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B. ELEMENTS OF QUASI DELICT 4.

4. This compromise agreement shall be a full and final settlement of a just cause, and according to the answer filed by the Western
of the issues between plaintiff (herein petitioner) and defendant Guaranty Corporation . . . the proximate cause of the accident was
1. ACT OR OMISSION
Western Guaranty in their complaint and answer and, from now the fault of the plaintiff (herein petitioner), hence it was not liable
G.R. No. 106436 December 3, 1994 on, they shall have no more right against one another except the for damages. There is in fact a congruence of affirmative defense
enforcement of this compromise agreement. among the answering defendants.
VIRGILIO D. IMSON, petitioner,
vs. In consequence of the compromise agreement, the trial court Moreover, it is undisputed that the injury caused is covered by the
HON. COURT OF APPEALS, HOLIDAY HILLS STOCK AND dismissed the Complaint for Damages against Western Guaranty insurance company concerned. Thus, when the said insurer
BREEDING FARM CORPORATION, FNCB FINANCE Corporation on June 16, 1987.8 A copy of the Order of dismissal settled its liability with the private respondent (petitioner
CORPORATION, respondents. was received by private respondent Holiday Hills Stock and herein) . . . , the other defendants, as the insured and
Breeding Farm Corporation on July 13, 1987. Nearly eighteen indispensable parties to a common cause of action, necessarily
PUNO, J.: (18) months later, said private respondent moved to dismiss the benefited from such settlement including the defaulted
The case at bench arose from a vehicular collision on case against all the other defendants. It argued that since they are defendants, for as stated in the aforecited cases, it is deemed that
December 11, 1983, involving petitioner's Toyota Corolla and a all indispensable parties under a common cause of action, the anything done by or for the answering defendant is done by or for
Hino diesel truck registered under the names of private dismissal of the case against defendant insurer must result in the the ones in default since it is implicit in the rule that default is in
respondents FNCB Finance Corporation and Holiday Hills dismissal of the suit against all of them. The trial court denied the essence a mere formality that deprives them of no more than to
Stock and Breeding Farm Corporation. The collision seriously motion. take part in the trial, but if the complaint is dismissed as to the
injured petitioner and totally wrecked his car. answering defendant, it should also be dismissed as to
Private respondent Holiday Hills Stock and Breeding Farm
them.9 (Citations omitted.)
On January 6, 1984, petitioner filed with the RTC Baguio Corporation assailed the denial order through a Petition
City1 a Complaint for Damages2 Sued were private for Certiorari, Prohibition and Mandamus With Restraining Order Petitioner now comes to this Court with the following assignments
respondents as registered owners of the truck; truck driver filed with respondent Court of Appeals. The Petition was docketed of error:
Felix B. Calip, Jr.; the beneficial owners of the truck, Gorgonio as CA-G.R. SP No. 17651. On July 10, 1992, the Court of
A.
Co Adarme, Felisa T. Co (also known as Felisa Tan), and Appeals,7 through its Special Sixth Division,8 reversed the trial
Cirilia Chua Siok Bieng, and the truck insurer, Western court, as it ruled: RESPONDENT COURT OF APPEALS COMMITTED A
Guaranty Corporation. REVERSIBLE ERROR IN RULING THAT THE DEFENDANTS IN
The petitioner (herein private respondent Holiday Hills Stock and
CIVIL CASE NO. 248-R ARE INDISPENSABLE PARTIES;
The Complaint prayed that defendants be ordered to pay, Breeding Farm Corporation) cites the doctrine laid down in Lim
jointly and severally, two hundred seventy thousand pesos Tanhu v. Hon. Ramolete, 66 SCRA 425, as applied later in Co v. B.
(P270,000.00) as compensatory damages, fifty thousand Acosta, 134 SCRA 185, to support its averment that the court a
quo gravely abused its discretion in refusing to dismiss the case. RESPONDENT COURT OF APPEALS COMMITTED A
pesos (P50,000.00) each as moral and exemplary damages,
REVERSIBLE ERROR IN RULING THAT IN CIVIL CASE NO.
and attorney's fees, litigation expenses, and cost of suit.8 Essentially, the doctrine adverted to essays that in a common 248-R THERE IS A COMMON CAUSE OF ACTION AGAINST
Defendants driver and beneficial owners failed to answer and cause of action where all the defendants are indispensable THE DEFENDANTS THEREIN;
were declared in default.4 On May 29, 1987, however, parties, the court's power to act is integral and cannot be split,
such that it cannot relieve any of them and at the same time C.
petitioner and defendant insurer, entered into a compromise
agreement which provided, inter alia: render judgment against the rest. RESPONDENT COURT OF APPEALS COMMITTED A
We find applicability of the doctrine to the case at bar. REVERSIBLE ERROR IN RULING THAT IN CIVIL CASE NO.
1. Defendant Western Guaranty Corporation (Western
248-R THE RULING OF THIS HONORABLE COURT IN LIM TAN
Guaranty for short) admits that its total liability under the laws A cursory reading of the complaint . . . reveals that the cause of HU VS. RAMOLETE IS APPLICABLE;
and the insurance contract sued upon is P70,000.00; action was the alleged bad faith and gross negligence of the
defendants resulting in the injuries complained of and for which D.
2. In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall pay the action for damages was filed. The inclusion of Western RESPONDENT COURT OF APPEALS COMMITTED A
plaintiff (herein petitioner) the amount of P70,000.00 upon the Guaranty Corporation was vital to the claim, it being the insurer of REVERSIBLE ERROR IN RULING THAT THE DOCTRINE OF
signing of this compromise agreement; the diesel truck without which, the claim could be set for naught. ESTOPPEL AND LACHES ON MATTERS OF JURISDICTION IS
Stated otherwise, it is an indispensable party as the petitioner NOT APPLICABLE IN CIVIL CASE NO. 248-R.
3. This compromise agreement shall in no way waive nor (herein private respondent stock and breeding farm
prejudice plaintiffs (herein petitioner's) rights to proceed corporation) . . . . Private respondent's (herein petitioner's There is merit to the petition,.
against the other defendants with respect the remainder of his argument that the said insurance company was sued on a In the case of Lim Tanhu v. Ramolete, 66 SCRA 425, 458-459
claims; different cause of action, i.e., its bounden duty under the (1975) this court held that:
insurance law to pay or settle claims arising under its policy
coverage, is untenable, for the cited law perceives the existence
1
. . . (I)n all instances where a common cause of action is pleadings pertaining to the acts of the defendant. Whether such indispensable parties. They are merely proper parties to the case.
alleged against several defendants, some of whom answer acts give him a right of action is determined by substantive law. 12 Proper parties have been described as parties whose presence is
and the others do not, the latter or those in default acquire a necessary in order to adjudicate the whole controversy, but whose
In the case at bench, it is clear that petitioner has different and
vested right not only to own the defense interposed in the interests are so far separable that a final decree can be made in
separate causes of action against the defendants in the case. The
answer of their co-defendant or co-defendants not in default their absence without affecting them.17 It is easy to see that if any
allegations in the Complaint show that petitioner seeks to recover
but also to expect a result of the litigation totally common with of them had not been impleaded as defendant, the case would still
from the truck driver for his wrong which caused injury to
them in kind and in amount whether favorable or unfavorable. proceed without prejudicing the party not impleaded. Thus, if
petitioner and his car. The cause of action against him is based on
The substantive unity of the plaintiffs cause against all the petitioner did not sue Western Guaranty Corporation, the omission
quasi-delict under Article 2176 of the New Civil Code. Quasi-
defendants is carried through to its adjective phase as would not cause the dismissal of the suit against the other
delict, too, is the basis of the cause of action against defendants
ineluctably demanded by the homogeneity and indivisibility of defendants. Even without the insurer, the trial court would not lose
beneficial and registered owners. But in their case, it is Article
justice itself. . . . The integrity of the common cause of action its competency to act completely and validly on the damage suit.
2180 of the same Code which governs the rights of the parties.
against all the defendants and the indispensability of all of The insurer, clearly, is not an indispensable party in Civil Case No.
them in the proceedings do not permit any possibility of waiver However, with respect to defendant Western Guaranty 248-R.
of the plaintiffs right only as to one or some of them, without Corporation, petitioner's cause of action is based on contract. He
IN VIEW WHEREOF, the instant petition is GRANTED. The
including all of them, and so, as a rule, withdrawal must be seeks to recover from the insurer on the basis of the third party
Decision, dated July 10, 1992, of the Court of Appeals in CA-G.R.
deemed to be a confession of weakness as to all. . . . . Where liability clause of its insurance contract with the owners of the
SP No. 17651 is REVERSED AND SET ASIDE. The Complaint in
all the defendants are indispensable parties, for which reason truck. This is acknowledged by the second paragraph of the
Civil Case No. 248-R is REINSTATED and REMANDED to the trial
the absence of any of them in the case would result in the compromise agreement between petitioner and defendant insurer,
court for further proceedings. No costs.
court losing its competency to act validly, any compromise that thus:
the plaintiff might wish to make with any of them must, as a SO ORDERED.
matter of correct procedure, have to await until after the 2. In full settlement of its liability under the laws and the said
rendition of the judgment, at which stage the plaintiff may then insurance contract, defendant Western Guaranty shall pay plaintiff G.R. No. 74761 November 6, 1990
treat the matter of its execution and the satisfaction of his (herein petitioner) the amount of P70,000.00 upon the signing of
NATIVIDAD V. ANDAMO and EMMANUEL R.
claim as variably as he might please. Accordingly, in the case this compromise agreement.
ANDAMO, petitioners, vs. INTERMEDIATE APPELLATE COURT
now before Us together with the dismissal of the complaint Quite clearly then, Lim Tanhu will not apply to the case at bench (First Civil Cases Division) and MISSIONARIES OF OUR LADY
against the non-defaulted defendants, the court should have for there is no showing that petitioner has a common cause of OF LA SALETTE, INC., respondents.
ordered also the dismissal thereof as to petitioner (referring to action against the defendants in Civil Case No. 248-R.
the defaulting defendants in the case). FERNAN, C.J.:
But this is not all. Defendants in Civil Case No. 248-R are not all
In sum, Lim Tanhu states that where a complaint alleges a The pivotal issue in this petition for certiorari, prohibition and
indispensable parties. An indispensable party is one whose
common cause of action against defendants who are all mandamus is whether a corporation, which has built through its
interest will be affected by the court's action in the litigation, and
indispensable parties to the case, its dismissal against any of agents, waterpaths, water conductors and contrivances within its
without whom no final determination of the case can be had. The
them by virtue of a compromise agreement with the plaintiff land, thereby causing inundation and damage to an adjacent land,
party's interest in the subject matter of the suit and in the relief
necessarily results in the dismissal of the case against the can be held civilly liable for damages under Articles 2176 and
sought are so inextricably intertwined with the other parties' that
other defendants, including those in default. The ruling is 2177 of the Civil Code on quasi-delicts such that the resulting civil
his legal presence as a party to the proceeding is an absolute
rooted on the rationale that the court's power to act in a case case can proceed independently of the criminal case.
necessity. 13 In his absence there cannot be a resolution of the
involving a common cause of action against indispensable dispute of the parties before the court which is effective, complete, The antecedent facts are as follows:
parties "is integral and cannot be split such that it cannot or equitable.14
relieve any of them and at the same time render judgment Petitioner spouses Emmanuel and Natividad Andamo are the
against the rest. 10 Conversely, a party is not indispensable to the suit if his interest in owners of a parcel of land situated in Biga (Biluso) Silang, Cavite
the controversy or subject matter is distinct and divisible from the which is adjacent to that of private respondent, Missionaries of
For Lim Tanhu to apply to the case at bench, it must be interest of the other parties and will not necessarily be prejudiced Our Lady of La Salette, Inc., a religious corporation.
established that: (1) petitioner has common cause of action by a judgment which does complete justice to the parties in
against private respondents and the other defendants in Civil court.15 He is not indispensable if his presence would merely Within the land of respondent corporation, waterpaths and
Case No. 248-R; and (2) all the defendants are indispensable permit complete relief between him and those already parties to contrivances, including an artificial lake, were constructed, which
parties to the case. the action, or will simply avoid multiple litigation.16 allegedly inundated and eroded petitioners' land, caused a young
man to drown, damaged petitioners' crops and plants, washed
Cause of action has a fixed meaning in this jurisdiction. It is It is true that all of petitioner's claims in Civil Case No. 248-R is away costly fences, endangered the lives of petitioners and their
the delict or wrong by which the right of the plaintiff is violated premised on the wrong committed by defendant truck driver. laborers during rainy and stormy seasons, and exposed plants
by the defendant. 11 The question as to whether a plaintiff has Concededly, the truck driver is an indispensable party to the suit. and other improvements to destruction.
a cause of action is determined by the averments in the The other defendants, however, cannot be categorized as

2
In July 1982, petitioners instituted a criminal action, docketed It is axiomatic that the nature of an action filed in court is a) Portions of the land of plaintiffs were eroded and converted to
as Criminal Case No. TG-907-82, before the Regional Trial determined by the facts alleged in the complaint as constituting deep, wide and long canals, such that the same can no longer be
Court of Cavite, Branch 4 (Tagaytay City), against Efren the cause of action. 7 The purpose of an action or suit and the law planted to any crop or plant.
Musngi, Orlando Sapuay and Rutillo Mallillin, officers and to govern it, including the period of prescription, is to be
b) Costly fences constructed by plaintiffs were, on several
directors of herein respondent corporation, for destruction by determined not by the claim of the party filing the action, made in
occasions, washed away.
means of inundation under Article 324 of the Revised Penal his argument or brief, but rather by the complaint itself, its
Code. allegations and prayer for relief. 8 The nature of an action is not c) During rainy and stormy seasons the lives of plaintiffs and their
necessarily determined or controlled by its title or heading but the laborers are always in danger.
Subsequently, on February 22, 1983, petitioners filed another
body of the pleading or complaint itself. To avoid possible denial of
action against respondent corporation, this time a civil case, d) Plants and other improvements on other portions of the land of
substantial justice due to legal technicalities, pleadings as well as
docketed as Civil Case No. TG-748, for damages with prayer plaintiffs are exposed to destruction. ... 10
remedial laws should be liberally construed so that the litigants
for the issuance of a writ of preliminary injunction before the
may have ample opportunity to prove their respective claims. 9 A careful examination of the aforequoted complaint shows that the
same court. 1
Quoted hereunder are the pertinent portions of petitioners' civil action is one under Articles 2176 and 2177 of the Civil Code
On March 11, 1983, respondent corporation filed its answer to on quasi-delicts. All the elements of a quasi-delict are present, to
complaint in Civil Case No. TG-748:
the complaint and opposition to the issuance of a writ of wit: (a) damages suffered by the plaintiff, (b) fault or negligence of
preliminary injunction. Hearings were conducted including 4) That within defendant's land, likewise located at Biga (Biluso), the defendant, or some other person for whose acts he must
ocular inspections on the land. However, on April 26, 1984, the Silang, Cavite, adjacent on the right side of the aforesaid land of respond; and (c) the connection of cause and effect between the
trial court, acting on respondent corporation's motion to plaintiffs, defendant constructed waterpaths starting from the fault or negligence of the defendant and the damages incurred by
dismiss or suspend the civil action, issued an middle-right portion thereof leading to a big hole or opening, also the plaintiff. 11
order suspending further hearings in Civil Case No, TG-748 constructed by defendant, thru the lower portion of its concrete
until after judgment in the related Criminal Case No. TG-907- hollow-blocks fence situated on the right side of its cemented gate Clearly, from petitioner's complaint, the waterpaths and
82. fronting the provincial highway, and connected by defendant to a contrivances built by respondent corporation are alleged to have
man height inter-connected cement culverts which were also inundated the land of petitioners. There is therefore, an assertion
Resolving respondent corporation's motion to dismiss filed on of a causal connection between the act of building these
constructed and lain by defendant cross-wise beneath the tip of
June 22, 1984, the trial court issued on August 27, 1984 the waterpaths and the damage sustained by petitioners. Such action
the said cemented gate, the left-end of the said inter-connected
disputed order dismissing Civil Case No. TG-748 for lack of if proven constitutes fault or negligence which may be the basis
culverts again connected by defendant to a big hole or opening
jurisdiction, as the criminal case which was instituted ahead of for the recovery of damages.
thru the lower portion of the same concrete hollowblocks fence on
the civil case was still unresolved. Said order was anchored on
the left side of the said cemented gate, which hole or opening is In the case of Samson vs. Dionisio, 12 the Court applied Article
the provision of Section 3 (a), Rule III of the Rules of Court
likewise connected by defendant to the cemented mouth of a big 1902, now Article 2176 of the Civil Code and held that "any person
which provides that "criminal and civil actions arising from the
canal, also constructed by defendant, which runs northward who without due authority constructs a bank or dike, stopping the
same offense may be instituted separately, but after the
towards a big hole or opening which was also built by defendant flow or communication between a creek or a lake and a river,
criminal action has been commenced the civil action cannot be
thru the lower portion of its concrete hollow-blocks fence which thereby causing loss and damages to a third party who, like the
instituted until final judgment has been rendered in the criminal
separates the land of plaintiffs from that of defendant (and which rest of the residents, is entitled to the use and enjoyment of the
action." 2
serves as the exit-point of the floodwater coming from the land of stream or lake, shall be liable to the payment of an indemnity for
Petitioners appealed from that order to the Intermediate defendant, and at the same time, the entrance-point of the same loss and damages to the injured party.
