G.R. Nos.

74387-90

Republic of the Philippines

SUPREME COURT
Manila

of Marinduque against BLTB and Superlines together with their respective drivers praying for
damages, attorney's fees and litigation expenses plus costs. Criminal cases against the drivers of
the two buses were filed in the Court of First Instance of Quezon.

SECOND DIVISION

Defendants BLTB and Superlines, together with their drivers Pon and Dasco, denied liability by
claiming that they exercised due care and diligence and shifted the fault, against each other. They
all interposed counterclaims against the plaintiffs and crossclaims against each other.

November 14, 1988

BATANGAS LAGUNA TAYABAS BUS COMPANY & ARMANDO PON, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, THE HEIRS OF PAZ VDA. DE PAMFILO,
THE HEIRS OF NORMA NERI, and BAYLON SALES and NENA VDA. DE
ROSALES, respondents.

After trial on the merits, the lower court exonerated defendants Superlines and its driver Dasco
from liability and attributed sole responsibility to defendants BLTB and its driver Pon, and
ordered them jointly and severally to pay damages to the plaintiffs. Defendants BLTB and
Armando Pon appealed from the decision of the lower court to respondent appellate court which
affirmed with modification the judgment of the lower court as earlier stated.

PARAS, J.:

Hence, this petition to review by certiorari of defendant BLTB assigning a lone error, to wit:

Before Us is a Petition to Review by Certiorari, the decision 1 of the respondent appellate court
which affirmed with modification the joint decision of the trial court in four (4) cases involving
similar facts and issues, finding favorably for the plaintiffs (private respondents herein), the
dispositive portion of said appellate judgment reading as follows:
WHEREFORE, with the modification that the death indemnity is raised to P30,000.00 to each
set of the victims' heirs, the rest of the judgment appealed from is hereby affirmed in toto.
Costs against the defendants-appellants.
SO ORDERED. (p. 20, Rollo)
From the records of the case We have gathered the following antecedent facts:
The collision between Bus No. 1046 of the Batangas Laguna Tayabas Bus Company (BLTB, for
brevity) driven by Armando Pon and Bus No. 404 of Superlines Transportation Company
(Superlines, for brevity) driven by Ruben Dasco took place at the highway traversing Barangay
Isabong, Tayabas, Quezon in the afternoon of August 11, 1978, which collision resulted in the
death of Aniceto Rosales, Francisco Pamfilo and Romeo Neri and in several injuries to Nena
Rosales (wife of Anecito) and Baylon Sales, all passengers of the BLTB Bus No. 1046. The
evidence shows that as BLTB Bus No. 1046 was negotiating the bend of the highway, it tried to
overtake a Ford Fiera car just as Bus No. 404 of Superlines was coming from the opposite
direction. Seeing thus, Armando Pon (driver of the BLTB Bus) made a belated attempt to slacken
the speed of his bus and tried to return to his proper lane. It was an unsuccessful try as the two
(2) buses collided with each other.
Nena Vda. de Rosales and Baylon Sales and the surviving heirs of the deceased Francisco
Pamfilo, Aniceto Rosales and Romeo Neri instituted separate cases in the Court of First Instance

THE INTERMEDIATE APPELLATE COURT ERRED IN ADJUDGING THAT THE

ACTIONS OF PRIVATE RESPONDENTS ARE BASED ON CULPA CONTRACTUAL. (p.
12, Rollo)
It is argued by petitioners that if the intention of private respondents were to file an action based
on culpa contractual or breach of contract of carriage, they could have done so by merely
impleading BLTB and its driver Pon. As it was in the trial court, private respondents filed an
action against all the defendants basing their action on culpa aquiliana or tort.
Petitioners' contentions deserve no merit. A reading of the respondent court's decision shows that
it anchored petitioners' liability both on culpa contractual and culpa aquiliana, to wit:
The proximate cause of the collision resulting in the death of three and injuries to two of the
passengers of BLTB was the negligence of the driver of the BLTB bus, who recklessly
operated and drove said bus by overtaking a Ford Fiera car as he was negotiating the
ascending bend of the highway (tsn, October 4, 1979, pp. 9-10, 35, 36, 61; Exhibit 6
Superlines, p. 47) which was divided into two lanes by a continuous yellow strip (tsn, October
4, 1979, p. 36). The driver of the BLTB bus admitted in his cross-examination that the
continuous yellow line on the ascending bend of the highway signifies a no-overtaking zone
(tsn, October 4, 1979, p. 36). It is no surprise then that the driver of the Superlines bus was
exonerated by the lower court. He had a valid reason to presuppose that no one would
overtake in such a dangerous situation. These facts show that patient imprudence of the BLTB
driver.
It is well settled that a driver abandoning his proper lane for the purpose of overtaking another
vehicle in ordinary situation has the duty to see that the road is clear and not to proceed if he
can not do so in safety (People v. Enriquez, 40 O.G. No. 5, 984).

... Before attempting to pass the vehicle ahead, the rear driver must see that the road is clear
and if there is no sufficient room for a safe passage, or the driver ahead does not turn out so as
to afford opportunity to pass, or if, after attempting to pass, the driver of the overtaking
vehicle finds that he cannot make the passage in safety, the latter must slacken his speed so as
to avoid the danger of a collision, even bringing his car to a stop if necessary. (3-4 Huddy
Encyclopedia of Automobile Law, Sec. 212, p. 195).
The above rule becomes more particularly applicable in this case when the overtaking took
place on an ascending curved highway divided into two lanes by a continuous yellow line.
Appellant Pon should have remembered that:
When a motor vehicle is approaching or rounding a curve there is special necessity for
keeping to the right side of the road and the driver has not the right to drive on the left hand
side relying upon having time to turn to the right if a car is approaching from the opposite
direction comes into view. (42 C.J. 42 906).
Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was violating any traffic regulation. (Art. 2165,
Civil Code).
In failing to observe these simple precautions, BLTB's driver undoubtedly failed to act with
the diligence demanded by the circumstances.
We now come to the subject of liability of the appellants.
For his own negligence in recklessly driving the truck owned by his employer, appellant
Armando Pon is primarily liable (Article 2176, Civil Code).<re||an1w>
On the other hand the liability of Pon's employer, appellant BLTB, is also primary, direct and
immediate in view of the fact that the death of or injuries to its passengers was through the
negligence of its employee (Marahan v. Mendoza, 24 SCRA 888, 894), and such liability does
not cease even upon proof that BLTB had exercised all the diligence of a good father of a
family in the selection and supervision of its employees (Article 1759, Civil Code).
The common carrier's liability for the death of or injuries to its passengers is based on its
contractual obligation to carry its passengers safely to their destination. That obligation is so
serious that the Civil Code requires "utmost diligence of very cautious person (Article 1755,
Civil Code). They are presumed to have been at fault or to have acted negligently unless they
prove that they have observed extraordinary diligence" (Article 1756, Civil Code). In the
present case, the appellants have failed to prove extraordinary diligence. Indeed, this legal
presumption was confirmed by the fact that the bus driver of BLTB was negligent. It must
follow that both the driver and the owner must answer for injuries or death to its passengers.

The liability of BLTB is also solidarily with its driver (Viluan v. Court of Appeals, 16 SCRA
742, 747) even though the liability of the driver springs from quasi delict while that of the bus
company from contract. (pp. 17-19, Rollo)
Conclusively therefore in consideration of the foregoing findings of the respondent appellate
court it is settled that the proximate cause of the collision resulting in the death of three and
injuries to two of the passengers of BLTB was the sole negligence of the driver of the BLTB Bus,
who recklessly operated and drove said bus in a lane where overtaking is not allowed by Traffic
Rules and Regulations. Such negligence and recklessness is binding against petitioner BLTB,
more so when We consider the fact that in an action based on a contract of carriage, the court
need not make an express finding of fault or negligence on the part of the carrier in order to hold
it responsible for the payment of the damages sought by the passenger. By the contract of
carriage, the carrier BLTB assumed the express obligation to transport the passengers to their
destination safely and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by its passengers is right away attributable
to the fault or negligence of the carrier (Art. 1756, New Civil Code).
Petitioners also contend that "a common carrier is not an absolute insurer against all risks of
travel and are not liable for acts or accidents which cannot be foreseen or inevitable and that
responsibility of a common carrier for the safety of its passenger prescribed in Articles 1733 and
1755 of the New Civil Code is not susceptible of a precise and definite formulation." (p. 13,
Rollo) Petitioners' contention holds no water because they had totally failed to point out any
factual basis for their defense of force majeure in the light of the undisputed fact that the cause of
the collision was the sole negligence and recklessness of petitioner Armando Pon. For the
defense offorce majeure or act of God to prosper the accident must be due to natural causes and
exclusively without human intervention.
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED.
SO ORDERED.

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

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 1719

January 23, 1907

M. H., RAKES, plaintiff-appellee,

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

The cause of the sagging of the tracks and the breaking of the tie, which was the immediate
occasion of the accident, is not clear in the evidence, but is found by the trial court and is
admitted in the briefs and in the argument to have been the dislodging of the crosspiece or piling
under the stringer by the water of the bay raised by a recent typhoon. The superintendent of the
company attributed it to the giving way of the block laid in the sand. No effort was made to
repair the injury at the time of the occurrence. According to plaintiffs witnesses, a depression of
the track, varying from one half inch to one inch and a half, was therafter apparent to the eye,
and a fellow workman of the plaintiff swears that the day before the accident he called the
attention of McKenna, the foreman, to it and asked by simply straightening out the crosspiece,
resetting the block under the stringer and renewing the tie, but otherwise leaving the very same
timbers as before. It has not proven that the company inspected the track after the typhoon or had
any proper system of inspection.
In order to charge the defendant with negligence, it was necessary to show a breach of duty on its
part in failing either to properly secure the load on iron to vehicles transporting it, or to skillfully
build the tramway or to maintain it in proper condition, or to vigilantly inspect and repair the
roadway as soon as the depression in it became visible. It is upon the failure of the defendant to
repair the weakened track, after notice of its condition, that the judge below based his judgment.
This case presents many important matters for our decision, and first among them is the standard
of duty which we shall establish in our jurisprudence on the part of employees toward
employees.
The lack or the harshness of legal rules on this subject has led many countries to enact designed
to put these relations on a fair basis in the form of compensation or liability laws or the
institution of insurance. In the absence of special legislation we find no difficulty in so applying
the general principles of our law as to work out a just result.
Article 1092 of the Civil Code provides:

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

Owners or directors of an establishment or enterprise are equally liable for the

damages caused by their employees in the service of the branches in which the latter
may be employed or in the performance of their duties.

And article 568 of the latter code provides:

xxx
He who shall execute through reckless negligence an act that if done with malice would
constitute a grave crime, shall be punished.
And article 590 provides that the following shall be punished:
4. Those who by simple imprudence or negligence, without committing any infraction of
regulations, shall cause an injury which, had malice intervened, would have constituted a
crime or misdemeanor.
And finally by articles 19 and 20, the liability of owners and employers for the faults of their
servants and representatives is declared to be civil and subsidiary in its character.
It is contented by the defendant, as its first defense to the action, that the necessary conclusion
from these collated laws is that the remedy for injuries through negligence lies only in a criminal
action in which the official criminally responsible must be made primarily liable and his
employer held only subsidiarily to him. According to this theory the plaintiff should have
procured the arrest of the representative of the company accountable for not repairing the tract,
and on his prosecution a suitable fine should have been imposed, payable primarily by him and
secondarily by his employer.
This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of the
Civil Code makes obligations arising from faults or negligence not punished by the law, subject
to the provisions of Chapter 11 of Title XVI. Section 1902 of that chapter reads:
A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.
SEC. 1903. The obligation imposed by the preceding article is demandable, not only
for personal acts and omissions, but also for those of the persons for whom they should
be responsible.
The father, and on his death or incapacity, the mother, is liable for the damages caused
by the minors who live with them.
xxx

xxx

xxx

xxx

xxx

The liability referred to in this article shall cease when the persons mentioned therein
prove that they employed all the diligence of a good father of a family to avoid the
damages.
As an answer to the argument urged in this particular action it may be sufficient to point out that
nowhere in our general statutes is the employer penalized for failure to provide or maintain safe
appliances for his workmen. His obligation therefore is one "not punished by the law " and falls
under civil rather than criminal jurisprudence. But the answer may be a broader one. We should
be reluctant, under any conditions, to adopt a forced construction of these scientific codes, such
as is proposed by the defendant, that would rob some of these articles of effect, would shut out
litigants their will from the civil courts, would make the assertion of their rights dependent upon
the selection for prosecution of the proper criminal offender, and render recovery doubtful by
reason of the strict rules of proof prevailing in criminal actions. Even if these articles had always
stood alone, such a construction would be unnecessary, but clear light is thrown upon their
meaning by the provisions of the Law of Criminal Procedure of Spain (Ley de Enjuiciamiento
Criminal), which, though n ever in actual force in these Islands, was formerly given a suppletory
or explanatory effect. Under article 111 of this law, both classes of action, civil and criminal,
might be prosecuted jointly or separately, but while the penal action was pending the civil was
suspended. According to article 112, the penal action once started, the civil remedy should be
sought therewith, unless it had been waived by the party injured or been expressly reserved by
him for civil proceedings for the future. If the civil action alone was prosecuted, arising out of a
crime that could be enforced by only on private complaint, the penal action thereunder should be
extinguished. These provisions are in harmony with those of articles 23 and 133 of our Penal
Code on the same subject.
An examination of this topic might be carried much further, but the citations of these articles
suffices to show that the civil liability was not intended to be merged in the criminal nor even to
be suspended thereby, except as expressly provided by law. Where an individual is civilly liable
for a negligent act or omission, it is not required that the inured party should seek out a third
person criminally liable whose prosecution must be a condition precedent to the enforcement of
the civil right.
Under article 20 of the Penal Code the responsibility of an employer may be regarded as
subsidiary in respect of criminal actions against his employees only while they are process of
prosecution, or in so far as they determinate the existence of the criminal act from which liability
arises, and his obligation under the civil law and its enforcement in the civil courts is not barred
thereby unless by election of the injured person. Inasmuch as no criminal in question, the
provisions of the Penal Code can not affect this action. This construction renders it unnecessary

to finally determine here whether this subsidiary civil liability in penal actions survived the laws
that fully regulated it or has been abrogated by the American civil and criminal procedure now in
force in the Philippines.
The difficulty in construing the articles of the code above cited in this case appears from the
briefs before us to have arisen from the interpretation of the words of article 1093, "fault or
negligence not punished by law," as applied to the comprehensive definition of offenses in
articles 568 and 590 of the Penal Code. It has been shown that the liability of an employer
arising out of his relation to his employee who is the offender is not to be regarded as derived
from negligence punished by the law, within the meaning of articles 1092 and 1093. More than
this, however, it can not be said to fall within the class of acts unpunished by the law, the
consequences of which are regulated by articles 1902 and 1903 of the Civil Code. The acts to
which these articles are applicable are understood to be those and growing out of preexisting
duties of the parties to one another. But were relations already formed give rise to duties, whether
springing from contract or quasi contract, then breaches of those duties are subject to articles
1101, 1103, and 1104, of the same code. A typical application of the distinction may be found in
the consequences of a railway accident due to defective machinery supplied by the employer. His
liability to his employee would arise out of the contract of employment, that to the passengers
out of the contract for passage. while that to that injured bystander would originate in the
negligent act itself. This distinction is thus clearly set forth by Manresa in his commentary on
article 1093.
We are with reference to such obligations, that culpa, or negligence, may be
understood in two difference senses; either as culpa, substantive and independent,
which on account of its origin arises in an obligation between two persons not formerly
bound by any other obligation; or as an incident in the performance of an obligation; or
as already existed, which can not be presumed to exist without the other, and which
increases the liability arising from the already exiting obligation.
Of these two species of culpa the first one mentioned, existing by itself, may be also
considered as a real source of an independent obligation, and, as chapter 2, title 16 of
this book of the code is devoted to it, it is logical to presume that the reference
contained in article 1093 is limited thereto and that it does not extend to those
provisions relating to the other species of culpa (negligence), the nature of which we
will discuss later. (Vol. 8, p. 29.)
And in his commentary on articles 1102 and 1104 he says that these two species of negligence
may be somewhat inexactly described as contractual and extra-contractual, the letter being
the culpa aquiliana of the Roman law and not entailing so strict an obligation as the former. This
terminology is unreservedly accepted by Sanchez-Roman (Derecho Civil, fourth section, Chapter
XI, Article II, No. 12), and the principle stated is supported be decisions of the supreme court of
Spain, among them those of November 20, 1896 (80 Jurisprudencia Civil, No. 151), and June 27,
1894 (75 Jurisprudencia Civil, No. 182). The contract is one for hire and not one of mandate.
(March 10, 1897, 81 Jurisprudencia Civil, No. 107.)

Spanish Jurisprudencia prior to the adoption of the Working Men's Accident Law of January 30,
1900, throws uncertain light on the relation between master and workman. Moved by the quick
industrial development of their people, the courts of France early applied to the subject the
principles common to the law of both countries, which are lucidly discussed by the leading
French commentators.
The original French theory, resting the responsibility of owners of industrial enterprises upon
articles 1382, 1383, and 1384 of the Code Napoleon, corresponding in scope to articles 1902 and
1903 of the Spanish Code, soon yielded to the principle that the true basis is the contractual
obligation of the employer and employee. (See 18 Dalloz, 196, Title Travail, 331.)
Later the hardships resulting from special exemptions inserted in contracts for employment led to
the discovery of a third basis for liability in an article of he French Code making the possessor of
any object answerable for damage done by it while in his charge. Our law having no counterpart
of this article, applicable to every kind of object, we need consider neither the theory growing
out of it nor that of "professional risk" more recently imposed by express legislation, but rather
adopting the interpretation of our Civil Code above given, find a rule for this case in the
contractual obligation. This contractual obligation, implied from the relation and perhaps so
inherent in its nature to be invariable by the parties, binds the employer to provide safe
appliances for the use of the employee, thus closely corresponding to English and American Law.
On these principles it was the duty of the defendant to build and to maintain its track in
reasonably sound condition, so as to protect its workingmen from unnecessary danger. It is plain
that in one respect or the other it failed in its duty, otherwise the accident could not have
occurred; consequently the negligence of the defendant is established.
Another contention of the defense is that the injury resulted to the plaintiff as a risk incident to
his employment and, as such, one assumed by him. It is evident that this can not be the case if
the occurrence was due to the failure to repair the track or to duly inspect, it for the employee is
not presumed to have stipulated that the employer might neglect his legal duty. Nor may it be
excused upon the ground that the negligence leading to the accident was that of a fellow-servant
of the injured man. It is not apparent to us that the intervention of a third person can relieve the
defendant from the performance of its duty nor impose upon the plaintiff the consequences of an
act or omission not his own. Sua cuique culpa nocet. This doctrine, known as "the fellowservant, rule," we are not disposed to introduce into our jurisprudence. Adopted in England by
Lord Abinger in the case of Prescottvs. Fowler (3 Meeson & Welsby, 1) in 1837, it has since been
effectually abrogated by "the Employers' Liability Acts" and the "Compensation Law." The
American States which applied it appear to be gradually getting rid of it; for instance, the New
York State legislature of 1906 did away with it in respect to railroad companies, and had in hand
a scheme for its total abolition. It has never found place in the civil law of continental Europe.
(Dalloz, vol. 39, 1858, Title Responsibilite, 630, and vol. 15, 1895, same title, 804. Also more
recent instances in Fuzier-Herman, Title Responsibilite Civile, 710.)
The French Cour de Cassation clearly laid down the contrary principle in its judgment of June
28, 1841, in the case of Reygasse, and has since adhered to it.

