudged liable to pay herein private respondents as expressly
stipulated in the contract of lease between petitioner and Rock Component Philippines, Inc. Moreover, the trial court applied Article
2194 of the new Civil Code on solidary accountability of join tortfeasors insofar as the liability of the driver, herein petitioner and
Rock Component Philippines was concerned (pp. 6-7, Decision; pp. 44-45, Rollo).

To the question of whether petitioner can be held responsible to the victim albeit the truck was leased to Rock Component
Philippines when the incident occurred, the appellate court answered in the affirmative on the basis of the jurisprudential dogmas
which, as aforesaid, were relied upon by the trial court although respondent court was quick to add the caveat embodied in the lease
covenant between petitioner and Rock Component Philippines relative to the latter's duty to reimburse any amount which may be
adjudged against petitioner (pp. 32-33, Rollo).

Petitioner asseverates that it should not have been haled to court and ordered to respond for the damage in the manner arrived at by
both the trial and appellate courts since paragraph 5 of the complaint lodged by the plaintiffs below would indicate that petitioner
was not the employer of the negligent driver who was under the control an supervision of Lino Castro at the time of the accident,
apart from the fact that the Isuzu truck was in the physical possession of Rock Component Philippines by virtue of the lease
agreement.

Aside from casting clouds of doubt on the propriety of invoking the Perez and Erezo doctrines, petitioner continue to persist with the
idea that the pronouncements of this Court in Duavit vs. Court of Appeals (173 SCRA 490 [1989]) and Duquillo vs. Bayot (67 Phil
131 [1939]) dovetail with the factual and legal scenario of the case at hand. Furthermore, petitioner assumes, given the so-
called hiatus on the basis for the award of damages as decreed by the lower and appellate courts, that Article 2180 of the new Civil
Code on vicarious liability will divest petitioner of any responsibility absent as there is any employer-employee relationship between
petitioner and the driver.

Contrary to petitioner's expectations, the recourse instituted from the rebuffs it encountered may not constitute a sufficient
foundation for reversal of the impugned judgment of respondent court. Petitioner is of the impression that the Perez and Erezo cases
are inapplicable due to the variance of the generative facts in said cases as against those obtaining in the controversy at bar.
A contrario, the lesson imparted by Justice Labrador in Erezo is still good law, thus:

. . . In previous decisions, We already have held that the registered owner of a certificate of public convenience is
liable to the public for the injuries or damages suffered by passengers or third persons caused by the operation of
said vehicle, even though the same had been transferred to a third person. (Montoya vs. Ignacio, 94 Phil., 182 50
Off. Gaz., 108; Roque vs. Malibay Transit, Inc., G.R. No. L-8561, November 18, 1955; Vda. de Medina vs.
Cresencia, 99 Phil., 506, 52 Off. Gaz., [10], 4606.) The principle upon which this doctrine is based is that in dealing
with vehicles registered under the Public Service Law, the public has the right to assume or presumed that the
registered owner is the actual owner thereof, for it would be difficult with the public to enforce the actions that they
may have for injuries caused to them by the vehicles being negligently operated if the public should be required to
prove who actual the owner is. How would the public or third persons know against whom to enforce their rights in
case of subsequent transfer of the vehicles? We do not imply by this doctrine, however, that the registered owner
may not recover whatever amount he had paid by virtue of his liability to third persons from the person to whom he
had actually sold, assigned or conveyed the vehicle.

Under the same principle the registered owner of any vehicle, even if not used for a public service, should primarily
responsible to the public or to the third persons for injuries caused the latter while the vehicle is being driven on the
highways or streets. The members of the Court are in agreement that the defendant-appellant should be held liable
to plaintiff-appellee for the injuries occasioned to the latter because of the negligence of the driver, even if the
defendant-appellant was no longer an owner of the vehicle at the time of the damage because he had previously sold
it to another. What is the legal basis for his (defendants-appellant's) liability?

There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he is the registered owner in
the Motor Vehicle Office. Should he not be allowed to prove the truth, that he had sold it to another and thus shift
the responsibility for the injury to the real and the actual owner? The defendants hold the affirmative of this
proposition; the trial court hold the negative.

The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that the vehicle may be used or operated
upon any public highway unless the same is properly registered. It has been stated that the system of licensing and
the requirement that each machine must carry a registration number, conspicuously displayed, is one of the
precautions taken to reduce the danger of injury of pedestrians and other travelers from the careless management of
automobiles, and to furnish a means of ascertaining the identity of persons violating the laws and ordinances,
regulating the speed and operation of machines upon the highways (2 R. C. L. 1176). Not only are vehicles to be
registered and that no motor vehicles are to be used or operated without being properly registered from the current
year, furnish the Motor Vehicle Office a report showing the name and address of each purchaser of motor vehicle
during the previous month and the manufacturer's serial number and motor number. (Section 5[c], Act No. 3992, as
amended.)