Appellate Court. 3 floodwater to the land of plaintiffs, year after year, during rainy or
stormy seasons. While the property involved in the cited case belonged to the
On February 17, 1986, respondent Appellate Court, First Civil public domain and the property subject of the instant case is
Cases Division, promulgated a decision 4 affirming the 5) That moreover, on the middle-left portion of its land just beside privately owned, the fact remains that petitioners' complaint
questioned order of the trial court. 5 A motion for the land of plaintiffs, defendant also constructed an artificial lake, sufficiently alleges that petitioners have sustained and will
reconsideration filed by petitioners was denied by the the base of which is soil, which utilizes the water being channeled continue to sustain damage due to the waterpaths and
Appellate Court in its resolution dated May 19, 1986. 6 thereto from its water system thru inter-connected galvanized iron contrivances built by respondent corporation. Indeed, the recitals
pipes (No. 2) and complimented by rain water during rainy or of the complaint, the alleged presence of damage to the
Directly at issue is the propriety of the dismissal of Civil Case stormy seasons, so much so that the water below it seeps into, petitioners, the act or omission of respondent corporation
No. TG-748 in accordance with Section 3 (a) of Rule 111 of the and the excess water above it inundates, portions of the adjoining supposedly constituting fault or negligence, and the causal
Rules of Court. Petitioners contend that the trial court and the land of plaintiffs. connection between the act and the damage, with no pre-existing
Appellate Court erred in dismissing Civil Case No. TG-748
6) That as a result of the inundation brought about by defendant's contractual obligation between the parties make a clear case of
since it is predicated on a quasi-delict. Petitioners have raised
aforementioned water conductors, contrivances and manipulators, a quasi delict or culpa aquiliana.
a valid point.
a young man was drowned to death, while herein plaintiffs
suffered and will continue to suffer, as follows:
3
It must be stressed that the use of one's property is not individuality, separate from criminal negligence. Such distinction This is an appeal from a sentence imposed by the Honorable A. S.
without limitations. Article 431 of the Civil Code provides that between criminal negligence and "culpa extra-contractual" or Crossfield, judge of the Court of First Instance of Manila, for
"the owner of a thing cannot make use thereof in such a "cuasi-delito" has been sustained by decisions of the Supreme homicide resulting from reckless negligence. The information
manner as to injure the rights of a third person." SIC UTERE Court of Spain ... 14 charges:
TUO UT ALIENUM NON LAEDAS. Moreover, adjoining
In the case of Castillo vs. Court of Appeals, 15 this Court held that That on or about November 2, 1911, in the city of Manila,
landowners have mutual and reciprocal duties which require
a quasi-delict or culpa aquiliana is a separate legal institution Philippine Islands, the said Segundo Barias was a motorman on
that each must use his own land in a reasonable manner so as
under the Civil Code with a substantivity all its own, and street car No. 9, run 7 of the Pasay-Cervantes lines of the Manila
not to infringe upon the rights and interests of others. Although
individuality that is entirely apart and independent from a delict or Electric Railroad and Light Company, a corporation duly organized
we recognize the right of an owner to build structures on his
crime a distinction exists between the civil liability arising from and doing business in the city of Manila, Philippine Islands; as a
land, such structures must be so constructed and maintained
a crime and the responsibility for quasi-delicts or culpa extra- such motorman he was controlling and operating said street car
using all reasonable care so that they cannot be dangerous to
contractual. The same negligence causing damages may produce along Rizal Avenue, formerly Calle Cervantes, of this city, and as
adjoining landowners and can withstand the usual and
civil liability arising from a crime under the Penal Code, or create such motorman of the said street car he was under obligation to
expected forces of nature. If the structures cause injury or
an action for quasi-delicts or culpa extra-contractual under the run the same with due care and diligence to avoid any accident
damage to an adjoining landowner or a third person, the latter
Civil Code. Therefore, the acquittal or conviction in the criminal that might occur to vehicles and pedestrians who were travelling
can claim indemnification for the injury or damage suffered.
case is entirely irrelevant in the civil case, unless, of course, in the on said Rizal Avenue; said accused, at said time and place, did
Article 2176 of the Civil Code imposes a civil liability on a event of an acquittal where the court has declared that the fact willfully, with reckless imprudence and inexcusable negligence
person for damage caused by his act or omission constituting from which the civil action arose did not exist, in which case the and in violation of the regulations promulgated to that effect,
fault or negligence, thus: extinction of the criminal liability would carry with it the extinction control and operate said street car, without heeding the
of the civil liability. pedestrians crossing Rizal Avenue from one side to the other, thus
Article 2176. Whoever by act or omission causes damage to
knocking down and causing by his carelessness and imprudent
another, there being fault or negligence, is obliged to pay for In Azucena vs. Potenciano, 16 the Court declared that in quasi-
negligence that said street car No. 9, operated and controlled by
the damage done. Such fault or negligence, if there is no pre- delicts, "(t)he civil action is entirely independent of the criminal
said accused, as hereinbefore stated, should knock down and
existing contractual relation between the parties, is called a case according to Articles 33 and 2177 of the Civil Code. There
pass over the body and head of one Fermina Jose, a girl 2 years
quasi-delict and is governed by the provisions of this chapter. can be no logical conclusion than this, for to subordinate the civil
old, who at said time and place was crossing the said Rizal
action contemplated in the said articles to the result of the criminal
Article 2176, whenever it refers to "fault or negligence", covers Avenue, the body of said girl being dragged along street-car on
prosecution whether it be conviction or acquittal would
not only acts "not punishable by law" but also acts criminal in said Rizal Avenue for a long distance, thus crushing and
render meaningless the independent character of the civil action
character, whether intentional and voluntary or negligent. destroying her head and causing her sudden death as a result of
and the clear injunction in Article 31, that his action may proceed
Consequently, a separate civil action lies against the offender the injury received; that if the acts executed by the accused had
independently of the criminal proceedings and regardless of the
in a criminal act, whether or not he is criminally prosecuted been done with malice, he would be guilty of the serious crime of
result of the latter."
and found guilty or acquitted, provided that the offended party homicide.
is not allowed, (if the tortfeasor is actually charged also WHEREFORE, the assailed decision dated February 17, 1986 of
The defendant was a motorman for the Manila Electric Railroad
criminally), to recover damages on both scores, and would be the then Intermediate Appellate Court affirming the order of
and Light Company. At about 6 o'clock on the morning of
entitled in such eventuality only to the bigger award of the two, dismissal of the Regional Trial Court of Cavite, Branch 18
November 2, 1911, he was driving his car along Rizal avenue and
assuming the awards made in the two cases vary. 13 (Tagaytay City) dated August 17, 1984 is hereby REVERSED and
stopped it near the intersection of that street with Calle Requesen
SET ASIDE. The trial court is ordered to reinstate Civil Case No.
The distinctness of quasi-delicta is shown in Article 2177 of the to take on some passengers. When the car stopped, the
TG-748 entitled "Natividad V. Andamo and Emmanuel R. Andamo
Civil Code, which states: defendant looked backward, presumably to note whether all the
vs. Missionaries of Our Lady of La Salette Inc." and to proceed
passengers were aboard, and then started his car. At that moment
Article 2177. Responsibility for fault or negligence under the with the hearing of the case with dispatch. This decision is
Fermina Jose, a child about 3 years old, walked or ran in front of
preceding article is entirely separate and distinct from the civil immediately executory. Costs against respondent corporation.
he car. She was knocked down and dragged some little distance
liability arising from negligence under the Penal Code. But the underneath the car, and was left dead upon the track. The
SO ORDERED.
plaintiff cannot recover damages twice for the same act or motorman proceeded with his car to the end of the track, some
omission of the defendant. 2. FAULT OR NEGLIGENCE distance from the place of the accident, and apparently knew
According to the Report of the Code Commission "the G.R. No. L-7567 November 12, 1912 nothing of it until his return, when he was informed of what
foregoing provision though at first sight startling, is not so happened.
THE UNITED STATES, plaintiff-appellee, vs. SEGUNDO
novel or extraordinary when we consider the exact nature of There is no substantial dispute as to the facts. It is true that one
BARIAS, defendant-appellant.
criminal and civil negligence. The former is a violation of the witness testified that the defendant started the car without turning
criminal law, while the latter is a distinct and independent CARSON, J.: his head, and while he was still looking backwards and that this
negligence, which is a "culpa aquiliana" or quasi-delict, of testimony was directly contradicted by that of another witness. But
ancient origin, having always had its own foundation and
4
we do not deem it necessary to make an express finding as to and diligence, that attention, which can be required of the least residents of such streets begin to move about. Under such
the precise direction in which the defendant's head was turned careful, attentive, or diligent. If a moment's attention and reflection conditions a motorman of an electric street car was clearly
at the moment when he started his car. It is sufficient for the would have shown a person that the act which he was about to charged with a high degree of diligence in the performance of his
purpose of our decision to hold, as we do, that the evidence perform was liable to have the harmful consequence which it had, duties. He was bound to know and to recognize that any
clearly discloses that he started his car from a standstill such person acted with temerity and may be guilty of negligence on his part in observing the track over which he was
without looking over the track immediately in front of the car to "imprudencia temeraria." It may be that in practice this idea has running his car might result in fatal accidents. He had no right to
satisfy himself that it was clear. he did not see the child until been given a greater scope and the acts of imprudence which did assume that the track before his car was clear. It was his duty to
after he had run his car over it, and after he had return to the not show carelessness as carried to such high degree, might have satisfy himself of that fact by keeping a sharp lookout, and to do
place where it was found dead, and we think we are justified in been punished as "imprudencia temeraria;" but in our opinion, the everything in his power to avoid the danger which is necessarily
saying that whenever he was looking at the moment when he proper meaning of the word does not authorize another incident to the operation of heavy street cars on public
started his car, he was not looking at the track immediately in interpretation. (Id., p. 133 [161].) thoroughfares in populous sections of the city.
front of the car, and that he had not satisfied himself that this
Groizard, commenting upon "imprudencia temeraria," on page Did he exercise the degree of diligence required of him? We think
portion of the tract was clear immediately before putting the
389, volume 8, of his work on the Penal Code, says: this question must be answered in the negative. We do not go so
car in the motion.
far as to say that having brought his car to a standstill it was his
Prudence is that cardinal virtue which teaches us to discern and
The trial court found the defendant guilty of imprudencia bounden duty to keep his eyes directed to the front. Indeed, in the
distinguish the good from bad, in order to adopt or flee from it. It
temeraria (reckless negligence) as charged in the information, absence of some regulation of his employers, we can well
also means good judgment, temperance, and moderation in one's
and sentenced him to over one year and one month of understand that, at times, it might be highly proper and prudent for
actions. `Temerario is one who exposes himself to danger or
imprisonment in the Bilibid Prison, and to pay the cause of the him to glance back before again setting his car in motion, to
rushes into it without reflection and without examining the same.
action. satisfy himself that he understood correctly a signal to go forward
Consequently, he who from lack of good judgment, temperance,
or that all the passengers had safely alighted or gotten on board.
The sole question raised by this appeal is whether the or moderation in his actions, exposes himself without reflection
But we do insist that before setting his car again in motion, it was
evidence shows such carelessness or want of ordinary care and examination to the danger of committing a crime, must be
his duty to satisfy himself that the track was clear, and, for that
on the part of the defendant as to amount to reckless held responsible under the provision of law aforementioned.
purpose, to look and to see the track just in front of his car. This
negligence (imprudencia temeraria).
Negligence is want of the care required by the circumstances. It is the defendant did not do, and the result of his negligence was the
Judge Cooley in his work on Torts (3d ed., 1324) defines a relative or comparative, not an absolute, term and its application death of the child.
negligence to be: "The failure to observe, for the protection of depends upon the situation of the parties and the degree of care
In the case of Smith vs. St. Paul City Ry. Co., (32 Minn., p. 1), the
the interests of another person, that degree of care, and vigilance which the circumstances reasonably require. Where
supreme court of Minnesota, in discussing the diligence required
precaution and vigilance which the circumstances justly the danger is great, a high degree of care is necessary, and the
of street railway companies in the conduct of their business
demand, whereby such other persons suffers injury." failure to observe it is a want of ordinary care under the
observed that: "The defendant was a carrier of passengers for
circumstances. (Ahern vs. Oregon Telephone Co., 24 Oreg., 276,
In the case of U. S. vs. Nava, (1 Phil. Rep., 580), we held that: hire, owing and controlling the tracks and cars operated thereon. It
294; 35 Pac., 549.)
"Reckless negligence consists of the failure to take such is therefore subject to the rules applicable to passenger carriers.
precautions or advance measures in the performance of an Ordinary care, if the danger is great, may arise to the grade of a (Thompson's Carriers, 442; Barrett vs. Third Ave. R. Co., 1
act as the most prudence would suggest whereby injury is very exact and unchangeable attention. (Parry Mfg. Co. vs. Eaton, Sweeny, 568; 8 Abb. Pr. (N.S.), 205.) As respects hazards and
caused to persons or to property." 41 Ind. App., 81, 1908; 83 N. E., 510.) dangers incident to the business or employment, the law enjoins
upon such carrier the highest degree of care consistent with its
Silvela says in his "Derecho Penal," in speaking of reckless In the case of U. S. vs. Reyes (1 Phil. Rep., 375-377), we held undertaking, and it is responsible for the slightest negligence.
imprudence (imprudencia temeraria): that: "The diligence with which the law requires the individual at all (Wilson vs. Northern Pacific R. Co., 26 Minn., 278; Warren vs.
the time to govern his conduct varies with the nature of the Fitchburg R. Co., 8 Allen, 233; 43 Am. Dec. 354, 356, notes and
The word "negligencia" used in the code, and the
situation in which he is placed and with the importance of the act cases.) . . . The severe ruled which enjoins upon the carrier such
term "imprudencia" with which this punishable act is defined,
which he is to perform.lawph!l.net extraordinary care and diligence, is intended, for reasons of public
express this idea in such a clear manner that it is not
necessary to enlarge upon it. He who has done everything on The question to be determined then, is whether, under all the policy, to secure the safe carriage of passengers, in so far as
his part to prevent his actions from causing damage to circumstances, and having in mind the situation of the defendant human skill and foresight can affect such result." The case just
another, although he has not succeeded in doing so, when he put his car in motion and ran it over the child, he was cited was a civil case, and the doctrine therein announced had
notwithstanding his efforts, is the victim of an accident and can guilty of a failure to take such precautions or advance measures special reference to the care which should be exercised in
not be considered responsible for the same. (Vol. 2, p. 127 as common prudence would suggest. securing the safety of passengers. But we hold that the reasons of
[153].) public policy which impose upon street car companies and their
The evidence shows that the thoroughfare on which the incident employees the duty of exercising the utmost degree of diligence in
Temerario is, in our opinion, one who omits, with regard to this occurred was a public street in a densely populated section of the securing the safety of passengers, apply with equal force to the
actions, which are liable to cause injury to another, that care city. The hour was six in the morning, or about the time when the duty of avoiding the infliction of injuries upon pedestrians and
5
others on the public streets and thoroughfares over which wherein we held that the defendant was not guilty of reckless Imprudence. Still unsatisfied with the decision of the Court of
these companies are authorized to run their cars. And while, in negligence, where it appeared that he killed another by the Appeals,1 petitioner has come to this Court for a complete reversal
a criminal case, the courts will require proof of the guilt of the discharge of his gun under such circumstances that he might of the judgment below.
company or its employees beyond a reasonable doubt, have been held guilty of criminally reckless negligence had he
The facts of the case as found by the appellate court are as
nevertheless the care or diligence required of the company had knowledge at that moment that another person was in such
follows:
and its employees is the same in both cases, and the only position as to be in danger if the gun should be discharged. In this
question to be determined is whether the proofs shows latter case the defendant had no reason to anticipate that the In the morning of July 4, 1972 at about 8:00 o'clock, the accused
beyond a reasonable doubt that the failure to exercise such person who was injured was in the line of fire, or that there was Hedy Gan was driving a Toyota car along North Bay Boulevard,
care or diligence was the cause of the accident, and that the any probability that he or anyone else would place himself in the Tondo, Manila. While in front of house no. 694 of North Bay
defendant was guilty thereof. line of fire. In the case at bar, however, it was, as we have seen, Boulevard, there were two vehicles, a truck and a jeepney parked
the manifest duty of the motorman to take reasonable precautions on one side of the road, one following the other about two to three
Counsel for the defendant insist that the accident might have
in starting his car to see that in doing so he was not endangering meters from each other. As the car driven by the accused
happened despite the exercise of the utmost care by the
the life of any pedestrian, old or young; and to this end it was approached the place where the two vehicles were parked, there
defendant, and they have introduced photographs into the
further his duty to guard against the reasonable possibility that was a vehicle coming from the opposite direction, followed by
record for the purpose of proving that while the motorman was
some one might be on the track immediately in front of the car. another which tried to overtake and bypass the one in front of it
standing in his proper place on the front platform of the car, a
We think that the evidence showing, as it does, that the child was and thereby encroached the lane of the car driven by the accused.
child might have walked up immediately in front of he car
killed at the moment when the car was set in motion, we are To avoid a head-on collision with the oncoming vehicle, the
without coming within the line of his vision. Examining the
justified in holding that, had the motorman seen the child, he defendant swerved to the right and as a consequence, the front
photographs, we think that this contention may have some
could have avoided the accident; the accident was not, therefore, bumper of the Toyota Crown Sedan hit an old man who was about
foundation in fact; but only to this extent, that standing erect,
"unavailable or inexplicable," and it appearing that the motorman, to cross the boulevard from south to north, pinning him against the
at the position he would ordinarily assume while the car is in
by the exercise of ordinary diligence, might have seen the child rear of the parked jeepney. The force of the impact caused the
motion, the eye of the average motorman might just miss
before he set the car in motion, his failure to satisfy himself that parked jeepney to move forward hitting the rear of the parts truck
seeing the top of the head of a child, about three years old,
the track was clear before doing so was reckless negligence, of ahead of it. The pedestrian was injured, the Toyota Sedan was
standing or walking close up to the front of the car. But it is
which he was properly convicted in the court below. damaged on its front, the jeep suffered damages on its rear and
also very evident that by inclining the head and shoulders
front paints, and the truck sustained scratches at the wooden
forward very slightly, and glancing in front of the car, a person We think, however, that the penalty should be reduced to that of
portion of its rear. The body of the old man who was later
in the position of a motorman could not fail to see a child on six months and one day of prision correccional. Modified by
Identified as Isidoro Casino was immediately brought to the Jose
the track immediately in front of his car; and we hold that it is substituting for so much thereof as imposes the penalty of one
Reyes Memorial Hospital but was (pronounced) dead on arrival.2
the manifest duty of a motorman, who is about to start his car year and one month of imprisonment, the penalty of six months
on a public thoroughfare in a thickly-settled district, to satisfy and one day of prision correccional, the judgment of the lower An information for Homicide thru Reckless Imprudence was filed
himself that the track is clear immediately in front of his car, court convicting and sentencing the appellant is affirmed, with against petitioner in view of the above incident. She entered a
and to incline his body slightly forward, if that be necessary, in costs of both instances against him. So ordered. plea of not guilty upon arraignment and the case was set for trial.
order to bring the whole track within his line of vision. Of
G.R. No. L-44264 September 19, 1988 Meanwhile, petitioner sought and was granted a re-investigation
course, this may not be, and usually is not necessary when
the car is in motion, but we think that it is required by the by the City Fiscal, as a result of which the trial fiscal moved for the
HEDY GAN y YU, petitioner, vs. THE HONORABLE COURT OF
dictates of the most ordinary prudence in starting from a dismissal of the case against petitioner during the resumption of
APPEALS and the PEOPLE OF THE
standstill. hearing on September 7, 1972. The grounds cited therefor were
PHILIPPINES, respondents.
lack of interest on the part of the complaining witness to prosecute
We are not unmindful of our remarks in the case of U. S. vs. FERNAN, C.J.: the case as evidenced by an affidavit of desistance submitted to
Bacho (10 Phil. Rep., 577), to which our attention is directed the trial court and lack of eyewitness to sustain the charge.
by counsel for appellant. In that case we said that: Petitioner Hedy Gan was convicted of the crime of Homicide thru
Reckless Imprudence in Criminal Case No. 10201 of the then The motion to dismiss filed by the fiscal was never resolved. The
. . . In the general experience of mankind, accidents Court of First Instance of Manila, Branch XXII presided by Judge Court instead ordered the prosecution to present its evidence.
apparently avoidable and often inexplicable are unfortunately Federico C. Alikpala. She was sentenced to an indeterminate After the prosecution rested its case, the petitioner filed a motion
too frequent to permit us to conclude that some one must be penalty of four (4) months and one (1) day of arresto mayor as to dismiss the case on the ground of insufficiency of evidence.
criminally liable for negligence in every case where an minimum and two (2) years, four (4) months and one (1) day
accident occurs. It is the duty of the prosecution in each case On December 22, 1972, the trial court rendered judgment finding
of prision correccional as maximum and was made to indemnify
to prove by competent evidence not only the existence of petitioner guilty beyond reasonable doubt of the of- offense
the heirs of the victim the sum of P12,000.00 without any
criminal negligence, but that the accused was guilty thereof. charged.
subsidiary imprisonment in case of insolvency and to pay the
costs. On appeal, the trial court's decision was modified and
Nor do we overlook the ruling in the case of U. S. vs. Barnes
petitioner was convicted only of Homicide thru Simple
(12 Phil. Rep., 93), to which our attention is also invited,
6
Petitioner appealed to the Court of Appeals in CA-G.R. No. Applying the above test to the case at bar, we find the petitioner Also, the respondent court itself pronounced that the petitioner
14472-CR. On May 3, 1976, the Court of Appeals rendered a not guilty of the crime of Simple Imprudence resulting in was driving her car within the legal limits. We therefore rule that
decision, the dispositive portion of which reads as follows: Homicide. the "emergency rule" enunciated above applies with full force to
the case at bar and consequently absolve petitioner from any
Wherefore, as modified, the accused Hedy Gan is guilty The appellate court in finding the petitioner guilty said:
criminal negligence in connection with the incident under
beyond reasonable doubt of the crime of homicide thru simple
The accused should have stepped on the brakes when she saw consideration.
imprudence and, pursuant to paragraph 2, Article 365 of the
the car going in the opposite direction followed by another which
Revised Penal Code, she is hereby sentenced to the We further set aside the award of damages to the heirs of the
overtook the first by passing towards its left. She should not only
indeterminate penalty of three (3) months and eleven (11) victim, who by executing a release of the claim due them, had
have swerved the car she was driving to the right but should have
days of arresto mayor and to indemnify the heirs of Isidoro effectively and clearly waived their right thereto.
also tried to stop or lessen her speed so that she would not bump
Casino in the sum of Twelve Thousand Pesos (Pl2,000.00)
into the pedestrian who was crossing at the time but also the WHEREFORE, judgment is hereby rendered acquitting petitioner
without, however, any subsidiary imprisonment in case of
jeepney which was then parked along the street. 7 HEDY GAN y YU of the crime of Homicide thru Simple
insolvency, and to pay the costs. 3
Imprudence. She is no longer liable for the P12,000.00 civil
The course of action suggested by the appellate court would
Petitioner now appeals to this Court on the following indemnity awarded by the appellate court to the heirs of the victim.
seem reasonable were it not for the fact that such suggestion did
assignments of errors:
not take into account the amount of time afforded petitioner to SO ORDERED.