The most controverted question in the case is that of the negligence of the plaintiff, contributing
to the accident, to what extent it existed in fact and what legal effect is to be given it. In two
particulars is he charged with carelessness:
First. That having noticed the depression in the track he continued his work; and
Second. That he walked on the ends of the ties at the side of the car instead of along the boards,
either before or behind it.
As to the first point, the depression in the track night indicate either a serious or a rival difficulty.
There is nothing in the evidence to show that the plaintiff did or could see the displaced timber
underneath the sleeper. The claim that he must have done so is a conclusion drawn from what is
assumed to have been a probable condition of things not before us, rather than a fair inference
from the testimony. While the method of construction may have been known to the men who had
helped build the road, it was otherwise with the plaintiff who had worked at this job less than two
days. A man may easily walk along a railway without perceiving a displacement of the
underlying timbers. The foreman testified that he knew the state of the track on the day of the
accident and that it was then in good condition, and one Danridge, a witness for the defendant,
working on the same job, swore that he never noticed the depression in the track and never saw
any bad place in it. The sagging of the track this plaintiff did perceive, but that was reported in
his hearing to the foreman who neither promised nor refused to repair it. His lack of caution in
continuing at his work after noticing the slight depression of the rail was not of so gross a nature
as to constitute negligence, barring his recovery under the severe American rule. On this point
we accept the conclusion of the trial judge who found as facts that "the plaintiff did not know the
cause of the one rail being lower than then other" and "it does not appear in this case that the
plaintiff knew before the accident occurred that the stringers and rails joined in the same place."
Were we not disposed to agree with these findings they would, nevertheless, be binding upon us,
because not "plainly and manifestly against the weight of evidence," as those words of section
497, paragraph 3 of the Code of Civil Procedure were interpreted by the Supreme Court of the
United States in the De la Rama case (201 U. S., 303).
In respect of the second charge of negligence against the plaintiff, the judgment below is not so
specific. While the judge remarks that the evidence does not justify the finding that the car was
pulled by means of a rope attached to the front end or to the rails upon it, and further that the
circumstances in evidence make it clear that the persons necessary to operate the car could not
walk upon the plank between the rails and that, therefore, it was necessary for the employees
moving it to get hold upon it as best they could, there is no specific finding upon the instruction
given by the defendant to its employees to walk only upon the planks, nor upon the necessity of
the plaintiff putting himself upon the ties at the side in order to get hold upon the car. Therefore
the findings of the judge below leave the conduct of the plaintiff in walking along the side of the
loaded car, upon the open ties, over the depressed track, free to our inquiry.

While the plaintiff and his witnesses swear that not only were they not forbidden to proceed in
this way, but were expressly directed by the foreman to do so, both the officers of the company
and three of the workmen testify that there was a general prohibition frequently made known to
all the gang against walking by the side of the car, and the foreman swears that he repeated the
prohibition before the starting of this particular load. On this contradiction of proof we think that
the preponderance is in favor of the defendant's contention to the extent of the general order
being made known to the workmen. If so, the disobedience of the plaintiff in placing himself in
danger contributed in some degree to the injury as a proximate, although not as its primary cause.
This conclusion presents sharply the question, What effect is to be given such an act of
contributory negligence? Does it defeat a recovery, according to the American rule, or is it to be
taken only in reduction of damages?
While a few of the American States have adopted to a greater or less extent the doctrine of
comparative negligence, allowing a recovery by a plaintiff whose own act contributed to his
injury, provided his negligence was slight as compared with that of the defendant, and some
others have accepted the theory of proportional damages, reducing the award to a plaintiff in
proportion to his responsibility for the accident, yet the overwhelming weight of adjudication
establishes the principle in American jurisprudence that any negligence, however slight, on the
part of the person injured which is one of the causes proximately contributing to his injury, bars
his recovery. (English and American Encyclopedia of law, Titles "Comparative Negligence" and
Contributory Negligence.")
In Grant Trunk Railway Company vs. Ives (144 U. S., 408, at page 429) the Supreme Court of
the United States thus authoritatively states the present rule of law:
Although the defendant's' negligence may have been the primary cause of the injury
complained of, yet an action for such injury can not be maintained if the proximate and
immediate cause of the injury can be traced to the want of ordinary care and caution in
the person injured; subject to this qualification, which has grown up in recent years
(having been first enunciated in Davies vs. Mann, 10 M. & W., 546) that the
contributory negligence of the party injured will not defeat the action if it be shown
that the defendant might, by the exercise of reasonable care and prudence, have
avoided the consequences of the injured party's negligence.
There are may cases in the supreme court of Spain in which the defendant was exonerated, but
when analyzed they prove to have been decided either upon the point that he was not negligent
or that the negligence of the plaintiff was the immediate cause of the casualty or that the accident
was due to casus fortuitus. Of the first class in the decision of January 26, 1887
(38 Jurisprudencia Criminal, No. 70), in which a railway employee, standing on a car, was
thrown therefrom and killed by the shock following the backing up of the engine. It was held that
the management of the train and engine being in conformity with proper rules of the company,
showed no fault on its part.

Of the second class are the decision of the 15th of January, the 19th of February, and the 7th of
March, 1902, stated in Alcubilla's Index of that year; and of the third class the decision of the 4th
of June, 1888 (64Jurisprudencia Civil, No. 1), in which the breaking down of plaintiff's dam by
the logs of the defendant impelled against it by the Tajo River, was held due to a freshet as a
fortuitous cause.
The decision of the 7th of March, 1902, on which stress has been laid, rested on two bases, one,
that the defendant was not negligent, because expressly relieved by royal order from the common
obligation imposed by the police law of maintaining a guard at the road crossing; the other,
because the act of the deceased in driving over level ground with unobstructed view in front of a
train running at speed, with the engine whistle blowing was the determining cause of the
accident. It is plain that the train was doing nothing but what it had a right to do and that the only
fault lay with the injured man. His negligence was not contributory, it was sole, and was of such
an efficient nature that without it no catastrophe could have happened.
On the other hand, there are many cases reported in which it seems plain that the plaintiff
sustaining damages was not free from contributory negligence; for instance, the decision of the
14th of December, 1894 (76Jurisprudencia Civil, No. 134), in which the owner of a building was
held liable for not furnishing protection to workmen engaged in hanging out flags, when the
latter must have perceived beforehand the danger attending the work.
None of those cases define the effect to be given the negligence of a plaintiff which contributed
to his injury as one of its causes, though not the principal one, and we are left to seek the theory
of the civil law in the practice of other countries.
In France in the case of Marquant, August 20, 1879, the cour de cassation held that the
carelessness of the victim did not civilly relieve the person without whose fault the accident
could not have happened, but that the contributory negligence of the injured man had the effect
only of reducing the damages. The same principle was applied in the case of Recullet, November
10, 1888. and that of Laugier of the 11th of November, 1896. (Fuzier-Herman,
Title Responsibilite Cirile, 411, 412.) Of like tenor are citations in Dalloz (vol. 18, 1806, Title
Trail, 363, 364, and vol. 15, 1895, Title Responsibilite, 193, 198).
In the Canadian Province of Quebee, which has retained for the most part the French Civil Law,
now embodied in a code following the Code Napoleon, a practice in accord with that of France is
laid down in many cases collected in the annotations to article 1053 of the code edited by
Beauchamps, 1904. One of these is Luttrell vs. Trottier, reported in La Revue de Jurisprudence,
volume 6, page 90, in which the court of Kings bench, otherwise known as the court of appeals,
the highest authority in the Dominion of Canada on points of French law, held that contributory
negligence did not exonerate the defendants whose fault had been the immediate cause of the
accident, but entitled him to a reduction of damages. Other similar cases in the provincial courts
have been overruled by appellate tribunals made up of common law judges drawn from other
provinces, who have preferred to impose uniformally throughout the Dominion the English
theory of contributory negligence. Such decisions throw no light upon the doctrines of the civil

law. Elsewhere we find this practice embodied in legislation; for instance, section 2 of article
2398 of the Code of Portugal reads as follows:
If in the case of damage there was fault or negligence on the part of the person injured
or in the part of some one else, the indemnification shall be reduced in the first case,
and in the second case it shall be appropriated in proportion to such fault or negligence
as provided in paragraphs 1 and 2 of section 2372.
And in article 1304 of the Austrian Code provides that the victim who is partly changeable with
the accident shall stand his damages in proportion to his fault, but when that proportion is
incapable of ascertainment, he shall share the liability equally with the person principally
responsible. The principle of proportional damages appears to be also adopted in article 51 of the
Swiss Code. Even in the United States in admirality jurisdictions, whose principles are derived
from the civil law, common fault in cases of collision have been disposed of not on the ground of
contradictor negligence, but on that of equal loss, the fault of the one part being offset against
that of the other. (Ralli vs. Troop, 157 U. S. 386; 97.)
The damage of both being added together and the sum equally divided, a decree is entered in
favor of the vessel sustaining the greater loss against the other for the excess of her damages over
one-half of the aggregate sum. (The Manitoba, 122 U. S., 97)
Exceptional practice appears to prevail in maritime law in other jurisdictions. The Spanish Code
of Commerce, article 827, makes each vessel for its own damage when both are the fault; this
provision restricted to a single class of the maritime accidents, falls for short of a recognition of
the principle of contributory negligence as understood in American Law, with which, indeed, it
has little in common. This is a plain from other articles of the same code; for instance, article
829, referring to articles 826, 827, and 828, which provides: "In the cases above mentioned the
civil action of the owner against the person liable for the damage is reserved, as well as the
criminal liability which may appear."
The rule of the common law, a hard and fast one, not adjustable with respects of the faults of the
parties, appears to have grown out the original method of trial by jury, which rendered difficult a
nice balancing of responsibilities and which demanded an inflexible standard as a safeguard
against too ready symphaty for the injured. It was assumed that an exact measure of several
concurring faults was unattainable.
The reason why, in cases of mutual concurring negligence, neither party can maintain
an action against the other, is, not the wrong of the one is set off against the wrong of
the other; it that the law can not measure how much of the damage suffered is
attributable to the plaintiff's own fault. If he were allowed to recover, it might be that
he would obtain from the other party compensation for hiss own misconduct.
(Heil vs.Glanding, 42 Penn. St. Rep., 493, 499.)

The parties being mutually in fault, there can be no appointment of damages. The law
has no scales to determine in such cases whose wrongdoing weighed most in the
compound that occasioned the mischief. (Railroad vs. Norton, 24 Penn. St. 565, 469.)
Experience with jury trials in negligence cases has brought American courts to review to relax
the vigor of the rule by freely exercising the power of setting aside verdicts deemed excessive,
through the device of granting new trials, unless reduced damages are stipulated for, amounting
to a partial revision of damages by the courts. It appears to us that the control by the court of the
subject matter may be secured on a moral logical basis and its judgment adjusted with greater
nicety to the merits of the litigants through the practice of offsetting their respective
responsibilities. In the civil law system the desirable end is not deemed beyond the capacity of its
tribunals.
Whatever may prove to be the doctrine finally adopted in Spain or in other countries under the
stress and counter stress of novel schemers of legislation, we find the theory of damages laid
down in the judgment the most consistent with the history and the principals of our law in these
Islands and with its logical development.
Difficulty seems to be apprehended in deciding which acts of the injured party shall be
considered immediate causes of the accident. The test is simple. Distinction must be between the
accident and the injury, between the event itself, without which there could have been no
accident, and those acts of the victim not entering into it, independent of it, but contributing
under review was the displacement of the crosspiece or the failure to replace it. this produced the
event giving occasion for damages that is, the shinking of the track and the sliding of the iron
rails. To this event, the act of the plaintiff in walking by the side of the car did not contribute,
although it was an element of the damage which came to himself. Had the crosspiece been out of
place wholly or partly thorough his act of omission of duty, the last would have been one of the
determining causes of the event or accident, for which he would have been responsible. Where
he contributes to the principal occurrence, as one of its determining factors, he can not recover.
Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover
the amount that the defendant responsible for the event should pay for such injury, less a sum
deemed a suitable equivalent for his own imprudence.
SECOND DIVISION
Accepting, though with some hesitation, the judgment of the trial court, fixing the damage
incurred by the plaintiff at 5,000 pesos, the equivalent of 2,500 dollars, United States money, we
deduct therefrom 2,500 pesos, the amount fairly attributable to his negligence, and direct
judgment to be entered in favor of the plaintiff for the resulting sum of 2,500 pesos, with cost of
both instances, and ten days hereafter let the case be remanded to the court below for proper
action. So ordered.

[G.R. No. 122039. May 31, 2000]

VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA JUJEURCHE
SUNGA and FRANCISCO SALVA, respondents.
D E C I S I ON
MENDOZA, J.:

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 oclock 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.

(1) P50,000.00 as actual and compensatory damages;

(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorneys 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. Sdaadsc
The petition has no merit.

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.Korte
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
Sungas 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:

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 of res 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 petitioners 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 petitioners 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
petitioners 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 petitioners driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of 32(a) of the same law. It provides: Mesm
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 petitioners contention that Sungas 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 petitioners 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 debtors 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. Kycalr
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 19891990 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 x x x 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]

The original actions a quo were instituted by Ford Philippines to recover from the drawee bank,
CITIBANK, N.A. (Citibank) and collecting bank, Philippine Commercial International Bank
(PCIBank) [formerly Insular Bank of Asia and America], the value of several checks payable to
the Commissioner of Internal Revenue, which were embezzled allegedly by an organized
syndicate.1wphi1.nt

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. Sungas
contention that petitioners 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. Exsm

G.R. Nos. 121413 and 121479 are twin petitions for review of the March 27, 1995 Decision 1 of
the Court of Appeals in CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. Citibank,
N.A. and Insular Bank of Asia and America (now Philipppine Commercial International Bank),
and the August 8, 1995 Resolution,2 ordering the collecting bank, Philippine Commercial
International Bank, to pay the amount of Citibank Check No. SN-04867.

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. SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

In G.R. No. 128604, petitioner Ford Philippines assails the October 15, 1996 Decision 3 of the
Court of Appeals and its March 5, 1997 Resolution 4 in CA-G.R. No. 28430 entitled "Ford
Philippines, Inc. vs. Citibank, N.A. and Philippine Commercial International Bank," affirming in
toto the judgment of the trial court holding the defendant drawee bank, Citibank, N.A., solely
liable to pay the amount of P12,163,298.10 as damages for the misapplied proceeds of the
plaintiff's Citibanl Check Numbers SN-10597 and 16508.
I. G.R. Nos. 121413 and 121479
The stipulated facts submitted by the parties as accepted by the Court of Appeals are as follows:

SECOND DIVISION
G.R. No. 121413

January 29, 2001

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly INSULAR BANK OF

ASIA AND AMERICA),petitioner,
vs.
COURT OF APPEALS and FORD PHILIPPINES, INC. and CITIBANK,
N.A., respondents.
G.R. No. 121479
January 29, 2001
FORD PHILIPPINES, INC., petitioner-plaintiff,
vs.
COURT OF APPEALS and CITIBANK, N.A. and PHILIPPINE COMMERCIAL
INTERNATIONAL BANK,respondents.
G.R. No. 128604
January 29, 2001
FORD PHILIPPINES, INC., petitioner,
vs.
CITIBANK, N.A., PHILIPPINE COMMERCIAL INTERNATIONAL BANK and COURT
OF APPEALS, respondents.
QUISUMBING, J.:
These consolidated petitions involve several fraudulently negotiated checks.

"On October 19, 1977, the plaintiff Ford drew and issued its Citibank Check No. SN-04867 in
the amount of P4,746,114.41, in favor of the Commissioner of Internal Revenue as payment of
plaintiff;s percentage or manufacturer's sales taxes for the third quarter of 1977.
The aforesaid check was deposited with the degendant IBAA (now PCIBank) and was
subsequently cleared at the Central Bank. Upon presentment with the defendant Citibank, the
proceeds of the check was paid to IBAA as collecting or depository bank.
The proceeds of the same Citibank check of the plaintiff was never paid to or received by the
payee thereof, the Commissioner of Internal Revenue.
As a consequence, upon demand of the Bureau and/or Commissioner of Internal Revenue, the
plaintiff was compelled to make a second payment to the Bureau of Internal Revenue of its
percentage/manufacturers' sales taxes for the third quarter of 1977 and that said second payment
of plaintiff in the amount of P4,746,114.41 was duly received by the Bureau of Internal
Revenue.
It is further admitted by defendant Citibank that during the time of the transactions in question,
plaintiff had been maintaining a checking account with defendant Citibank; that Citibank Check
No. SN-04867 which was drawn and issued by the plaintiff in favor of the Commissioner of
Internal Revenue was a crossed check in that, on its face were two parallel lines and written in
between said lines was the phrase "Payee's Account Only"; and that defendant Citibank paid the
full face value of the check in the amount of P4,746,114.41 to the defendant IBAA.

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

because there was an error in the computation of the tax due to the Bureau of Internal Revenue
(BIR). With Rivera's instruction, PCIBank replaced the check with two of its own Manager's
Checks (MCs). Alleged members of a syndicate later deposited the two MCs with the Pacific
Banking Corporation.

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

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

Upon verification, plaintiff discovered that its Citibank Check No. SN-04867 in the amount of
P4,746,114.41 was not paid to the Commissioner of Internal Revenue. Hence, in separate letters
dated October 26, 1979, addressed to the defendants, the plaintiff notified the latter that in case
it will be re-assessed by the BIR for the payment of the taxes covered by the said checks, then
plaintiff shall hold the defendants liable for reimbursement of the face value of the same. Both
defendants denied liability and refused to pay.
In a letter dated February 28, 1980 by the Acting Commissioner of Internal Revenue
addressed to the plaintiff - supposed to be Exhibit "D", the latter was officially informed,
among others, that its check in the amount of P4, 746,114.41 was not paid to the government
or its authorized agent and instead encashed by unauthorized persons, hence, plaintiff has to
pay the said amount within fifteen days from receipt of the letter. Upon advice of the plaintiff's
lawyers, plaintiff on March 11, 1982, paid to the Bureau of Internal Revenue, the amount of
P4,746,114.41, representing payment of plaintiff's percentage tax for the third quarter of 1977.

On June 15, 1989, the trial court rendered its decision, as follows:
"Premises considered, judgment is hereby rendered as follows:
"1. Ordering the defendants Citibank and IBAA (now PCI Bank), jointly and severally, to pay
the plaintiff the amount of P4,746,114.41 representing the face value of plaintiff's Citibank
Check No. SN-04867, with interest thereon at the legal rate starting January 20, 1983, the date
when the original complaint was filed until the amount is fully paid, plus costs;
"2. On defendant Citibank's cross-claim: ordering the cross-defendant IBAA (now PCI Bank)
to reimburse defendant Citibank for whatever amount the latter has paid or may pay to the
plaintiff in accordance with next preceding paragraph;
"3. The counterclaims asserted by the defendants against the plaintiff, as well as that asserted
by the cross-defendant against the cross-claimant are dismissed, for lack of merits; and
"4. With costs against the defendants.