Registration is required not to make said registration the operative act by which ownership in vehicles is transferred,
as in land registration cases, because the administrative proceeding of registration does not bear any essential
relation to the contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit
the use and operation of the vehicle upon any public highway (section 5[a], Act No. 3992, as amended). the main
aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or
injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual,
the registered owner. Instances are numerous where vehicles running on public highways caused accidents or
injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant
means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the
motor vehicle registration is primarily obtained, in the interest of the determinations of persons responsible for
damages or injuries caused on public highways.

One of the principle purposes of motor vehicles legislation is identification of the vehicle and of the
operator, in case of accident; and another is that the knowledge that means of detection are always
available my act as a deterrent from lax observance of the law and of the rules of conservative and
safe operation. Whatever purpose there may be in these statutes, it is subordinate at the last to the
primary purpose of rendering it certain that the violator of the law or of the rules of safety shall not
escape because of lack of means to discover him. The purpose of the statute is thwarted, and the
displayed number becomes a "share and delusion," if courts would entertain such defenses as that
put forward by appellee in this case. No responsible person or corporation could be held liable for
 the most outrageous acts of negligence, if they should be allowed to pace a "middleman" between
them and the public, and escape liability by the manner in which they recompense their servants.
(King vs. Breham Automobile Co., Inc. 145 S. W. 278, 279.)

With the above policy in mind, the question that defendant-appellant poses is: should not the registered owner be
allowed at the trial to prove who the actual and real owner is, and in accordance with such proof escape or evade
responsibility and lay the same on the person actually owning the vehicle? We hold with the trial court that the law
does not allow him to do so; the law, with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or consequence of registration. Were a registered
owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him,
by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or
to one who possesses no property with which to respond financially for the damage or injury done. A victim of
recklessness on the public highways is usually without means to discover or Identify the person actually causing the
injury or damage. He has no means other then by a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership. If the policy of the law is to
be enforced and carried out, the registered owner should not be allowed to prove the contrary to the prejudice of the
person injured, that is, to prove that a third person or another has become the owner, so that he may thereby be
relieved of the responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem to conflict with truth and
justice. We do not think it is so. A registered owner who has already sold or transferred a vehicle has the recourse to
a third-party complaint, in the same action brought against him to recover for the damage or injury done, against the
vendee or transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of liability;
said inconvenience is the price he pays for failure to comply with the registration that the law demands and requires.

In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible for the
damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be indemnified by
the real or actual owner of the amount that he may be required to pay as damage for the injury caused to the
plaintiff-appellant.

If the foregoing words of wisdom were applied in solving the circumstance whereof the vehicle had been alienated or sold to another,
there certainly can be no serious exception against utilizing the same rationale to the antecedents of this case where the subject
vehicle was merely leased by petitioner to Rock Component Philippines, Inc., with petitioner retaining ownership over the vehicle.

Petitioner's reliance on the ruling of this Court in Duavit vs. Court of Appeals and in Duquillo vs. Bayot (supra) is legally unpalatable
for the purpose of the present discourse. The vehicles adverted to in the two cases shared a common thread, so to speak, in that the
jeep and the truck were driven in reckless fashion without the consent or knowledge of the respective owners. Cognizant of the
inculpatory testimony spewed by defendant Sabiniano when he admitted that he took the jeep from the garage of defendant Dauvit
without the consent or authority of the latter, Justice Gutierrez, Jr. in Duavit remarked;

. . . Herein petitioner does not deny ownership of the vehicle involved in the mishap but completely denies having
employed the driver Sabiniano or even having authorized the latter to drive his jeep. The jeep was virtually stolen
from the petitioner's garage. To hold, therefore, the petitioner liable for the accident caused by the negligence of
Sabiniano who was neither his driver nor employee would be absurd as it would be like holding liable the owner of a
stolen vehicle for an accident caused by the person who stole such vehicle. In this regard, we cannot ignore the many
cases of vehicles forcibly taken from their owners at gunpoint or stolen from garages and parking areas and the
instances of service station attendants or mechanics of auto repair shops using, without the owner's consent, vehicles
entrusted to them for servicing or repair.(at p. 496.)

In the Duquillo case, the defendant therein cannot, according to Justice Diaz, be held liable for anything because of circumstances
which indicated that the truck was driven without the consent or knowledge of the owner thereof.

Consequently, there is no need for Us to discuss the matter of imputed negligence because petitioner merely presumed, erroneously,
however, that judgment was rendered against it on the basis of such doctrine embodied under Article 2180 of the new Civil Code.