I react to the situation she was in. For it is undeniable that the
suggested course of action presupposes sufficient time for
The Court of Appeals erred in holding that when the petitioner
appellant to analyze the situation confronting her and to ponder G.R. No. L-12219 March 15, 1918
saw a car travelling directly towards her, she should have
on which of the different courses of action would result in the least
stepped on the brakes immediately or in swerving her vehicle AMADO PICART, plaintiff-appellant, vs. FRANK SMITH,
possible harm to herself and to others.
to the right should have also stepped on the brakes or JR., defendant-appellee.
lessened her speed, to avoid the death of a pedestrian. Due to the lack of eyewitnesses, no evidence was presented by
the prosecution with respect to the relative distances of petitioner STREET, J.:
II
to the parked jeepney and the oncoming overtaking vehicle that In this action the plaintiff, Amado Picart, seeks to recover of the
The Court of Appeals erred in convicting the petitioner of the would tend to prove that petitioner did have sufficient time to defendant, Frank Smith, jr., the sum of P31,000, as damages
crime of Homicide thru Simple Imprudence. reflect on the consequences of her instant decision to swerve her alleged to have been caused by an automobile driven by the
car to the light without stepping on her brakes. In fact, the defendant. From a judgment of the Court of First Instance of the
III evidence presented by the prosecution on this point is the Province of La Union absolving the defendant from liability the
The Court of Appeals erred in adjudging the petitioner liable to petitioner's statement to the police 8 stating:: plaintiff has appealed.
indemnify the deceased in the sum of P12,000.00.4 And masasabi ko lang ho umiwas ho ako sa isang sasakyan The occurrence which gave rise to the institution of this action
We reverse. na biglang nagovertake sa sasakyan na aking kasalubong kung took place on December 12, 1912, on the Carlatan Bridge, at San
kaya ay aking kinabig sa kanan ang akin kotse subalit siya Fernando, La Union. It appears that upon the occasion in question
The test for determining whether or not a person is negligent naman biglangpagtawid ng tao o victim at hindi ko na ho
in doing an act whereby injury or damage results to the person the plaintiff was riding on his pony over said bridge. Before he had
naiwasan at ako ay wala ng magawa . Iyan ho ang buong gotten half way across, the defendant approached from the
or property of another is this: Would a prudent man in the pangyayari nang nasabing aksidente.9 (Emphasis supplied)
position of the person to whom negligence is attributed opposite direction in an automobile, going at the rate of about ten
foresee harm to the person injured as a reasonable The prosecution having presented this exhibit as its own or twelve miles per hour. As the defendant neared the bridge he
consequence of the course about to be pursued? If so, the law evidence, we cannot but deem its veracity to have been admitted saw a horseman on it and blew his horn to give warning of his
imposes the duty oil the doer to take precaution against its by it. Thus, under the circumstances narrated by petitioner, we approach. He continued his course and after he had taken the
mischievous results and the failure to do so constitutes find that the appellate court is asking too much from a mere bridge he gave two more successive blasts, as it appeared to him
negligence. 5 mortal like the petitioner who in the blink of an eye had to exercise that the man on horseback before him was not observing the rule
her best judgment to extricate herself from a difficult and of the road.
A corollary rule is what is known in the law as the emergency dangerous situation caused by the driver of the overtaking
rule. "Under that rule, one who suddenly finds himself in a The plaintiff, it appears, saw the automobile coming and heard the
vehicle. Petitioner certainly could not be expected to act with all warning signals. However, being perturbed by the novelty of the
place of danger, and is required to act without time to consider the coolness of a person under normal conditions. 10 The danger
the best means that may be adopted to avoid the impending apparition or the rapidity of the approach, he pulled the pony
confronting petitioner was real and imminent, threatening her very closely up against the railing on the right side of the bridge instead
danger, is not guilty of negligence, if he fails to adopt what existence. She had no opportunity for rational thinking but only
subsequently and upon reflection may appear to have been a of going to the left. He says that the reason he did this was that he
enough time to heed the very powerfull instinct of self- thought he did not have sufficient time to get over to the other
better method, unless the emergency in which he finds himself preservation.
is brought about by his own negligence." 6 side. The bridge is shown to have a length of about 75 meters and

7
a width of 4.80 meters. As the automobile approached, the horses, there was an appreciable risk that, if the animal in problem always is to discover which agent is immediately and
defendant guided it toward his left, that being the proper side question was unacquainted with automobiles, he might get exited directly responsible. It will be noted that the negligent acts of the
of the road for the machine. In so doing the defendant and jump under the conditions which here confronted him. When two parties were not contemporaneous, since the negligence of
assumed that the horseman would move to the other side. The the defendant exposed the horse and rider to this danger he was, the defendant succeeded the negligence of the plaintiff by an
pony had not as yet exhibited fright, and the rider had made in our opinion, negligent in the eye of the law. appreciable interval. Under these circumstances the law is that the
no sign for the automobile to stop. Seeing that the pony was person who has the last fair chance to avoid the impending harm
The test by which to determine the existence of negligence in a
apparently quiet, the defendant, instead of veering to the right and fails to do so is chargeable with the consequences, without
particular case may be stated as follows: Did the defendant in
while yet some distance away or slowing down, continued to reference to the prior negligence of the other party.
doing the alleged negligent act use that person would have used
approach directly toward the horse without diminution of
in the same situation? If not, then he is guilty of negligence. The The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co.
speed. When he had gotten quite near, there being then no
law here in effect adopts the standard supposed to be supplied by (7 Phil. Rep., 359) should perhaps be mentioned in this
possibility of the horse getting across to the other side, the
the imaginary conduct of the discreet paterfamilias of the Roman connection. This Court there held that while contributory
defendant quickly turned his car sufficiently to the right to
law. The existence of negligence in a given case is not determined negligence on the part of the person injured did not constitute a
escape hitting the horse alongside of the railing where it as
by reference to the personal judgment of the actor in the situation bar to recovery, it could be received in evidence to reduce the
then standing; but in so doing the automobile passed in such
before him. The law considers what would be reckless, damages which would otherwise have been assessed wholly
close proximity to the animal that it became frightened and
blameworthy, or negligent in the man of ordinary intelligence and against the other party. The defendant company had there
turned its body across the bridge with its head toward the
prudence and determines liability by that. employed the plaintiff, as a laborer, to assist in transporting iron
railing. In so doing, it as struck on the hock of the left hind leg
rails from a barge in Manila harbor to the company's yards located
by the flange of the car and the limb was broken. The horse The question as to what would constitute the conduct of a prudent
not far away. The rails were conveyed upon cars which were
fell and its rider was thrown off with some violence. From the man in a given situation must of course be always determined in
hauled along a narrow track. At certain spot near the water's edge
evidence adduced in the case we believe that when the the light of human experience and in view of the facts involved in
the track gave way by reason of the combined effect of the weight
accident occurred the free space where the pony stood the particular case. Abstract speculations cannot here be of much
of the car and the insecurity of the road bed. The car was in
between the automobile and the railing of the bridge was value but this much can be profitably said: Reasonable men
consequence upset; the rails slid off; and the plaintiff's leg was
probably less than one and one half meters. As a result of its govern their conduct by the circumstances which are before them
caught and broken. It appeared in evidence that the accident was
injuries the horse died. The plaintiff received contusions which or known to them. They are not, and are not supposed to be,
due to the effects of the typhoon which had dislodged one of the
caused temporary unconsciousness and required medical omniscient of the future. Hence they can be expected to take care
supports of the track. The court found that the defendant company
attention for several days. only when there is something before them to suggest or warn of
was negligent in having failed to repair the bed of the track and
danger. Could a prudent man, in the case under consideration,
The question presented for decision is whether or not the also that the plaintiff was, at the moment of the accident, guilty of
foresee harm as a result of the course actually pursued? If so, it
defendant in maneuvering his car in the manner above contributory negligence in walking at the side of the car instead of
was the duty of the actor to take precautions to guard against that
described was guilty of negligence such as gives rise to a civil being in front or behind. It was held that while the defendant was
harm. Reasonable foresight of harm, followed by ignoring of the
obligation to repair the damage done; and we are of the liable to the plaintiff by reason of its negligence in having failed to
suggestion born of this prevision, is always necessary before
opinion that he is so liable. As the defendant started across keep the track in proper repair nevertheless the amount of the
negligence can be held to exist. Stated in these terms, the proper
the bridge, he had the right to assume that the horse and the damages should be reduced on account of the contributory
criterion for determining the existence of negligence in a given
rider would pass over to the proper side; but as he moved negligence in the plaintiff. As will be seen the defendant's
case is this: Conduct is said to be negligent when a prudent man
toward the center of the bridge it was demonstrated to his negligence in that case consisted in an omission only. The liability
in the position of the tortfeasor would have foreseen that an effect
eyes that this would not be done; and he must in a moment of the company arose from its responsibility for the dangerous
harmful to another was sufficiently probable to warrant his
have perceived that it was too late for the horse to cross with condition of its track. In a case like the one now before us, where
foregoing conduct or guarding against its consequences.
safety in front of the moving vehicle. In the nature of things this the defendant was actually present and operating the automobile
change of situation occurred while the automobile was yet Applying this test to the conduct of the defendant in the present which caused the damage, we do not feel constrained to attempt
some distance away; and from this moment it was not longer case we think that negligence is clearly established. A prudent to weigh the negligence of the respective parties in order to
within the power of the plaintiff to escape being run down by man, placed in the position of the defendant, would in our opinion, apportion the damage according to the degree of their relative
going to a place of greater safety. The control of the situation have recognized that the course which he was pursuing was fault. It is enough to say that the negligence of the defendant was
had then passed entirely to the defendant; and it was his duty fraught with risk, and would therefore have foreseen harm to the in this case the immediate and determining cause of the accident
either to bring his car to an immediate stop or, seeing that horse and the rider as reasonable consequence of that course. and that the antecedent negligence of the plaintiff was a more
there were no other persons on the bridge, to take the other Under these circumstances the law imposed on the defendant the remote factor in the case.
side and pass sufficiently far away from the horse to avoid the duty to guard against the threatened harm.
A point of minor importance in the case is indicated in the special
danger of collision. Instead of doing this, the defendant ran
It goes without saying that the plaintiff himself was not free from defense pleaded in the defendant's answer, to the effect that the
straight on until he was almost upon the horse. He was, we
fault, for he was guilty of antecedent negligence in planting subject matter of the action had been previously adjudicated in the
think, deceived into doing this by the fact that the horse had
himself on the wrong side of the road. But as we have already court of a justice of the peace. In this connection it appears that
not yet exhibited fright. But in view of the known nature of
stated, the defendant was also negligent; and in such case the soon after the accident in question occurred, the plaintiff caused
8
criminal proceedings to be instituted before a justice of the 3. DAMAGES On March 1, 1991, private respondent Tiong sent a letter to
peace charging the defendant with the infliction of serious petitioner which reads as follows:
G.R. No. 120554 September 21, 1999
injuries (lesiones graves). At the preliminary investigation the
March 1, 1991
defendant was discharged by the magistrate and the SO PING BUN, petitioner, vs.COURT OF APPEALS, TEK HUA
proceedings were dismissed. Conceding that the acquittal of ENTERPRISES CORP. and MANUEL C. TIONG, respondents. Mr. So Ping Bun
the defendant at the trial upon the merits in a criminal
prosecution for the offense mentioned would be res adjudicata QUISUMBING, J.: 930 Soler Street
upon the question of his civil liability arising from negligence -- This petition for certiorari challenges the Decision 1 of the Court of Binondo, Manila
a point upon which it is unnecessary to express an opinion -- Appeals dated October 10, 1994, and the Resolution 2 dated June
the action of the justice of the peace in dismissing the criminal Dear Mr. So,
5, 1995, in CA-G.R. CV No. 38784. The appellate court affirmed
proceeding upon the preliminary hearing can have no effect. the decision of the Regional Trial Court of Manila, Branch 35, Due to my closed (sic) business associate (sic) for three decades
(See U. S. vs. Banzuela and Banzuela, 31 Phil. Rep., 564.) except for the award of attorney's fees, as follows: with your late grandfather Mr. So Pek Giok and late father, Mr. So
From what has been said it results that the judgment of the Chong Bon, I allowed you temporarily to use the warehouse of Tek
WHEREFORE, foregoing considered, the appeal of respondent-
lower court must be reversed, and judgment is her rendered Hua Enterprising Corp. for several years to generate your
appellant So Ping Bun for lack of merit is DISMISSED. The
that the plaintiff recover of the defendant the sum of two personal business.
appealed decision dated April 20, 1992 of the court a quo is
hundred pesos (P200), with costs of other instances. The sum modified by reducing the attorney's fees awarded to plaintiff Tek Since I decided to go back into textile business, I need a
here awarded is estimated to include the value of the horse, Hua Enterprising Corporation from P500,000.00 to P200,000.00. 3 warehouse immediately for my stocks. Therefore, please be
medical expenses of the plaintiff, the loss or damage advised to vacate all your stocks in Tek Hua Enterprising Corp.
occasioned to articles of his apparel, and lawful interest on the The facts are as follows:
Warehouse. You are hereby given 14 days to vacate the premises
whole to the date of this recovery. The other damages claimed In 1963, Tek Hua Trading Co, through its managing partner, So unless you have good reasons that you have the right to stay.
by the plaintiff are remote or otherwise of such character as Pek Giok, entered into lease agreements with lessor Dee C. Otherwise, I will be constrained to take measure to protect my
not to be recoverable. So ordered. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts interest.
Arellano, C.J., Torres, Carson, Araullo, Avancea, and Fisher, were premises located at Nos. 930, 930-Int., 924-B and 924-C,
Please give this urgent matter your preferential attention to avoid
JJ., concur. Soler Street, Binondo, Manila. Tek Hua used the areas to store its
inconvenience on your part.
Johnson, J., reserves his vote. textiles. The contracts each had a one-year term. They provided
that should the lessee continue to occupy the premises after the Very truly yours,
Separate Opinions term, the lease shall be on a month-to-month basis.
(Sgd) Manuel C. Tiong
MALCOLM, J., concurring: When the contracts expired, the parties did not renew the
contracts, but Tek Hua continued to occupy the premises. In 1976, MANUEL C. TIONG
After mature deliberation, I have finally decided to concur with
the judgment in this case. I do so because of my Tek Hua Trading Co. was dissolved. Later, the original members President 4
understanding of the "last clear chance" rule of the law of of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek
Hua Enterprising Corp., herein respondent corporation. Petitioner refused to vacate. On March 4, 1992, petitioner
negligence as particularly applied to automobile accidents.
requested formal contracts of lease with DCCSI in favor
This rule cannot be invoked where the negligence of the So Pek Giok, managing partner of Tek Hua Trading, died in 1986. Trendsetter Marketing. So Ping Bun claimed that after the death of
plaintiff is concurrent with that of the defendant. Again, if a So Pek Giok's grandson, petitioner So Ping Bun, occupied the his grandfather, So Pek Giok, he had been occupying the
traveler when he reaches the point of collision is in a situation warehouse for his own textile business, Trendsetter Marketing. premises for his textile business and religiously paid rent. DCCSI
to extricate himself and avoid injury, his negligence at that
On August 1, 1989, lessor DCCSI sent letters addressed to Tek acceded to petitioner's request. The lease contracts in favor of
point will prevent a recovery. But Justice Street finds as a fact
Hua Enterprises, informing the latter of the 25% increase in rent Trendsetter were executed.
that the negligent act of the interval of time, and that at the
moment the plaintiff had no opportunity to avoid the accident. effective September 1, 1989. The rent increase was later on In the suit for injunction, private respondents pressed for the
Consequently, the "last clear chance" rule is applicable. In reduced to 20% effective January 1, 1990, upon other lessees' nullification of the lease contracts between DCCSI and petitioner.
other words, when a traveler has reached a point where he demand. Again on December 1, 1990, the lessor implemented a They also claimed damages.
cannot extricate himself and vigilance on his part will not avert 30% rent increase. Enclosed in these letters were new lease
contracts for signing. DCCSI warned that failure of the lessee to After trial, the trial court ruled:
the injury, his negligence in reaching that position becomes
the condition and not the proximate cause of the injury and will accomplish the contracts shall be deemed as lack of interest on WHEREFORE, judgment is rendered:
not preclude a recovery. (Note especially Aiken vs. Metcalf the lessee's part, and agreement to the termination of the lease.
[1917], 102 Atl., 330.) Private respondents did not answer any of these letters. Still, the 1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3,
lease contracts were not rescinded. inclusive) all dated March 11, 1991, between defendant So Ping
Bun, doing business under the name and style of "Trendsetter

9
Marketing", and defendant Dee C. Chuan & Sons, Inc. over for the damage suffered. 6 One becomes liable in an action for In the instant case, it is clear that petitioner So Ping Bun prevailed
the premises located at Nos. 924-B, 924-C, 930 and 930, Int., damages for a nontrespassory invasion of another's interest in the upon DCCSI to lease the warehouse to his enterprise at the
respectively, Soler Street, Binondo Manila; private use and enjoyment of asset if (a) the other has property expense of respondent corporation. Though petitioner took
rights and privileges with respect to the use or enjoyment interest in the property of respondent corporation and benefited
2. Making permanent the writ of preliminary injunction issued
interfered with, (b) the invasion is substantial, (c) the defendant's from it, nothing on record imputes deliberate wrongful motives or
by this Court on June 21, 1991;
conduct is a legal cause of the invasion, and (d) the invasion is malice on him.
3. Ordering defendant So Ping Bun to pay the aggrieved party, either intentional and unreasonable or unintentional and
Sec. 1314 of the Civil Code categorically provides also that, "Any
plaintiff Tek Hua Enterprising Corporation, the sum of actionable under general negligence rules. 7
third person who induces another to violate his contract shall be
P500,000.00, for attorney's fees;
The elements of tort interference are: (1) existence of a valid liable for damages to the other contracting party." Petitioner
4. Dismissing the complaint, insofar as plaintiff Manuel C. contract; (2) knowledge on the part of the third person of the argues that damage is an essential element of tort interference,
Tiong is concerned, and the respective counterclaims of the existence of contract; and (3) interference of the third person is and since the trial court and the appellate court ruled that private
defendant; without legal justification or excuse. 8 respondents were not entitled to actual, moral or exemplary
damages, it follows that he ought to be absolved of any liability,
5. Ordering defendant So Ping Bun to pay the costs of this A duty which the law of torts is concerned with is respect for the
including attorney's fees.
lawsuit; property of others, and a cause of action ex delicto may be
predicated upon an unlawful interference by one person of the It is true that the lower courts did not award damages, but this was
This judgment is without prejudice to the rights of plaintiff Tek enjoyment by the other of his private only because the extent of damages was not quantifiable. We had
Hua Enterprising Corporation and defendant Dee C. Chuan & property.9 This may pertain to a situation where a third person a similar situation in Gilchrist, where it was difficult or impossible to
Sons, Inc. to negotiate for the renewal of their lease contracts induces a party to renege on or violate his undertaking under a determine the extent of damage and there was nothing on record
over the premises located at Nos. 930, 930-Int., 924-B and contract. In the case before us, petitioner's Trendsetter Marketing to serve as basis thereof. In that case we refrained from awarding
924-C Soler Street, Binondo, Manila, under such terms and asked DCCSI to execute lease contracts in its favor, and as a damages. We believe the same conclusion applies in this case.
conditions as they agree upon, provided they are not contrary result petitioner deprived respondent corporation of the latter's
to law, public policy, public order, and morals. While we do not encourage tort interferers seeking their economic
property right. Clearly, and as correctly viewed by the appellate
interest to intrude into existing contracts at the expense of others,
SO ORDERED. 5 court, the three elements of tort interference above-mentioned are
however, we find that the conduct herein complained of did not
present in the instant case.