As a consequence of defendant's refusal to reimburse plaintiff of the payment it had made for
the second time to the BIR of its percentage taxes, plaintiff filed on January 20, 1983 its
original complaint before this Court.
On December 24, 1985, defendant IBAA was merged with the Philippine Commercial
International Bank (PCI Bank) with the latter as the surviving entity.
Defendant Citibank maintains that; the payment it made of plaintiff's Citibank Check No. SN04867 in the amount of P4,746,114.41 "was in due course"; it merely relied on the clearing
stamp of the depository/collecting bank, the defendant IBAA that "all prior indorsements
and/or lack of indorsements guaranteed"; and the proximate cause of plaintiff's injury is the
gross negligence of defendant IBAA in indorsing the plaintiff's Citibank check in question.
It is admitted that on December 19, 1977 when the proceeds of plaintiff's Citibank Check No.
SN-048867 was paid to defendant IBAA as collecting bank, plaintiff was maintaining a
checking account with defendant Citibank."5
Although it was not among the stipulated facts, an investigation by the National Bureau of
Investigation (NBI) revealed that Citibank Check No. SN-04867 was recalled by Godofredo
Rivera, the General Ledger Accountant of Ford. He purportedly needed to hold back the check

SO ORDERED."6
Not satisfied with the said decision, both defendants, Citibank and PCIBank, elevated their
respective petitions for review on certiorari to the Courts of Appeals. On March 27, 1995, the
appellate court issued its judgment as follows:
"WHEREFORE, in view of the foregoing, the court AFFIRMS the appealed decision with
modifications.
The court hereby renders judgment:
1. Dismissing the complaint in Civil Case No. 49287 insofar as defendant Citibank N.A. is
concerned;
2. Ordering the defendant IBAA now PCI Bank to pay the plaintiff the amount of
P4,746,114.41 representing the face value of plaintiff's Citibank Check No. SN-04867, with
interest thereon at the legal rate starting January 20, 1983, the date when the original
complaint was filed until the amount is fully paid;

3. Dismissing the counterclaims asserted by the defendants against the plaintiff as well as
that asserted by the cross-defendant against the cross-claimant, for lack of merits.
Costs against the defendant IBAA (now PCI Bank).
IT IS SO ORDERED."7
PCI Bank moved to reconsider the above-quoted decision of the Court of Appeals, while Ford
filed a "Motion for Partial Reconsideration." Both motions were denied for lack of merit.
Separately, PCIBank and Ford filed before this Court, petitions for review by certiorari under
Rule 45.
In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution of the Twelfth
Division of the Court of Appeals contending that it merely acted on the instruction of Ford and
such casue of action had already prescribed.
PCIBank sets forth the following issues for consideration:
I. Did the respondent court err when, after finding that the petitioner acted on the check drawn
by respondent Ford on the said respondent's instructions, it nevertheless found the petitioner
liable to the said respondent for the full amount of the said check.
II. Did the respondent court err when it did not find prescription in favor of the petitioner.8
In a counter move, Ford filed its petition docketed as G.R. No. 121479, questioning the same
decision and resolution of the Court of Appeals, and praying for the reinstatement in toto of the
decision of the trial court which found both PCIBank and Citibank jointly and severally liable for
the loss.
In G.R. No. 121479, appellant Ford presents the following propositions for consideration:

Internal Revenue; thus, PCIBank's only obligation is to deliver the proceeds to the
Commissioner of the Bureau of Internal Revenue.10
2. PCIBank which affixed its indorsement on the subject check ("All prior indorsement
and/or lack of indorsement guaranteed"), is liable as collecting bank. 11
3. PCIBank is barred from raising issues of fact in the instant proceedings. 12
4. Petitioner Ford's cause of action had not prescribed. 13
II. G.R. No. 128604
The same sysndicate apparently embezzled the proceeds of checks intended, this time, to settle
Ford's percentage taxes appertaining to the second quarter of 1978 and the first quarter of 1979.
The facts as narrated by the Court of Appeals are as follows:
Ford drew Citibank Check No. SN-10597 on July 19, 1978 in the amount of P5,851,706.37
representing the percentage tax due for the second quarter of 1978 payable to the Commissioner
of Internal Revenue. A BIR Revenue Tax Receipt No. 28645385 was issued for the said purpose.
On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of
P6,311,591.73, representing the payment of percentage tax for the first quarter of 1979 and
payable to the Commissioner of Internal Revenue. Again a BIR Revenue Tax Receipt No. A1697160 was issued for the said purpose.
Both checks were "crossed checks" and contain two diagonal lines on its upper corner between,
which were written the words "payable to the payee's account only."
The checks never reached the payee, CIR. Thus, in a letter dated February 28, 1980, the BIR,
Region 4-B, demanded for the said tax payments the corresponding periods above-mentioned.
As far as the BIR is concernced, the said two BIR Revenue Tax Receipts were considered "fake
and spurious". This anomaly was confirmed by the NBI upon the initiative of the BIR. The
findings forced Ford to pay the BIR a new, while an action was filed against Citibank and
PCIBank for the recovery of the amount of Citibank Check Numbers SN-10597 and 16508.

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

1. As drawee bank, respondent Citibank owes to petitioner Ford, as the drawer of the subject
check and a depositor of respondent Citibank, an absolute and contractual duty to pay the
proceeds of the subject check only to the payee thereof, the Commissioner of Internal
Revenue.
2. Respondent Citibank failed to observe its duty as banker with respect to the subject
check, which was crossed and payable to "Payee's Account Only."
3. Respondent Citibank raises an issue for the first time on appeal; thus the same should not
be considered by the Honorable Court.
4. As correctly held by the trial court, there is no evidence of gross negligence on the part of
petitioner Ford.9
II. PCI Bank is liable to petitioner Ford considering that:
1. There were no instructions from petitioner Ford to deliver the proceeds of the subject
check to a person other than the payee named therein, the Commissioner of the Bureau of

The Regional Trial Court of Makati, Branch 57, which tried the case, made its findings on
the modus operandi of the syndicate, as follows:
"A certain Mr. Godofredo Rivera was employed by the plaintiff FORD as its General
Ledger Accountant. As such, he prepared the plaintiff's check marked Ex. 'A' [Citibank
Check No. Sn-10597] for payment to the BIR. Instead, however, fo delivering the same
of the payee, he passed on the check to a co-conspirator named Remberto Castro who
was a pro-manager of the San Andres Branch of PCIB.* In connivance with one
Winston Dulay, Castro himself subsequently opened a Checking Account in the name
of a fictitious person denominated as 'Reynaldo reyes' in the Meralco Branch of
PCIBank where Dulay works as Assistant Manager.
After an initial deposit of P100.00 to validate the account, Castro deposited a worthless
Bank of America Check in exactly the same amount as the first FORD check (Exh.

"A", P5,851,706.37) while this worthless check was coursed through PCIB's main
office enroute to the Central Bank for clearing, replaced this worthless check with
FORD's Exhibit 'A' and accordingly tampered the accompanying documents to cover
the replacement. As a result, Exhibit 'A' was cleared by defendant CITIBANK, and the
fictitious deposit account of 'Reynaldo Reyes' was credited at the PCIB Meralco
Branch with the total amount of the FORD check Exhibit 'A'. The same method was
again utilized by the syndicate in profiting from Exh. 'B' [Citibank Check No. SN16508] which was subsequently pilfered by Alexis Marindo, Rivera's Assistant at
FORD.

against PCIBank and holding Citibank solely responsible for the proceeds of Citibank Check
Numbers SN-10597 and 16508 for P5,851,706.73 and P6,311,591.73 respectively.

From this 'Reynaldo Reyes' account, Castro drew various checks distributing the sahres of the
other participating conspirators namely (1) CRISANTO BERNABE, the mastermind who
formulated the method for the embezzlement; (2) RODOLFO R. DE LEON a customs broker
who negotiated the initial contact between Bernabe, FORD's Godofredo Rivera and PCIB's
Remberto Castro; (3) JUAN VASTILLO who assisted de Leon in the initial arrangements; (4)
GODOFREDO RIVERA, FORD's accountant who passed on the first check (Exhibit "A") to
Castro; (5) REMERTO CASTRO, PCIB's pro-manager at San Andres who performed the
switching of checks in the clearing process and opened the fictitious Reynaldo Reyes account
at the PCIB Meralco Branch; (6) WINSTON DULAY, PCIB's Assistant Manager at its
Meralco Branch, who assisted Castro in switching the checks in the clearing process and
facilitated the opening of the fictitious Reynaldo Reyes' bank account; (7) ALEXIS
MARINDO, Rivera's Assistant at FORD, who gave the second check (Exh. "B") to Castro; (8)
ELEUTERIO JIMENEZ, BIR Collection Agent who provided the fake and spurious revenue
tax receipts to make it appear that the BIR had received FORD's tax payments.

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

Several other persons and entities were utilized by the syndicate as conduits in the
disbursements of the proceeds of the two checks, but like the aforementioned participants in
the conspiracy, have not been impleaded in the present case. The manner by which the said
funds were distributed among them are traceable from the record of checks drawn against the
original "Reynaldo Reyes" account and indubitably identify the parties who illegally benefited
therefrom and readily indicate in what amounts they did so."14
On December 9, 1988, Regional Trial Court of Makati, Branch 57, held drawee-bank, Citibank,
liable for the value of the two checks while adsolving PCIBank from any liability, disposing as
follows:
"WHEREFORE, judgment is hereby rendered sentencing defendant CITIBANK to reimburse
plaintiff FORD the total amount of P12,163,298.10 prayed for in its complaint, with 6%
interest thereon from date of first written demand until full payment, plus P300,000.00
attorney's fees and expenses litigation, and to pay the defendant, PCIB (on its counterclaim to
crossclaim) the sum of P300,000.00 as attorney's fees and costs of litigation, and pay the costs.

Ford avers that the Court of Appeals erred in dismissing the complaint against defendant
PCIBank considering that:
I. Defendant PCIBank was clearly negligent when it failed to exercise the diligence
required to be exercised by it as a banking insitution.

III. Defendant PCIBank was, due to its negligence, clearly liable for the loss or damage
resulting to the plaintiff Ford as a consequence of the substitution of the check
consistent with Section 5 of Central Bank Circular No. 580 series of 1977.
IV. Assuming arguedo that defedant PCIBank did not accept, endorse or negotiate in
due course the subject checks, it is liable, under Article 2154 of the Civil Code, to
return the money which it admits having received, and which was credited to it its
Central bank account.16
The main issue presented for our consideration by these petitions could be simplified as follows:
Has petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank
(Citibank) the value of the checks intended as payment to the Commissioner of Internal
Revenue? Or has Ford's cause of action already prescribed?
Note that in these cases, the checks were drawn against the drawee bank, but the title of the
person negotiating the same was allegedly defective because the instrument was obtained by
fraud and unlawful means, and the proceeds of the checks were not remitted to the payee. It was
established that instead of paying the checks to the CIR, for the settlement of the approprite
quarterly percentage taxes of Ford, the checks were diverted and encashed for the eventual
distribution among the mmbers of the syndicate. As to the unlawful negotiation of the check the
applicable law is Section 55 of the Negotiable Instruments Law (NIL), which provides:
"When title defective -- The title of a person who negotiates an instrument is defective
within the meaning of this Act when he obtained the instrument, or any signature
thereto, by fraud, duress, or fore and fear, or other unlawful means, or for an illegal
consideration, or when he negotiates it in breach of faith or under such circumstances
as amount to a fraud."

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

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

Petitioner Ford prays that judgment be rendered setting aside the portion of the Court of Appeals
decision and its resolution dated March 5, 1997, with respect to the dismissal of the complaint

In this case, we note that the direct perpetrators of the offense, namely the embezzlers belonging
to a syndicate, are now fugitives from justice. They have, even if temporarily, escaped liability

SO ORDERED."15

for the embezzlement of millions of pesos. We are thus left only with the task of determining
who of the present parties before us must bear the burden of loss of these millions. It all boils
down to the question of liability based on the degree of negligence among the parties concerned.
Foremost, we must resolve whether the injured party, Ford, is guilty of the "imputed contributory
negligence" that would defeat its claim for reimbursement, bearing ing mind that its employees,
Godofredo Rivera and Alexis Marindo, were among the members of the syndicate.
Citibank points out that Ford allowed its very own employee, Godofredo Rivera, to negotiate the
checks to his co-conspirators, instead of delivering them to the designated authorized collecting
bank (Metrobank-Alabang) of the payee, CIR. Citibank bewails the fact that Ford was remiss in
the supervision and control of its own employees, inasmuch as it only discovered the syndicate's
activities through the information given by the payee of the checks after an unreasonable period
of time.
PCIBank also blames Ford of negligence when it allegedly authorized Godofredo Rivera to
divert the proceeds of Citibank Check No. SN-04867, instead of using it to pay the BIR. As to
the subsequent run-around of unds of Citibank Check Nos. SN-10597 and 16508, PCIBank
claims that the proximate cause of the damge to Ford lies in its own officers and employees who
carried out the fradulent schemes and the transactions. These circumstances were not checked by
other officers of the company including its comptroller or internal auditor. PCIBank contends
that the inaction of Ford despite the enormity of the amount involved was a sheer negligence and
stated that, as between two innocent persons, one of whom must suffer the consequences of a
breach of trust, the one who made it possible, by his act of negligence, must bear the loss.
For its part, Ford denies any negligence in the performance of its duties. It avers that there was
no evidence presented before the trial court showing lack of diligence on the part of Ford. And,
citing the case of Gempesaw vs. Court of Appeals, 17 Ford argues that even if there was a finding
therein that the drawer was negligent, the drawee bank was still ordered to pay damages.
Furthermore, Ford contends the Godofredo rivera was not authorized to make any representation
in its behalf, specifically, to divert the proceeds of the checks. It adds that Citibank raised the
issue of imputed negligence against Ford for the first time on appeal. Thus, it should not be
considered by this Court.
On this point, jurisprudence regarding the imputed negligence of employer in a master-servant
relationship is instructive. Since a master may be held for his servant's wrongful act, the law
imputes to the master the act of the servant, and if that act is negligent or wrongful and
proximately results in injury to a third person, the negligence or wrongful conduct is the
negligence or wrongful conduct of the master, for which he is liable. 18 The general rule is that if
the master is injured by the negligence of a third person and by the concuring contributory
negligence of his own servant or agent, the latter's negligence is imputed to his superior and will
defeat the superior's action against the third person, asuming, of course that the contributory
negligence was the proximate cause of the injury of which complaint is made.19
Accordingly, we need to determine whether or not the action of Godofredo Rivera, Ford's
General Ledger Accountant, and/or Alexis Marindo, his assistant, was the proximate cause of the
loss or damage. AS defined, proximate cause is that which, in the natural and continuous

sequence, unbroken by any efficient, intervening cause produces the injury and without the result
would not have occurred.20
It appears that although the employees of Ford initiated the transactions attributable to an
organized syndicate, in our view, their actions were not the proximate cause of encashing the
checks payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as
the proximate cause of the injury to the parties.
The Board of Directors of Ford, we note, did not confirm the request of Godofredo Rivera to
recall Citibank Check No. SN-04867. Rivera's instruction to replace the said check with
PCIBank's Manager's Check was not in theordinary course of business which could have
prompted PCIBank to validate the same.
As to the preparation of Citibank Checks Nos. SN-10597 and 16508, it was established that these
checks were made payable to the CIR. Both were crossed checks. These checks were apparently
turned around by Ford's emploees, who were acting on their own personal capacity.
Given these circumstances, the mere fact that the forgery was committed by a drawer-payor's
confidential employee or agent, who by virtue of his position had unusual facilities for
perpertrating the fraud and imposing the forged paper upon the bank, does note ntitle the bank
toshift the loss to the drawer-payor, in the absence of some circumstance raising estoppel against
the drawer.21 This rule likewise applies to the checks fraudulently negotiated or diverted by the
confidential employees who hold them in their possession.
With respect to the negligence of PCIBank in the payment of the three checks involved,
separately, the trial courts found variations between the negotiation of Citibank Check No. SN04867 and the misapplication of total proceeds of Checks SN-10597 and 16508. Therefore, we
have to scrutinize, separately, PCIBank's share of negligence when the syndicate achieved its
ultimate agenda of stealing the proceeds of these checks.
G.R. Nos. 121413 and 121479
Citibank Check No. SN-04867 was deposited at PCIBank through its Ermita Branch. It was
coursed through the ordinary banking transaction, sent to Central Clearing with the indorsement
at the back "all prior indorsements and/or lack of indorsements guaranteed," and was presented
to Citibank for payment. Thereafter PCIBank, instead of remitting the proceeds to the CIR,
prepared two of its Manager's checks and enabled the syndicate to encash the same.
On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The
neglect of PCIBank employees to verify whether his letter requesting for the replacement of the
Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required
in the circumstances.
Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in
behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding
the unwarranted instructions given by the payor or its agent. As aptly stated by the trial court, to
wit:

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

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

As agent of the BIR (the payee of the check), defendant IBAA should receive instructions only
from its principal BIR and not from any other person especially so when that person is not
known to the defendant. It is very imprudent on the part of the defendant IBAA to just rely on
the alleged telephone call of the one Godofredo Rivera and in his signature considering that
the plaintiff is not a client of the defendant IBAA."

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

It is a well-settled rule that the relationship between the payee or holder of commercial paper and
the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that
of principal and agent.22 A bank which receives such paper for collection is the agent of the
payee or holder.23
Even considering arguendo, that the diversion of the amount of a check payable to the collecting
bank in behalf of the designated payee may be allowed, still such diversion must be properly
authorized by the payor. Otherwise stated, the diversion can be justified only by proof of
authority from the drawer, or that the drawer has clothed his agent with apparent authority to
receive the proceeds of such check.
Citibank further argues that PCI Bank's clearing stamp appearing at the back of the questioned
checks stating that ALL PRIOR INDORSEMENTS AND/OR LACK OF INDORSEMENTS
GURANTEED should render PCIBank liable because it made it pass through the clearing house
and therefore Citibank had no other option but to pay it. Thus, Citibank had no other option but
to pay it. Thus, Citibank assets that the proximate cause of Ford's injury is the gross negligence
of PCIBank. Since the questione dcrossed check was deposited with PCIBank, which claimed to
be a depository/collecting bank of the BIR, it had the responsibility to make sure that the check
in questions is deposited in Payee's account only.
Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the
check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting
bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is
the collecting bank (PCIBank) which is bound to scruninize the check and to know its depositors
before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement
guaranteed".
In Banco de Oro Savings and Mortgage Bank vs. Equitable Banking Corporation, 24 we ruled:
"Anent petitioner's liability on said instruments, this court is in full accord with the ruling of
the PCHC's Board of Directors that:
'In presenting the checks for clearing and for payment, the defendant made an express
guarantee on the validity of "all prior endorsements." Thus, stamped at the back of the checks
are the defedant's clear warranty: ALL PRIOR ENDORSEMENTS AND/OR LACK OF
ENDORSEMENTS GUARANTEED. Without such warranty, plaintiff would not have paid on
the checks.'

Having established that the collecting bank's negligence is the proximate cause of the loss, we
conclude that PCIBank is liable in the amount corresponding to the proceeds of Citibank Check
No. SN-04867.
G.R. No. 128604
The trial court and the Court of Appeals found that PCIBank had no official act in the ordinary
course of business that would attribute to it the case of the embezzlement of Citibank Check
Numbers SN-10597 and 16508, because PCIBank did not actually receive nor hold the two Ford
checks at all. The trial court held, thus:
"Neither is there any proof that defendant PCIBank contributed any official or conscious
participation in the process of the embezzlement. This Court is convinced that the switching
operation (involving the checks while in transit for "clearing") were the clandestine or hidden
actuations performed by the members of the syndicate in their own personl, covert and private
capacity and done without the knowledge of the defendant PCIBank" 27
In this case, there was no evidence presented confirming the conscious particiapation of
PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the
wrongful or tortuous acts and declarations of its officers or agents within the course and scope of
their employment.28 A bank will be held liable for the negligence of its officers or agents when
acting within the course and scope of their employment. It may be liable for the tortuous acts of
its officers even as regards that species of tort of which malice is an essential element. In this
case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched
by a syndicate in which its own management employees had particiapted.
The pro-manager of San Andres Branch of PCIBank, Remberto Castro, received Citibank Check
Numbers SN-10597 and 16508. He passed the checks to a co-conspirator, an Assistant Manager
of PCIBank's Meralco Branch, who helped Castro open a Checking account of a fictitious person
named "Reynaldo Reyes." Castro deposited a worthless Bank of America Check in exactly the

same amount of Ford checks. The syndicate tampered with the checks and succeeded in
replacing the worthless checks and the eventual encashment of Citibank Check Nos. SN 10597
and 16508. The PCIBank Ptro-manager, Castro, and his co-conspirator Assistant Manager
apparently performed their activities using facilities in their official capacity or authority but for
their personal and private gain or benefit.

its designated payee. The fact that the drawee bank did not discover the irregularity seasonably,
in our view, consitutes negligence in carrying out the bank's duty to its depositors. The point is
that as a business affected with public interest and because of the nature of its functions, the bank
is under obligation to treat the accounts of its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship. 33

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

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

Moreover, as correctly pointed out by Ford, Section 5 31 of Central Bank Circular No. 580, Series
of 1977 provides that any theft affecting items in transit for clearing, shall be for the account of
sending bank, which in this case is PCIBank.
But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.
The evidence on record shows that Citibank as drawee bank was likewise negligent in the
performance of its duties. Citibank failed to establish that its payment of Ford's checjs were
made in due course and legally in order. In its defense, Citibank claims the genuineness and due
execution of said checks, considering that Citibank (1) has no knowledge of any informity in the
issuance of the checks in question (2) coupled by the fact that said checks were sufficiently
funded and (3) the endorsement of the Payee or lack thereof was guaranteed by PCI Bank
(formerly IBAA), thus, it has the obligation to honor and pay the same.
For its part, Ford contends that Citibank as the drawee bank owes to Ford an absolute and
contractual duty to pay the proceeds of the subject check only to the payee thereof, the CIR.
Citing Section 6232 of the Negotiable Instruments Law, Ford argues that by accepting the
instrument, the acceptro which is Citibank engages that it will pay according to the tenor of its
acceptance, and that it will pay only to the payee, (the CIR), considering the fact that here the
check was crossed with annotation "Payees Account Only."
As ruled by the Court of Appeals, Citibank must likewise answer for the damages incurred by
Ford on Citibank Checks Numbers SN 10597 and 16508, because of the contractual relationship
existing between the two. Citibank, as the drawee bank breached its contractual obligation with
Ford and such degree of culpability contributed to the damage caused to the latter. On this score,
we agree with the respondent court's ruling.
Citibank should have scrutinized Citibank Check Numbers SN 10597 and 16508 before paying
the amount of the proceeds thereof to the collecting bank of the BIR. One thing is clear from the
record: the clearing stamps at the back of Citibank Check Nos. SN 10597 and 16508 do not bear
any initials. Citibank failed to notice and verify the absence of the clearing stamps. Had this been
duly examined, the switching of the worthless checks to Citibank Check Nos. 10597 and 16508
would have been discovered in time. For this reason, Citibank had indeed failed to perform what
was incumbent upon it, which is to ensure that the amount of the checks should be paid only to