WHEREFORE, the petition is hereby DISMISSED and decision under review AFFIRMED without special pronouncement as to
costs.
12. G.R. No. 104408 June 21, 1993 METRO MANILA TRANSIT CORPORATION vs. CA AND NENITA CUSTODIA

This appeal calls for a review of the legal validity and sufficiency of petitioner's invocation of due diligence in the selection and
supervision of employees as its defense against liability resulting from a vehicular collision. With the facility by which such a
defense can be contrived and our country having reputedly the highest traffic accident rate in its geographical region, it is indeed
high time for us to once again address this matter which poses not only a litigation issue for the courts but affects the very safety of
our streets.

The facts of the case at bar are recounted for us by respondent court, thus —

At about six o'clock in the morning of August 28, 1979, plaintiff-appellant Nenita Custodio boarded as a paying
passenger a public utility jeepney with plate No. D7 305 PUJ Pilipinas 1979, then driven by defendant Agudo
Calebag and owned by his co-defendant Victorino Lamayo, bound for her work at Dynetics Incorporated located in
Bicutan, Taguig, Metro Manila, where she then worked as a machine operator earning P16.25 a day. While the
passenger jeepney was travelling at (a) fast clip along DBP Avenue, Bicutan, Taguig, Metro Manila another fast
moving vehicle, a Metro Manila Transit Corp. (MMTC, for short) bus bearing plate no. 3Z 307 PUB (Philippines)
"79 driven by defendant Godofredo C. Leonardo was negotiating Honeydew Road, Bicutan, Taguig, Metro Manila
bound for its terminal at Bicutan. As both vehicles approached the intersection of DBP Avenue and Honeydew Road
they failed to slow down and slacken their speed; neither did they blow their horns to warn approaching vehicles. As
a consequence, a collision between them occurred, the passenger jeepney ramming the left side portion of the
MMTC bus. The collision impact caused plaintiff-appellant Nenita Custodio to hit the front windshield of the
passenger jeepney and (she) was thrown out therefrom, falling onto the pavement unconscious with serious physical
injuries. She was brought to the Medical City Hospital where she regained consciousness only after one (1) week.
Thereat, she was confined for twenty-four (24) days, and as a consequence, she was unable to work for three and one
half months (31/2). 1

A complaint for damages 2 was filed by herein private respondent, who being then a minor was assisted by her parents, against all of
therein named defendants following their refusal to pay the expenses incurred by the former as a result of the collision.

Said defendants denied all the material allegations in the complaint and pointed an accusing finger at each other as being the party at
fault. Further, herein petitioner Metro Manila Transit Corporation (MMTC), a government-owned corporation and one of the
defendants in the court a quo, along with its driver, Godofredo Leonardo, contrarily averred in its answer with cross-claim and
counterclaim 3 that the MMTC bus was driven in a prudent and careful manner by driver Leonardo and that it was the passenger
jeepney which was driven recklessly considering that it hit the left middle portion of the MMTC bus, and that it was defendant
Lamayo, the owner of the jeepney and employer of driver Calebag, who failed to exercise due diligence in the selection and
supervision of employees and should thus be held solidarily liable for damages caused to the MMTC bus through the fault and
negligence of its employees.

Defendant Victorino Lamayo, for his part, alleged in his answer with cross-claim and counterclaim 4 that the damages suffered by
therein plaintiff should be borne by defendants MMTC and its driver, Godofredo Leonardo, because the latter's negligence was the
sole and proximate cause of the accident and that MMTC failed to exercise due diligence in the selection and supervision of its
employees.

By order of the trial court, defendant Calebag was declared in default for failure to file an answer. 5 Thereafter, as no amicable
settlement was reached during the pre-trial conference, 6 trial on the merits ensued with the opposing parties presenting their
respective witnesses and documentary evidence.

Herein private respondent Nenita Custodia, along with her parents, were presented as witnesses for the prosecution. In addition, Dr.
Edgardo del Mundo, the attending physician, testified on the cause, nature and extent of the injuries she sustained as a result of the
vehicular mishap. 7 On the other hand, defendant MMTC presented as witnesses Godofredo Leonardo, Christian Bautista and
Milagros Garbo. Defendant Lamayo, however, failed to present any witness.

Milagros Garbo testified that, as a training officer of MMTC, she was in charge of the selection of the company's bus drivers,
conducting for this purpose a series of training programs and examinations. According to her, new applicants for job openings at
MMTC are preliminarily required to submit certain documents such as National Bureau of Investigation (NBI) clearance, birth or
residence certificate, ID pictures, certificate or diploma of highest educational attainment, professional driver's license, and work
experience certification. Re-entry applicants, aside from the foregoing requirements, are additionally supposed to submit company
clearance for shortages and damages and revenue performance for the preceding year. Upon satisfactory compliance with said
requisites, applicants are recommended for and subjected to a Preliminary interview, followed by a record check to find out whether
they are included in the list of undesirable employees given by other companies.