Petitioner's motion for reconsideration of the above decision transcend the limits forbidding an obligatory award for damages in
was denied. Authorities debate on whether interference may be justified where the absence of any malice. The business desire is there to make
the defendant acts for the sole purpose of furthering his own some gain to the detriment of the contracting parties. Lack of
On appeal by So Ping Bun, the Court of Appeals upheld the financial or economic interest. 10 One view is that, as a general malice, however, precludes damages. But it does not relieve
trial court. On motion for reconsideration, the appellate court rule, justification for interfering with the business relations of petitioner of the legal liability for entering into contracts and
modified the decision by reducing the award of attorney's fees another exists where the actor's motive is to benefit himself. Such causing breach of existing ones. The respondent appellate court
from five hundred thousand (P500,000.00) pesos to two justification does not exist where his sole motive is to cause harm correctly confirmed the permanent injunction and nullification of
hundred thousand (P200,000.00) pesos. to the other. Added to this, some authorities believe that it is not the lease contracts between DCCSI and Trendsetter Marketing,
Petitioner is now before the Court raising the following issues: necessary that the interferer's interest outweigh that of the party without awarding damages. The injunction saved the respondents
whose rights are invaded, and that an individual acts under an from further damage or injury caused by petitioner's interference.
I. WHETHER THE APPELLATE COURT ERRED IN economic interest that is substantial, not merely de minimis, such
AFFIRMING THE TRIAL COURT'S DECISION FINDING SO Lastly, the recovery of attorney's fees in the concept of actual or
that wrongful and malicious motives are negatived, for he acts in
PING BUN GUILTY OF TORTUOUS INTERFERENCE OF compensatory damages, is allowed under the circumstances
self-protection. 11 Moreover justification for protecting one's
CONTRACT? provided for in Article 2208 of the Civil Code. 16 One such
financial position should not be made to depend on a comparison
occasion is when the defendant's act or omission has compelled
of his economic interest in the subject matter with that of
II. WHETHER THE APPELLATE COURT ERRED IN the plaintiff to litigate with third persons or to incur expenses to
others. 12 It is sufficient if the impetus of his conduct lies in a
AWARDING ATTORNEY'S FEES OF P200,000.00 IN FAVOR protect his interest. 17 But we have consistently held that the
proper business interest rather than in wrongful motives. 13
OF PRIVATE RESPONDENTS. award of considerable damages should have clear factual and
As early as Gilchrist vs. Cuddy, 14 we held that where there was legal bases. 18 In connection with attorney's fees, the award
The foregoing issues involve, essentially, the correct
no malice in the interference of a contract, and the impulse behind should be commensurate to the benefits that would have been
interpretation of the applicable law on tortuous conduct,
one's conduct lies in a proper business interest rather than in derived from a favorable judgment. Settled is the rule that fairness
particularly unlawful interference with contract. We have to
wrongful motives, a party cannot be a malicious interferer. Where of the award of damages by the trial court calls for appellate
begin, obviously, with certain fundamental principles on torts
the alleged interferer is financially interested, and such interest review such that the award if far too excessive can be
and damages.
motivates his conduct, it cannot be said that he is an officious or reduced. 19 This ruling applies with equal force on the award of
Damage is the loss, hurt, or harm which results from injury, malicious intermeddler. 15 attorney's fees. In a long line of cases we said, "It is not sound
and damages are the recompense or compensation awarded policy to place in penalty on the right to litigate. To compel the
10
defeated party to pay the fees of counsel for his successful In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were was guilty of contributory negligence since she climbed the
opponent would throw wide open the door of temptation to the at the 2nd floor of Syvels Department Store, Makati counter, triggering its eventual collapse on her. Petitioners also
opposing party and his counsel to swell the fees to undue City. CRISELDA was signing her credit card slip at the payment emphasized that the counter was made of sturdy wood with a
proportions."20 and verification counter when she felt a sudden gust of wind and strong support; it never fell nor collapsed for the past fifteen years
heard a loud thud. She looked behind her. She then beheld her since its construction.
Considering that the respondent corporation's lease contract,
daughter ZHIENETH on the floor, her young body pinned by the
at the time when the cause of action accrued, ran only on a Additionally, petitioner Jarco Marketing Corporation maintained
bulk of the stores gift-wrapping counter/structure. ZHIENETH was
month-to-month basis whence before it was on a yearly basis, that it observed the diligence of a good father of a family in the
crying and screaming for help. Although shocked, CRISELDA was
we find even the reduced amount of attorney's fees ordered by selection, supervision and control of its employees. The other
quick to ask the assistance of the people around in lifting the
the Court of Appeals still exorbitant in the light of prevailing petitioners likewise raised due care and diligence in the
counter and retrieving ZHIENETH from the floor.[3]
jurisprudence. 21Consequently, the amount of two hundred performance of their duties and countered that the complaint was
thousand (P200,000.00) awarded by respondent appellate ZHIENETH was quickly rushed to the Makati Medical Center malicious for which they suffered besmirched reputation and
court should be reduced to one hundred thousand where she was operated on. The next day ZHIENETH lost her mental anguish. They sought the dismissal of the complaint and
(P100,000.00) pesos as the reasonable award or attorney's speech and thereafter communicated with CRISELDA by writing an award of moral and exemplary damages and attorneys fees in
fees in favor of private respondent corporation. on a magic slate. The injuries she sustained took their toil on her their favor.
young body. She died fourteen (14) days after the accident or on
WHEREFORE, the petition is hereby DENIED. The assailed In its decision[7] the trial court dismissed the complaint and
22 May 1983, on the hospital bed. She was six years old.[4]
Decision and Resolution of the Court of Appeals in CA-G.R. counterclaim after finding that the preponderance of the evidence
CV No. 38784 are hereby AFFIRMED, with MODIFICATION The cause of her death was attributed to the injuries she favored petitioners. It ruled that the proximate cause of the fall of
that the award of attorney's fees is reduced from two hundred sustained. The provisional medical certificate[5] issued by the counter on ZHIENETH was her act of clinging to it. It believed
thousand (P200,000.00) to one hundred thousand ZHIENETHs attending doctor described the extent of her injuries: petitioners witnesses who testified that ZHIENETH clung to the
(P100,000.00) pesos. No pronouncement as to counter, afterwhich the structure and the girl fell with the structure
Diagnoses:
costs.1wphi1.nt falling on top of her, pinning her stomach. In contrast, none of
1. Shock, severe, sec. to intra-abdominal injuries due to blunt private respondents witnesses testified on how the counter
SO ORDERED.
injury fell. The trial court also held that CRISELDAs negligence
contributed to ZHIENETHs accident.
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L)
JARCO MARKETING CORPORATION, LEONARDO KONG, lobe liver In absolving petitioners from any liability, the trial court reasoned
JOSE TIOPE and ELISA PANELO, petitioners, that the counter was situated at the end or corner of the 2nd floor
3. Rupture, stomach, anterior & posterior walls as a precautionary measure hence, it could not be considered as
vs. HONORABLE COURT OF APPEALS, CONRADO C.
AGUILAR and CRISELDA R. AGUILAR, respondents. 4. Complete transection, 4th position, duodenum an attractive nuisance.[8] The counter was higher than
ZHIENETH. It has been in existence for fifteen years. Its structure
DECISION 5. Hematoma, extensive, retroperitoneal was safe and well-balanced. ZHIENETH, therefore, had no
DAVIDE, JR., C.J.: 6. Contusion, lungs, severe business climbing on and clinging to it.

In this petition for review on certiorari under Rule 45 of the CRITICAL Private respondents appealed the decision, attributing as errors of
Rules of Court, petitioners seek the reversal of the 17 June the trial court its findings that: (1) the proximate cause of the fall of
After the burial of their daughter, private respondents demanded the counter was ZHIENETHs misbehavior; (2) CRISELDA was
1996 decision[1] of the Court of Appeals in C.A. G.R. No. CV
upon petitioners the reimbursement of the hospitalization, medical negligent in her care of ZHIENETH; (3) petitioners were not
37937 and the resolution[2]denying their motion for
bills and wake and funeral expenses[6] which they had negligent in the maintenance of the counter; and (4) petitioners
reconsideration. The assailed decision set aside the 15
incurred. Petitioners refused to pay. Consequently, private were not liable for the death of ZHIENETH.
January 1992 judgment of the Regional Trial Court (RTC),
respondents filed a complaint for damages, docketed as Civil
Makati City, Branch 60 in Civil Case No. 7119 and ordered Further, private respondents asserted that ZHIENETH should be
Case No. 7119 wherein they sought the payment of P157,522.86
petitioners to pay damages and attorneys fees to private entitled to the conclusive presumption that a child below nine (9)
for actual damages, P300,000 for moral damages, P20,000 for
respondents Conrado and Criselda (CRISELDA) Aguilar. years is incapable of contributory negligence. And even if
attorneys fees and an unspecified amount for loss of income and
Petitioner Jarco Marketing Corporation is the owner of Syvels exemplary damages. ZHIENETH, at six (6) years old, was already capable of
Department Store, Makati City. Petitioners Leonardo Kong, contributory negligence, still it was physically impossible for her to
In their answer with counterclaim, petitioners denied any liability have propped herself on the counter. She had a small frame (four
Jose Tiope and Elisa Panelo are the stores branch manager,
for the injuries and consequent death of ZHIENETH. They feet high and seventy pounds) and the counter was much higher
operations manager, and supervisor, respectively. Private
claimed that CRISELDA was negligent in exercising care and and heavier than she was. Also, the testimony of one of the stores
respondents are spouses and the parents of Zhieneth Aguilar
diligence over her daughter by allowing her to freely roam around former employees, Gerardo Gonzales, who accompanied
(ZHIENETH).
in a store filled with glassware and appliances. ZHIENETH too, ZHIENETH when she was brought to the emergency room of the

11
Makati Medical Center belied petitioners theory that the defective counter. It was inconsequential that the counter had the death of ZHIENETH. The proximate cause was ZHIENETHs
ZHIENETH climbed the counter. Gonzales claimed that when been in use for some time without a prior incident. act of clinging to the counter. This act in turn caused the counter
ZHIENETH was asked by the doctor what she did, ZHIENETH to fall on her. This and CRISELDAs contributory negligence,
The Court of Appeals declared that ZHIENETH, who was below
replied, [N]othing, I did not come near the counter and the through her failure to provide the proper care and attention to her
seven (7) years old at the time of the incident, was absolutely
counter just fell on me.[9] Accordingly, Gonzales testimony on child while inside the store, nullified private respondents claim for
incapable of negligence or other tort. It reasoned that since a child
ZHIENETHs spontaneous declaration should not only be damages. It is also for these reasons that parents are made
under nine (9) years could not be held liable even for an
considered as part of res gestae but also accorded credit. accountable for the damage or injury inflicted on others by their
intentional wrong, then the six-year old ZHIENETH could not be
minor children. Under these circumstances, petitioners could not
Moreover, negligence could not be imputed to CRISELDA for it made to account for a mere mischief or reckless act. It also
be held responsible for the accident that befell ZHIENETH.
was reasonable for her to have let go of ZHIENETH at the absolved CRISELDA of any negligence, finding nothing wrong or
precise moment that she was signing the credit card slip. out of the ordinary in momentarily allowing ZHIENETH to walk Petitioners also assail the credibility of Gonzales who was already
while she signed the document at the nearby counter. separated from Syvels at the time he testified; hence, his
Finally, private respondents vigorously maintained that the
testimony might have been tarnished by ill-feelings against them.
proximate cause of ZHIENETHs death, was petitioners The Court of Appeals also rejected the testimonies of the
negligence in failing to institute measures to have the counter witnesses of petitioners. It found them biased and prejudiced. It For their part, private respondents principally reiterated their
permanently nailed. instead gave credit to the testimony of disinterested witness arguments that neither ZHIENETH nor CRISELDA was negligent
Gonzales. The Court of Appeals then awarded P99,420.86 as at any time while inside the store; the findings and conclusions of
On the other hand, petitioners argued that private respondents
actual damages, the amount representing the hospitalization the Court of Appeals are substantiated by the evidence on record;
raised purely factual issues which could no longer be
expenses incurred by private respondents as evidenced by the the testimony of Gonzales, who heard ZHIENETH comment on
disturbed. They explained that ZHIENETHs death while
hospital's statement of account.[12] It denied an award for funeral the incident while she was in the hospitals emergency room
unfortunate and tragic, was an accident for which neither
expenses for lack of proof to substantiate the same. Instead, a should receive credence; and finally, ZHIENETHs part of the res
CRISELDA nor even ZHIENETH could entirely be held
compensatory damage of P50,000 was awarded for the death of gestae declaration that she did nothing to cause the heavy
faultless and blameless. Further, petitioners adverted to the
ZHIENETH. structure to fall on her should be considered as the correct version
trial courts rejection of Gonzales testimony as unworthy of
of the gruesome events.
credence. We quote the dispositive portion of the assailed decision,[13] thus:
We deny the petition.
As to private respondents claim that the counter should have WHEREFORE, premises considered, the judgment of the lower
been nailed to the ground, petitioners justified that it was not court is SET ASIDE and another one is entered against The two issues to be resolved are: (1) whether the death of
necessary. The counter had been in existence for several [petitioners], ordering them to pay jointly and severally unto ZHIENETH was accidental or attributable to negligence; and (2) in
years without any prior accident and was deliberately placed [private respondents] the following: case of a finding of negligence, whether the same was attributable
at a corner to avoid such accidents. Truth to tell, they acted to private respondents for maintaining a defective counter or to
1. P50,000.00 by way of compensatory damages for the death of
without fault or negligence for they had exercised due CRISELDA and ZHIENETH for failing to exercise due and
Zhieneth Aguilar, with legal interest (6% p.a.) from 27 April 1984;
diligence on the matter. In fact, the criminal case[10] for reasonable care while inside the store premises.
homicide through simple negligence filed by private 2. P99,420.86 as reimbursement for hospitalization expenses
An accident pertains to an unforeseen event in which no fault or
respondents against the individual petitioners was dismissed; incurred; with legal interest (6% p.a.) from 27 April 1984;
negligence attaches to the defendant.[15] It is a fortuitous
a verdict of acquittal was rendered in their favor.
3. P100,000.00 as moral and exemplary damages; circumstance, event or happening; an event happening without
The Court of Appeals, however, decided in favor of private any human agency, or if happening wholly or partly through
respondents and reversed the appealed judgment. It found 4. P20,000.00 in the concept of attorneys fees; and human agency, an event which under the circumstances is
that petitioners were negligent in maintaining a structurally 5. Costs. unusual or unexpected by the person to whom it happens.[16]
dangerous counter. The counter was shaped like an inverted
Private respondents sought a reconsideration of the decision but On the other hand, negligence is the omission to do something
L[11] with a top wider than the base. It was top heavy and the
the same was denied in the Court of Appeals resolution [14] of 16 which a reasonable man, guided by those considerations which
weight of the upper portion was neither evenly distributed nor
July 1997. ordinarily regulate the conduct of human affairs, would do, or the
supported by its narrow base. Thus, the counter was
doing of something which a prudent and reasonable man would
defective, unstable and dangerous; a downward pressure on Petitioners now seek the reversal of the Court of Appeals decision not do.[17] Negligence is the failure to observe, for the protection of
the overhanging portion or a push from the front could cause and the reinstatement of the judgment of the trial court. Petitioners the interest of another person, that degree of care, precaution and
the counter to fall. Two former employees of petitioners had primarily argue that the Court of Appeals erred in disregarding the vigilance which the circumstances justly demand, whereby such
already previously brought to the attention of the management factual findings and conclusions of the trial court. They stress that other person suffers injury.[18]
the danger the counter could cause. But the latter ignored their since the action was based on tort, any finding of negligence on
concern. The Court of Appeals faulted the petitioners for this the part of the private respondents would necessarily negate their Accident and negligence are intrinsically contradictory; one cannot
omission, and concluded that the incident that befell claim for damages, where said negligence was the proximate exist with the other. Accident occurs when the person concerned
ZHIENETH could have been avoided had petitioners repaired cause of the injury sustained. The injury in the instant case was is exercising ordinary care, which is not caused by fault of any

12
person and which could not have been prevented by any the declarant had the time to think and concoct a falsehood as Q When that gift wrapping counter was transferred at the second
means suggested by common prudence.[19] witnessed by the person who testified in court. Under the floor on February 12, 1983, will you please describe that to the
circumstances thus described, it is unthinkable for ZHIENETH, a honorable Court?
The test in determining the existence of negligence is
child of such tender age and in extreme pain, to have lied to a
enunciated in the landmark case of Picart v. Smith,[20] thus: Did A I told her that the counter wrapper [sic] is really in
doctor whom she trusted with her life. We therefore accord
the defendant in doing the alleged negligent act use that good [sic] condition; it was shaky. I told her that we had to nail it.
credence to Gonzales testimony on the matter, i.e., ZHIENETH
reasonable care and caution which an ordinarily prudent
performed no act that facilitated her tragic death. Sadly, Q When you said she, to whom are you referring to [sic]?
person would have used in the same situation? If not, then he
petitioners did, through their negligence or omission to secure or
is guilty of negligence.[21] A I am referring to Ms. Panelo, sir.
make stable the counters base.