Time and again, we have stressed that banking business is so impressed with public interest
where the trust and confidence of the public in general is of paramount umportance such that the
appropriate standard of diligence must be very high, if not the highest, degree of diligence. 34 A
bank's liability as obligor is not merely vicarious but primary, wherein the defense of exercise of
due diligence in the selection and supervision of its employees is of no moment. 35
Banks handle daily transactions involving millions of pesos. 36 By the very nature of their work
the degree of responsibility, care and trustworthiness expected of their employees and officials is
far greater than those of ordinary clerks and employees. 37 Banks are expected to exercise the
highest degree of diligence in the selection and supervision of their employees. 38
On the issue of prescription, PCIBank claims that the action of Ford had prescribed because of
its inability to seek judicial relief seasonably, considering that the alleged negligent act took
place prior to December 19, 1977 but the relief was sought only in 1983, or seven years
thereafter.
The statute of limitations begins to run when the bank gives the depositor notice of the payment,
which is ordinarily when the check is returned to the alleged drawer as a voucher with a
statement of his account, 39 and an action upon a check is ordinarily governed by the statutory
period applicable to instruments in writing. 40
Our laws on the matter provide that the action upon a written contract must be brought within ten
year from the time the right of action accrues. 41 hence, the reckoning time for the prescriptive
period begins when the instrument was issued and the corresponding check was returned by the
bank to its depositor (normally a month thereafter). Applying the same rule, the cause of action
for the recovery of the proceeds of Citibank Check No. SN 04867 would normally be a month
after December 19, 1977, when Citibank paid the face value of the check in the amount of
P4,746,114.41. Since the original complaint for the cause of action was filed on January 20,
1984, barely six years had lapsed. Thus, we conclude that Ford's cause of action to recover the
amount of Citibank Check No. SN 04867 was seasonably filed within the period provided by
law.
Finally, we also find thet Ford is not completely blameless in its failure to detect the fraud.
Failure on the part of the depositor to examine its passbook, statements of account, and cancelled
checks and to give notice within a reasonable time (or as required by statute) of any discrepancy
which it may in the exercise of due care and diligence find therein, serves to mitigate the banks'
liability by reducing the award of interest from twelve percent (12%) to six percent (6%) per

annum. As provided in Article 1172 of the Civil Code of the Philippines, respondibility arising
from negligence in the performance of every kind of obligation is also demandable, but such
liability may be regulated by the courts, according to the circumstances. In quasi-delicts, the
contributory negligence of the plaintiff shall reduce the damages that he may recover. 42
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV
No. 25017 areAFFIRMED. PCIBank, know formerly as Insular Bank of Asia and America, id
declared solely responsible for the loss of the proceeds of Citibank Check No SN 04867 in the
amount P4,746,114.41, which shall be paid together with six percent (6%) interest thereon to
Ford Philippines Inc. from the date when the original complaint was filed until said amount is
fully paid.
However, the Decision and Resolution of the Court of Appeals in CA-G.R. No. 28430
are MODIFIED as follows: PCIBank and Citibank are adjudged liable for and must share the
loss, (concerning the proceeds of Citibank Check Numbers SN 10597 and 16508 totalling
P12,163,298.10) on a fifty-fifty ratio, and each bank is ORDEREDto pay Ford Philippines Inc.
P6,081,649.05, with six percent (6%) interest thereon, from the date the complaint was filed until
full payment of said amount.1wphi1.nt
Costs against Philippine Commercial International Bank and Citibank N.A.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12219

March 15, 1918

AMADO PICART, plaintiff-appellant,

vs.
FRANK SMITH, JR., defendant-appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr., the
sum of P31,000, as damages alleged to have been caused by an automobile driven by the
defendant. From a judgment of the Court of First Instance of the Province of La Union absolving
the defendant from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12, 1912,
on the Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in question
the plaintiff was riding on his pony over said bridge. Before he had gotten half way across, the

defendant approached from the opposite direction in an automobile, going at the rate of about ten
or twelve miles per hour. As the defendant neared the bridge he saw a horseman on it and blew
his horn to give warning of his approach. He continued his course and after he had taken the
bridge he gave two more successive blasts, as it appeared to him that the man on horseback
before him was not observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning signals. However,
being perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the
pony closely up against the railing on the right side of the bridge instead of going to the left. He
says that the reason he did this was that he thought he did not have sufficient time to get over to
the other side. The bridge is shown to have a length of about 75 meters and a width of 4.80
meters. As the automobile approached, the defendant guided it toward his left, that being the
proper side of the road for the machine. In so doing the defendant assumed that the horseman
would move to the other side. The pony had not as yet exhibited fright, and the rider had made
no sign for the automobile to stop. Seeing that the pony was apparently quiet, the defendant,
instead of veering to the right while yet some distance away or slowing down, continued to
approach directly toward the horse without diminution of speed. When he had gotten quite near,
there being then no possibility of the horse getting across to the other side, the defendant quickly
turned his car sufficiently to the right to escape hitting the horse alongside of the railing where it
as then standing; but in so doing the automobile passed in such close proximity to the animal that
it became frightened and turned its body across the bridge with its head toward the railing. In so
doing, it as struck on the hock of the left hind leg by the flange of the car and the limb was
broken. The horse fell and its rider was thrown off with some violence. From the evidence
adduced in the case we believe that when the accident occurred the free space where the pony
stood between the automobile and the railing of the bridge was probably less than one and one
half meters. As a result of its injuries the horse died. The plaintiff received contusions which
caused temporary unconsciousness and required medical attention for several days.
The question presented for decision is whether or not the defendant in maneuvering his car in the
manner above described was guilty of negligence such as gives rise to a civil obligation to repair
the damage done; and we are of the opinion that he is so liable. As the defendant started across
the bridge, he had the right to assume that the horse and the rider would pass over to the proper
side; but as he moved toward the center of the bridge it was demonstrated to his eyes that this
would not be done; and he must in a moment have perceived that it was too late for the horse to
cross with safety in front of the moving vehicle. In the nature of things this change of situation
occurred while the automobile was yet some distance away; and from this moment it was not
longer within the power of the plaintiff to escape being run down by going to a place of greater
safety. The control of the situation had then passed entirely to the defendant; and it was his duty
either to bring his car to an immediate stop or, seeing that there were no other persons on the
bridge, to take the other side and pass sufficiently far away from the horse to avoid the danger of
collision. Instead of doing this, the defendant ran straight on until he was almost upon the horse.
He was, we think, deceived into doing this by the fact that the horse had not yet exhibited fright.
But in view of the known nature of horses, there was an appreciable risk that, if the animal in
question was unacquainted with automobiles, he might get exited and jump under the conditions

which here confronted him. When the defendant exposed the horse and rider to this danger he
was, in our opinion, negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that person would have used in
the same situation? If not, then he is guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to the
personal judgment of the actor in the situation before him. The law considers what would be
reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and
determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation must
of course be always determined in the light of human experience and in view of the facts
involved in the particular case. Abstract speculations cannot here be of much value but this much
can be profitably said: Reasonable men govern their conduct by the circumstances which are
before them or known to them. They are not, and are not supposed to be, omniscient of the
future. Hence they can be expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under consideration, foresee harm as
a result of the course actually pursued? If so, it was the duty of the actor to take precautions to
guard against that harm. Reasonable foresight of harm, followed by ignoring of the suggestion
born of this prevision, is always necessary before negligence can be held to exist. Stated in these
terms, the proper criterion for determining the existence of negligence in a given case is this:
Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have
foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing
conduct or guarding against its consequences.
Applying this test to the conduct of the defendant in the present case we think that negligence is
clearly established. A prudent man, placed in the position of the defendant, would in our opinion,
have recognized that the course which he was pursuing was fraught with risk, and would
therefore have foreseen harm to the horse and the rider as reasonable consequence of that course.
Under these circumstances the law imposed on the defendant the duty to guard against the
threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself on the wrong side of the road. But as we have already
stated, the defendant was also negligent; and in such case the problem always is to discover
which agent is immediately and directly responsible. It will be noted that the negligent acts of the
two parties were not contemporaneous, since the negligence of the defendant succeeded the
negligence of the plaintiff by an appreciable interval. Under these circumstances the law is that
the person who has the last fair chance to avoid the impending harm and fails to do so is
chargeable with the consequences, without reference to the prior negligence of the other party.

The decision in the case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should
perhaps be mentioned in this connection. This Court there held that while contributory
negligence on the part of the person injured did not constitute a bar to recovery, it could be
received in evidence to reduce the damages which would otherwise have been assessed wholly
against the other party. The defendant company had there employed the plaintiff, as a laborer, to
assist in transporting iron rails from a barge in Manila harbor to the company's yards located not
far away. The rails were conveyed upon cars which were hauled along a narrow track. At certain
spot near the water's edge the track gave way by reason of the combined effect of the weight of
the car and the insecurity of the road bed. The car was in consequence upset; the rails slid off;
and the plaintiff's leg was caught and broken. It appeared in evidence that the accident was due to
the effects of the typhoon which had dislodged one of the supports of the track. The court found
that the defendant company was negligent in having failed to repair the bed of the track and also
that the plaintiff was, at the moment of the accident, guilty of contributory negligence in walking
at the side of the car instead of being in front or behind. It was held that while the defendant was
liable to the plaintiff by reason of its negligence in having failed to keep the track in proper
repair nevertheless the amount of the damages should be reduced on account of the contributory
negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted in an
omission only. The liability of the company arose from its responsibility for the dangerous
condition of its track. In a case like the one now before us, where the defendant was actually
present and operating the automobile which caused the damage, we do not feel constrained to
attempt to weigh the negligence of the respective parties in order to apportion the damage
according to the degree of their relative fault. It is enough to say that the negligence of the
defendant was in this case the immediate and determining cause of the accident and that the
antecedent negligence of the plaintiff was a more remote factor in the case.
A point of minor importance in the case is indicated in the special defense pleaded in the
defendant's answer, to the effect that the subject matter of the action had been previously
adjudicated in the court of a justice of the peace. In this connection it appears that soon after the
accident in question occurred, the plaintiff caused criminal proceedings to be instituted before a
justice of the peace charging the defendant with the infliction of serious injuries (lesiones
graves). At the preliminary investigation the defendant was discharged by the magistrate and the
proceedings were dismissed. Conceding that the acquittal of the defendant at the trial upon the
merits in a criminal prosecution for the offense mentioned would be res adjudicata upon the
question of his civil liability arising from negligence -- a point upon which it is unnecessary to
express an opinion -- the action of the justice of the peace in dismissing the criminal proceeding
upon the preliminary hearing can have no effect. (See U. S. vs. Banzuela and Banzuela, 31 Phil.
Rep., 564.)
From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum here awarded is estimated to include the value of
the horse, medical expenses of the plaintiff, the loss or damage occasioned to articles of his
apparel, and lawful interest on the whole to the date of this recovery. The other damages claimed
by the plaintiff are remote or otherwise of such character as not to be recoverable. So ordered.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-29462

March 7, 1929

IGNACIO DEL PRADO, plaintiff-appellee,

vs.
MANILA ELECTRIC CO., defendant-appellant.
STREET, J.:
This action was instituted in the Court of First Instance of Manila by Ignacio del Prado to
recover damages in the amount of P50,000 for personal injuries alleged to have been caused by
the negligence of the defendant, the Manila Electric Company, in the operation of one of its
street cars in the City of Manila. Upon hearing the cause the trial court awarded to the plaintiff
the sum of P10,000, as damages, with costs of suit, and the defendant appealed.
The appellant, the Manila Electric Company, is engaged in operating street cars in the City for
the conveyance of passengers; and on the morning of November 18, 1925, one Teodorico
Florenciano, as appellant's motorman, was in charge of car No. 74 running from east to west on
R. Hidalgo Street, the scene of the accident being at a point near the intersection of said street
and Mendoza Street. After the car had stopped at its appointed place for taking on and letting off
passengers, just east of the intersection, it resumed its course at a moderate speed under the
guidance of the motorman. The car had proceeded only a short distance, however, when the
plaintiff, Ignacio del Prado, ran across the street to catch the car, his approach being made from
the left. The car was of the kind having entrance and exist at either end, and the movement of the
plaintiff was so timed that he arrived at the front entrance of the car at the moment when the car
was passing.
The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends to shows that
the plaintiff, upon approaching the car, raised his hand as an indication to the motorman of his
desire to board the car, in response to which the motorman eased up a little, without stopping.
Upon this the plaintiff seized, with his hand, the front perpendicular handspot, at the same time
placing his left foot upon the platform. However, before the plaintiff's position had become
secure, and even before his raised right foot had reached the flatform, the motorman applied the
power, with the result that the car gave a slight lurch forward. This sudden impulse to the car
caused the plaintiff's foot to slip, and his hand was jerked loose from the handpost, He therefore
fell to the ground, and his right foot was caught and crushed by the moving car. The next day the
member had to be amputated in the hospital. The witness, Ciriaco Guevara, also stated that, as
the plaintiff started to board the car, he grasped the handpost on either side with both right and
left hand. The latter statement may possibly be incorrect as regards the use of his right hand by

the plaintiff, but we are of the opinion that the finding of the trial court to the effect that the
motorman slowed up slightly as the plaintiff was boarding the car that the plaintiff's fall was due
in part at lease to a sudden forward movement at the moment when the plaintiff put his foot on
the platform is supported by the evidence and ought not to be disturbed by us.
The motorman stated at the trial that he did not see the plaintiff attempting to board the car; that
he did not accelerate the speed of the car as claimed by the plaintiff's witnesses; and that he in
fact knew nothing of the incident until after the plaintiff had been hurt and some one called to
him to stop. We are not convinced of the complete candor of this statement, for we are unable to
see how a motorman operating this car could have failed to see a person boarding the car under
the circumstances revealed in this case. It must be remembered that the front handpost which, as
all witness agree, was grasped by the plaintiff in attempting to board the car, was immediately on
the left side of the motorman.
With respect to the legal aspects of the case we may observe at the outset that there is no
obligation on the part of a street railway company to stop its cars to let on intending passengers
at other points than those appointed for stoppage. In fact it would be impossible to operate a
system of street cars if a company engage in this business were required to stop any and
everywhere to take on people who were too indolent, or who imagine themselves to be in too
great a hurry, to go to the proper places for boarding the cars. Nevertheless, although the
motorman of this car was not bound to stop to let the plaintiff on, it was his duty to do act that
would have the effect of increasing the plaintiff's peril while he was attempting to board the car.
The premature acceleration of the car was, in our opinion, a breach of this duty.
The relation between a carrier of passengers for hire and its patrons is of a contractual nature;
and in failure on the part of the carrier to use due care in carrying its passengers safely is a
breach of duty (culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code.
Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons
boarding the cars as well as to those alighting therefrom. The case of Cangco vs. Manila Railroad
Co. (38 Phil., 768), supplies an instance of the violation of this duty with respect to a passenger
who was getting off of a train. In that case the plaintiff stepped off of a moving train, while it was
slowing down in a station, and at the time when it was too dark for him to see clearly where he
was putting his feet. The employees of the company had carelessly left watermelons on the
platform at the place where the plaintiff alighted, with the result that his feet slipped and he fell
under the car, where his right arm badly injured. This court held that the railroad company was
liable for breach positive duty (culpa contractual), and the plaintiff was awarded damages in the
amount of P2,500 for the loss of his arm. In the opinion in that case the distinction is clearly
drawn between a liability for negligence arising from breach of contructual duty and that arising
articles 1902 and 1903 of the Civil Code (culpa aquiliana).
The distiction between these two sorts of negligence is important in this jurisdiction, for the
reason that where liability arises from a mere tort (culpa aquiliana), not involving a breach of
positive obligation, an employer, or master, may exculpate himself, under the last paragraph of
article 1903 of the Civil Code, by providing that he had exercised due degligence to prevent the

damage; whereas this defense is not available if the liability of the master arises from a breach of
contrauctual duty (culpa contractual). In the case bfore us the company pleaded as a special
defense that it had used all the deligence of a good father of a family to prevent the damage
suffered by the plaintiff; and to establish this contention the company introduced testimony
showing that due care had been used in training and instructing the motorman in charge of this
car in his art. But this proof is irrelevant in view of the fact that the liability involved was derived
from a breach of obligation under article 1101 of the Civil Code and related provisions. (Manila
Railroad Co. vs. Compana Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875, 887; De
Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706, 710.)
Another practical difference between liability for negligence arising under 1902 of the Civil
Code and liability arising from negligence in the performance of a positive duty, under article
1101 and related provisions of the Civil Code, is that, in dealing with the latter form of
negligence, the court is given a discretion to mitigate liability according to the circumstances of
the case (art 1103). No such general discretion is given by the Code in dealing with liability
arising under article 1902; although possibly the same end is reached by courts in dealing with
the latter form of liability because of the latitude of the considerations pertinent to cases arising
under this article.
As to the contributory negligence of the plaintiff, we are of the opinion that it should be treated,
as in Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating circumstance under
article 1103 of the Civil Code. It is obvious that the plaintiff's negligence in attempting to board
the moving car was not the proximate cause of the injury. The direct and proximate cause of the
injury was the act of appellant's motorman in putting on the power prematurely. A person
boarding a moving car must be taken to assume the risk of injury from boarding the car under the
conditions open to his view, but he cannot fairly be held to assume the risk that the motorman,
having the situation in view, will increase his peril by accelerating the speed of the car before he
is planted safely on the platform. Again, the situation before us is one where the negligent act of
the company's servant succeeded the negligent act of the plaintiff, and the negligence of the
company must be considered the proximate cause of the injury. The rule here applicable seems to
be analogous to, if not identical with that which is sometimes referred to as the doctrine of "the
last clear chance." In accordance with this doctrine, the contributory negligence of the party
injured will not defeat the action if it be shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the consequences of the negligence of the injured
party (20 R. C. L., p. 139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The
negligence of the plaintiff was, however, contributory to the accident and must be considered as
a mitigating circumstance.
With respect to the effect of this injury upon the plaintiff's earning power, we note that, although
he lost his foot, he is able to use an artificial member without great inconvenience and his
earning capacity has probably not been reduced by more than 30 per centum. In view of the
precedents found in our decisions with respect to the damages that ought to be awarded for the
loss of limb, and more particularly Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359);
Cangco vs. Manila Railroad Co. (38 Phil., 768); and Borromeo vs. Manila Electric Railroad and

Light Co. (44 Phil., 165), and in view of all the circumstances connected with the case, we are of
the opinion that the plaintiff will be adequately compensated by an award of P2,500.
It being understood, therefore, that the appealed judgment is modified by reducing the recovery
to the sum of P2,500, the judgment, as thus modified, is affirmed. So ordered, with costs against
the appellant.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 72964

January 7, 1988

FILOMENO URBANO, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT AND PEOPLE OF THE
PHILIPPINES, respondents.
GUTIERREZ, JR., J.:
This is a petition to review the decision of the then Intermediate Appellate Court which affirmed
the decision of the then Circuit Criminal Court of Dagupan City finding petitioner Filomeno
Urban guilty beyond reasonable doubt of the crime of homicide.
The records disclose the following facts of the case.
At about 8:00 o'clock in the morning of October 23, 1980, petitioner Filomeno Urbano went to
his ricefield at Barangay Anonang, San Fabian, Pangasinan located at about 100 meters from the
tobacco seedbed of Marcelo Javier. He found the place where he stored his palay flooded with
water coming from the irrigation canal nearby which had overflowed. Urbano went to the
elevated portion of the canal to see what happened and there he saw Marcelo Javier and Emilio

Erfe cutting grass. He asked them who was responsible for the opening of the irrigation canal
and Javier admitted that he was the one. Urbano then got angry and demanded that Javier pay for
his soaked palay. A quarrel between them ensued. Urbano unsheathed his bolo (about 2 feet long,
including the handle, by 2 inches wide) and hacked Javier hitting him on the right palm of his
hand, which was used in parrying the bolo hack. Javier who was then unarmed ran away from
Urbano but was overtaken by Urbano who hacked him again hitting Javier on the left leg with
the back portion of said bolo, causing a swelling on said leg. When Urbano tried to hack and
inflict further injury, his daughter embraced and prevented him from hacking Javier.
Immediately thereafter, Antonio Erfe, Emilio Erfe, and Felipe Erfe brought Javier to his house
about 50 meters away from where the incident happened. Emilio then went to the house of
Barangay Captain Menardo Soliven but not finding him there, Emilio looked for barrio
councilman Felipe Solis instead. Upon the advice of Solis, the Erfes together with Javier went to
the police station of San Fabian to report the incident. As suggested by Corporal Torio, Javier
was brought to a physician. The group went to Dr. Guillermo Padilla, rural health physician of
San Fabian, who did not attend to Javier but instead suggested that they go to Dr. Mario Meneses
because Padilla had no available medicine.
After Javier was treated by Dr. Meneses, he and his companions returned to Dr. Guillermo
Padilla who conducted a medico-legal examination. Dr. Padilla issued a medico-legal certificate
(Exhibit "C" dated September 28, 1981) which reads:
TO WHOM IT MAY CONCERN:
This is to certify that I have examined the wound of Marcelo Javier, 20 years of age, married,
residing at Barangay Anonang, San Fabian, Pangasinan on October 23, 1980 and found the
following:
1 -Incised wound 2 inches in length at the upper portion of the lesser palmar prominence,
right.

forgiveness to Filomeno Urbano who shoulder (sic) all the expenses in his medical treatment,
and promising to him and to this Office that this will never be repeated anymore and not to
harbour any grudge against each other. (p. 87, Original Records.)
Urbano advanced P400.00 to Javier at the police station. On November 3, 1980, the additional
P300.00 was given to Javier at Urbano's house in the presence of barangay captain Soliven.
At about 1:30 a.m. on November 14, 1980, Javier was rushed to the Nazareth General Hospital in
a very serious condition. When admitted to the hospital, Javier had lockjaw and was having
convulsions. Dr. Edmundo Exconde who personally attended to Javier found that the latter's
serious condition was caused by tetanus toxin. He noticed the presence of a healing wound in
Javier's palm which could have been infected by tetanus.
On November 15, 1980 at exactly 4:18 p.m., Javier died in the hospital. The medical findings of
Dr. Exconde are as follows:
Date Diagnosis
11-14-80 ADMITTED due to trismus
adm. at DX TETANUS
1:30 AM Still having frequent muscle spasm. With diffi#35, 421 culty opening his mouth. Restless at times. Febrile
11-15-80 Referred. Novaldin 1 amp. inj. IM. Sudden cessation of respiration and HR after
muscular spasm.
02 inhalation administered. Ambo bag resuscitation and cardiac massage done but to no avail.