Thereafter, she continued, if an applicant is found to be acceptable, a final interview by the Chief Supervisor is scheduled and
followed by a training program which consists of seminars and actual driving and Psycho-physical tests and X-ray examinations. The
seminars, which last for a total of eighteen (18) days, include familiarization with assigned routes, existing traffic rules and
regulations, Constabulary Highway Patrol Group (CHPG) seminar on defensive driving, preventive maintenance, proper vehicle
handling, interpersonal relationship ,and administrative rules on discipline and on-the-job training. Upon completion of all the
seminars and tests, a final clearance is issued, an employment contract is executed and the driver is ready to report for duty. 8

MMTC's Transport Supervisor, Christian Bautista, testified that it was his duty to monitor the daily operation of buses in the field, to
countercheck the dispatcher on duty prior to the operation of the buses in the morning and to see to it that the bus crew follow written
guidelines of the company, which include seeing to it that its employees are in proper uniform, briefed in traffic rules and regulations
before the start of duty, fit to drive and, in general, follow other rules and regulations of the Bureau of Land Transportation as well as
of the company. 9

The reorganized trial court, in its decision of August 1, 1989, 10 found both drivers of the colliding vehicles concurrently negligent
for non-observance of appropriate traffic rules and regulations and for failure to take the usual precautions when approaching an
intersection. As joint tortfeasors, both drivers, as well as defendant Lamayo, were held solidarily liable for damages sustained by
plaintiff Custodio. Defendant MMTC, on the bases of the evidence presented was, however, absolved from liability for the accident
on the ground that it was not only careful and diligent in choosing and screening applicants for job openings but was also strict and
diligent in supervising its employees by seeing to it that its employees were in proper uniforms, briefed in traffic rules and
regulations before the start of duty, and that it checked its employees to determine whether or not they were positive for alcohol and
followed other rules and regulations and guidelines of the Bureau of Land Transportation and of the company.

The trial court accordingly ruled:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered dismissing the complaint against the
Metro Manila Transit Corporation and ordering defendants Agudo P. Calebag, Victorino Lamayo and Godofredo C.
Leonardo to pay plaintiffs, jointly and severally, the following:

a) the sum of P10,000.00 by way of medical expenses; b) the sum of P5,000.00 by way of expenses of litigation; c)
the sum of P15,000.00 by way of moral damages; d) the sum of P2,672.00 by way of loss of earnings; e) the sum of
P5,000.00 by way of exemplary damages; f) the sum of P6,000.00 by way of attorney's fees; and g) costs of suit. SO
ORDERED. 11

Plaintiff's motion to have that portion of the trial court's decision absolving MMTC from liability reconsidered 12having been denied
for lack of merit, 13 an appeal was filed by her with respondent appellate court. After consideration of the appropriate pleadings on
appeal and finding the appeal meritorious, the Court of Appeals modified the trial court's decision by holding MMTC solidarily
liable with the other defendants for the damages awarded by the trial court because of their concurrent negligence, concluding that
while there is no hard and fast rule as to what constitutes sufficient evidence to prove that an employer has exercised the due
diligence required of it in the selection and supervision of its employees, based on the quantum of evidence adduced the said
appellate court was not disposed to say that MMTC had exercised the diligence required of a good father of a family in the selection
and supervision of its driver, Godofredo Leonardo. 14

The Court of Appeals was resolute in its conclusion and denied the motions for reconsideration of appellee Custodio and appellant
MMTC in a resolution dated February 17, 1982, 15 thus prompting MMTC to file the instant petition invoking the review powers of
this Court over the decision of the Court of Appeals, raising as issues for resolution whether or not (1) the documentary evidence to
support the positive testimonies of witnesses Garbo and Bautista are still necessary; (2) the testimonies of witnesses Garbo and
Bautista may still be disturbed on appeal; and (3) the evidence presented during the trial with respect to the proof of due diligence of
petitioner MMTC in the selection and supervision of its employees, particularly driver Leonardo, is sufficient.

Prefatorily, private respondent questions the timeliness of the filing of the petition at bar in view of the procedural stricture that the
timely perfection of an appeal is both a mandatory and jurisdictional requirement. This is a legitimate concern on the part of private
respondent and presents an opportune occasion to once again clarify this point as there appears to be some confusion in the
application of the rules and interpretative rulings regarding the computation of reglementary periods at this stage of the proceedings.
The records of this case reveal that the decision of respondent Court of Appeals, dated October 31, 1991, was received by MMTC on
November 18, 1991 16 and it seasonably filed a motion for the reconsideration thereof on November 28, 1991. 17 Said motion for
reconsideration was denied by respondent court in its resolution dated February 17, 1992, which in turn was received by MMTC on
March 9, 1992. 18 Therefore, it had, pursuant to Section 1, Rule 45 of the Rules of Court, fifteen (15) days therefrom or up to March
24, 1992 within which to file its petition, for review on certiorari. Anticipating, however, that it may not be able to file said petition
before the lapse of the reglementary period therefor, MMTC filed a motion on March 19, 1992 for an extension of thirty (30) days to
file the present petition, with proof of service of copies thereof to respondent court and the adverse parties. The Court granted said
motion, with the extended period to be counted from the expiration of the reglementary period.19 Consequently, private respondent
had thirty (30) days from March 24, 1992 within which to file its petition, or up to April 23, 1992, and the eventual filing of said
petition on April 14, 1992 was well within the period granted by the Court.