We rule that the tragedy which befell ZHIENETH was no Q And what was the answer of Ms. Panelo when you told her that
Gonzales earlier testimony on petitioners insistence to keep and
accident and that ZHIENETHs death could only be attributed the counter was shaky?
maintain the structurally unstable gift-wrapping counter proved
to negligence.
their negligence, thus: A She told me Why do you have to teach me. You are only my
We quote the testimony of Gerardo Gonzales who was at the subordinate and you are to teach me? And she even got angry at
Q When you assumed the position as gift wrapper at the second
scene of the incident and accompanied CRISELDA and me when I told her that.
floor, will you please describe the gift wrapping counter, were you
ZHIENETH to the hospital:
able to examine? xxx
Q While at the Makati Medical Center, did you hear or notice
A Because every morning before I start working I used to clean Q From February 12, 1983 up to May 9, 1983, what if any, did Ms.
anything while the child was being treated?
that counter and since it is not nailed and it was only standing on Panelo or any employee of the management do to that (sic)
A At the emergency room we were all surrounding the the floor, it was shaky.
child. And when the doctor asked the child what did you do, xxx
xxx
the child said nothing, I did not come near the counter and the Witness:
counter just fell on me. Q Will you please describe the counter at 5:00 oclock [sic] in the
afternoon on [sic] May 9 1983? None, sir. They never nailed the counter. They only nailed the
Q (COURT TO ATTY. BELTRAN) counter after the accident happened.[25] [Emphasis supplied]
A At that hour on May 9, 1983, that counter was standing beside
You want the words in Tagalog to be translated? Without doubt, petitioner Panelo and another store supervisor
the verification counter. And since the top of it was heavy and
ATTY. BELTRAN considering that it was not nailed, it can collapse at anytime, since were personally informed of the danger posed by the unstable
the top is heavy. counter. Yet, neither initiated any concrete action to remedy the
Yes, your Honor. situation nor ensure the safety of the stores employees and
xxx patrons as a reasonable and ordinary prudent man would have
COURT
Q And what did you do? done. Thus, as confronted by the situation petitioners miserably
Granted. Intercalate wala po, hindi po ako lumapit doon. Basta failed to discharge the due diligence required of a good father of a
bumagsak.[22] A I informed Mr. Maat about that counter which is [sic] shaky and family.
since Mr. Maat is fond of putting display decorations on tables, he
This testimony of Gonzales pertaining to ZHIENETHs even told me that I would put some decorations. But since I told On the issue of the credibility of Gonzales and Guevarra,
statement formed (and should be admitted as) part of the res him that it not [sic] nailed and it is shaky he told me better inform petitioners failed to establish that the formers testimonies were
gestae under Section 42, Rule 130 of the Rules of Court, thus: also the company about it. And since the company did not do biased and tainted with partiality. Therefore, the allegation that
anything about the counter, so I also did not do anything about Gonzales and Guevarras testimonies were blemished by ill
Part of res gestae. Statements made by a person while a
the counter.[24] [Emphasis supplied] feelings against petitioners since they (Gonzales and Guevarra)
startling occurrence is taking place or immediately prior or
were already separated from the company at the time their
subsequent thereto with respect to the circumstances thereof, Ramon Guevarra, another former employee, corroborated the testimonies were offered in court was but mere speculation and
may be given in evidence as part of the res gestae. So, also, testimony of Gonzales, thus: deserved scant consideration.
statements accompanying an equivocal act material to the
issue, and giving it a legal significance, may be received as Q Will you please described [sic] to the honorable Court the It is settled that when the issue concerns the credibility of
part of the res gestae. counter where you were assigned in January 1983? witnesses, the appellate courts will not as a general rule disturb
the findings of the trial court, which is in a better position to
It is axiomatic that matters relating to declarations of pain or xxx
determine the same. The trial court has the distinct advantage of
suffering and statements made to a physician are generally
A That counter assigned to me was when my supervisor ordered actually hearing the testimony of and observing the deportment of
considered declarations and admissions.[23] All that is required
me to carry that counter to another place. I told him that the the witnesses.[26] However, the rule admits of exceptions such as
for their admissibility as part of the res gestae is that they be
counter needs nailing and it has to be nailed because it might when its evaluation was reached arbitrarily or it overlooked or
made or uttered under the influence of a startling event before
cause injury or accident to another since it was shaky. failed to appreciate some facts or circumstances of weight and
13
substance which could affect the result of the case.[27] In the the hospital that she did not do anything; the counter just fell on search party composed of, among others, Capts. Willis
instant case, petitioners failed to bring their claim within the her. Rohlings and Jaime Manzano, both of the PAL organized to
exception. track down the missing helicopter, found it in a ravine located in
the barrio of Ampusungan, Benguet, Mt. Province within the
Anent the negligence imputed to ZHIENETH, we apply the
WHEREFORE, in view of all the foregoing, the instant petition is lumber concession of defendant-appellee, Heald Lumber Co.
conclusive presumption that favors children below nine (9)
DENIED and the challenged decision of the Court of Appeals of which is several kilometers before reaching Mankayan. The
years old in that they are incapable of contributory
17 June 1996 in C.A. G.R. No. CV 37937 is hereby AFFIRMED. helicopter was a total wreck and both Capt. Hernandez and Lt.
negligence. In his book,[28] former Judge Cezar S. Sangco
Imperial were dead. The body of the former was strapped to his
stated: Costs against petitioners. seat, but that of the latter was several feet away from the
In our jurisdiction, a person under nine years of age is SO ORDERED. wreckage. At the time of the flight, Capt. Hernandez was a duly
conclusively presumed to have acted without discernment, licensed helicopter pilot, whereas Lt. Imperial, although a licensed
and is, on that account, exempt from criminal liability. The plane pilot, was then under training as helicopter pilot.
same presumption and a like exemption from criminal liability G.R. No. L-14088 September 30, 1961 Owing to this accident, three (3) actions were instituted in the
obtains in a case of a person over nine and under fifteen years
CONCEPCION PELLOSA VDA. DE IMPERIAL, in her own court aforementioned, against said defendant, namely: (1) case
of age, unless it is shown that he has acted with
behalf and as Guardian Ad Litem of her minor child, No. 580 (G.R. No. L-14112), filed by PAL on March 2, 1956; (2)
discernment. Since negligence may be a felony and a quasi-
REX IMPERIAL, JR., plaintiffs-appellants, case No. 591 (G.R. No. L-14088), filed by Concepcion Pellosa de
delict and required discernment as a condition of liability,
vs. Imperial, widow of the deceased Lt. Imperial, on April 13, 1956;
either criminal or civil, a child under nine years of age is, by
HEALD LUMBER COMPANY, defendant-appellee. and 3) case No. 592 (G.R. No. L-14089), filed by Lourdes Ferrer
analogy, conclusively presumed to be incapable of negligence;
de Hernandez, widow of Capt. Hernandez, on the date last
and that the presumption of lack of discernment or incapacity -------------------------------- mentioned.
for negligence in the case of a child over nine but under fifteen
years of age is a rebuttable one, under our law. The rule, G.R. No. L-14089 September 30, 1961 In the first case, the PAL sought to recover the following:
therefore, is that a child under nine years of age must be
LOURDES FERRER VDA. DE HERNANDEZ, in her own behalf
conclusively presumed incapable of contributory negligence
and as Guardian Ad Litem of her minor children,
as a matter of law. [Emphasis supplied] upon the ground that the mishap was due to the fact that the
JULIO HERNANDEZ, GABRIEL HERNANDEZ, JR., and
ROSARIO HERNANDEZ, plaintiffs-appellants, helicopter had collided "with defendant's tramway steel cables
Even if we attribute contributory negligence to ZHIENETH and
vs. strung in parallel of approximately 3,000 yards in length between
assume that she climbed over the counter, no injury should
HEALD LUMBER COMPANY, defendant-appellee. two mountains approximately 3,000 to 5,000 feet high in the
have occurred if we accept petitioners theory that the counter
vicinity of defendant's logging area in Ampusungan, Mountain
was stable and sturdy. For if that was the truth, a frail six-year
-------------------------------- Province."
old could not have caused the counter to collapse. The
physical analysis of the counter by both the trial court and G.R. No. L-14112 September 30, 1961 In each of the other cases, the respective plaintiffs therein prayed
Court of Appeals and a scrutiny of the evidence[29]on record for judgment as follows:
PHILIPPINE AIR LINES, INC., plaintiff-appellant,
reveal otherwise, i.e., it was not durable after all. Shaped like
vs.
an inverted L, the counter was heavy, huge, and its top laden
HEALD LUMBER COMPANY, defendant-appellee.
with formica. It protruded towards the customer waiting area Actual and compensatory P150,000.00
and its base was not secured.[30] CONCEPCION, J.: damages
CRISELDA too, should be absolved from any contributory Appeal from a decision of the Court of First Instance of Baguio Exemplary damages 50,000.00
negligence. Initially, ZHIENETH held on to CRISELDAs waist, dismissing the complaints in the above entitled three (3) cases,
later to the latters hand. [31] CRISELDA momentarily released with costs against the plaintiffs. Moral damages 50,000.00
the childs hand from her clutch when she signed her credit
card slip. At this precise moment, it was reasonable and usual On June 4, 1954, at about 6:50 a.m., a helicopter (PIC361) of the Expenses of litigation 10,000.00
for CRISELDA to let go of her child. Further, at the time Philippine Air Lines, Inc. (PAL), which had been chartered by the
Lepanto Consolidated Mining Co., took off from Nichols Fields, in Attorney's fees 20,000.00
ZHIENETH was pinned down by the counter, she was just a
foot away from her mother; and the gift-wrapping counter was Makati, Rizal, headed for Mankayan, Mt. Province, via Rosales,
just four meters away from CRISELDA. [32] The time and Pangasinan. On board the helicopter were Capt. Gabriel
distance were both significant.ZHIENETH was near her Hernandez and Lt. Rex Imperial. The helicopter reached Rosales TO TAL P280,000.00
mother and did not loiter as petitioners would want to impress at 8:22 a.m., and, fifty-three (53) minutes later, or at 9:15 a.m., it
upon us. She even admitted to the doctor who treated her at undertook the last leg of its flight to Mankayan. However, the
helicopter did not reach this place for it crashed on the way. A

14
upon the theory that the death of Lt. Imperial and Capt. steel cable or the rough bark of a pine tree. (Decision, Record on consumed its entire supply of gasoline, thus justifying the belief
Hernandez was due to defendant's alleged "gross negligence" Appeal, pp. 19-20.) that it was forced to land in Ampusungan due to lack of gasoline,
and "flagrant violation of applicable laws and regulations." and that, as the engine ceased to function, its maneuverability
Upon the other hand, defendant endeavored to prove that the
must have become impaired, in view of which it crashed, thus
Being interrelated, the three (3) cases were jointly heard, and, mishap had been due to two (2) causes, namely: (1) exhaustion of
causing it to fall into a ravine in defendant's
in due course, thereafter, the lower court, presided by Hon. the fuel; and (2) negligence of the pilot.
concession.1awphl.nt
Jesus de Veyra, rendered the decision appealed from, finding
The record shows that the helicopter had a main tank and an
that plaintiffs had "failed to make out a case of negligence on Several factors indicate strongly that this was in all likelihood what
auxiliary tank with a capacity of twenty-seven (27) and fifteen (15)
the part of the defendant" and, accordingly, dismissing the happened for: (1) the site of the crash was more than a mile (over
gallons of fuel, respectively. The main tank was connected to the
three (3) complaints. Hence, this appeal by the plaintiffs. The three [3] miles, according to the defendant) off the plotted course,
engine, but the auxiliary tank was not. In order to transfer gasoline
three (3) cases are before us the amount of the demand in altho, under normal conditions, no reasonably prudent pilot
from the latter to the former, it was necessary to land the
each being in excess of P200,000, exclusive of costs and according to appellants witness, Capt. Manzano would have
helicopter, as the process could not be undertaken during flight.
interest. attempted to land in the vicinity of the scene of the occurrence; (2)
This was, in all probability, the reason why the aircraft had to land
the wrecked helicopter emitted no smell of gasoline and there was
Appellants maintain that the accident is imputable to the in Rosales, Pangasinan, before proceeding to Mankayan.
no sign of fire resulting from the crash, despite the fact that the
defendant, because the helicopter, particularly its main rotor
Having left Rosales at 9:15 a.m., after its flight from Nichols Field, helicopter was using high octane gasoline, which, admittedly, is
blades, had hit or collided with defendant's aforementioned
of one (1) hour and thirty-two (32) minutes (from 6:50 to 8:22), the highly inflammable and would have probably set the craft aflame
steel cables.
helicopter was supposed to reach Mankayan at 10:44 a.m., the upon hitting the pine tree above referred to, had there been some
In this connection, Capt. Rohlings, who, at the time of the estimated flying time between Rosales and Mankayan being one gasoline in the tank at that time; and (3) the helicopter was a total
occurrence, was Assistant Superintendent of the Flight Control (1) hour and twenty-nine (29) minutes. Upon the other hand, the wreck, thus showing that the impact must have been strong.
of the PAL, testified that, during the investigation conducted by time of the crash was placed at around 11:30 a.m., or between
The foregoing considerations suggest, also, that Capt. Hernandez
him at the site of the crash, he found on the rotor blades of the 11:00 and 11:30 a.m. By that time the helicopter had already flown
and Lt. Imperial had acted recklessly in undertaking the flight with
helicopter. from one (1) hour and forty-five (45) minutes to two (2) hours and
a supply of fuel hardly sufficient to enable them to reach their
fifteen (15) minutes, since it took off from Rosales, thus exceeding
several long marks which contained small indentations which destination. Besides, the landing report (Exhibit 9) shows that the
by sixteen (16) to forty-six (46) minutes the aforementioned
were parallel to each other, parallel lines, if you would put it portions thereof pertaining to the pilot were accomplished or filled
estimated flying time. Considering that, with twenty-seven (27)
that way, these marks were covered by blackish substance of in by Lt. Imperial upon landing at the Rosales airport. In fact, he
gallons of gasoline, the helicopter had to refuel after a flight of one
some kind which I took to be of grease of some kind. (t.s.n, p. signed said report as pilot of the helicopter. Again, it appears that
(1) hour and thirty-two (32) minutes (from Nichols Field to
95.) during the flight from Rosales to Mankayan, the helicopter had
Rosales), it is apparent that, after flying for a longer period of one
deviated from one to three miles from the course plotted by Capt.
Capt. Manzano, the Superintendent of Helicopter Operations (1) hour and forty-five (45) minutes to two (2) hours and fifteen
Hernandez, in which Col. Arnaiz concurred "because that was the
of the PAL, tried to corroborate this testimony of Capt. (15) minutes, with a little over fifteen (15) gallons or at most
most logical route to follow." Had Capt. Hernandez been piloting
Rohlings. Both opined that the marks were due to the contact twenty-seven (27) gallons of gasoline, the provision of fuel must
the machine from Rosales to Mankayan, he would have had no
of said rotor blades with the steel cables of defendant herein. have already been exhausted.
reason to deviate from the course planned by him, for the "visibility
Photographs (Exhibits E-21, E-22 and E-24) allegedly taken and ceiling were unlimited in the area and vicinity where the
Col. Arnaiz, aircraft dispatcher of PAL, testified that the "maximum
by Capt. Rohlings of the rotor blades, purporting to show helicopter fell." All indications are, therefore, to the effect that, at
flight endurance" of the helicopter was "two hours and fifty
the aforementioned markings, were introduced in evidence in the time of the accident, the helicopter was being piloted, not by
minutes including the auxiliary tank." The Flight Plan (Exhibit B-1),
lieu of said rotor blades. Capt. Hernandez but by Lt. Imperial, in violation of Aeronautics
as explained by Col. Arnaiz, shows that the estimated flying time
It is admitted, however, that the helicopter had hit a tree before from Nichols Field to Rosales was one (1) hour and forty-two (42) Bulletin No. 1, Civil Aviation Regulations, of the Bureau of
falling into a ravine. Moreover, commenting on appellants' minutes, and from Rosales to Mankayan, one (1) hour and Aeronautics (CAA)1 as well as of Republic Act No. 776, Section 42
evidence, His Honor, the trial Judge, had the following to say: twenty-nine (29) minutes, or an aggregate estimated flying time of (H),2 for Lt. Imperial was not a lincesed helicopter pilot and was
three (3) hours and eleven (11) minutes, or twenty-one (21) merely in the initial stage of his training as such pilot.
The evidence for the plaintiffs as to the cause of the crash is minutes longer than the estimated "maximum flight endurance" of
not conclusive. The main rotor blade was not preserved, so It is next urged that defendant was negligent in failing to give
the helicopter. Even if we deduct from said total estimated flying
this Court was not able to satisfy itself as to the nature of the notice to the Civil Aeronautics Administration of the presence of
time, from Nichols Field to Mankayan, the ten (10) minutes saved
two long seriated streaks on the main rotor blade. The the aforementioned tram cables, which, appellants maintain,
in the flight from Nichols Field to Rosales, Pangasinan, the result
composition of these streaks was not determined whether constituted a hazard to aerial navigation. However, this pretense is
would still be eleven (11) minutes beyond the said "maximum
they were grease from the steel cable or marks from hitting a not borne out by the record. Appellants' witness, Capt. Manzano,
flight endurance" of the helicopter. In fact, the crash site
pine tree for it can be equally argued that these seriated testified that although, in searching for the missing helicopter, his
(Ampusungan) is only about sixteen (16) kilometers, or ten (10)
streaks could have been caused by the strands of a greasy plane flew so low that there was danger of collision with the
minutes flying time, to Mankayan. In other words, the accident
mountains, he did not notice said cables. The same were not,
took place in the area in which the helicopter was to have fully
15
therefore, within the navigable air space. Similarly, Capt. common evidence against defendant, 2 by reason of the virtual Ordering defendant-appellant to pay:
Rohlings described the area over which the cables were identity of the issues involved in both cases.
1. Carlito Castillo the following amounts:
strung as "a congested area full of pine trees" and a
Private respondents alleged that during the on-going construction
"mountainous terrain slopping valley," thereby implying that a) Compensatory damages in the amount of P56,290.00 with legal
of its steel and fabrication yard, petitioner's personnel and heavy
the space from the cables down was not suitable for air interest from the time of the finality of this decision until the same
equipment trespassed into the adjacent parcels of land belonging
navigation. In short, it has not been satisfactorily shown that shall have been fully paid;
to private respondents without their consent. These heavy
the cables were a hazard to aerial navigation, or that the
equipment damaged big portions of private respondents' property b) Exemplary damages in the amount of P10,000.00;
defendant should have or could have reasonably foreseen that
which were further used by petitioner as a depot or parking lots
aircrafts would fly so low over the place as to get entangled c) Attorney's fees of P10,000.00; and
without paying any rent therefor, nor does it appear from the
with said cables, for the area is dangerous to navigation owing
records that such use of their land was with the former's d) Costs of this suit.
to its mountainous terrain "full of pine trees."
conformity.
In short plaintiffs-appellants have failed to establish their 2. Cornelio Castillo the following sums:
Private respondents further alleged that as a result of the
pretense by a preponderance of evidence, in view of which the a) Compensatory damages in the amount of P255,401.25 with
dredging operation of petitioner company, the sea silt and water
decision appealed from must be, as it is hereby affirmed, with legal interest from the time of the finality of this decision up to the
overflowed and were deposited upon their land. Consequently, the
costs against them. It is so ordered. time the amount is fully paid;
said property which used to be agricultural lands principally
devoted to rice production and each averaging an annual net b) Exemplary damages of P10,000.00;
harvest of 75 cavans, could no longer be planted with palay as the
G.R. Nos. 114841-42 August 23, 1995 soil became infertile, salty, unproductive and unsuitable for c) Attorney's fees of P10,000.00; and
ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, agriculture.3
d) Costs of this suit;
INC., petitioner, Petitioner company denied all the allegations of private
vs. 3. Cristeta Castillo the following amount(s):
respondents and contended that its personnel and equipment had
COURT OF APPEALS, CARLITO D. CASTILLO, HEIRS OF neither intruded upon nor occupied any portion of private a) Compensatory damages of P249,815.62 with legal interest from
CRISTETA CASTILLO and CORNELIO respondents' landholdings. The alleged sea silt with water, the time this decision becomes final until the amount is fully paid;
CASTILLO, respondents. according to petitioner was due to the flood brought by the heavy
b) Exemplary damages of P10,000.00;
REGALADO, J.: rains when typhoon "Ruping" hit and lashed the province of
Batangas in 1982.4 c) Attorney's fees of P10,000.00; and
Assailed in this appeal by certiorari is the judgment 1 of
respondent appellate court rendered in CA-G.R CV Nos. On September 6, 1990, the trial court promulgated its decision d) Costs of suit.6
29976-77, which affirmed with modifications the judgment of with this fallo:
Petitioner company is now before us, arguing for nullification or, at
the trial court by increasing the award of damages to herein WHEREFORE, judgment is hereby rendered ordering defendant: least, partial modification of respondent court's judgment on the
private respondents. While the increased awards could bases of the following assignment of errors:
arguably have been justified, it was the inaction of private 1) To pay Carlito Castillo the sum of P65,240.00 plus legal interest
respondents that now militate against the same. from the time of the filing of his complaint; I
Sometime in 1982, petitioner company commenced the 2) To pay the heirs of Cristeta Castillo the sum of P32,630.00 plus That the respondent Honorable Court of Appeals exercised its
construction of a steel fabrication plant in the Municipality of legal interest from the time of the filing of her complaint; judicial power and discretion in a most arbitrary, capricious and
Bauan, Batangas, necessitating dredging operations at the whimsical manner by awarding against the petitioner,
3) To pay Cornelio Castillo the sum of P47,490.00 with legal
Batangas Bay in an area adjacent to the real property of unconscionable, unreasonable and excessive damages clearly not
interest from the time of the filing of his complaint;
private respondents. warranted under Articles 20 and 2176 of the Civil Code.