As to my observation the incapacitation is from (7-9) days period. This wound was presented
to me only for medico-legal examination, as it was already treated by the other doctor. (p. 88,
Original Records)

Pronounced dead by Dra. Cabugao at 4:18 P.M.

PMC done and cadaver brought home by relatives. (p. 100, Original Records)

Upon the intercession of Councilman Solis, Urbano and Javier agreed to settle their differences.
Urbano promised to pay P700.00 for the medical expenses of Javier. Hence, on October 27,
1980, the two accompanied by Solis appeared before the San Fabian Police to formalize their
amicable settlement. Patrolman Torio recorded the event in the police blotter (Exhibit A), to wit:
Entry Nr 599/27 Oct '80/103OH/ Re entry Nr 592 on page 257 both parties appeared before
this Station accompanied by brgy. councilman Felipe Solis and settled their case amicably, for
they are neighbors and close relatives to each other. Marcelo Javier accepted and granted

In an information dated April 10, 1981, Filomeno Urbano was charged with the crime of
homicide before the then Circuit Criminal Court of Dagupan City, Third Judicial District.
Upon arraignment, Urbano pleaded "not guilty." After trial, the trial court found Urbano guilty as
charged. He was sentenced to suffer an indeterminate prison term of from TWELVE (12)
YEARS of prision mayor, as minimum to SEVENTEEN (17) years, FOUR (4) MONTHS and
ONE (1) DAY of reclusion temporal, as maximum, together with the accessories of the law, to

indemnify the heirs of the victim, Marcelo Javier, in the amount of P12,000.00 without
subsidiary imprisonment in case of insolvency, and to pay the costs. He was ordered confined at
the New Bilibid Prison, in Muntinlupa, Rizal upon finality of the decision, in view of the nature
of his penalty.
The then Intermediate Appellate Court affirmed the conviction of Urbano on appeal but raised
the award of indemnity to the heirs of the deceased to P30,000.00 with costs against the
appellant.
The appellant filed a motion for reconsideration and/or new trial. The motion for new trial was
based on an affidavit of Barangay Captain Menardo Soliven (Annex "A") which states:
That in 1980, I was the barrio captain of Barrio Anonang, San Fabian, Pangasinan, and up to
the present having been re-elected to such position in the last barangay elections on May 17,
1982;
That sometime in the first week of November, 1980, there was a typhoon that swept
Pangasinan and other places of Central Luzon including San Fabian, a town of said province;
That during the typhoon, the sluice or control gates of the Bued irrigation dam which irrigates
the ricefields of San Fabian were closed and/or controlled so much so that water and its flow
to the canals and ditches were regulated and reduced;
That due to the locking of the sluice or control gates of the dam leading to the canals and
ditches which will bring water to the ricefields, the water in said canals and ditches became
shallow which was suitable for catching mudfishes;
That after the storm, I conducted a personal survey in the area affected, with my secretary
Perfecto Jaravata;
That on November 5, 1980, while I was conducting survey, I saw the late Marcelo Javier
catching fish in the shallow irrigation canals with some companions;
That few days there after,or on November l5, l980, I came to know that said Marcelo Javier
died of tetanus. (p. 33, Rollo)
The motion was denied. Hence, this petition.
In a resolution dated July 16, 1986, we gave due course to the petition.
The case involves the application of Article 4 of the Revised Penal Code which provides that
"Criminal liability shall be incurred: (1) By any person committing a felony (delito) although the
wrongful act done be different from that which he intended ..." Pursuant to this provision "an

accused is criminally responsible for acts committed by him in violation of law and for all the
natural and logical consequences resulting therefrom." (People v. Cardenas, 56 SCRA 631).
The record is clear that Marcelo Javier was hacked by the petitioner who used a bolo as a result
of which Javier suffered a 2-inch incised wound on his right palm; that on November 14, 1981
which was the 22nd day after the incident, Javier was rushed to the hospital in a very serious
condition and that on the following day, November 15, 1981, he died from tetanus.
Under these circumstances, the lower courts ruled that Javier's death was the natural and logical
consequence of Urbano's unlawful act. Hence, he was declared responsible for Javier's death.
Thus, the appellate court said:
The claim of appellant that there was an efficient cause which supervened from the time the
deceased was wounded to the time of his death, which covers a period of 23 days does not
deserve serious consideration. True, that the deceased did not die right away from his wound,
but the cause of his death was due to said wound which was inflicted by the appellant. Said
wound which was in the process of healing got infected with tetanus which ultimately caused
his death.
Dr. Edmundo Exconde of the Nazareth General Hospital testified that the victim suffered
lockjaw because of the infection of the wound with tetanus. And there is no other way by
which he could be infected with tetanus except through the wound in his palm (tsn., p. 78, Oct.
5, 1981). Consequently, the proximate cause of the victim's death was the wound which got
infected with tetanus. And the settled rule in this jurisdiction is that an accused is liable for all
the consequences of his unlawful act. (Article 4, par. 1, R.P.C. People v. Red, CA 43 O.G.
5072; People v. Cornel 78 Phil. 418).
Appellant's allegation that the proximate cause of the victim's death was due to his own
negligence in going back to work without his wound being properly healed, and lately, that he
went to catch fish in dirty irrigation canals in the first week of November, 1980, is an
afterthought, and a desperate attempt by appellant to wiggle out of the predicament he found
himself in. If the wound had not yet healed, it is impossible to conceive that the deceased
would be reckless enough to work with a disabled hand. (pp. 20-21, Rollo)
The petitioner reiterates his position that the proximate cause of the death of Marcelo Javier was
due to his own negligence, that Dr. Mario Meneses found no tetanus in the injury, and that Javier
got infected with tetanus when after two weeks he returned to his farm and tended his tobacco
plants with his bare hands exposing the wound to harmful elements like tetanus germs.
The evidence on record does not clearly show that the wound inflicted by Urbano was infected
with tetanus at the time of the infliction of the wound. The evidence merely confirms that the
wound, which was already healing at the time Javier suffered the symptoms of the fatal ailment,
somehow got infected with tetanus However, as to when the wound was infected is not clear
from the record.

In Vda. de Bataclan, et al. v. Medina (102 Phil. 1181), we adopted the following definition of
proximate cause:
... A satisfactory definition of proximate cause is found in Volume 38, pages 695-696 of
American Jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:
... "that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have
occurred."And more comprehensively, "the proximate legal cause is that acting first and
producing the injury, either immediately or by setting other events in motion, all constituting a
natural and continuous chain of events, each having a close causal connection with its
immediate predecessor, the final event in the chain immediately effecting the injury as a
natural and probable result of the cause which first acted, under such circumstances that the
person responsible for the first event should, as an ordinarily prudent and intelligent person,
have reasonable ground to expect at the moment of his act or default that an injury to some
person might probably result therefrom." (at pp. 185-186)
The issue, therefore, hinges on whether or not there was an efficient intervening cause from the
time Javier was wounded until his death which would exculpate Urbano from any liability for
Javier's death.

progresses, minimal or inapparent stimuli produce more intense and longer lasting spasms
with increasing frequency. Respiration may be impaired by laryngospasm or tonic contraction
of respiratory muscles which prevent adequate ventilation. Hypoxia may then lead to
irreversible central nervous system damage and death.
Mild tetanus is characterized by an incubation period of at least 14 days and an onset time of
more than 6 days. Trismus is usually present, but dysphagia is absent and generalized spasms
are brief and mild. Moderately severe tetanus has a somewhat shorter incubation period and
onset time; trismus is marked, dysphagia and generalized rigidity are present, but ventilation
remains adequate even during spasms. The criteria for severe tetanus include a short
incubation time, and an onset time of 72 hrs., or less, severe trismus, dysphagia and rigidity
and frequent prolonged, generalized convulsive spasms. (Harrison's Principle of Internal
Medicine, 1983 Edition, pp. 1004-1005; Emphasis supplied)
Therefore, medically speaking, the reaction to tetanus found inside a man's body depends on the
incubation period of the disease.
In the case at bar, Javier suffered a 2-inch incised wound on his right palm when he parried the
bolo which Urbano used in hacking him. This incident took place on October 23, 1980. After 22
days, or on November 14, 1980, he suffered the symptoms of tetanus, like lockjaw and muscle
spasms. The following day, November 15, 1980, he died.

We look into the nature of tetanusThe incubation period of tetanus, i.e., the time between injury and the appearance of
unmistakable symptoms, ranges from 2 to 56 days. However, over 80 percent of patients
become symptomatic within 14 days. A short incubation period indicates severe disease, and
when symptoms occur within 2 or 3 days of injury the mortality rate approaches 100 percent.
Non-specific premonitory symptoms such as restlessness, irritability, and headache are
encountered occasionally, but the commonest presenting complaints are pain and stiffness in
the jaw, abdomen, or back and difficulty swallowing. As the progresses, stiffness gives way to
rigidity, and patients often complain of difficulty opening their mouths. In fact, trismus in the
commonest manifestation of tetanus and is responsible for the familiar descriptive name of
lockjaw. As more muscles are involved, rigidity becomes generalized, and sustained
contractions called risus sardonicus. The intensity and sequence of muscle involvement is
quite variable. In a small proportion of patients, only local signs and symptoms develop in the
region of the injury. In the vast majority, however, most muscles are involved to some degree,
and the signs and symptoms encountered depend upon the major muscle groups affected.
Reflex spasm usually occur within 24 to 72 hours of the first symptom, an interval referred to
as the onset time. As in the case of the incubation period, a short onset time is associated with
a poor prognosis. Spasms are caused by sudden intensification of afferent stimuli arising in the
periphery, which increases rigidity and causes simultaneous and excessive contraction of
muscles and their antagonists. Spasms may be both painful and dangerous. As the disease

If, therefore, the wound of Javier inflicted by the appellant was already infected by tetanus germs
at the time, it is more medically probable that Javier should have been infected with only a mild
cause of tetanus because the symptoms of tetanus appeared on the 22nd day after the hacking
incident or more than 14 days after the infliction of the wound. Therefore, the onset time should
have been more than six days. Javier, however, died on the second day from the onset time. The
more credible conclusion is that at the time Javier's wound was inflicted by the appellant, the
severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could
have been infected with tetanus after the hacking incident. Considering the circumstance
surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but not
20 to 22 days before he died.
The rule is that the death of the victim must be the direct, natural, and logical consequence of
the wounds inflicted upon him by the accused. (People v. Cardenas, supra) And since we are
dealing with a criminal conviction, the proof that the accused caused the victim's death must
convince a rational mind beyond reasonable doubt. The medical findings, however, lead us to a
distinct possibility that the infection of the wound by tetanus was an efficient intervening cause
later or between the time Javier was wounded to the time of his death. The infection was,
therefore, distinct and foreign to the crime. (People v. Rellin, 77 Phil. 1038).
Doubts are present. There is a likelihood that the wound was but the remote cause and its
subsequent infection, for failure to take necessary precautions, with tetanus may have been

the proximate cause of Javier's death with which the petitioner had nothing to do. As we ruled
in Manila Electric Co. v. Remoquillo, et al. (99 Phil. 118).
"A prior and remote cause cannot be made the be of an action if such remote cause did nothing
more than furnish the condition or give rise to the occasion by which the injury was made
possible, if there intervened between such prior or remote cause and the injury a distinct,
successive, unrelated, and efficient cause of the injury, even though such injury would not
have happened but for such condition or occasion. If no danger existed in the condition except
because of the independent cause, such condition was not the proximate cause. And if an
independent negligent act or defective condition sets into operation the instances which result
in injury because of the prior defective condition, such subsequent act or condition is the
proximate cause." (45 C.J. pp. 931-932). (at p. 125)
It strains the judicial mind to allow a clear aggressor to go scot free of criminal liability. At the
very least, the records show he is guilty of inflicting slight physical injuries. However, the
petitioner's criminal liability in this respect was wiped out by the victim's own act. After the
hacking incident, Urbano and Javier used the facilities of barangay mediators to effect a
compromise agreement where Javier forgave Urbano while Urbano defrayed the medical
expenses of Javier. This settlement of minor offenses is allowed under the express provisions of
Presidential Decree G.R. No. 1508, Section 2(3). (See also People v. Caruncho, 127 SCRA 16).

This is one of those causes where confused thinking leads to unfortunate and deplorable
consequences. Such reasoning fails to draw a clear line of demarcation between criminal
liability and civil responsibility, and to determine the logical result of the distinction. The
two liabilities are separate and distinct from each other. One affects the social order and
the other, private rights. One is for the punishment or correction of the offender while the
other is for reparation of damages suffered by the aggrieved party. The two responsibilities
are so different from each other that article 1813 of the present (Spanish) Civil Code reads
thus: "There may be a compromise upon the civil action arising from a crime; but the
public action for the imposition of the legal penalty shall not thereby be extinguished." It is
just and proper that, for the purposes of the imprisonment of or fine upon the accused, the
offense should be proved beyond reasonable doubt. But for the purpose of indemnity the
complaining party, why should the offense also be proved beyond reasonable doubt? Is not
the invasion or violation of every private right to be proved only by a preponderance of
evidence? Is the right of the aggrieved person any less private because the wrongful act is
also punishable by the criminal law?
"For these reasons, the Commission recommends the adoption of the reform under
discussion. It will correct a serious defect in our law. It will close up an inexhaustible
source of injustice-a cause for disillusionment on the part of the innumerable persons
injured or wronged."

We must stress, however, that our discussion of proximate cause and remote cause is limited to
the criminal aspects of this rather unusual case. It does not necessarily follow that the petitioner
is also free of civil liability. The well-settled doctrine is that a person, while not criminally liable,
may still be civilly liable. Thus, in the recent case of People v. Rogelio Ligon y Tria, et al. (G.R.
No. 74041, July 29, 1987), we said:

The respondent court increased the P12,000.00 indemnification imposed by the trial court to
P30,000.00. However, since the indemnification was based solely on the finding of guilt beyond
reasonable doubt in the homicide case, the civil liability of the petitioner was not thoroughly
examined. This aspect of the case calls for fuller development if the heirs of the victim are so
minded.

... While the guilt of the accused in a criminal prosecution must be established beyond
reasonable doubt, only a preponderance of evidence is required in a civil action for damages.
(Article 29, Civil Code). The judgment of acquittal extinguishes the civil liability of the
accused only when it includes a declaration that the facts from which the civil liability might
arise did not exist. (Padilla v. Court of Appeals, 129 SCRA 559).

WHEREFORE, the instant petition is hereby GRANTED. The questioned decision of the then
Intermediate Appellate Court, now Court of Appeals, is REVERSED and SET ASIDE. The
petitioner is ACQUITTED of the crime of homicide. Costs de oficio.

The reason for the provisions of article 29 of the Civil Code, which provides that the acquittal
of the accused on the ground that his guilt has not been proved beyond reasonable doubt does
not necessarily exempt him from civil liability for the same act or omission, has been
explained by the Code Commission as follows:
The old rule that the acquittal of the accused in a criminal case also releases him from civil
liability is one of the most serious flaws in the Philippine legal system. It has given use to
numberless instances of miscarriage of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the accused. The reasoning followed is that
inasmuch as the civil responsibility is derived from the criminal offense, when the latter is
not proved, civil liability cannot be demanded.

SO ORDERED.

The plaintiff, David Taylor, was at the time when he received the injuries complained of, 15
years of age, the son of a mechanical engineer, more mature than the average boy of his age, and
having considerable aptitude and training in mechanics.
On the 30th of September, 1905, plaintiff, with a boy named Manuel Claparols, about 12 years of
age, crossed the footbridge to the Isla del Provisor, for the purpose of visiting one Murphy, an
employee of the defendant, who and promised to make them a cylinder for a miniature engine.
Finding on inquiry that Mr. Murphy was not in his quarters, the boys, impelled apparently by
youthful curiosity and perhaps by the unusual interest which both seem to have taken in
machinery, spent some time in wandering about the company's premises. The visit was made on
a Sunday afternoon, and it does not appear that they saw or spoke to anyone after leaving the
power house where they had asked for Mr. Murphy.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4977

March 22, 1910

DAVID TAYLOR, plaintiff-appellee,

vs.
THE MANILA ELECTRIC RAILROAD AND LIGHT COMPANY, defendant-appellant.

After watching the operation of the travelling crane used in handling the defendant's coal, they
walked across the open space in the neighborhood of the place where the company dumped in
the cinders and ashes from its furnaces. Here they found some twenty or thirty brass fulminating
caps scattered on the ground. These caps are approximately of the size and appearance of small
pistol cartridges and each has attached to it two long thin wires by means of which it may be
discharged by the use of electricity. They are intended for use in the explosion of blasting
charges of dynamite, and have in themselves a considerable explosive power. After some
discussion as to the ownership of the caps, and their right to take them, the boys picked up all
they could find, hung them on stick, of which each took end, and carried them home. After
crossing the footbridge, they met a little girl named Jessie Adrian, less than 9 years old, and all
three went to the home of the boy Manuel. The boys then made a series of experiments with the
caps. They trust the ends of the wires into an electric light socket and obtained no result. They
next tried to break the cap with a stone and failed. Manuel looked for a hammer, but could not
find one. Then they opened one of the caps with a knife, and finding that it was filled with a
yellowish substance they got matches, and David held the cap while Manuel applied a lighted
match to the contents. An explosion followed, causing more or less serious injuries to all three.
Jessie, who when the boys proposed putting a match to the contents of the cap, became
frightened and started to run away, received a slight cut in the neck. Manuel had his hand burned
and wounded, and David was struck in the face by several particles of the metal capsule, one of
which injured his right eye to such an extent as to the necessitate its removal by the surgeons
who were called in to care for his wounds.

CARSON, J.:
An action to recover damages for the loss of an eye and other injuries, instituted by David Taylor,
a minor, by his father, his nearest relative.
The defendant is a foreign corporation engaged in the operation of a street railway and an electric
light system in the city of Manila. Its power plant is situated at the eastern end of a small island
in the Pasig River within the city of Manila, known as the Isla del Provisor. The power plant may
be reached by boat or by crossing a footbridge, impassable for vehicles, at the westerly end of
the island.