We digress to reiterate, in view of erroneous submissions that we continue to receive, that in the case of a petition for review
on certiorari from a decision rendered by the Court of Appeals, Section 1, Rule 45 of the Rules of Court, which has long since been
clarified in Lacsamana vs. The Hon. Second Special Cases Division of the Intermediate Appellate Court, et al., 20 allows the same to
be filed "within fifteen (15) days from notice of judgment or of the denial of the motion for reconsideration filed in due time, and
paying at the same time to the corresponding docket fee." In other words, in the event a motion for reconsideration is filed and
denied, the period of fifteen (15) days begins to run all over again from notice of the denial resolution. Otherwise put, if a motion for
reconsideration is filed, the reglementary period within which to appeal the decision of the Court of Appeals to the Supreme Court is
reckoned from the date the party who intends to appeal received the order denying the motion for reconsideration.21 Furthermore, a
motion for extension of time to file a petition for review may be filed with this Court within said reglementary period, paying at the
same time the corresponding docket fee.

1. The first two issues raised by petitioner shall be correlatively discussed in view of their interrelation.

In its present petition, MMTC insists that the oral testimonies of its employees were presented as witnesses in its behalf sufficiently
prove, even without the presentation documentary evidence, that driver Leonardo had complied with all the hiring and clearance
requirements and had undergone all trainings, tests and examinations preparatory to actual employment, and that said positive
testimonies spell out the rigid procedure for screening of job applicants and the supervision of its employees in the field. It
underscored the fact that it had indeed complied with the measure of diligence in the selection and supervision of its employees as
enunciated in Campo, et al. vs. Camarote, et al. 22 requiring an employer, in the exercise of the diligence of a good father of a family,
to carefully examine the applicant for employment as to his qualifications, experience and record service, and not merely be satisfied
with the possession of a professional driver's license.

It goes on to say since the testimonies of these witnesses were allegedly neither discredited nor impeached by the adverse party, they
should be believed and not arbitrarily disregarded or rejected nor disturbed on appeal. It assiduously argues that inasmuch as there is
no law requiring that facts alleged by petitioner be established by documentary evidence, the probative force and weight of their
testimonies should not be discredited, with the further note that the lower court having passed upon the relevancy of the oral
testimonies and considered the same as unrebutted, its consideration should no longer be disturbed on appeal. 23

Private respondent, on the other hand, retorts that the factual findings of respondent court are conclusive upon the High Court which
cannot be burdened with the task of analyzing and weighing the evidence all over again. 24

At this juncture, it suffices to note that factual findings of the trial court may be reversed by the Court of Appeals, which is vested by
law with the power to review both legal and factual issues, if on the evidence of record, it appears that the trial court may have been
mistaken 25 particularly in the appreciation of evidence, which is within the domain of the Court of Appeals. 26 The general rule laid
down in a plethora of cases is that such findings of fact by the Court of Appeals are conclusive upon and beyond the power of review
of the Supreme Court. 27However, it is now well-settled that while the findings of fact of the Court of Appeals are entitled to great
respect, and even finality at times, that rule is not inflexible and is subject to well established exceptions, to wit: (1) when the
conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) where there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of
the case and the same are contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals
are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs are not disputed by the
respondents and (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and are
contradicted by the evidence on record. 28

When as in this case, the findings of the Court of Appeals and the trial court are contrary to each other, this court may scrutinize the
evidence on record, 29 in order to arrive at a correct finding based thereon. 30
A perusal of the same shows that since there is no dispute as to the finding of concurrent negligence on the part of the defendant
Calebag, the driver of the passenger jeepney, and co-defendant Leonardo, the bus driver of petitioner MMTC, both of whom were
solidarily held liable with defendant Lamayo, the owner of the jeepney, we are spared the necessity of determining the sufficiency of
evidence establishing the fact of negligence. 31 The contrariety is in the findings of the two lower courts, and which is the subject of
this present controversy, with regard to the liability of MMTC as employer of one the erring drivers.