4) To pay plaintiffs the sum of P10,000.00 each as exemplary
As an offshoot of said dredging operations, an action for II
damages;
damages against herein petitioner Atlantic Gulf and Pacific
That grave and patent abuse of discretion in the exercise of
Company of Manila, Inc. was filed by Carlito D. Castillo which 5) To pay plaintiffs the sum of P10,000.00 each as attorney's fees;
judicial power constitute a ground for the issuance of the writ
was docketed as Civil Case No. 10276, and another action by
6) To pay the costs of suit.5 of certiorari . . .
Cristeta Castillo for herself and as guardian of Cornelio
Castillo, docketed as Civil Case No. 10696. Dissatisfied with said judgment, petitioner company appealed to III
the Court of Appeals. On March 29, 1994, respondent court
On August 19, 1985, the above-mentioned cases were That the respondent Honorable Court of Appeals violated Article
affirmed the judgment of the trial court with the following
consolidated, as the plaintiffs therein intended to present 2177 of the Civil Code which states that: "the plaintiff cannot
modifications:
recover damages twice for the same act or omission of the
16
defendant" when it condemned the petitioner as a result of its The entrenched procedural rule in this jurisdiction is that a party The case stemmed from a complaint filed by the private
dredging operations, to pay private respondents not only the who has not himself appealed cannot obtain from the appellate respondent Rommel's Marketing Corporation (RMC for brevity),
expected total amount of profits the latter would have derived court any affirmative relief other than those granted in the decision represented by its President and General Manager Romeo
from the expected sale of their palay harvest for 135 months of the lower court. The appellee can only advance any argument Lipana, to recover from the former Philippine Bank of Commerce
or over 11 years, from the half hectare agricultural land, but that he may deem necessary to defeat the appellant's claim or to (PBC for brevity), now absorbed by the Philippine Commercial
also rentals on the basis of P5.00 per square meter of their uphold the decision that is being disputed. He can assign errors International Bank, the sum of P304,979.74 representing various
said entire landholdings.7 on appeal if such are required to strengthen the views expressed deposits it had made in its current account with said bank but
by the court a quo. Such assigned errors, in turn, may be which were not credited to its account, and were instead
The evidence on record indubitably support the findings of the
considered by the appellate court solely to maintain the appealed deposited to the account of one Bienvenido Cotas, allegedly due
trial and appellate courts that petitioner company is liable for
decision on other grounds, but not for the purpose of modifying to the gross and inexcusable negligence of the petitioner bank.
the destruction of the property of herein private respondents
the judgment in the appellee's favor and giving him other
and consequently entitle the latter to an award of the damages RMC maintained two (2) separate current accounts, Current
affirmative reliefs.11
prayed for. Such conclusions and findings of fact by the lower Account Nos. 53-01980-3 and 53-01748-7, with the Pasig Branch
courts are entitled to great weight on appeal and will not be WHEREFORE, the challenged judgment of respondent Court of of PBC in connection with its business of selling appliances.
disturbed except for strong and cogent reasons, none of Appeals is hereby MODIFIED with regard to the amount of
In the ordinary and usual course of banking operations, current
which, however, obtain in the case at bar. The fact that the damages awarded to private respondents and the awards of the
account deposits are accepted by the bank on the basis of deposit
appellate court adopted the findings of the trial court, as in this trial court on this matter are hereby reinstated for that purpose. In
slips prepared and signed by the depositor, or the latter's agent or
case, makes the same binding upon the Supreme Court, for all other respects, the decision of respondent court is AFFIRMED,
representative, who indicates therein the current account number
the factual findings of said appellate court are generally without pronouncement as to costs.
to which the deposit is to be credited, the name of the depositor or
binding on the latter. For that matter the findings of the Court
SO ORDERED. current account holder, the date of the deposit, and the amount of
of Appeals by itself, and which are supported by substantial
the deposit either in cash or checks. The deposit slip has an upper
evidence, are almost beyond the power of review by the
portion or stub, which is detached and given to the depositor or his
Supreme Court.8
ANDAMO VS IAC agent; the lower portion is retained by the bank. In some
Hence, on this aspect of its recourse, petitioner cannot expect instances, however, the deposit slips are prepared in duplicate by
a reversal since it is a basic rule that only questions of law C. LAST CLEAR CHANCE (ART. 2179) the depositor. The original of the deposit slip is retained by the
may be raised in an appeal by certiorari under Rule 45 of the bank, while the duplicate copy is returned or given to the
Rules of Court. The jurisdiction of the Supreme Court in cases depositor.
thus brought to it from the Court of Appeals is limited to PHEONIX CONSTRUCTION vs IAC
From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana
reviewing and revising the errors of law imputed to it. 9 It is not
claims to have entrusted RMC funds in the form of cash totalling
the function of this Court to analyze or weigh such evidence all
P304,979.74 to his secretary, Irene Yabut, for the purpose of
over again. Its jurisdiction is limited to reviewing errors of law G.R. No. 97626 March 14, 1997 depositing said funds in the current accounts of RMC with PBC. It
that might have been committed by the lower court. Barring a
PHILIPPINE BANK OF COMMERCE, now absorbed by turned out, however, that these deposits, on all occasions, were
showing that the factual findings complained of are totally
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, not credited to RMC's account but were instead deposited to
devoid of support in the record or that they are so glaringly
ROGELIO LACSON, DIGNA DE LEON, MARIA ANGELITA Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas
erroneous as to constitute serious abuse of discretion, such
PASCUAL, et al., petitioners, who likewise maintains an account with the same bank. During
findings must stand, for the Supreme Court is not expected or
vs. this period, petitioner bank had, however, been regularly
required to examine or contrast the oral and documentary
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., furnishing private respondent with monthly statements showing its
evidence submitted by the parties.10
represented by ROMEO LIPANA, its President & General current accounts balances. Unfortunately, it had never been the
However, this Court finds that respondent Court of Appeals Manager, respondents. practice of Romeo Lipana to check these monthly statements of
committed a reversible error of law in increasing the amount of account reposing complete trust and confidence on petitioner
damages awarded to private respondents by the court a quo. HERMOSISIMA, JR., J.: bank.
Respondent appellate court exceeded its jurisdiction when it Challenged in this petition for review is the Decision dated Irene Yabut's modus operandi is far from complicated. She would
modified the judgment of the trial court by increasing the February 28, 19911 rendered by public respondent Court of accomplish two (2) copies of the deposit slip, an original and a
award of damages in favor of private respondents who, in the Appeals which affirmed the Decision dated November 15, 1985 of duplicate. The original showed the name of her husband as
first place, did not interpose an appeal therefrom. This being the Regional Trial Court, National Capital Judicial Region, Branch depositor and his current account number. On the duplicate copy
the case, they are presumed to be satisfied with the CLX (160), Pasig City, in Civil Case No. 27288 entitled "Rommel's was written the account number of her husband but the name of
adjudication made by the lower court. As to them, the Marketing Corporation, etc. v. Philippine Bank of Commerce, now the account holder was left blank. PBC's teller, Azucena Mabayad,
judgment of the court below may be said to have attained absorbed by Philippine Commercial and Industrial Bank." would, however, validate and stamp both the original and the
finality. duplicate of these deposit slips retaining only the original copy
17
despite the lack of information on the duplicate slip. The complaint, P25,000.00 attorney's fees and costs in the lower court We sustain the private respondent.
second copy was kept by Irene Yabut allegedly for record as well as in this Court.3
Our law on quasi-delicts states:
purposes. After validation, Yabut would then fill up the name of
Hence, this petition anchored on the following grounds:
RMC in the space left blank in the duplicate copy and change Art. 2176. Whoever by act or omission causes damage to another,
the account number written thereon, which is that of her 1) The proximate cause of the loss is the negligence of there being fault or negligence, is obliged to pay for the damage
husband's, and make it appear to be RMC's account respondent Rommel Marketing Corporation and Romeo Lipana in done. Such fault or negligence, if there is no pre-existing
number, i.e., C.A. No. 53-01980-3. With the daily remittance entrusting cash to a dishonest employee. contractual relation between the parties, is called a quasi-
records also prepared by Ms. Yabut and submitted to private delict and is governed by the provisions of this Chapter.
respondent RMC together with the validated duplicate slips 2) The failure of respondent Rommel Marketing Corporation to
with the latter's name and account number, she made her cross-check the bank's statements of account with its own records There are three elements of a quasi-delict: (a) damages suffered
company believe that all the while the amounts she deposited during the entire period of more than one (1) year is the proximate by the plaintiff; (b) fault or negligence of the defendant, or some
were being credited to its account when, in truth and in fact, cause of the commission of subsequent frauds and other person for whose acts he must respond; and (c) the
they were being deposited by her and credited by the misappropriation committed by Ms. Irene Yabut. connection of cause and effect between the fault or negligence of
petitioner bank in the account of Cotas. This went on in a span the defendant and the damages incurred by the plaintiff.7
3) The duplicate copies of the deposit slips presented by
of more than one (1) year without private respondent's respondent Rommel Marketing Corporation are falsified and are In the case at bench, there is no dispute as to the damage
knowledge. not proof that the amounts appearing thereon were deposited to suffered by the private respondent (plaintiff in the trial court) RMC
Upon discovery of the loss of its funds, RMC demanded from respondent Rommel Marketing Corporation's account with the in the amount of P304,979.74. It is in ascribing fault or negligence
petitioner bank the return of its money, but as its demand went bank, which caused the damage where the parties point to each other
unheeded, it filed a collection suit before the Regional Trial as the culprit.
4) The duplicate copies of the deposit slips were used by Ms.
Court of Pasig, Branch 160. The trial court found petitioner Irene Yabut to cover up her fraudulent acts against respondent Negligence is the omission to do something which a reasonable
bank negligent and ruled as follows: Rommel Marketing Corporation, and not as records of deposits man, guided by those considerations which ordinarily regulate the
WHEREFORE, judgment is hereby rendered sentencing she made with the bank.4 conduct of human affairs, would do, or the doing of something
defendant Philippine Bank of Commerce, now absorbed by which a prudent and reasonable man would do. The seventy-eight
The petition has no merit.
defendant Philippine Commercial & Industrial Bank, and (78)-year-old, yet still relevant, case of Picart v. Smith,8 provides
defendant Azucena Mabayad to pay the plaintiff, jointly and Simply put, the main issue posited before us is: What is the the test by which to determine the existence of negligence in a
severally, and without prejudice to any criminal action which proximate cause of the loss, to the tune of P304,979.74, suffered particular case which may be stated as follows: Did the defendant
may be instituted if found warranted: by the private respondent RMC petitioner bank's negligence or in doing the alleged negligent act use that reasonable care and
that of private respondent's? caution which an ordinarily prudent person would have used in the
1. The sum of P304,979.72, representing plaintiffs lost deposit, same situation? If not, then he is guilty of negligence. The law
plus interest thereon at the legal rate from the filing of the Petitioners submit that the proximate cause of the loss is the here in effect adopts the standard supposed to be supplied by the
complaint; negligence of respondent RMC and Romeo Lipana in entrusting imaginary conduct of the discreet paterfamilias of the Roman law.
cash to a dishonest employee in the person of Ms. Irene The existence of negligence in a given case is not determined by
2. A sum equivalent to 14% thereof, as exemplary damages; Yabut.5 According to them, it was impossible for the bank to know reference to the personal judgment of the actor in the situation
3. A sum equivalent to 25% of the total amount due, as and for that the money deposited by Ms. Irene Yabut belong to RMC; before him. The law considers what would be reckless,
attorney's fees; and neither was the bank forewarned by RMC that Yabut will be blameworthy, or negligent in the man of ordinary intelligence and
depositing cash to its account. Thus, it was impossible for the prudence and determines liability by that.
4. Costs. bank to know the fraudulent design of Yabut considering that her
husband, Bienvenido Cotas, also maintained an account with the Applying the above test, it appears that the bank's teller, Ms.
Defendants' counterclaim is hereby dismissed for lack of
bank. For the bank to inquire into the ownership of the cash Azucena Mabayad, was negligent in validating, officially stamping
merit.2
deposited by Ms. Irene Yabut would be irregular. Otherwise and signing all the deposit slips prepared and presented by Ms.
On appeal, the appellate court affirmed the foregoing decision stated, it was RMC's negligence in entrusting cash to a dishonest Yabut, despite the glaring fact that the duplicate copy was not
with modifications, viz: employee which provided Ms. Irene Yabut the opportunity to completely accomplished contrary to the self-imposed procedure
defraud RMC.6 of the bank with respect to the proper validation of deposit slips,
WHEREFORE, the decision appealed from herein is original or duplicate, as testified to by Ms. Mabayad herself, thus:
MODIFIED in the sense that the awards of exemplary Private respondent, on the other hand, maintains that the
damages and attorney's fees specified therein are eliminated proximate cause of the loss was the negligent act of the bank, Q: Now, as teller of PCIB, Pasig Branch, will you please tell us
and instead, appellants are ordered to pay plaintiff, in addition thru its teller Ms. Azucena Mabayad, in validating the deposit Mrs. Mabayad your important duties and functions?
to the principal sum of P304,979.74 representing plaintiff's lost slips, both original and duplicate, presented by Ms. Yabut to Ms.
A: I accept current and savings deposits from depositors and
deposit plus legal interest thereon from the filing of the Mabayad, notwithstanding the fact that one of the deposit slips
encashments.
was not completely accomplished.
18
Q: Now in the handling of current account deposits of bank the true reason why the name of the account holder in the It was this negligence of Ms. Azucena Mabayad, coupled by the
clients, could you tell us the procedure you follow? duplicate slip was left blank while that in the original was filled up. negligence of the petitioner bank in the selection and supervision
She should not have been so naive in accepting hook, line and of its bank teller, which was the proximate cause of the loss
A: The client or depositor or the authorized representative
sinker the too shallow excuse of Ms. Irene Yabut to the effect that suffered by the private respondent, and not the latter's act of
prepares a deposit slip by filling up the deposit slip with the
since the duplicate copy was only for her personal record, she entrusting cash to a dishonest employee, as insisted by the
name, the account number, the date, the cash breakdown, if it
would simply fill up the blank space later on. 11 A "reasonable man petitioners.
is deposited for cash, and the check number, the amount and
of ordinary prudence" 12would not have given credence to such
then he signs the deposit slip. Proximate cause is determined on the facts of each case upon
explanation and would have insisted that the space left blank be
mixed considerations of logic, common sense, policy and
Q: Now, how many deposit slips do you normally require in filled up as a condition for validation. Unfortunately, this was not
precedent. 15 Vda. de Bataclan v. Medina, 16 reiterated in the case
accomplishing current account deposit, Mrs. Mabayad? how bank teller Mabayad proceeded thus resulting in huge losses
of Bank of the Phil. Islands v. Court of Appeals, 17 defines
to the private respondent.
A: The bank requires only one copy of the deposit although proximate cause as "that cause, which, in natural and continuous
some of our clients prepare the deposit slip in duplicate. Negligence here lies not only on the part of Ms. Mabayad but also sequence, unbroken by any efficient intervening cause, produces
on the part of the bank itself in its lackadaisical selection and the injury, and without which the result would not have
Q: Now in accomplishing current account deposits from your supervision of Ms. Mabayad. This was exemplified in the occurred. . . ." In this case, absent the act of Ms. Mabayad in
clients, what do you issue to the depositor to evidence the testimony of Mr. Romeo Bonifacio, then Manager of the Pasig negligently validating the incomplete duplicate copy of the deposit
deposit made? Branch of the petitioner bank and now its Vice-President, to the slip, Ms. Irene Yabut would not have the facility with which to
A: We issue or we give to the clients the depositor's stub as a effect that, while he ordered the investigation of the incident, he perpetrate her fraudulent scheme with impunity. Apropos, once
receipt of the deposit. never came to know that blank deposit slips were validated in total again, is the pronouncement made by the respondent appellate
disregard of the bank's validation procedures, viz: court, to wit:
Q: And who prepares the deposit slip?
Q: Did he ever tell you that one of your cashiers affixed the stamp . . . . Even if Yabut had the fraudulent intention to misappropriate
A: The depositor or the authorized representative sir? mark of the bank on the deposit slips and they validated the same the funds entrusted to her by plaintiff, she would not have been
Q: Where does the depositor's stub comes (sic) from Mrs. with the machine, the fact that those deposit slips were unfilled able to deposit those funds in her husband's current account, and
Mabayad, is it with the deposit slip? up, is there any report similar to that? then make plaintiff believe that it was in the latter's accounts
wherein she had deposited them, had it not been for bank teller
A: The depositor's stub is connected with the deposit slip or A: No, it was not the cashier but the teller.
Mabayad's aforesaid gross and reckless negligence. The latter's
the bank's copy. In a deposit slip, the upper portion is the Q: The teller validated the blank deposit slip? negligence was thus the proximate, immediate and efficient cause
depositor's stub and the lower portion is the bank's copy, and that brought about the loss claimed by plaintiff in this case, and
you can detach the bank's copy from the depositor's stub by A: No it was not reported. the failure of plaintiff to discover the same soon enough by failing
tearing it sir. Q: You did not know that any one in the bank tellers or cashiers to scrutinize the monthly statements of account being sent to it by
validated the blank deposit slip? appellant bank could not have prevented the fraud and
Q: Now what do you do upon presentment of the deposit slip
misappropriation which Irene Yabut had already completed when
by the depositor or the depositor's authorized representative? A: I am not aware of that. she deposited plaintiff's money to the account of her husband
A: We see to it that the deposit slip9 is properly accomplished Q: It is only now that you are aware of that? instead of to the latter's accounts. 18
and then we count the money and then we tally it with the
A: Yes, sir. 13 Furthermore, under the doctrine of "last clear chance" (also
deposit slip sir.
referred to, at times as "supervening negligence" or as
Q: Now is the depositor's stub which you issued to your clients Prescinding from the above, public respondent Court of Appeals "discovered peril"), petitioner bank was indeed the culpable party.
validated? aptly observed: This doctrine, in essence, states that where both parties are
negligent, but the negligent act of one is appreciably later in time
A: Yes, sir. 10 [Emphasis ours] xxx xxx xxx
than that of the other, or when it is impossible to determine whose
Clearly, Ms. Mabayad failed to observe this very important It was in fact only when he testified in this case in February, 1983, fault or negligence should be attributed to the incident, the one
procedure. The fact that the duplicate slip was not or after the lapse of more than seven (7) years counted from the who had the last clear opportunity to avoid the impending harm
compulsorily required by the bank in accepting deposits period when the funds in question were deposited in plaintiff's and failed to do so is chargeable with the consequences
should not relieve the petitioner bank of responsibility. The odd accounts (May, 1975 to July, 1976) that bank manager Bonifacio thereof. 19Stated differently, the rule would also mean that an
circumstance alone that such duplicate copy lacked one vital admittedly became aware of the practice of his teller Mabayad of antecedent negligence of a person does not preclude the recovery
information that of the name of the account holder validating blank deposit slips. Undoubtedly, this is gross, wanton, of damages for the supervening negligence of, or bar a defense
should have already put Ms. Mabayad on guard. Rather than and inexcusable negligence in the appellant bank's supervision of against liability sought by another, if the latter, who had the last
readily validating the incomplete duplicate copy, she should its employees. 14 fair chance, could have avoided the impending harm by the
have proceeded more cautiously by being more probing as to exercise of due diligence. 20Here, assuming that private

19
respondent RMC was negligent in entrusting cash to a Petitioners nevertheless aver that the failure of respondent RMC WHEREFORE, the decision of the respondent Court of Appeals is
dishonest employee, thus providing the latter with the to cross-check the bank's statements of account with its own modified by reducing the amount of actual damages private
opportunity to defraud the company, as advanced by the records during the entire period of more than one (1) year is the respondent is entitled to by 40%. Petitioners may recover from
petitioner, yet it cannot be denied that the petitioner bank, thru proximate cause of the commission of subsequent frauds and Ms. Azucena Mabayad the amount they would pay the private
its teller, had the last clear opportunity to avert the injury misappropriation committed by Ms. Irene Yabut. respondent. Private respondent shall have recourse against Ms.
incurred by its client, simply by faithfully observing their self- Irene Yabut. In all other respects, the appellate court's decision is
We do not agree.
imposed validation procedure. AFFIRMED.