The evidence does definitely and conclusively disclose how the caps came to be on the
defendant's premises, nor how long they had been there when the boys found them. It appears,
however, that some months before the accident, during the construction of the defendant's plant,
detonating caps of the same size and kind as those found by the boys were used in sinking a well
at the power plant near the place where the caps were found; and it also appears that at or about
the time when these caps were found, similarly caps were in use in the construction of an
extension of defendant's street car line to Fort William McKinley. The caps when found appeared
to the boys who picked them up to have been lying for a considerable time, and from the place

where they were found would seem to have been discarded as detective or worthless and fit only
to be thrown upon the rubbish heap.
No measures seems to have been adopted by the defendant company to prohibit or prevent
visitors from entering and walking about its premises unattended, when they felt disposed so to
do. As admitted in defendant counsel's brief, "it is undoubtedly true that children in their play
sometimes crossed the foot bridge to the islands;" and, we may add, roamed about at will on the
uninclosed premises of the defendant, in the neighborhood of the place where the caps were
found. There is evidence that any effort ever was made to forbid these children from visiting the
defendant company's premises, although it must be assumed that the company or its employees
were aware of the fact that they not infrequently did so.
Two years before the accident, plaintiff spent four months at sea, as a cabin boy on one of the
interisland transports. Later he took up work in his father's office, learning mechanical drawing
and mechanical engineering. About a month after his accident he obtained employment as a
mechanical draftsman and continued in that employment for six months at a salary of P2.50 a
day; and it appears that he was a boy of more than average intelligence, taller and more mature
both mentally and physically than most boys of fifteen.
The facts set out in the foregoing statement are to our mind fully and conclusively established by
the evidence of record, and are substantially admitted by counsel. The only questions of fact
which are seriously disputed are plaintiff's allegations that the caps which were found by plaintiff
on defendant company's premises were the property of the defendant, or that they had come from
its possession and control, and that the company or some of its employees left them exposed on
its premises at the point where they were found.
The evidence in support of these allegations is meager, and the defendant company, apparently
relying on the rule of law which places the burden of proof of such allegations upon the plaintiff,
offered no evidence in rebuttal, and insists that plaintiff failed in his proof. We think, however,
that plaintiff's evidence is sufficient to sustain a finding in accord with his allegations in this
regard.
It was proven that caps, similar to those found by plaintiff, were used, more or less extensively,
on the McKinley extension of the defendant company's track; that some of these caps were used
in blasting a well on the company's premises a few months before the accident; that not far from
the place where the caps were found the company has a storehouse for the materials, supplies
and so forth, used by it in its operations as a street railway and a purveyor of electric light; and
that the place, in the neighborhood of which the caps were found, was being used by the
company as a sort of dumping ground for ashes and cinders. Fulminating caps or detonators for
the discharge by electricity of blasting charges by dynamite are not articles in common use by
the average citizen, and under all the circumstances, and in the absence of all evidence to the
contrary, we think that the discovery of twenty or thirty of these caps at the place where they
were found by the plaintiff on defendant's premises fairly justifies the inference that the
defendant company was either the owner of the caps in question or had the caps under its

possession and control. We think also that the evidence tends to disclose that these caps or
detonators were willfully and knowingly thrown by the company or its employees at the spot
where they were found, with the expectation that they would be buried out of the sight by the
ashes which it was engaged in dumping in that neighborhood, they being old and perhaps
defective; and, however this may be, we are satisfied that the evidence is sufficient to sustain a
finding that the company or some of its employees either willfully or through an oversight left
them exposed at a point on its premises which the general public, including children at play,
where not prohibited from visiting, and over which the company knew or ought to have known
that young boys were likely to roam about in pastime or in play.
Counsel for appellant endeavors to weaken or destroy the probative value of the facts on which
these conclusions are based by intimidating or rather assuming that the blasting work on the
company's well and on its McKinley extension was done by contractors. It was conclusively
proven, however, that while the workman employed in blasting the well was regularly employed
by J. G. White and Co., a firm of contractors, he did the work on the well directly and
immediately under the supervision and control of one of defendant company's foremen, and there
is no proof whatever in the record that the blasting on the McKinley extension was done
by independent contractors. Only one witness testified upon this point, and while he stated that
he understood that a part of this work was done by contract, he could not say so of his own
knowledge, and knew nothing of the terms and conditions of the alleged contract, or of the
relations of the alleged contractor to the defendant company. The fact having been proven that
detonating caps were more or less extensively employed on work done by the defendant
company's directions and on its behalf, we think that the company should have introduced the
necessary evidence to support its contention if it wished to avoid the not unreasonable inference
that it was the owner of the material used in these operations and that it was responsible for
tortious or negligent acts of the agents employed therein, on the ground that this work had been
intrusted to independent contractors as to whose acts the maxim respondent superior should not
be applied. If the company did not in fact own or make use of caps such as those found on its
premises, as intimated by counsel, it was a very simple matter for it to prove that fact, and in the
absence of such proof we think that the other evidence in the record sufficiently establishes the
contrary, and justifies the court in drawing the reasonable inference that the caps found on its
premises were its property, and were left where they were found by the company or some of its
employees.
Plaintiff appears to have rested his case, as did the trial judge his decision in plaintiff's favor,
upon the provisions of article 1089 of the Civil Code read together with articles 1902, 1903, and
1908 of that code.
ART. 1089 Obligations are created by law, by contracts, by quasi-contracts, and illicit
acts and omissions or by those in which any kind of fault or negligence occurs.
ART. 1902 A person who by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done.

xxx

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

These proposition are, of course, elementary, and do not admit of discussion, the real difficulty
arising in the application of these principles to the particular facts developed in the case under
consideration.

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

It is clear that the accident could not have happened and not the fulminating caps been left
exposed at the point where they were found, or if their owner had exercised due care in keeping
them in an appropriate place; but it is equally clear that plaintiff would not have been injured had
he not, for his own pleasure and convenience, entered upon the defendant's premises, and strolled
around thereon without the express permission of the defendant, and had he not picked up and
carried away the property of the defendant which he found on its premises, and had he not
thereafter deliberately cut open one of the caps and applied a match to its contents.

xxx

xxx

Owners or directors of an establishment or enterprise are equally liable for damages

caused by their employees in the service of the branches in which the latter may be
employed or on account of their duties.
xxx

xxx

xxx

The liability referred to in this article shall cease when the persons mentioned therein
prove that they employed all the diligence of a good father of a family to avoid the
damage.
ART. 1908 The owners shall also be liable for the damage caused
1 By the explosion of machines which may not have been cared for with due diligence,
and for kindling of explosive substances which may not have been placed in a safe and
proper place.
Counsel for the defendant and appellant rests his appeal strictly upon his contention that the facts
proven at the trial do not established the liability of the defendant company under the provisions
of these articles, and since we agree with this view of the case, it is not necessary for us to
consider the various questions as to form and the right of action (analogous to those raised in the
case of Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359), which would, perhaps, be
involved in a decision affirming the judgment of the court below.
We agree with counsel for appellant that under the Civil Code, as under the generally accepted
doctrine in the United States, the plaintiff in an action such as that under consideration, in order
to establish his right to a recovery, must establish by competent evidence:
(1) Damages to the plaintiff.
(2) Negligence by act or omission of which defendant personally, or some person for
whose acts it must respond, was guilty.
(3) The connection of cause and effect between the negligence and the damage.

But counsel for plaintiff contends that because of plaintiff's youth and inexperience, his entry
upon defendant company's premises, and the intervention of his action between the negligent act
of defendant in leaving the caps exposed on its premises and the accident which resulted in his
injury should not be held to have contributed in any wise to the accident, which should be
deemed to be the direct result of defendant's negligence in leaving the caps exposed at the place
where they were found by the plaintiff, and this latter the proximate cause of the accident which
occasioned the injuries sustained by him.
In support of his contention, counsel for plaintiff relies on the doctrine laid down in many of the
courts of last resort in the United States in the cases known as the "Torpedo" and "Turntable"
cases, and the cases based thereon.
In a typical cases, the question involved has been whether a railroad company is liable for an
injury received by an infant of tender years, who from mere idle curiosity, or for the purposes of
amusement, enters upon the railroad company's premises, at a place where the railroad company
knew, or had good reason to suppose, children would be likely to come, and there found
explosive signal torpedoes left unexposed by the railroad company's employees, one of which
when carried away by the visitor, exploded and injured him; or where such infant found upon the
premises a dangerous machine, such as a turntable, left in such condition as to make it probable
that children in playing with it would be exposed to accident or injury therefrom and where the
infant did in fact suffer injury in playing with such machine.
In these, and in great variety of similar cases, the great weight of authority holds the owner of the
premises liable.
As laid down in Railroad Co. vs. Stout (17 Wall. (84 U. S.), 657), wherein the principal question
was whether a railroad company was liable for in injury received by an infant while upon its
premises, from idle curiosity, or for purposes of amusement, if such injury was, under
circumstances, attributable to the negligence of the company), the principles on which these
cases turn are that "while a railroad company is not bound to the same degree of care in regard to
mere strangers who are unlawfully upon its premises that it owes to passengers conveyed by it, it
is not exempt from responsibility to such strangers for injuries arising from its negligence or

from its tortious acts;" and that "the conduct of an infant of tender years is not to be judged by
the same rule which governs that of adult. While it is the general rule in regard to an adult that to
entitle him to recover damages for an injury resulting from the fault or negligence of another he
must himself have been free from fault, such is not the rule in regard to an infant of tender years.
The care and caution required of a child is according to his maturity and capacity only, and this is
to be determined in each case by the circumstances of the case."
The doctrine of the case of Railroad Company vs. Stout was vigorously controverted and sharply
criticized in several state courts, and the supreme court of Michigan in the case of Ryan vs.
Towar (128 Mich., 463) formally repudiated and disapproved the doctrine of the Turntable cases,
especially that laid down in Railroad Company vs. Stout, in a very able decision wherein it held,
in the language of the syllabus: (1) That the owner of the land is not liable to trespassers thereon
for injuries sustained by them, not due to his wanton or willful acts; (2) that no exception to this
rule exists in favor of children who are injured by dangerous machinery naturally calculated to
attract them to the premises; (3) that an invitation or license to cross the premises of another can
not be predicated on the mere fact that no steps have been taken to interfere with such practice;
(4) that there is no difference between children and adults as to the circumstances that will
warrant the inference of an invitation or a license to enter upon another's premises.
Similar criticisms of the opinion in the case of Railroad Company vs. Stout were indulged in by
the courts in Connecticut and Massachusetts. (Nolan vs. Railroad Co., 53 Conn., 461; 154 Mass.,
349). And the doctrine has been questioned in Wisconsin, Pennsylvania, New Hampshire, and
perhaps in other States.
On the other hand, many if not most of the courts of last resort in the United States, citing and
approving the doctrine laid down in England in the leading case of Lynch vs. Nurding (1 Q. B.,
29, 35, 36), lay down the rule in these cases in accord with that announced in the Railroad
Company vs. Stout (supra), and the Supreme Court of the United States, in a unanimous opinion
delivered by Justice Harlan in the case of Union Pacific Railway Co. vs. McDonal and
reconsidered the doctrine laid down in Railroad Co. vs. Stout, and after an exhaustive and critical
analysis and review of many of the adjudged cases, both English and American, formally
declared that it adhered "to the principles announced in the case of Railroad Co. vs. Stout."
In the case of Union Pacific Railway Co. vs. MacDonald (supra) the facts were as follows: The
plaintiff, a boy 12 years of age, out of curiosity and for his own pleasure, entered upon and
visited the defendant's premises, without defendant's express permission or invitation, and while
there, was by accident injured by falling into a burning slack pile of whose existence he had no
knowledge, but which had been left by defendant on its premises without any fence around it or
anything to give warning of its dangerous condition, although defendant knew or had reason the
interest or curiosity of passers-by. On these facts the court held that the plaintiff could not be
regarded as a mere trespasser, for whose safety and protection while on the premises in question,
against the unseen danger referred to, the defendant was under no obligation to make provision.

We quote at length from the discussion by the court of the application of the principles involved
to the facts in that case, because what is said there is strikingly applicable in the case at bar, and
would seem to dispose of defendant's contention that, the plaintiff in this case being a trespasser,
the defendant company owed him no duty, and in no case could be held liable for injuries which
would not have resulted but for the entry of plaintiff on defendant's premises.
We adhere to the principles announced in Railroad Co. vs. Stout (supra). Applied to the case
now before us, they require us to hold that the defendant was guilty of negligence in leaving
unguarded the slack pile, made by it in the vicinity of its depot building. It could have
forbidden all persons from coming to its coal mine for purposes merely of curiosity and
pleasure. But it did not do so. On the contrary, it permitted all, without regard to age, to visit
its mine, and witness its operation. It knew that the usual approach to the mine was by a
narrow path skirting its slack pit, close to its depot building, at which the people of the
village, old and young, would often assemble. It knew that children were in the habit of
frequenting that locality and playing around the shaft house in the immediate vicinity of the
slack pit. The slightest regard for the safety of these children would have suggested that they
were in danger from being so near a pit, beneath the surface of which was concealed (except
when snow, wind, or rain prevailed) a mass of burning coals into which a child might
accidentally fall and be burned to death. Under all the circumstances, the railroad company
ought not to be heard to say that the plaintiff, a mere lad, moved by curiosity to see the mine,
in the vicinity of the slack pit, was a trespasser, to whom it owed no duty, or for whose
protection it was under no obligation to make provisions.
In Townsend vs. Wathen (9 East, 277, 281) it was held that if a man dangerous traps, baited
with flesh, in his own ground, so near to a highway, or to the premises of another, that dogs
passing along the highway, or kept in his neighbors premises, would probably be attracted by
their instinct into the traps, and in consequence of such act his neighbor's dogs be so attracted
and thereby injured, an action on the case would lie. "What difference," said Lord
Ellenborough, C.J., "is there in reason between drawing the animal into the trap by means of
his instinct which he can not resist, and putting him there by manual force?" What difference,
in reason we may observe in this case, is there between an express license to the children of
this village to visit the defendant's coal mine, in the vicinity of its slack pile, and an implied
license, resulting from the habit of the defendant to permit them, without objection or
warning, to do so at will, for purposes of curiosity or pleasure? Referring it the case
of Townsend vs. Wathen, Judge Thompson, in his work on the Law of Negligence, volume 1,
page 305, note, well says: "It would be a barbarous rule of law that would make the owner of
land liable for setting a trap thereon, baited with stinking meat, so that his neighbor's dog
attracted by his natural instinct, might run into it and be killed, and which would exempt him
from liability for the consequence of leaving exposed and unguarded on his land a dangerous
machine, so that his neighbor's child attracted to it and tempted to intermeddle with it by
instincts equally strong, might thereby be killed or maimed for life."
Chief Justice Cooley, voicing the opinion of the supreme court of Michigan, in the case
of Powers vs. Harlow (53 Mich., 507), said that (p. 515):

Children, wherever they go, must be expected to act upon childlike instincts and impulses;
and others who are chargeable with a duty of care and caution toward them must calculate
upon this, and take precautions accordingly. If they leave exposed to the observation of
children anything which would be tempting to them, and which they in their immature
judgment might naturally suppose they were at liberty to handle or play with, they should
expect that liberty to be taken.
And the same eminent jurist in his treatise or torts, alluding to the doctrine of implied invitation
to visit the premises of another, says:
In the case of young children, and other persons not fully sui juris, an implied license might
sometimes arise when it would not on behalf of others. Thus leaving a tempting thing for
children to play with exposed, where they would be likely to gather for that purpose, may be
equivalent to an invitation to them to make use of it; and, perhaps, if one were to throw away
upon his premises, near the common way, things tempting to children, the same implication
should arise. (Chap. 10, p. 303.)
The reasoning which led the Supreme Court of the United States to its conclusion in the cases
of Railroad Co. vs. Stout (supra) and Union Pacific Railroad Co. vs. McDonald (supra) is not
less cogent and convincing in this jurisdiction than in that wherein those cases originated.
Children here are actuated by similar childish instincts and impulses. Drawn by curiosity and
impelled by the restless spirit of youth, boys here as well as there will usually be found whenever
the public is permitted to congregate. The movement of machinery, and indeed anything which
arouses the attention of the young and inquiring mind, will draw them to the neighborhood as
inevitably as does the magnet draw the iron which comes within the range of its magnetic
influence. The owners of premises, therefore, whereon things attractive to children are exposed,
or upon which the public are expressly or impliedly permitted to enter or upon which the owner
knows or ought to know children are likely to roam about for pastime and in play, " must
calculate upon this, and take precautions accordingly." In such cases the owner of the premises
can not be heard to say that because the child has entered upon his premises without his express
permission he is a trespasser to whom the owner owes no duty or obligation whatever. The
owner's failure to take reasonable precautions to prevent the child from entering his premises at a
place where he knows or ought to know that children are accustomed to roam about of to which
their childish instincts and impulses are likely to attract them is at least equivalent to an implied
license to enter, and where the child does enter under such conditions the owner's failure to take
reasonable precautions to guard the child against injury from unknown or unseen dangers, placed
upon such premises by the owner, is clearly a breach of duty, responsible, if the child is actually
injured, without other fault on its part than that it had entered on the premises of a stranger
without his express invitation or permission. To hold otherwise would be expose all the children
in the community to unknown perils and unnecessary danger at the whim of the owners or
occupants of land upon which they might naturally and reasonably be expected to enter.
This conclusion is founded on reason, justice, and necessity, and neither is contention that a man
has a right to do what will with his own property or that children should be kept under the care of

their parents or guardians, so as to prevent their entering on the premises of others is of sufficient
weight to put in doubt. In this jurisdiction as well as in the United States all private property is
acquired and held under the tacit condition that it shall not be so used as to injure the equal rights
and interests of the community (see U. S. vs. Toribio,1 No. 5060, decided January 26, 1910), and
except as to infants of very tender years it would be absurd and unreasonable in a community
organized as is that in which we lived to hold that parents or guardian are guilty of negligence or
imprudence in every case wherein they permit growing boys and girls to leave the parental roof
unattended, even if in the event of accident to the child the negligence of the parent could in any
event be imputed to the child so as to deprive it a right to recover in such cases a point which
we neither discuss nor decide.
But while we hold that the entry of the plaintiff upon defendant's property without defendant's
express invitation or permission would not have relieved defendant from responsibility for
injuries incurred there by plaintiff, without other fault on his part, if such injury were attributable
to the negligence of the defendant, we are of opinion that under all the circumstances of this case
the negligence of the defendant in leaving the caps exposed on its premises was not the
proximate cause of the injury received by the plaintiff, which therefore was not, properly
speaking, "attributable to the negligence of the defendant," and, on the other hand, we are
satisfied that plaintiffs action in cutting open the detonating cap and putting match to its contents
was the proximate cause of the explosion and of the resultant injuries inflicted upon the plaintiff,
and that the defendant, therefore is not civilly responsible for the injuries thus incurred.
Plaintiff contends, upon the authority of the Turntable and Torpedo cases, that because of
plaintiff's youth the intervention of his action between the negligent act of the defendant in
leaving the caps exposed on its premises and the explosion which resulted in his injury should
not be held to have contributed in any wise to the accident; and it is because we can not agree
with this proposition, although we accept the doctrine of the Turntable and Torpedo cases, that
we have thought proper to discuss and to consider that doctrine at length in this decision. As was
said in case of Railroad Co. vs. Stout (supra), "While it is the general rule in regard to an adult
that to entitle him to recover damages for an injury resulting from the fault or negligence of
another he must himself have been free from fault, such is not the rule in regard to an infant of
tender years. The care and caution required of a child is according to his maturity and capacity
only, and this is to be determined in each case by the circumstances of the case." As we think we
have shown, under the reasoning on which rests the doctrine of the Turntable and Torpedo cases,
no fault which would relieve defendant of responsibility for injuries resulting from its negligence
can be attributed to the plaintiff, a well-grown boy of 15 years of age, because of his entry upon
defendant's uninclosed premises without express permission or invitation' but it is wholly
different question whether such youth can be said to have been free from fault when he willfully
and deliberately cut open the detonating cap, and placed a match to the contents, knowing, as he
undoubtedly did, that his action would result in an explosion. On this point, which must be
determined by "the particular circumstances of this case," the doctrine laid down in the Turntable
and Torpedo cases lends us no direct aid, although it is worthy of observation that in all of the
"Torpedo" and analogous cases which our attention has been directed, the record discloses that
the plaintiffs, in whose favor judgments have been affirmed, were of such tender years that they