The trial court, in absolving MMTC from liability ruled that —

On the question as to whether defendant MMTC was successful in proving its defense that indeed it had exercised
the due diligence of a good father of a family in the selection and supervision of defendant Leonardo, this Court
finds that based on the evidence presented during the trial, defendant MMTC was able to prove that it was not only
careful and diligent in choosing and screening applicants for job openings but also strict (and) diligent in supervising
its employees by seeing to it that its employees were in proper uniforms, briefed in traffic rules and regulations
before the start of duty, checked employees to determine whether they were positive for alcohol and followed other
rules and regulations and guidelines of the Bureau of Land Transportation as well as its company. Having
successfully proven such defense, defendant MMTC therefore, cannot be held liable for the accident.

Having reached this conclusion, the Court now, holds that defendant MMTC be totally absolved from liability and
that the complaint against it be dismissed. . . . 32

whereas respondent court was of the opinion that —

It is surprising though that witness Milagros Garbo did not testify nor present any evidence that defendant-appellee's
driver, defendant Godofredo Leonardo has complied with or has undergone all clearances and trainings she referred
to. The clearances, result of seminars and tests which Godofredo Leonardo submitted and complied with, if any,
were not presented in court despite the fact that they are obviously in the possession and control of defendant-
appellee. Instead, it resorted to generalities. The Court has ruled that due diligence in (the) selection and supervision
of employee(s) are not proved by mere testimonies to the effect that its applicant has complied with all the company
requirements before one is admitted as an employee but without proof thereof. . . .

On the part of Christian Bautista, the transport supervisor of defendant-appellee, he testified that it is his duty to
monitor the operation of buses in the field; to countercheck the dispatchers' duty prior to the operation of the buses in
the morning; to see to it that bus crew follows written guidelines of the company (t.s.n., April 29, 1988, pp. 4-5), but
when asked to present in court the alleged written guidelines of the company he merely stated that he brought with
him a "wrong document" and defendant-appellee's counsel asked for reservation to present such written guidelines in
the next hearing but the same was (sic) never presented in court. 33

A thorough and scrupulous review of the records of this case reveals that the conclusion of respondent Court of Appeals is more
firmly grounded on jurisprudence and amply supported by the evidence of record than that of the court below.

It is procedurally required for each party in a case to prove his own affirmative assertion by the degree of evidence required by
law. 34 In civil cases, the degree of evidence required of a party in order to support his claim is preponderance of evidence, or that
evidence adduced by one party which is more conclusive and credible than that of the other party. It is, therefore, incumbent on the
plaintiff who is claiming a right to prove his case. Corollarily, defendant must likewise prove own allegation to buttress its claim that
it is not liable. 35

In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of presenting at the trial such
amount of evidence required by law to obtain a favorable judgment. 36 It is entirely within each of the parties discretion, consonant
with the theory of the case it or he seeks to advance and subject to such procedural strategy followed thereby, to present all available
evidence at its or his disposal in the manner which may be deemed necessary and beneficial to prove its or his position, provided
only that the same shall measure up to the quantum of evidence required by law. In making proof in its or his case, it is paramount
that the best and most complete evidence be formally entered. 37

Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must be corroborated by
documentary evidence, or even subject evidence for that matter, inasmuch as the witnesses' testimonies dwelt on mere generalities,
we cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the selection and
supervision of employees. 38 Petitioner's attempt to prove itsdiligentissimi patris familias in the selection and supervision of
employees through oral evidence must fail as it was unable to buttress the same with any other evidence, object or documentary,
which might obviate the apparent biased nature of the testimony. 39

Our view that the evidence for petitioner MMTC falls short of the required evidentiary quantum as would convincingly and
undoubtedly prove its observance of the diligence of a good father of a family has its precursor in the underlying rationale
pronounced in the earlier case of Central Taxicab Corp. vs. Ex-Meralco Employees Transportation Co., et al., 40 set amidst an almost
identical factual setting, where we held that:

. . . . This witness spoke of an "affidavit of experience" which a driver-applicant must accomplish before he is
employed by the company, a written "time schedule" for each bus, and a record of the inspections and thorough
checks pertaining to each bus before it leaves the car barn; yet no attempt was ever made to present in evidence any
of these documents, despite the fact that they were obviously in the possession and control of the defendant
company.

xxx xxx xxx

Albert also testified that he kept records of the preliminary and final tests given him as well as a record of the
qualifications and experience of each of the drivers of the company. It is rather strange, therefore, that he failed to
produce in court the all important record of Roberto, the driver involved in this case.

The failure of the defendant company to produce in court any "record" or other documentary proof tending to
establish that it had exercised all the diligence of a good father of a family in the selection and supervision of its
drivers and buses, notwithstanding the calls therefor by both the trial court and the opposing counsel, argues strongly
against its pretensions.