While it is true that had private respondent checked the monthly
At this juncture, it is worth to discuss the degree of diligence Proportionate costs.
statements of account sent by the petitioner bank to RMC, the
ought to be exercised by banks in dealing with their clients.
latter would have discovered the loss early on, such cannot be SO ORDERED.
The New Civil Code provides: used by the petitioners to escape liability. This omission on the
part of the private respondent does not change the fact that were
Art. 1173. The fault or negligence of the obligor consists in the
it not for the wanton and reckless negligence of the petitioners' [G.R. Nos. 79050-51. November 14, 1989.]
omission of that diligence which is required by the nature of
employee in validating the incomplete duplicate deposit slips
the obligation and corresponds with the circumstances of the
presented by Ms. Irene Yabut, the loss would not have occurred. PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR
persons, of the time and of the place. When negligence shows
Considering, however, that the fraud was committed in a span of BASCOS BAESA, thru her personal guardian FRANCISCA O.
bad faith, the provisions of articles 1171 and 2201, paragraph
more than one (1) year covering various deposits, common BASCOS, FE O. ICO, in her behalf and in behalf of her minor
2, shall apply.
human experience dictates that the same would not have been children, namely ERWIN, OLIVE, EDMUNDO and SHARON
If the law or contract does not state the diligence which is to possible without any form of collusion between Ms. Yabut and ICO, Respondents.
be observed in the performance, that which is expected of bank teller Mabayad. Ms. Mabayad was negligent in the
a good father of a family shall be required. (1104a) performance of her duties as bank teller nonetheless. Thus, the Efren N. Ambrosio & Associates for petitioner PNEI.
petitioners are entitled to claim reimbursement from her for
In the case of banks, however, the degree of diligence whatever they shall be ordered to pay in this case.
required is more than that of a good father of a family. Emiliano S. Micu for Respondents.
Considering the fiduciary nature of their relationship with their The foregoing notwithstanding, it cannot be denied that, indeed, SYLLABUS
depositors, banks are duty bound to treat the accounts of their private respondent was likewise negligent in not checking its
clients with the highest degree of care. 21 monthly statements of account. Had it done so, the company 1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE;
would have been alerted to the series of frauds being committed WHEN APPLICABLE. The doctrine of last clear chance applies
As elucidated in Simex International (Manila), Inc. v. Court of against RMC by its secretary. The damage would definitely not only in a situation where the defendant, having the last fair chance
Appeals, 22 in every case, the depositor expects the bank to have ballooned to such an amount if only RMC, particularly to avoid the impending harm and failed to do so, becomes liable
treat his account with the utmost fidelity, whether such account Romeo Lipana, had exercised even a little vigilance in their for all the consequences of the accident notwithstanding the prior
consists only of a few hundred pesos or of millions. The bank financial affairs. This omission by RMC amounts to contributory negligence of the plaintiff.
must record every single transaction accurately, down to the negligence which shall mitigate the damages that may be
last centavo, and as promptly as possible. This has to be done awarded to the private respondent 23 under Article 2179 of the 2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE.
if the account is to reflect at any given time the amount of New Civil Code, to wit: In order that the doctrine of last clear chance may be applied, it
money the depositor can dispose as he sees fit, confident that must be shown that the person who allegedly had the last
the bank will deliver it as and to whomever he directs. A . . . When the plaintiff's own negligence was the immediate and opportunity to avert the accident was aware of the existence of the
blunder on the part of the bank, such as the failure to duly proximate cause of his injury, he cannot recover damages. But if peril or with exercise of due care should have been aware of it.
credit him his deposits as soon as they are made, can cause his negligence was only contributory, the immediate and
the depositor not a little embarrassment if not financial loss proximate cause of the injury being the defendant's lack of due 3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING
and perhaps even civil and criminal litigation. care, the plaintiff may recover damages, but the courts shall INSTANTANEOUSLY OR BY AVAILABLE MEANS. This
mitigate the damages to be awarded. doctrine of last chance has no application to a case where a
The point is that as a business affected with public interest
and because of the nature of its functions, the bank is under In view of this, we believe that the demands of substantial justice person is to act instantaneously, and if the injury cannot be
obligation to treat the accounts of its depositors with are satisfied by allocating the damage on a 60-40 ratio. Thus, avoided by using all means available after the peril is or should
meticulous care, always having in mind the fiduciary nature of 40% of the damage awarded by the respondent appellate court, have been discovered.
their relationship. In the case before us, it is apparent that the except the award of P25,000.00 attorney's fees, shall be borne by
petitioner bank was remiss in that duty and violated that private respondent RMC; only the balance of 60% needs to be 4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE
relationship. paid by the petitioners. The award of attorney's fees shall be ENTERING A THROUGH HIGHWAY OR A STOP
borne exclusively by the petitioners. INTERSECTION. Section 43 (c), Article III, Chapter IV of
Republic Act No. 1436 cannot apply to case a bar where at the

20
time of the accident, the jeepney had already crossed the Malalam River, a speeding PANTRANCO bus from Aparri, on its ordering the defendant PANTRANCO North Express, Inc. to pay:
intersection. regular route to Manila, encroached on the jeepneys lane while
negotiating a curve, and collided with it.
5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the
THE EMPLOYER. A finding of negligence on the part of the As a result of the accident David Ico, spouses Ceasar Baesa and following damages:
driver establishes a presumption that the employer has been Marilyn Baesa and their children, Harold Jim and Marcelino
negligent and the latter has the burden of proof that it has Baesa, died while the rest of the passengers suffered injuries. The A) As compensatory damages for the death of Ceasar Baesa
exercised due negligence not only in the selection of its jeepney was extensively damaged. After the accident the driver of P30,000.00;
employees but also in adequately supervising their work. the PANTRANCO Bus, Ambrosio Ramirez, boarded a car and
proceeded to Santiago, Isabela. From that time on up to the B) As compensatory damages for the death of Marilyn Baesa
6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT present, Ramirez has never been seen and has apparently P30,000.00;
CLAIM FOR DAMAGES. Plaintiffs failure to present remained in hiding.
documentary evidence to support their claim for damages for C) As compensatory damages for the death of Harold Jim Baesa
loss of earning capacity of the deceased victim does not bar All the victims and/or their surviving heirs except herein private and Marcelino Baesa P30,000.00;
recovery of the damages, if such loss may be based respondents settled the case amicably under the "No Fault"
sufficiently on their testimonies. insurance coverage of PANTRANCO. D) For the loss of earnings of Ceasar Baesa P630,000.00;

7. ID.; ID.; INDEMNITY FIXED AT P30,000. The indemnity Maricar Baesa through her guardian Francisca O. Bascos and Fe E) For the loss of earnings of Marilyn Bascos Baesa
for the death of a person was fixed by this Court at O. Ico for herself and for her minor children, filed separate actions P375,000.00;
(P30,000.00). for damages arising from quasi-delict against PANTRANCO,
respectively docketed as Civil Case No. 561-R and 589-R of the F) For the burial expenses of the deceased Ceasar and Marilyn
DECISION
Court of First Instance of Pangasinan. Baesa P41,200.00;
CORTES, J.:
In its answer, PANTRANCO, aside from pointing to the late David G) For hospitalization expenses of Maricar Baesa P3,727.00;
In this Petition, Pantranco North Express Inc. (PANTRANCO), Icos alleged negligence as the proximate cause of the accident,
asks the Court to review the decision of the Court of Appeals invoked the defense of due diligence in the selection and H) As moral damages P50,000.00;
in CA-G.R. No. 05494-95 which affirmed the decisions of the supervision of its driver, Ambrosio
Court of First Instance of Rosales, Pangasinan in Civil Case Ramirez.chanroblesvirtualawlibrary I) As attorneys fees P20,000.00;
No. 561-R and Civil Case No. 589-R wherein PANTRANCO
was ordered to pay damages and attorneys fees to herein On July 3, 1984, the CFI of Pangasinan rendered a decision II. The plaintiffs in Civil Case No. 589-R, the following damages:
private respondents.chanrobles virtual lawlibrary against PANTRANCO awarding the total amount of Two Million
Three Hundred Four Thousand Six Hundred Forty-Seven A) As compensatory damages for the death of David Ico
The pertinent fact are as follows: (P2,304,647.00) as damages, plus 10% thereof as attorneys fees P30,000.00;
and costs to Maricar Baesa in Civil Case No. 561-R, and the total
At about 7:00 oclock in the morning of June 12, 1981, the amount of Six Hundred Fifty Two Thousand Six Hundred Seventy- B) For loss of earning capacity of David Ico P252,000.00;
spouses Ceasar and Marilyn Baesa and their children Harold Two Pesos (P652,672.00) as damages, plus 10% thereof as
Jim, Marcelino and Maricar, together with spouses David Ico attorneys fees and costs to Fe Ico and her children in Civil Case C) As moral damages for the death of David Ico and the injury of
and Fe O. Ico with their son Erwin Ico and seven other No. 589-R. On appeal, the cases were consolidated and the Court Fe Ico P30,000.00
persons, were aboard a passenger jeepney on their way to a of Appeals modified the decision of the trial court by ordering
picnic at Malalam River, Ilagan, Isabela, to celebrate the fifth PANTRANCO to pay the total amount of One Million One Hundred D) As payment for the jeepney P20,000.00;
wedding anniversary of Ceasar and Marilyn Baesa. Eighty-Nine Thousand Nine Hundred Twenty Seven Pesos
(P1,189,927.00) as damages, plus Twenty Thousand Pesos E) For the hospitalization of Fe Ico P12,000.000;
The group, numbering fifteen (15) persons, rode in the (P20,000.00) as attorneys fees to Maricar Baesa, and the total
passenger jeepney driven by David Ico, who was also the amount of Three Hundred Forty-Four Thousand Pesos F) And for attorneys fees P10,000.00;
registered owner thereof. From Ilagan, Isabela, they (P344,000.00) plus Ten Thousand Pesos (P10,000.00) as
proceeded to Barrio Capayacan to deliver some viands to one attorneys fees to Fe Ico and her children, and to pay the costs in and to pay the costs in both cases.
Mrs. Bascos and thenceforth to San Felipe, taking the highway both cases. The dispositive portion of the assailed decision reads
going to Malalam River. Upon reaching the highway, the as follows: The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in
jeepney turned right and proceeded to Malalam River at a Civil Case No. 561-R, and the medical expenses in the sum of
speed of about 20 kph. While they were proceeding towards WHEREFORE, the decision appealed from is hereby modified by P3,273.55, should be deducted from the award in her
21
favor.chanrobles virtual lawlibrary damages.chanrobles lawlibrary : rednad prevent an accident. The speed at which the approaching bus was
running prevented David Ico from swerving the jeepney to the
All the foregoing amounts herein awarded except the costs To avoid liability for the negligence of its driver, petitioner claims right shoulder of the road in time to avoid the collision. Thus, even
shall earn interest at the legal rate from date of this decision that the original negligence of its driver was not the proximate assuming that the jeepney driver perceived the danger a few
until fully paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.] cause of the accident and that the sole proximate cause was the seconds before the actual collision, he had no opportunity to avoid
supervening negligence of the jeepney driver David Ico in failing it. This Court has held that the last clear chance doctrine "can
PANTRANCO filed a motion for reconsideration of the Court of to avoid the accident. It is petitioners position that even assuming never apply where the party charged is required to act
Appeals decision, but on June 26, 1987, it denied the same arguendo, that the bus encroached into the lane of the jeepney, instantaneously, and if the injury cannot be avoided by the
for lack of merit. PANTRANCO then filed the instant petition the driver of the latter could have swerved the jeepney towards application of all means at hand after the peril is or should have
for review. the spacious dirt shoulder on his right without danger to himself or been discovered" [Ong v. Metropolitan Water District,
his passengers. supra].chanrobles.com : virtual law library
I
Petitioner faults the Court of Appeals for not applying the The above contention of petitioner is manifestly devoid of merit. Petitioner likewise insists that David Ico was negligent in failing to
doctrine of the "last clear chance" against the jeepney driver. observe Section 43 (c), Article III Chapter IV of Republic Act No.
Petitioner claims that under the circumstances of the case, it Contrary to the petitioners contention, the doctrine of "last clear 4136 * which provides that the driver of a vehicle entering a
was the driver of the passenger jeepney who had the last clear chance" finds no application in this case. For the doctrine to be through highway or a stop intersection shall yield the right of way
chance to avoid the collision and was therefore negligent in applicable, it is necessary to show that the person who allegedly to all vehicles approaching in either direction on such through
failing to utilize with reasonable care and competence his then had the last opportunity to avert the accident was aware of the highway.
existing opportunity to avoid the harm. existence of the peril or should, with exercise of due care, have
been aware of it. One cannot be expected to avoid an accident or Petitioners misplaced reliance on the aforesaid law is readily
The doctrine of the last clear chance was defined by this Court injury if he does not know or could not have known the existence apparent in this case. The cited law itself provides that it applies
in the case of Ong v. Metropolitan Water District, 104 Phil. 397 of the peril. In this case, there is nothing to show that the jeepney only to vehicles entering a through highway or a stop intersection.
(1958), in this wise: driver David Ico knew of the impending danger. When he saw at a At the time of the accident, the jeepney had already crossed the
distance that the approaching bus was encroaching on his lane, intersection and was on its way to Malalam River. Petitioner itself
The doctrine of the last clear chance simply, means that the he did not immediately swerve the jeepney to the dirt shoulder on cited Fe Icos testimony that the accident occurred after the
negligence of a claimant does not preclude a recovery for the his right since he must have assumed that the bus driver will jeepney had travelled a distance of about two (2) meters from the
negligence of defendant where it appears that the latter, by return the bus to its own lane upon seeing the jeepney point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the
exercising reasonable care and prudence, might have avoided approaching from the opposite direction. As held by this Court in witness for the petitioner, Leo Marantan, testified that both
injurious consequences to claimant notwithstanding his the case of Vda. De Bonifacio v. BLTB, G.R. No. L-26810, August vehicles were coming from opposite directions [CA Decision, p. 7;
negligence. 31, 1970, 34 SCRA 618, a motorist who is properly proceeding on Rollo, p. 50], clearly indicating that the jeepney had already
his own side of the highway is generally entitled to assume that an crossed the intersection.
The doctrine applies only in a situation where the plaintiff was approaching vehicle coming towards him on the wrong side, will
guilty of prior or antecedent negligence but the defendant, who return to his proper lane of traffic. There was nothing to indicate to Considering the foregoing, the Court finds that the negligence of
had the last fair chance to avoid the impending harm and David Ico that the bus could not return to its own lane or was petitioners driver in encroaching into the lane of the incoming
failed to do so, is made liable for all the consequences of the prevented from returning to the proper lane by anything beyond jeepney and in failing to return the bus to its own lane immediately
accident notwithstanding the prior negligence of the plaintiff the control of its driver. Leo Marantan, an alternate driver of the upon seeing the jeepney coming from the opposite direction was
[Picart v. Smith, 37 Phil. 809 (1918); Glan Peoples Lumber Pantranco bus who was seated beside the driver Ramirez at the the sole and proximate cause of the accident without which the
and Hardware, Et. Al. v. Intermediate Appellate Court, Cecilia time of the accident, testified that Ramirez had no choice but to collision would not have occurred. There was no supervening or
Alferez Vda. de Calibo, Et Al., G.R. No. 70493, May 18, 1989]. swerve the steering wheel to the left and encroach on the intervening negligence on the part of the jeepney driver which
The subsequent negligence of the defendant in failing to jeepneys lane because there was a steep precipice on the right would have made the prior negligence of petitioners driver a mere
exercise ordinary care to avoid injury to plaintiff becomes the [CA Decision, p. 2; Rollo, p. 45]. However, this is belied by the remote cause of the accident.
immediate or proximate cause of the accident which evidence on record which clearly shows that there was enough
II
intervenes between the accident and the more remote space to swerve the bus back to its own lane without any danger
negligence of the plaintiff, thus making the defendant liable to [CA Decision, p. 7; Rollo, p. 50].
the plaintiff [Picart v. Smith, supra].
Moreover, both the trial court and the Court of Appeals found that On the issue of its liability as an employer, petitioner claims that it
Generally, the last clear chance doctrine is invoked for the at the time of the accident the Pantranco bus was speeding had observed the diligence of a good father of a family to prevent
purpose of making a defendant liable to a plaintiff who was towards Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David damage, conformably to the last paragraph of Article 2180 of the
guilty of prior or antecedent negligence, although it may also Ico must have realized that the bus was not returning to its own Civil Code. Petitioner adduced evidence to show that in hiring its
be raised as a defense to defeat claim for lane, it was already too late to swerve the jeepney to his right to drivers, the latter are required to have professional drivers license
22
and police clearance. The drivers must also pass written and Francisca Bascos as to the earning capacity of David Ico, and
examinations, interviews and practical driving tests, and are The finding of negligence on the part of its driver Ambrosio the spouses Baesa, respectively, are sufficient to establish a basis
required to undergo a six-month training period. Rodrigo San Ramirez gave rise to the presumption of negligence on the part of from which the court can make a fair and reasonable estimate of
Pedro, petitioners Training Coordinator, testified on petitioner and the burden of proving that it exercised due diligence the damages for the loss of earning capacity of the three
petitioners policy of conducting regular and continuing training not only in the selection of its employees but also in adequately deceased victims. Moreover, in fixing the damages for loss of
programs and safety seminars for its drivers, conductors, supervising their work rests with the petitioner [Lilius v. Manila earning capacity of a deceased victim, the court can consider the
inspectors and supervisors at a frequency rate of at least two Railroad Company, 59 Phil. 758 (1934); Umali v. Bacani, G.R. No. nature of his occupation, his educational attainment and the state
(2) seminars a month. L-40570, June 30, 1976, 69 SCRA 623]. Contrary to petitioners of his health at the time of death.