were held not to have the capacity to understand the nature or character of the explosive
instruments which fell into their hands.
In the case at bar, plaintiff at the time of the accident was a well-grown youth of 15, more mature
both mentally and physically than the average boy of his age; he had been to sea as a cabin boy;
was able to earn P2.50 a day as a mechanical draftsman thirty days after the injury was incurred;
and the record discloses throughout that he was exceptionally well qualified to take care of
himself. The evidence of record leaves no room for doubt that, despite his denials on the witness
stand, he well knew the explosive character of the cap with which he was amusing himself. The
series of experiments made by him in his attempt to produce an explosion, as described by the
little girl who was present, admit of no other explanation. His attempt to discharge the cap by the
use of electricity, followed by his efforts to explode it with a stone or a hammer, and the final
success of his endeavors brought about by the application of a match to the contents of the caps,
show clearly that he knew what he was about. Nor can there be any reasonable doubt that he had
reason to anticipate that the explosion might be dangerous, in view of the fact that the little girl, 9
years of age, who was within him at the time when he put the match to the contents of the cap,
became frightened and ran away.
True, he may not have known and probably did not know the precise nature of the explosion
which might be expected from the ignition of the contents of the cap, and of course he did not
anticipate the resultant injuries which he incurred; but he well knew that a more or less
dangerous explosion might be expected from his act, and yet he willfully, recklessly, and
knowingly produced the explosion. It would be going far to say that "according to his maturity
and capacity" he exercised such and "care and caution" as might reasonably be required of him,
or that defendant or anyone else should be held civilly responsible for injuries incurred by him
under such circumstances.
The law fixes no arbitrary age at which a minor can be said to have the necessary capacity to
understand and appreciate the nature and consequences of his own acts, so as to make it
negligence on his part to fail to exercise due care and precaution in the commission of such acts;
and indeed it would be impracticable and perhaps impossible so to do, for in the very nature of
things the question of negligence necessarily depends on the ability of the minor to understand
the character of his own acts and their consequences; and the age at which a minor can be said to
have such ability will necessarily depends of his own acts and their consequences; and at the age
at which a minor can be said to have such ability will necessarily vary in accordance with the
varying nature of the infinite variety of acts which may be done by him. But some idea of the
presumed capacity of infants under the laws in force in these Islands may be gathered from an
examination of the varying ages fixed by our laws at which minors are conclusively presumed to
be capable of exercising certain rights and incurring certain responsibilities, though it can not be
said that these provisions of law are of much practical assistance in cases such as that at bar,
except so far as they illustrate the rule that the capacity of a minor to become responsible for his
own acts varies with the varying circumstances of each case. Under the provisions of the Penal
Code a minor over fifteen years of age is presumed to be capable of committing a crime and is to
held criminally responsible therefore, although the fact that he is less than eighteen years of age

will be taken into consideration as an extenuating circumstance (Penal Code, arts. 8 and 9). At 10
years of age a child may, under certain circumstances, choose which parent it prefers to live with
(Code of Civil Procedure, sec. 771). At 14 may petition for the appointment of a guardian (Id.,
sec. 551), and may consent or refuse to be adopted (Id., sec. 765). And males of 14 and females
of 12 are capable of contracting a legal marriage (Civil Code, art. 83; G. O., No. 68, sec. 1).
We are satisfied that the plaintiff in this case had sufficient capacity and understanding to be
sensible of the danger to which he exposed himself when he put the match to the contents of the
cap; that he was sui juris in the sense that his age and his experience qualified him to understand
and appreciate the necessity for the exercise of that degree of caution which would have avoided
the injury which resulted from his own deliberate act; and that the injury incurred by him must
be held to have been the direct and immediate result of his own willful and reckless act, so that
while it may be true that these injuries would not have been incurred but for the negligence act of
the defendant in leaving the caps exposed on its premises, nevertheless plaintiff's own act was
the proximate and principal cause of the accident which inflicted the injury.
The rule of the Roman law was: Quod quis ex culpa sua damnum sentit, non intelligitur sentire.
(Digest, book 50, tit. 17 rule 203.)
The Patidas contain the following provisions:
The just thing is that a man should suffer the damage which comes to him through his own
fault, and that he can not demand reparation therefor from another. (Law 25, tit. 5, Partida 3.)
And they even said that when a man received an injury through his own acts the grievance
should be against himself and not against another. (Law 2, tit. 7, Partida 2.)
According to ancient sages, when a man received an injury through his own acts the grievance
should be against himself and not against another. (Law 2, tit. 7 Partida 2.)
And while there does not appear to be anything in the Civil Code which expressly lays down the
law touching contributory negligence in this jurisdiction, nevertheless, the interpretation placed
upon its provisions by the supreme court of Spain, and by this court in the case of Rakes vs.
Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359), clearly deny to the plaintiff in the case at bar
the right to recover damages from the defendant, in whole or in part, for the injuries sustained by
him.
The judgment of the supreme court of Spain of the 7th of March, 1902 (93 Jurisprudencia Civil,
391), is directly in point. In that case the court said:
According to the doctrine expressed in article 1902 of the Civil Code, fault or negligence is a
source of obligation when between such negligence and the injury there exists the relation of
cause and effect; but if the injury produced should not be the result of acts or omissions of a

third party, the latter has no obligation to repair the same, although such acts or omission were
imprudent or unlawful, and much less when it is shown that the immediate cause of the injury
was the negligence of the injured party himself.
The same court, in its decision of June 12, 1900, said that "the existence of the alleged fault or
negligence is not sufficient without proof that it, and no other cause, gave rise to the damage."

stated in Alcubilla's Index of that year); none of the cases decided by the supreme court of Spain
"define the effect to be given the negligence of its causes, though not the principal one, and we
are left to seek the theory of the civil law in the practice of other countries;" and in such cases we
declared that law in this jurisdiction to require the application of "the principle of proportional
damages," but expressly and definitely denied the right of recovery when the acts of the injured
party were the immediate causes of the accident.

See also judgment of October 21, 1903.

The doctrine as laid down in that case is as follows:

To similar effect Scaevola, the learned Spanish writer, writing under that title in
his Jurisprudencia del Codigo Civil (1902 Anuario, p. 455), commenting on the decision of
March 7, 1902 of the Civil Code, fault or negligence gives rise to an obligation when between
it and the damage there exists the relation of cause and effect; but if the damage caused does
not arise from the acts or omissions of a third person, there is no obligation to make good upon
the latter, even though such acts or omissions be imprudent or illegal, and much less so when
it is shown that the immediate cause of the damage has been the recklessness of the injured
party himself.
And again
In accordance with the fundamental principle of proof, that the burden thereof is upon the
plaintiff, it is apparent that it is duty of him who shall claim damages to establish their
existence. The decisions of April 9, 1896, and March 18, July, and September 27, 1898, have
especially supported the principle, the first setting forth in detail the necessary points of the
proof, which are two: An act or omission on the part of the person who is to be charged with
the liability, and the production of the damage by said act or omission.
This includes, by inference, the establishment of a relation of cause or effect between the act
or omission and the damage; the latter must be the direct result of one of the first two. As the
decision of March 22, 1881, said, it is necessary that the damages result immediately and
directly from an act performed culpably and wrongfully; "necessarily presupposing a legal
ground for imputability." (Decision of October 29, 1887.)
Negligence is not presumed, but must be proven by
(Scavoela, Jurisprudencia del Codigo Civil, vol. 6, pp. 551-552.)

him

who

alleges

it.

(Cf. decisions of supreme court of Spain of June 12, 1900, and June 23, 1900.)
Finally we think the doctrine in this jurisdiction applicable to the case at bar was definitely
settled in this court in the maturely considered case of Rakes vs. Atlantic, Gulf and Pacific
Co. (supra), wherein we held that while "There are many cases (personal injury cases) was
exonerated," on the ground that "the negligence of the plaintiff was the immediate cause of the
casualty" (decisions of the 15th of January, the 19th of February, and the 7th of March, 1902,

Difficulty seems to be apprehended in deciding which acts of the injured party shall be
considered immediate causes of the accident. The test is simple. Distinction must be
made between the accident and the injury, between the event itself, without which
there could have been no accident, and those acts of the victim not entering into it,
independent of it, but contributing to his own proper hurt. For instance, the cause of the
accident under review was the displacement of the crosspiece or the failure to replace
it. This produces the event giving occasion for damagesthat is, the sinking of the
track and the sliding of the iron rails. To this event, the act of the plaintiff in walking
by the side of the car did not contribute, although it was an element of the damage
which came to himself. Had the crosspiece been out of place wholly or partly through
his act or omission of duty, that would have been one of the determining causes of the
event or accident, for which he would have been responsible. Where he contributes to
the principal occurrence, as one of its determining factors, he can not recover. Where,
in conjunction with the occurrence, he contributes only to his own injury, he may
recover the amount that the defendant responsible for the event should pay for such
injury, less a sum deemed a suitable equivalent for his own imprudence.
We think it is quite clear that under the doctrine thus stated, the immediate cause of the
explosion, the accident which resulted in plaintiff's injury, was in his own act in putting a match
to the contents of the cap, and that having "contributed to the principal occurrence, as one of its
determining factors, he can not recover."
We have not deemed it necessary to examine the effect of plaintiff's action in picking up upon
defendant's premises the detonating caps, the property of defendant, and carrying the relation of
cause and effect between the negligent act or omission of the defendant in leaving the caps
exposed on its premises and the injuries inflicted upon the plaintiff by the explosion of one of
these caps. Under the doctrine of the Torpedo cases, such action on the part of an infant of very
tender years would have no effect in relieving defendant of responsibility, but whether in view of
the well-known fact admitted in defendant's brief that "boys are snappers-up of unconsidered
trifles," a youth of the age and maturity of plaintiff should be deemed without fault in picking up
the caps in question under all the circumstances of this case, we neither discuss nor decide.
Twenty days after the date of this decision let judgment be entered reversing the judgment of the
court below, without costs to either party in this instance, and ten days thereafter let the record be

returned to the court wherein it originated, where the judgment will be entered in favor of the
defendant for the costs in first instance and the complaint dismissed without day. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 97626

March 14, 1997

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL

INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE LEON, MARIA
ANGELITA PASCUAL, et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by
ROMEO LIPANA, its President & General Manager, respondents.
HERMOSISIMA, JR., J.:
Challenged in this petition for review is the Decision dated February 28, 1991 1 rendered by
public respondent Court of Appeals which affirmed the Decision dated November 15, 1985 of
the Regional Trial Court, National Capital Judicial Region, Branch CLX (160), Pasig City, in
Civil Case No. 27288 entitled "Rommel's Marketing Corporation, etc. v. Philippine Bank of
Commerce, now absorbed by Philippine Commercial and Industrial Bank."
The case stemmed from a complaint filed by the private respondent Rommel's Marketing
Corporation (RMC for brevity), represented by its President and General Manager Romeo
Lipana, to recover from the former Philippine Bank of Commerce (PBC for brevity), now
absorbed by the Philippine Commercial International Bank, the sum of P304,979.74 representing
various deposits it had made in its current account with said bank but which were not credited to
its account, and were instead deposited to the account of one Bienvenido Cotas, allegedly due to
the gross and inexcusable negligence of the petitioner bank.
RMC maintained two (2) separate current accounts, Current Account Nos. 53-01980-3 and 5301748-7, with the Pasig Branch of PBC in connection with its business of selling appliances.
In the ordinary and usual course of banking operations, current account deposits are accepted by
the bank on the basis of deposit slips prepared and signed by the depositor, or the latter's agent or
representative, who indicates therein the current account number to which the deposit is to be
credited, the name of the depositor or current account holder, the date of the deposit, and the
amount of the deposit either in cash or checks. The deposit slip has an upper portion or stub,
which is detached and given to the depositor or his agent; the lower portion is retained by the

bank. In some instances, however, the deposit slips are prepared in duplicate by the depositor.
The original of the deposit slip is retained by the bank, while the duplicate copy is returned or
given to the depositor.
From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC
funds in the form of cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of
depositing said funds in the current accounts of RMC with PBC. It turned out, however, that
these deposits, on all occasions, were not credited to RMC's account but were instead deposited
to Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas who likewise maintains an
account with the same bank. During this period, petitioner bank had, however, been regularly
furnishing private respondent with monthly statements showing its current accounts balances.
Unfortunately, it had never been the practice of Romeo Lipana to check these monthly
statements of account reposing complete trust and confidence on petitioner bank.
Irene Yabut's modus operandi is far from complicated. She would accomplish two (2) copies of
the deposit slip, an original and a duplicate. The original showed the name of her husband as
depositor and his current account number. On the duplicate copy was written the account number
of her husband but the name of the account holder was left blank. PBC's teller, Azucena
Mabayad, would, however, validate and stamp both the original and the duplicate of these
deposit slips retaining only the original copy despite the lack of information on the duplicate slip.
The second copy was kept by Irene Yabut allegedly for record purposes. After validation, Yabut
would then fill up the name of RMC in the space left blank in the duplicate copy and change the
account number written thereon, which is that of her husband's, and make it appear to be RMC's
account number, i.e., C.A. No. 53-01980-3. With the daily remittance records also prepared by
Ms. Yabut and submitted to private respondent RMC together with the validated duplicate slips
with the latter's name and account number, she made her company believe that all the while the
amounts she deposited were being credited to its account when, in truth and in fact, they were
being deposited by her and credited by the petitioner bank in the account of Cotas. This went on
in a span of more than one (1) year without private respondent's knowledge.
Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its
money, but as its demand went unheeded, it filed a collection suit before the Regional Trial Court
of Pasig, Branch 160. The trial court found petitioner bank negligent and ruled as follows:
WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Bank of
Commerce, now absorbed by defendant Philippine Commercial & Industrial Bank, and
defendant Azucena Mabayad to pay the plaintiff, jointly and severally, and without prejudice
to any criminal action which may be instituted if found warranted:
1. The sum of P304,979.72, representing plaintiffs lost deposit, plus interest thereon at the
legal rate from the filing of the complaint;
2. A sum equivalent to 14% thereof, as exemplary damages;

3. A sum equivalent to 25% of the total amount due, as and for attorney's fees; and
4. Costs.
Defendants' counterclaim is hereby dismissed for lack of merit. 2
On appeal, the appellate court affirmed the foregoing decision with modifications, viz:
WHEREFORE, the decision appealed from herein is MODIFIED in the sense that the awards
of exemplary damages and attorney's fees specified therein are eliminated and instead,
appellants are ordered to pay plaintiff, in addition to the principal sum of P304,979.74
representing plaintiff's lost deposit plus legal interest thereon from the filing of the complaint,
P25,000.00 attorney's fees and costs in the lower court as well as in this Court. 3

of Yabut considering that her husband, Bienvenido Cotas, also maintained an account with the
bank. For the bank to inquire into the ownership of the cash deposited by Ms. Irene Yabut would
be irregular. Otherwise stated, it was RMC's negligence in entrusting cash to a dishonest
employee which provided Ms. Irene Yabut the opportunity to defraud RMC. 6
Private respondent, on the other hand, maintains that the proximate cause of the loss was the
negligent act of the bank, thru its teller Ms. Azucena Mabayad, in validating the deposit slips,
both original and duplicate, presented by Ms. Yabut to Ms. Mabayad, notwithstanding the fact
that one of the deposit slips was not completely accomplished.
We sustain the private respondent.
Our law on quasi-delicts states:

1) The proximate cause of the loss is the negligence of respondent Rommel Marketing
Corporation and Romeo Lipana in entrusting cash to a dishonest employee.

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

2) The failure of respondent Rommel Marketing Corporation to cross-check the bank's

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

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

3) The duplicate copies of the deposit slips presented by respondent Rommel Marketing
Corporation are falsified and are not proof that the amounts appearing thereon were deposited
to respondent Rommel Marketing Corporation's account with the bank,

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

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

Negligence is the omission to do something which a reasonable man, guided by those

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

Hence, this petition anchored on the following grounds:

The petition has no merit.

Simply put, the main issue posited before us is: What is the proximate cause of the loss, to the
tune of P304,979.74, suffered by the private respondent RMC petitioner bank's negligence or
that of private respondent's?
Petitioners submit that the proximate cause of the loss is the negligence of respondent RMC and
Romeo Lipana in entrusting cash to a dishonest employee in the person of Ms. Irene
Yabut. 5 According to them, it was impossible for the bank to know that the money deposited by
Ms. Irene Yabut belong to RMC; neither was the bank forewarned by RMC that Yabut will be
depositing cash to its account. Thus, it was impossible for the bank to know the fraudulent design

Applying the above test, it appears that the bank's teller, Ms. Azucena Mabayad, was negligent in
validating, officially stamping and signing all the deposit slips prepared and presented by Ms.

Yabut, despite the glaring fact that the duplicate copy was not completely accomplished contrary
to the self-imposed procedure of the bank with respect to the proper validation of deposit slips,
original or duplicate, as testified to by Ms. Mabayad herself, thus:
Q: Now, as teller of PCIB, Pasig Branch, will you please tell us Mrs. Mabayad your important
duties and functions?
A: I accept current and savings deposits from depositors and encashments.
Q: Now in the handling of current account deposits of bank clients, could you tell us the
procedure you follow?
A: The client or depositor or the authorized representative prepares a deposit slip by filling up
the deposit slip with the name, the account number, the date, the cash breakdown, if it is
deposited for cash, and the check number, the amount and then he signs the deposit slip.
Q: Now, how many deposit slips do you normally require in accomplishing current account
deposit, Mrs. Mabayad?
A: The bank requires only one copy of the deposit although some of our clients prepare the
deposit slip in duplicate.
Q: Now in accomplishing current account deposits from your clients, what do you issue to the
depositor to evidence the deposit made?
A: We issue or we give to the clients the depositor's stub as a receipt of the deposit.

Q: Now is the depositor's stub which you issued to your clients validated?
A: Yes, sir. 10 [Emphasis ours]
Clearly, Ms. Mabayad failed to observe this very important procedure. The fact that the
duplicate slip was not compulsorily required by the bank in accepting deposits should not
relieve the petitioner bank of responsibility. The odd circumstance alone that such duplicate
copy lacked one vital information that of the name of the account holder should have
already put Ms. Mabayad on guard. Rather than readily validating the incomplete duplicate
copy, she should have proceeded more cautiously by being more probing as to the true reason
why the name of the account holder in the duplicate slip was left blank while that in the
original was filled up. She should not have been so naive in accepting hook, line and sinker
the too shallow excuse of Ms. Irene Yabut to the effect that since the duplicate copy was only
for her personal record, she would simply fill up the blank space later on. 11 A "reasonable man
of ordinary prudence" 12 would not have given credence to such explanation and would have
insisted that the space left blank be filled up as a condition for validation. Unfortunately, this
was not how bank teller Mabayad proceeded thus resulting in huge losses to the private
respondent.
Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself
in its lackadaisical selection and supervision of Ms. Mabayad. This was exemplified in the
testimony of Mr. Romeo Bonifacio, then Manager of the Pasig Branch of the petitioner bank and
now its Vice-President, to the effect that, while he ordered the investigation of the incident, he
never came to know that blank deposit slips were validated in total disregard of the bank's
validation procedures, viz:

Q: And who prepares the deposit slip?

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

A: The depositor or the authorized representative sir?

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

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

Q: The teller validated the blank deposit slip?

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

A: No it was not reported.

Q: Now what do you do upon presentment of the deposit slip by the depositor or the
depositor's authorized representative?
A: We see to it that the deposit slip 9 is properly accomplished and then we count the money
and then we tally it with the deposit slip sir.

Q: You did not know that any one in the bank tellers or cashiers validated the blank deposit
slip?
A: I am not aware of that.
Q: It is only now that you are aware of that?