We are fully aware that there is no hard-and-fast rule on the quantum of evidence needed to prove due observance of
all the diligence of a good father of a family as would constitute a valid defense to the legal presumption of
negligence on the part of an employer or master whose employee has by his negligence, caused damage to
another. . . . (R)educing the testimony of Albert to its proper proportions, we do not have enough trustworthy
evidence left to go by. We are of the considered opinion, therefore, that the believable evidence on the degree of care
and diligence that has been exercised in the selection and supervision of Roberto Leon y Salazar, is not legally
sufficient to overcome the presumption of negligence against the defendant company.

Whether or not the diligence of a good father of a family has been observed by petitioner is a matter of proof which under the
circumstances in the case at bar has not been clearly established. It is not felt by the Court that there is enough evidence on record as
would overturn the presumption of negligence, and for failure to submit all evidence within its control, assuming the putative
existence thereof, petitioner MMTC must suffer the consequences of its own inaction and indifference.

2. In any event, we do not find the evidence presented by petitioner sufficiently convincing to prove the diligence of a good father of
a family, which for an employer doctrinally translates into its observance of due diligence in the selection and supervision of its
employees but which mandate, to use an oft-quoted phrase, is more often honored in the breach than in the observance.

Petitioner attempted to essay in detail the company's procedure for screening job applicants and supervising its employees in the
field, through the testimonies of Milagros Garbo, as its training officer, and Christian Bautista, as its transport supervisor, both of
whom naturally and expectedly testified for MMTC. It then concluded with its sweeping pontifications that "thus, there is no doubt
that considering the nature of the business of petitioner, it would not let any applicant-drivers to be (sic) admitted without undergoing
the rigid selection and training process with the end (in) view of protecting the public in general and its passengers in particular; . . .
thus, there is no doubt that applicant had fully complied with the said requirements otherwise Garbo should not have allowed him to
undertake the next set of requirements . . . and the training conducted consisting of seminars and actual driving tests were satisfactory
otherwise he should have not been allowed to drive the subject vehicle. 41

These statements strike us as both presumptuous and in the nature of petitio principii, couched in generalities and shorn of any
supporting evidence to boost their verity. As earlier observed, respondent court could not but express surprise, and thereby its
incredulity, that witness Garbo neither testified nor presented any evidence that driver Leonardo had complied with or had undergone
all the clearances and trainings she took pains to recite and enumerate. The supposed clearances, results of seminars and tests which
Leonardo allegedly submitted and complied with were never presented in court despite the fact that, if true, then they were obviously
in the possession and control of petitioner. 42
The case at bar is clearly within the coverage of Article 2176 and 2177, in relation to Article 2180, of the Civil Code provisions
on quasi-delicts as all the elements thereof are present, to wit: (1) damages suffered by the plaintiff, (2) fault or negligence of the
defendant or some other person for whose act he must respond, and (3) the connection of cause and effect between fault or
negligence of the defendant and the damages incurred by plaintiff. 43 It is to be noted that petitioner was originally sued as employer
of driver Leonardo under Article 2180, the pertinent parts of which provides that:

The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of
persons for whom one is responsible.

xxx xxx xxx

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

xxx xxx xxx

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

The basis of the employer's vicarious liability has been explained under this ratiocination:

The responsibility imposed by this article arises by virtue of a presumption juris tantum of negligence on the part of
the persons made responsible under the article, derived from their failure to exercise due care and vigilance over the
acts of subordinates to prevent them from causing damage. Negligence is imputed to them by law, unless they prove
the contrary. Thus, the last paragraph of the article says that such responsibility ceases if is proved that the persons
who might be held responsible under it exercised the diligence of a good father of a family (diligentissimi patris
familias) to prevent damage. It is clear, therefore, that it is not representation, nor interest, nor even the necessity of
having somebody else answer for the damages caused by the persons devoid of personality, but it is the non-
performance of certain duties of precaution and prudence imposed upon the persons who become responsible by
civil bond uniting the actor to them, which forms the foundation of such responsibility. 44

The above rule is, of course, applicable only where there is an employer-employee relationship, although it is not necessary that the
employer be engaged in business or industry. Whether or not engaged in any business or industry, the employer under Article 2180 is
liable for torts committed by his employees within the scope of their assigned tasks. But, it is necessary first to establish the
employment relationship. Once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within
the scope of his assigned task when the tort complained of was committed. It is only then that the defendant, as employer, may find it
necessary to interpose the defense of due diligence in the selection and supervision of employees. 45 The diligence of a good father of
a family required to be observed by employers to prevent damages under Article 2180 refers to due diligence in the selection and
supervision of employees in order to protect the public. 46