A: Yes, sir. 13
Prescinding from the above, public respondent Court of Appeals aptly observed:
It was in fact only when he testified in this case in February, 1983, or after the lapse of more
than seven (7) years counted from the period when the funds in question were deposited in
plaintiff's accounts (May, 1975 to July, 1976) that bank manager Bonifacio admittedly became
aware of the practice of his teller Mabayad of validating blank deposit slips. Undoubtedly, this
is gross, wanton, and inexcusable negligence in the appellant bank's supervision of its
employees. 14
It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner
bank in the selection and supervision of its bank teller, which was the proximate cause of the loss
suffered by the private respondent, and not the latter's act of entrusting cash to a dishonest
employee, as insisted by the petitioners.
Proximate cause is determined on the facts of each case upon mixed considerations of logic,
common sense, policy and precedent. 15 Vda. de Bataclan v. Medina, 16 reiterated in the case
of Bank of the Phil. Islands v. Court of Appeals, 17 defines proximate cause as "that cause, which,
in natural and continuous sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred. . . ." In this case, absent the act of
Ms. Mabayad in negligently validating the incomplete duplicate copy of the deposit slip, Ms.
Irene Yabut would not have the facility with which to perpetrate her fraudulent scheme with
impunity. Apropos, once again, is the pronouncement made by the respondent appellate court, to
wit:
. . . . Even if Yabut had the fraudulent intention to misappropriate the funds entrusted to her by
plaintiff, she would not have been able to deposit those funds in her husband's current account,
and then make plaintiff believe that it was in the latter's accounts wherein she had deposited
them, had it not been for bank teller Mabayad's aforesaid gross and reckless negligence. The
latter's negligence was thus the proximate, immediate and efficient cause that brought about
the loss claimed by plaintiff in this case, and the failure of plaintiff to discover the same soon
enough by failing to scrutinize the monthly statements of account being sent to it by appellant
bank could not have prevented the fraud and misappropriation which Irene Yabut had already
completed when she deposited plaintiff's money to the account of her husband instead of to the
latter's accounts. 18
Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening
negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This
doctrine, in essence, states that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible to determine whose fault
or negligence should be attributed to the incident, the one who had the last clear opportunity to
avoid the impending harm and failed to do so is chargeable with the consequences
thereof.19 Stated differently, the rule would also mean that an antecedent negligence of a person

does not preclude the recovery of damages for the supervening negligence of, or bar a defense
against liability sought by another, if the latter, who had thelast fair chance, could have avoided
the impending harm by the exercise of due diligence. 20 Here, assuming that private respondent
RMC was negligent in entrusting cash to a dishonest employee, thus providing the latter with the
opportunity to defraud the company, as advanced by the petitioner, yet it cannot be denied that
the petitioner bank, thru its teller, had the last clear opportunity to avert the injury incurred by its
client, simply by faithfully observing their self-imposed validation procedure.
At this juncture, it is worth to discuss the degree of diligence ought to be exercised by banks in
dealing with their clients.
The New Civil Code provides:
Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances of
the persons, of the time and of the place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance,
that which is expected of a good father of a family shall be required. (1104a)
In the case of banks, however, the degree of diligence required is more than that of a good father
of a family. Considering the fiduciary nature of their relationship with their depositors, banks are
duty bound to treat the accounts of their clients with the highest degree of care. 21
As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in every case, the
depositor expects the bank to treat his account with the utmost fidelity, whether such account
consists only of a few hundred pesos or of millions. The bank must record every single
transaction accurately, down to the last centavo, and as promptly as possible. This has to be done
if the account is to reflect at any given time the amount of money the depositor can dispose as he
sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on the
part of the bank, such as the failure to duly credit him his deposits as soon as they are made, can
cause the depositor not a little embarrassment if not financial loss and perhaps even civil and
criminal litigation.
The point is that as a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with meticulous
care, always having in mind the fiduciary nature of their relationship. In the case before us, it is
apparent that the petitioner bank was remiss in that duty and violated that relationship.
Petitioners nevertheless aver that the failure of respondent RMC to cross-check the bank's
statements of account with its own records during the entire period of more than one (1) year is

the proximate cause of the commission of subsequent frauds and misappropriation committed by
Ms. Irene Yabut.

SO ORDERED.

We do not agree.
While it is true that had private respondent checked the monthly statements of account sent by
the petitioner bank to RMC, the latter would have discovered the loss early on, such cannot be
used by the petitioners to escape liability. This omission on the part of the private respondent
does not change the fact that were it not for the wanton and reckless negligence of the petitioners'
employee in validating the incomplete duplicate deposit slips presented by Ms. Irene Yabut, the
loss would not have occurred. Considering, however, that the fraud was committed in a span of
more than one (1) year covering various deposits, common human experience dictates that the
same would not have been possible without any form of collusion between Ms. Yabut and bank
teller Mabayad. Ms. Mabayad was negligent in the performance of her duties as bank teller
nonetheless. Thus, the petitioners are entitled to claim reimbursement from her for whatever they
shall be ordered to pay in this case.
The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise
negligent in not checking its monthly statements of account. Had it done so, the company would
have been alerted to the series of frauds being committed against RMC by its secretary. The
damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo
Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC
amounts to contributory negligence which shall mitigate the damages that may be awarded to the
private respondent 23 under Article 2179 of the New Civil Code, to wit:
. . . When the plaintiff's own negligence was the immediate and proximate cause of his
injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant's lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
In view of this, we believe that the demands of substantial justice are satisfied by allocating
the damage on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate
court, except the award of P25,000.00 attorney's fees, shall be borne by private respondent
RMC; only the balance of 60% needs to be paid by the petitioners. The award of attorney's
fees shall be borne exclusively by the petitioners.
WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the
amount of actual damages private respondent is entitled to by 40%. Petitioners may recover from
Ms. Azucena Mabayad the amount they would pay the private respondent. Private respondent
shall have recourse against Ms. Irene Yabut. In all other respects, the appellate court's decision is
AFFIRMED.
Proportionate costs.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-40570

January 30, 1976

TEODORO C. UMALI, petitioner,

vs.
HON. ANGEL BACANI, in his capacity as Presiding Judge of Branch IX of the Court of
First Instance of Pangasinan and FIDEL H. SAYNES, respondents.
ESGUERRA, J.:
Petition for certiorari to review the decision of the Court of First Instance of Pangasinan Branch
IX, in Civil Case No. U2412, entitled, "Fidel H. Saynes, plaintiff-appellee versus Teodoro C.
Umali, defendant-appellant", which found the death by electrocution of Manuel Saynes, a boy of
3 years and 8 months, as "due to the fault or negligence of the defendant (Umali) as owner and
manager of the Alcala Electric Plant", although the liability of defendant is mitigated by the
contributory negligence of the parents of the boy "in not providing for the proper and delegate
supervision and control over their son The dispositive part of the decision reads as follows:
Wherefore, the Court hereby renders judgment in favor of the plaintiff by ordering the
defendant to pay to the plaintiff the sum of Five Thousand Pesos (P5,000.00) for the death of
his son, Manuel Saynes; the sum of One Thousand Two Hundred Pesos (P1,200.00) for actual
expenses for and in connection with the burial of said deceased child, and the further sum of
Three Thousand Pesos (P3,000.00) for moral damages and Five Hundred (P500.00) Pesos as
reasonable attorney's fee, or a total of Nine Thousand Seven Hundred (P9,700.00) Pesos, and
to pay the costs of this suit. It Is So Ordered.
Undisputed facts appearing of record are:
On May 14, 1972, a storm with strong rain hit the Municipality of Alcala Pangasinan, which
started from 2:00 o'clock in the afternoon and lasted up to about midnight of the same day.

During the storm, the banana plants standing on an elevated ground along the barrio road in
San Pedro Ili of said municipality and near the transmission line of the Alcala Electric Plant
were blown down and fell on the electric wire. As a result, the live electric wire was cut, one
end of which was left hanging on the electric post and the other fell to the ground under the
fallen banana plants.
On the following morning, at about 9:00 o'clock barrio captain Luciano Bueno of San Pedro
Iii who was passing by saw the broken electric wire and so he warned the people in the place
not to go near the wire for they might get hurt. He also saw Cipriano Baldomero, a laborer of
the Alcala Electric Plant near the place and notified him right then and there of the broken line
and asked him to fix it, but the latter told the barrio captain that he could not do it but that he
was going to look for the lineman to fix it.
Sometime after the barrio captain and Cipriano Baldomero had left the place, a small boy of 3
years and 8 months old by the name of Manuel P. Saynes, whose house is just on the opposite
side of the road, went to the place where the broken line wire was and got in contact with it.
The boy was electrocuted and he subsequently died. It was only after the electrocution of
Manuel Saynes that the broken wire was fixed at about 10:00 o'clock on the same morning by
the lineman of the electric plant.
Petitioner claims that he could not be liable under the concept of quasi-delict or tort as owner and
manager of the Alcala Electric Plant because the proximate cause of the boy's death electrocution
could not be due to any negligence on his part, but rather to a fortuitous event-the storm that
caused the banana plants to fall and cut the electric line-pointing out the absence of negligence
on the part of his employee Cipriano Baldomero who tried to have the line repaired and the
presence of negligence of the parents of the child in allowing him to leave his house during that
time.
A careful examination of the record convinces Us that a series of negligence on the part of
defendants' employees in the Alcala Electric Plant resulted in the death of the victim by
electrocution. First, by the very evidence of the defendant, there were big and tall banana plants
at the place of the incident standing on an elevated ground which were about 30 feet high and
which were higher than the electric post supporting the electric line, and yet the employees of the
defendant who, with ordinary foresight, could have easily seen that even in case of moderate
winds the electric line would be endangered by banana plants being blown down, did not even
take the necessary precaution to eliminate that source of danger to the electric line. Second, even
after the employees of the Alcala Electric Plant were already aware of the possible damage the
storm of May 14, 1972, could have caused their electric lines, thus becoming a possible threat to
life and property, they did not cut off from the plant the flow of electricity along the lines, an act
they could have easily done pending inspection of the wires to see if they had been cut. Third,
employee Cipriano Baldomero was negligent on the morning of the incident because even if he
was already made aware of the live cut wire, he did not have the foresight to realize that the same
posed a danger to life and property, and that he should have taken the necessary precaution to
prevent anybody from approaching the live wire; instead Baldomero left the premises because

what was foremost in his mind was the repair of the line, obviously forgetting that if left
unattended to it could endanger life and property.
On defendants' argument that the proximate cause of the victim's death could be attributed to the
parents' negligence in allowing a child of tender age to go out of the house alone, We could
readily see that because of the aforementioned series of negligence on the part of defendants'
employees resulting in a live wire lying on the premises without any visible warning of its lethal
character, anybody, even a responsible grown up or not necessarily an innocent child, could have
met the same fate that befell the victim. It may be true, as the lower Court found out, that the
contributory negligence of the victim's parents in not properly taking care of the child, which
enabled him to leave the house alone on the morning of the incident and go to a nearby place cut
wire was very near the house (where victim was living) where the fatal fallen wire electrocuted
him, might mitigate respondent's liability, but we cannot agree with petitioner's theory that the
parents' negligence constituted the proximate cause of the victim's death because the real
proximate cause was the fallen live wire which posed a threat to life and property on that
morning due to the series of negligence adverted to above committed by defendants' employees
and which could have killed any other person who might by accident get into contact with it.
Stated otherwise, even if the child was allowed to leave the house unattended due to the parents'
negligence, he would not have died that morning where it not for the cut live wire he accidentally
touched.
Art. 2179 of the Civil Code provides that if the negligence of the plaintiff (parents of the victim
in this case) was only contributory, the immediate and proximate cause of the injury being the
defendants' lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded. This law may be availed of by the petitioner but does not exempt him
from liability. Petitioner's liability for injury caused by his employees negligence is well defined
in par. 4, of Article 2180 of the Civil Code, which states:
The owner and manager of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on tile occasion of their functions.
The negligence of the employee is presumed to be the negligence of the employer because the
employer is supposed to exercise supervision over the work of the employees. This liability of
the employer is primary and direct (Standard Vacuum Oil Co. vs. Tan and Court of Appeals, 107
Phil. 109). In fact the proper defense for the employer to raise so that he may escape liability is
to prove that he exercised, the diligence of the good father of the family to prevent damage not
only in the selection of his employees but also in adequately supervising them over their work.
This defense was not adequately proven as found by the trial Court, and We do not find any
sufficient reason to deviate from its finding.
Notwithstanding diligent efforts, we fail to fired any reversible error committed by the trial Court
in this case, either in its appreciation of the evidence on questions of facts or on the interpretation
and application of laws government quasi-delicts and liabilities emanating therefrom. The

inevitable conclusion is that no error amounting to grave abuse of discretion was committed and
the decision must be left untouched.
WHEREFORE, the decision of respondent Court dated June 27, 1974 is affirmed.
Costs against petitioner.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-32611
CULION ICE, FISH AND ELECTRIC CO., INC., plaintiff-appellee,
vs.
PHILIPPINE MOTORS CORPORATION, defendant-appellant.
STREET, J.:

November 3, 1930

This action was instituted in the Court of First Instance of Manila by the Culion Ice, Fish &
Electric Co., Inc., for the purpose of recovering from the Philippine Motors Corporation the sum
of P11,350, with interest and costs. Upon hearing the cause the trial court gave judgment in favor
of the plaintiff to recover of the defendant the sum of P9,850, with interest at 6 per centum per
annum from March 24,1927, the date of the filing of the complaint, until satisfaction of the
judgment, with costs. From this judgment the defendant appealed.
The plaintiff and defendant are domestic corporations; and at the time of the incident with which
we are here concerned, H.D. Cranston was the representative of the plaintiff in the City of
Manila. At the same time the plaintiff was the registered owner of the motor
schooner Gwendoline, which was used in the fishing trade in the Philippine Islands. In January,
1925, Cranston decided, if practicable, to have the engine on the Gwendoline changed from a
gasoline consumer to a crude oil burner, expecting thereby to effect economy in the cost of
running the boat. He therefore made known his desire to McLeod & Co., a firm dealing in
tractors, and was told by Mc Kellar, of said company, that he might make inquiries of the
Philippine Motors Corporations, which had its office on Ongpin Street, in the City of Manila.
Cranston accordingly repaired to the office of the Philippine Motors Corporation and had a
conference with C.E. Quest, its manager, who agreed to do the job, with the understanding that
payment should be made upon completion of the work.
The Philippine Motors Corporation was at this time engaged in business as an automobile
agency, but, under its charter, it had authority to deal in all sorts of machinery engines and
motors, as well as to build, operate, buy and sell the same and the equipment thereof. Quest, as
general manager, had full charge of the corporations in all its branches.
As a result of the aforesaid interview, Quest, in company with Cranston, visited
the Gwendoline while it lay at anchor in the Pasig River, and the work of effecting the change in
the engine was begun and conducted under the supervision of Quest, chiefly by a mechanic
whom Quest took with him to the boat. In this work Quest had the assistance of the members of
the crew of the Gwendoline, who had been directed by Cranston to place themselves under
Quest's directions.
Upon preliminary inspection of the engine, Quest came to the conclusion that the principal thing
necessary to accomplish the end in view was to install a new carburetor, and a Zenith carburetor
was chosen as the one most adapted to the purpose. After this appliance had been installed, the
engine was tried with gasoline as a fuel, supplied from the tank already in use. The result of this
experiment was satisfactory. The next problem was to introduce into the carburetor the baser
fuel, consisting of a low grade of oil mixed with distillate. For this purpose a temporary tank to
contain the mixture was placed on deck above and at a short distance from the compartment
covering the engine. This tank was connected with the carburetor by a piece of tubing, which
was apparently not well fitted at the point where it was connected with the tank. Owing to this
fact the fuel mixture leaked from the tank and dripped sown into the engine compartment. The
new fuel line and that already in use between the gasoline tank and carburetor were so fixed that
it was possible to change from the gasoline fuel to the mixed fuel. The purpose of this

arrangement was to enable the operator to start the engine on gasoline and then, after the engine
had been operating for a few moments, to switch to the new fuel supply. lawphil.net
In the course of the preliminary work upon the carburetor and its connections, it was observed
that the carburetor was flooding, and that the gasoline, or other fuel, was trickling freely from the
lower part to the carburetor to the floor. This fact was called to Quest's attention, but he appeared
to think lightly of the matter and said that, when the engine had gotten to running well, the
flooding would disappear.
After preliminary experiments and adjustments had been made the boat was taken out into the
bay for a trial run at about 5 p.m. or a little later, on the evening of January 30,1925. The first
part of the course was covered without any untoward development, other than he fact that the
engine stopped a few times, owing no doubt to the use of an improper mixture of fuel. In the
course of the trial Quest remained outside of the engine compartment and occupied himself with
making distillate, with a view to ascertaining what proportion of the two elements would give
best results in the engine.
As the boat was coming in from this run, at about 7:30 p.m. and when passing near Cavite, the
engine stopped, and connection again had to be made with the gasoline line to get a new start.
After this had been done the mechanic, or engineer, switched to the tube connecting with the new
mixture. A moment later a back fire occurred in the cylinder chamber. This caused a flame to
shoot back into the carburetor, and instantly the carburetor and adjacent parts were covered with
a mass of flames, which the members of the crew were unable to subdue. They were therefore
compelled, as the fire spread, to take to a boat, and their escape was safely effected, but the
Gwendoline was reduced to a mere hulk. The salvage from, the wreck, when sold, brought only
the sum of P150. The value of the boat, before the accident occured, as the court found, was
P10,000.
A study of the testimony lead us to the conclusion that the loss of this boat was chargeable to the
negligence and lack of skill of Quest. The temporary tank in which the mixture was prepared was
apparently at too great an elevation from the carburetor, with the result that when the fuel line
was opened, the hydrostatic pressure in the carburetor was greater than the delicate parts of the
carburetor could sustain. This was no doubt the cause of the flooding of the carburetor; and the
result was that; when the back fire occurred, the external parts of the carburetor, already
saturated with gasoline, burst into flames, whence the fire was quickly communicated to the
highly inflammable material near-by. Ordinarily a back fire from an engine would not be
followed by any disaster, but in this case the leak along the pipe line and the flooding of the
carburetor had created a dangerous situation, which a prudent mechanic, versed in repairs of this
nature, would have taken precautions to avoid. The back fire may have been due either to the fact
that the spark was too advanced or the fuel improperly mixed.
In this connection it must be remembered that when a person holds himself out as being
competent to do things requiring professional skill, he will be held liable for negligence if he
fails to exhibit the care and skill of one ordinarily skilled in the particular work which he

attempts to do. The proof shows that Quest had had ample experience in fixing the engines of
automobiles and tractors, but it does not appear that he was experienced in the doing of similar
work on boats. For this reason, possibly the dripping of the mixture form the tank on deck and
the flooding of the carburetor did not convey to his mind an adequate impression of the danger of
fire. But a person skilled in that particular sort of work would, we think have been sufficiently
warned from those circumstances to cause him to take greater and adequate precautions against
the danger. In other words Quest did not use the skill that would have been exhibited by one
ordinarily expert in repairing gasoline engines on boats. There was here, in our opinion, on the
part of Quest, a blameworthy antecedent inadvertence to possible harm, and this constitutes
negligence. The burning of the Gwendoline may be said to have resulted from accident, but this
accident was in no sense an unavoidable accident. It would not have occured but for Quest's
carelessness or lack of skill. The test of liability is not whether the injury was accidental in a
sense, but whether Quest was free from blame.
We therefore see no escape from the conclusion that this accident is chargeable to lack of skill or
negligence in effecting the changes which Quest undertook to accomplish; and even supposing
that our theory as to the exact manner in which the accident occurred might appear to be in some
respects incorrect, yet the origin of the fire in not so inscrutable as to enable us to say that it
was casus fortuitus.
The trial judge seems to have proceeded on the idea that, inasmuch as Quest had control of
the Gwendolineduring the experimental run, the defendant corporation was in the position of a
bailee and that, as a consequence, the burden of proof was on the defendant to exculpate itself
from responsibility by proving that the accident was not due to the fault of Quest. We are unable
to accede to this point of view. Certainly, Quest was not in charge of the navigation of the boat

on this trial run. His employment contemplated the installation of new parts in the engine only,
and it seems rather strained to hold that the defendant corporation had thereby become bailee of
the boat. As a rule workmen who make repairs on a ship in its owner's yard, or a mechanic who
repairs a coach without taking it to his shop, are not bailees, and their rights and liabilities are
determined by the general rules of law, under their contract. The true bailee acquires possession
and what is usually spoken of as special property in the chattel bailed. As a consequence of such
possession and special property, the bailee is given a lien for his compensation. These ideas seem
to be incompatible with the situation now under consideration. But though defendant cannot be
held liable in the supposition that the burden of proof had not been sustained by it in disproving
the negligence of its manager, we are nevertheless of the opinion that the proof shows by a clear
preponderance that the accident to the Gwendoline and the damages resulting therefrom are
chargeable to the negligence or lack of skill of Quest.
This action was instituted about two years after the accident in question had occured, and after
Quest had ceased to be manager of the defendant corporation and had gone back to the United
States. Upon these facts, the defendant bases the contention that the action should be considered
stale. It is sufficient reply to say that the action was brought within the period limited by the
statute of limitations and the situation is not one where the defense of laches can be properly
invoked.
It results that the judgment appealed from, awarding damages to the plaintiff in the amount of
P9,850, with interest, must be affirmed; and it is so ordered, with costs against the appellant.