With the allegation and subsequent proof of negligence against the defendant driver and of an employer-employee relation between
him and his co-defendant MMTC in this instance, the case in undoubtedly based on aquasi-delict under Article 2180 47 When the
employee causes damage due to his own negligence while performing his own duties, there arises the juris tantum presumption that
the employer is negligent, 48 rebuttable only by proof of observance of the diligence of a good father of a family. For failure to rebut
such legal presumption of negligence in the selection and supervision of employees, the employer is likewise responsible for
damages, 49the basis of the liability being the relationship of pater familias or on the employer's own negligence. 50

As early as the case of Gutierrez vs. Gutierrez, 51 and thereafter, we have consistently held that where the injury is due to the
concurrent negligence of the drivers of the colliding vehicles, the drivers and owners of the said vehicles shall be primarily, directly
and solidarily liable for damages and it is immaterial that one action is based onquasi-delict and the other on culpa contractual, as
the solidarily of the obligation is justified by the very nature thereof. 52

It should be borne in mind that the legal obligation of employers to observe due diligence in the selection and supervision of
employees is not to be considered as an empty play of words or a mere formalism, as appears to be the fashion of the times, since the
non-observance thereof actually becomes the basis of their vicarious liability under Article 2180.

On the matter of selection of employees, Campo vs. Camarote, supra, lays down this admonition:
 . . . . In order tat the owner of a vehicle may be considered as having exercised all diligence of a good father of a
family, he should not have been satisfied with the mere possession of a professional driver's license; he should have
carefully examined the applicant for employment as to his qualifications, his experience and record of service. These
steps appellant failed to observe; he has therefore, failed to exercise all due diligence required of a good father of a
family in the choice or selection of driver.

Due diligence in the supervision of employees, on the other hand, includes the formulation of suitable rules and regulations for the
guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the
employer has relations through his or its employees and the imposition of necessary disciplinary measures upon employees in case of
breach or as may be warranted to ensure the performance of acts indispensable to the business of and beneficial to their
employer. 53 To this, we add that actual implementation and monitoring of consistent compliance with said rules should be the
constant concern of the employer, acting through dependable supervisors who should regularly report on their supervisory functions.

In order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible, it is
not enough to emptily invoke the existence of said company guidelines and policies on hiring and supervision. As the negligence of
the employee gives rise to the presumption of negligence on the part of the employer, the latter has the burden of proving that it has
been diligent not only in the selection of employees but also in the actual supervision of their work. The mere allegation of the
existence of hiring procedures and supervisory policies, without anything more, is decidedly not sufficient to overcome presumption.

We emphatically reiterate our holding, as a warning to all employers, that "(t)he mere formulation of various company policies on
safety without showing that they were being complied with is not sufficient to exempt petitioner from liability arising from
negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the erring driver the
recruitment procedures and company policies on efficiency and safety were followed." 54 Paying lip-service to these injunctions or
merely going through the motions of compliance therewith will warrant stern sanctions from the Court.

These obligations, imposed by the law and public policy in the interests and for the safety of the commuting public, herein petitioner
failed to perform. Respondent court was definitely correct in ruling that ". . . due diligence in the selection and supervision of
employee (is) not proved by mere testimonies to the effect that its applicant has complied with all the company requirements before
one is admitted as an employee but without proof thereof." 55 It is further a distressing commentary on petitioner that it is a
government-owned public utility, maintained by public funds, and organized for the public welfare.

The Court it is necessary to once again stress the following rationale behind these all-important statutory and jurisprudential
mandates, for it has been observed that despite its pronouncement in Kapalaran Bus Line vs. Coronado, et al., supra, there has been
little improvement in the transport situation in the country:

In requiring the highest possible degree of diligence from common carriers and creating a presumption of negligence
against them, the law compels them to curb the recklessness of their drivers. While the immediate beneficiaries of
the standard of extraordinary diligence are, of course, the passengers and owners of the cargo carried by a common
carrier, they are not the only persons that the law seeks to benefit. For if common carriers carefully observe the
statutory standard of extraordinary diligence in respect of their own passengers, they cannot help but simultaneously
benefit pedestrians and the owners and passengers of other vehicles who are equally entitled to the safe and
convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) and the destruction of property (whether freight or not) on our highways by buses, the
very size and power of which seem often to inflame the minds of their drivers. . . .

Finally, we believe that respondent court acted in the exercise of sound discretion when it affirmed the trial court's award, without
requiring the payment of interest thereon as an item of damages just because of delay in the determination thereof, especially since
private respondent did not specifically pray therefor in her complaint. Article 2211 of the Civil Code provides that in quasi-delicts,
interest as a part of the damages may be awarded in the discretion of the court, and not as a matter of right. We do not perceive that
there have been international dilatory maneuvers or any special circumstances which would justify that additional award and,
consequently, we find no reason to disturb said ruling.

WHEREFORE, the impugned decision of respondent Court of Appeals is hereby AFFIRMED.