claim, there is no presumption that the usual recruitment
On this point, the Court quotes with approval the following procedures and safety standards were observed. The mere In the instant case, David Ico was thirty eight (38) years old at the
findings of the trial court which was adopted by the Court of issuance of rules and regulations and the formulation of various time of his death in 1981 and was driving his own passenger
Appeals in its challenged decision: company policies on safety, without showing that they are being jeepney. The spouses Ceasar and Marilyn Baesa were both thirty
complied with, are not sufficient to exempt petitioner from liability (30) years old at the time of their death. Ceasar Baesa was a
When an injury is caused by the negligence of an employee, arising from the negligence of its employee. It is incumbent upon commerce degree holder and the proprietor of the Cauayan
there instantly arises a presumption that the employer has petitioner to show that in recruiting and employing the erring Press, printer of the Cauayan Valley Newspaper and the Valley
been negligent either in the selection of his employees or in driver, the recruitment procedures and company policies on Times at Cauayan, Isabela. Marilyn Baesa graduated as a nurse
the supervision over their acts. Although this presumption is efficiency and safety were followed. Petitioner failed to do this. in 1976 and at the time of her death, was the company nurse,
only a disputable presumption which could be overcome by Hence, the Court finds no cogent reason to disturb the finding of personnel manager, treasurer and cashier of the Ilagan Press at
proof of diligence of a good father of a family, this Court both the trial court and the Court of Appeals that the evidence Ilagan, Isabela. Respondent court duly considered these factors,
believes that the evidence submitted by the defendant to show presented by the petitioner, which consists mainly of the together with the uncontradicted testimonies of Fe Ico and
that it exercised the diligence of a good father of a family in the uncorroborated testimony of its Training Coordinator, is insufficient Francisca Bascos, in fixing the amount of damages for the loss of
case of Ramirez, as a company driver is far from sufficient. No to overcome the presumption of negligence against earning capacity of David Ico and the spouses
support evidence has been adduced. The professional drivers petitioner.cralawnad Baesa.chanrobles.com:
license of Ramirez has not been produced. There is no proof
III
that he is between 25 to 38 years old. There is also no proof However, it should be pointed out that the Court of Appeals
as to his educational attainment, his age, his weight and the committed error in fixing the compensatory damages for the death
fact that he is married or not. Neither are the result of the of Harold Jim Baesa and Marcelino Baesa. Respondent court
written test, psychological and physical test, among other On the question of damages, petitioner claims that the Court of awarded to plaintiff (private respondent) Maricar Baesa Thirty
tests, have been submitted in evidence [sic]. His NBI or police Appeals erred in fixing the damages for the loss of earning Thousand Pesos (P30,000.00) as "compensatory damages for the
clearances and clearances from previous employment were capacity of the deceased victims. Petitioner assails respondent death of Harold Jim Baesa and Marcelino Baesa." [CA Decision,
not marked in evidence. No evidence was presented that courts findings because no documentary evidence in support p. 14; Rollo, 57]. In other words, the Court of Appeals awarded
Ramirez actually and really attended the seminars. Vital thereof, such as income tax returns, pay-rolls, pay slips or only Fifteen Thousand Pesos (P15,000.00) as indemnity for the
evidence should have been the certificate of attendance or invoices obtained in the usual course of business, were presented death of Harold Jim Baesa and another Fifteen Thousand Pesos
certificate of participation or evidence of such participation like [Petition, p. 22; Rollo, p. 39]. Petitioner argues that the "bare and (P15,000.00) for the death of Marcelino Baesa. This is clearly
a logbook signed by the trainees when they attended the self-serving testimonies of the wife of the deceased David Ico and erroneous. In the case of People v. de la Fuente, G.R. Nos.
seminars. If such records are not available, the testimony of the mother of the deceased Marilyn Baesa . . . have no probative 63251-52, December 29, 1983, 126 SCRA 518, the indemnity for
the classmates that Ramirez was their classmate in said value to sustain in law the Court of Appeals conclusion on the the death of a person was fixed by this Court at Thirty Thousand
seminar (should have been presented) [CA Decision, pp. 8-9; respective earnings of the deceased victims." [Petition, pp. 21-22; Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore be
Rollo, pp. 51-52]. Rollo, pp. 38-39.] It is petitioners contention that the evidence awarded Sixty Thousand Pesos (P60,000.00) as indemnity for the
presented by the private respondent does not meet the death of her brothers, Harold Jim Baesa and Marcelino Baesa or
Petitioner contends that the fact that Ambrosio Ramirez was requirements of clear and satisfactory evidence to prove actual Thirty Thousand Pesos (P30,000.00) for the death of each
employed and remained as its driver only means that he and compensatory damages. brother.
underwent the same rigid selection process and was
subjected to the same strict supervision imposed by petitioner The Court finds that the Court of Appeals committed no reversible The other items of damages awarded by respondent court which
on all applicants and employees. It is argued by the petitioner error in fixing the amount of damages for the loss of earning were not challenged by the petitioner are hereby affirmed.
that unless proven otherwise, it is presumed that petitioner capacity of the deceased victims. While it is true that private
observed its usual recruitment procedure and company respondents should have presented documentary evidence to WHEREFORE, premises considered, the petition is DENIED, and
polices on safety and efficiency [Petition, p. 20; Rollo, p. 37]. support their claim for damages for loss of earning capacity of the the decision of respondent Court of Appeals is hereby AFFIRMED
deceased victims, the absence thereof does not necessarily bar with the modification that the amount of compensatory damages
The Court finds the above contention unmeritorious. the recovery of the damages in question. The testimony of Fe Ico for the death of Harold Jim Baesa and Marcelino Baesa are
23
increased to Thirty Thousand Pesos (P30,000.00) each. Forces of the Philippines. Portions of the first two reports are as 5 and X-6 were admitted without objection; the admission of the
follows: others, including the disputed ones, carried no such explanation.
SO ORDERED.
1. Police Department report: On the second point, although Detective Capacillo did take the
witness stand, he was not examined and he did not testify as to
Investigation disclosed that at about 4:00 P.M. March 18, 1948,
the facts mentioned in his alleged report (signed by Detective
PICART vs. SMITH while Leandro Flores was transferring gasoline from a tank truck,
Zapanta). All he said was that he was one of those who
plate No. T-5292 into the underground tank of the Caltex Gasoline
investigated "the location of the fire and, if possible, gather
Station located at the corner of Rizal Avenue and Antipolo Street,
witnesses as to the occurrence, and that he brought the report
this City, an unknown Filipino lighted a cigarette and threw the
D. RES IPSA LOQUITOR (ART. 2179) with him. There was nothing, therefore, on which he need be
burning match stick near the main valve of the said underground
cross-examined; and the contents of the report, as to which he did
G.R. No. L-12986 March 31, 1966 tank. Due to the gasoline fumes, fire suddenly blazed. Quick
not testify, did not thereby become competent evidence. And even
action of Leandro Flores in pulling off the gasoline hose
THE SPOUSES BERNABE AFRICA and SOLEDAD C. if he had testified, his testimony would still have been
connecting the truck with the underground tank prevented a
AFRICA, and the HEIRS OF DOMINGA ONG, petitioners- objectionable as far as information gathered by him from third
terrific explosion. However, the flames scattered due to the hose
appellants, persons was concerned.
from which the gasoline was spouting. It burned the truck and the
vs.
following accessorias and residences. Petitioners maintain, however, that the reports in themselves, that
CALTEX (PHIL.), INC., MATEO BOQUIREN and THE is, without further testimonial evidence on their contents, fall within
COURT OF APPEALS, respondents-appellees. 2. The Fire Department report:
the scope of section 35, Rule 123, which provides that "entries in
Ross, Selph, Carrascoso and Janda for the respondents. In connection with their allegation that the premises was (sic) official records made in the performance of his duty by a public
Bernabe Africa, etc. for the petitioners. subleased for the installation of a coca-cola and cigarette stand, officer of the Philippines, or by a person in the performance of a
the complainants furnished this Office a copy of a photograph duty specially enjoined by law, are prima facie evidence of the
MAKALINTAL., J.: facts therein stated."
taken during the fire and which is submitted herewith. it appears in
This case is before us on a petition for review of the decision this picture that there are in the premises a coca-cola cooler and a
There are three requisites for admissibility under the rule just
of the Court of Appeals, which affirmed that of the Court of rack which according to information gathered in the neighborhood
mentioned: (a) that the entry was made by a public officer, or by
First Instance of Manila dismissing petitioners' second contained cigarettes and matches, installed between the gasoline
another person specially enjoined by law to do so; (b) that it was
amended complaint against respondents. pumps and the underground tanks.
made by the public officer in the performance of his duties, or by
The action is for damages under Articles 1902 and 1903 of the The report of Captain Tinio reproduced information given by a such other person in the performance of a duty specially enjoined
old Civil Code. It appears that in the afternoon of March 18, certain Benito Morales regarding the history of the gasoline by law; and (c) that the public officer or other person had sufficient
1948 a fire broke out at the Caltex service station at the corner station and what the chief of the fire department had told him on knowledge of the facts by him stated, which must have been
of Antipolo street and Rizal Avenue, Manila. It started while the same subject. acquired by him personally or through official information (Moran,
gasoline was being hosed from a tank truck into the Comments on the Rules of Court, Vol. 3 [1957] p. 398).
The foregoing reports were ruled out as "double hearsay" by the
underground storage, right at the opening of the receiving tank Of the three requisites just stated, only the last need be
Court of Appeals and hence inadmissible. This ruling is now
where the nozzle of the hose was inserted. The fire spread to considered here. Obviously the material facts recited in the reports
assigned as error. It is contended: first, that said reports were
and burned several neighboring houses, including the as to the cause and circumstances of the fire were not within the
admitted by the trial court without objection on the part of
personal properties and effects inside them. Their owners, personal knowledge of the officers who conducted the
respondents; secondly, that with respect to the police report
among them petitioners here, sued respondents Caltex (Phil.), investigation. Was knowledge of such facts, however, acquired by
(Exhibit V-Africa) which appears signed by a Detective Zapanta
Inc. and Mateo Boquiren, the first as alleged owner of the them through official information? As to some facts the sources
allegedly "for Salvador Capacillo," the latter was presented as
station and the second as its agent in charge of operation. thereof are not even identified. Others are attributed to Leopoldo
witness but respondents waived their right to cross-examine him
Negligence on the part of both of them was attributed as the Medina, referred to as an employee at the gas station were the
although they had the opportunity to do so; and thirdly, that in any
cause of the fire. fire occurred; to Leandro Flores, driver of the tank truck from
event the said reports are admissible as an exception to the
The trial court and the Court of Appeals found that petitioners hearsay rule under section 35 of Rule 123, now Rule 130. which gasoline was being transferred at the time to the
failed to prove negligence and that respondents had exercised underground tank of the station; and to respondent Mateo
The first contention is not borne out by the record. The transcript Boquiren, who could not, according to Exhibit V-Africa, give any
due care in the premises and with respect to the supervision of of the hearing of September 17, 1953 (pp. 167-170) shows that reason as to the origin of the fire. To qualify their statements as
their employees.
the reports in question, when offered as evidence, were objected "official information" acquired by the officers who prepared the
The first question before Us refers to the admissibility of to by counsel for each of respondents on the ground that they reports, the persons who made the statements not only must have
certain reports on the fire prepared by the Manila Police and were hearsay and that they were "irrelevant, immaterial and personal knowledge of the facts stated but must have the duty to
Fire Departments and by a certain Captain Tinio of the Armed impertinent." Indeed, in the court's resolution only Exhibits J, K, K- give such statements for record.1

24
The reports in question do not constitute an exception to the defendant and the injury is such as in the ordinary course of or employees. Plaintiff applied to this Court for a Writ of Review
hearsay rule; the facts stated therein were not acquired by the things does not occur if he having such control use proper care, it which was granted, and the case is now before us for
reporting officers through official information, not having been affords reasonable evidence, in the absence of the explanation, decision.1wph1.t
given by the informants pursuant to any duty to do so. that the injury arose from defendant's want of care."
In resolving the issue of negligence, the Supreme Court of
The next question is whether or not, without proof as to the And the burden of evidence is shifted to him to establish that he Louisiana held:
cause and origin of the fire, the doctrine of res ipsa has observed due care and diligence. (San Juan Light & Transit
Plaintiff's petition contains two distinct charges of negligence
loquitur should apply so as to presume negligence on the part Co. v. Requena, 244, U.S. 89, 56 L. ed. 680.) This rule is known
one relating to the cause of the fire and the other relating to the
of appellees. Both the trial court and the appellate court by the name of res ipsa loquitur (the transaction speaks for itself),
spreading of the gasoline about the filling station.
refused to apply the doctrine in the instant case on the and is peculiarly applicable to the case at bar, where it is
grounds that "as to (its) applicability ... in the Philippines, there unquestioned that the plaintiff had every right to be on the Other than an expert to assess the damages caused plaintiff's
seems to he nothing definite," and that while the rules do not highway, and the electric wire was under the sole control of building by the fire, no witnesses were placed on the stand by the
prohibit its adoption in appropriate cases, "in the case at bar, defendant company. In the ordinary course of events, electric defendant.
however, we find no practical use for such doctrine." The wires do not part suddenly in fair weather and injure people,
question deserves more than such summary dismissal. The unless they are subjected to unusual strain and stress or there are Taking up plaintiff's charge of negligence relating to the cause of
doctrine has actually been applied in this jurisdiction, in the defects in their installation, maintenance and supervision; just as the fire, we find it established by the record that the filling station
case of Espiritu vs. Philippine Power and Development Co. barrels do not ordinarily roll out of the warehouse windows to and the tank truck were under the control of the defendant and
(CA-G.R. No. 3240-R, September 20, 1949), wherein the injure passersby, unless some one was negligent. (Byrne v. operated by its agents or employees. We further find from the
decision of the Court of Appeals was penned by Mr. Justice Boadle, 2 H & Co. 722; 159 Eng. Reprint 299, the leading case uncontradicted testimony of plaintiff's witnesses that fire started in
J.B.L. Reyes now a member of the Supreme Court. that established that rule). Consequently, in the absence of the underground tank attached to the filling station while it was
contributory negligence (which is admittedly not present), the fact being filled from the tank truck and while both the tank and the
The facts of that case are stated in the decision as follows: truck were in charge of and being operated by the agents or
that the wire snapped suffices to raise a reasonable presumption
of negligence in its installation, care and maintenance. Thereafter, employees of the defendant, extended to the hose and tank truck,
In the afternoon of May 5, 1946, while the plaintiff-appellee
as observed by Chief Baron Pollock, "if there are any facts and was communicated from the burning hose, tank truck, and
and other companions were loading grass between the
inconsistent with negligence, it is for the defendant to prove." escaping gasoline to the building owned by the plaintiff.
municipalities of Bay and Calauan, in the province of Laguna,
with clear weather and without any wind blowing, an electric Predicated on these circumstances and the further circumstance
It is true of course that decisions of the Court of Appeals do not
transmission wire, installed and maintained by the defendant of defendant's failure to explain the cause of the fire or to show its
lay down doctrines binding on the Supreme Court, but we do not
Philippine Power and Development Co., Inc. alongside the lack of knowledge of the cause, plaintiff has evoked the doctrine
consider this a reason for not applying the particular doctrine
road, suddenly parted, and one of the broken ends hit the of res ipsa loquitur. There are many cases in which the doctrine
of res ipsa loquitur in the case at bar. Gasoline is a highly
head of the plaintiff as he was about to board the truck. As a may be successfully invoked and this, we think, is one of them.
combustible material, in the storage and sale of which extreme
result, plaintiff received the full shock of 4,400 volts carried by
care must be taken. On the other hand, fire is not considered a Where the thing which caused the injury complained of is shown
the wire and was knocked unconscious to the ground. The
fortuitous event, as it arises almost invariably from some act of to be under the management of defendant or his servants and the
electric charge coursed through his body and caused
man. A case strikingly similar to the one before Us is Jones vs. accident is such as in the ordinary course of things does not
extensive and serious multiple burns from skull to legs, leaving
Shell Petroleum Corporation, et al., 171 So. 447: happen if those who have its management or control use proper
the bone exposed in some parts and causing intense pain and
wounds that were not completely healed when the case was Arthur O. Jones is the owner of a building in the city of Hammon care, it affords reasonable evidence, in absence of explanation by
tried on June 18, 1947, over one year after the mishap. which in the year 1934 was leased to the Shell Petroleum defendant, that the accident arose from want of care. (45 C.J.
Corporation for a gasoline filling station. On October 8, 1934, #768, p. 1193).
The defendant therein disclaimed liability on the ground that
during the term of the lease, while gasoline was being transferred This statement of the rule of res ipsa loquitur has been widely
the plaintiff had failed to show any specific act of negligence,
from the tank wagon, also operated by the Shell Petroleum approved and adopted by the courts of last resort. Some of the
but the appellate court overruled the defense under the
Corporation, to the underground tank of the station, a fire started cases in this jurisdiction in which the doctrine has been applied
doctrine of res ipsa loquitur. The court said:
with resulting damages to the building owned by Jones. Alleging are the following, viz.: Maus v. Broderick, 51 La. Ann. 1153, 25 So.
The first point is directed against the sufficiency of plaintiff's that the damages to his building amounted to $516.95, Jones 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522, 35 So.
evidence to place appellant on its defense. While it is the rule, sued the Shell Petroleum Corporation for the recovery of that 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc.,
as contended by the appellant, that in case of noncontractual amount. The judge of the district court, after hearing the R. Co., 115 La. 63, 38 So. 892; Bents v. Page, 115 La. 560, 39 So.
negligence, or culpa aquiliana, the burden of proof is on the testimony, concluded that plaintiff was entitled to a recovery and 599.
plaintiff to establish that the proximate cause of his injury was rendered judgment in his favor for $427.82. The Court of Appeals
the negligence of the defendant, it is also a recognized for the First Circuit reversed this judgment, on the ground the The principle enunciated in the aforequoted case applies with
principal that "where the thing which caused injury, without testimony failed to show with reasonable certainty any negligence equal force here. The gasoline station, with all its appliances,
fault of the injured person, is under the exclusive control of the on the part of the Shell Petroleum Corporation or any of its agents equipment and employees, was under the control of appellees. A

25
fire occurred therein and spread to and burned the statement of Leandro Flores before the police investigator. Flores The next issue is whether Caltex should be held liable for the
neighboring houses. The persons who knew or could have was the driver of the gasoline tank wagon who, alone and without damages caused to appellants. This issue depends on whether
known how the fire started were appellees and their assistance, was transferring the contents thereof into the Boquiren was an independent contractor, as held by the Court of
employees, but they gave no explanation thereof whatsoever. underground storage when the fire broke out. He said: "Before Appeals, or an agent of Caltex. This question, in the light of the
It is a fair and reasonable inference that the incident happened loading the underground tank there were no people, but while the facts not controverted, is one of law and hence may be passed
because of want of care. loading was going on, there were people who went to drink coca- upon by this Court. These facts are: (1) Boquiren made an
cola (at the coca-cola stand) which is about a meter from the hole admission that he was an agent of Caltex; (2) at the time of the
In the report submitted by Captain Leoncio Mariano of the
leading to the underground tank." He added that when the tank fire Caltex owned the gasoline station and all the equipment
Manila Police Department (Exh. X-1 Africa) the following
was almost filled he went to the tank truck to close the valve, and therein; (3) Caltex exercised control over Boquiren in the
appears:
while he had his back turned to the "manhole" he, heard someone management of the state; (4) the delivery truck used in delivering
Investigation of the basic complaint disclosed that the Caltex shout "fire." gasoline to the station had the name of CALTEX painted on it; and
Gasoline Station complained of occupies a lot approximately (5) the license to store gasoline at the station was in the name of
Even then the fire possibly would not have spread to the
10 m x 10 m at the southwest corner of Rizal Avenue and Caltex, which paid the license fees. (Exhibit T-Africa; Exhibit U-
neighboring houses were it not for another negligent omission on
Antipolo. The location is within a very busy business district Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
the part of defendants, namely, their failure to provide a concrete
near the Obrero Market, a railroad crossing and very thickly
wall high enough to prevent the flames from leaping over it. As it In Boquiren's amended answer to the second amended complaint,
populated neighborhood where a great number of people mill
was the concrete wall was only 2-1/2 meters high, and beyond he denied that he directed one of his drivers to remove gasoline
around t
that height it consisted merely of galvanized iron sheets, which from the truck into the tank and alleged that the "alleged driver, if
until would predictably crumple and melt when subjected to intense one there was, was not in his employ, the driver being an
heat. Defendants' negligence, therefore, was not only with respect employee of the Caltex (Phil.) Inc. and/or the owners of the
gasoline to the cause of the fire but also with respect to the spread thereof gasoline station." It is true that Boquiren later on amended his
tever be theWactjvities of these peopleor lighting a cigarette to the neighboring houses. answer, and that among the changes was one to the effect that he
cannot be excluded and this constitute a secondary hazard to was not acting as agent of Caltex. But then again, in his motion to
There is an admission on the part of Boquiren in his amended
its operation which in turn endangers the entire neighborhood dismiss appellants' second amended complaint the ground alleged
answer to the second amended complaint that "the fire was
to conflagration. was that it stated no cause of action since under the allegations
caused through the acts of a stranger who, without authority, or
thereof he was merely acting as agent of Caltex, such that he
Furthermore, aside from precautions already taken by its permission of answering defendant, passed through the gasoline
could not have incurred personal liability. A motion to dismiss on
operator the concrete walls south and west adjoining the station and negligently threw a lighted match in the premises." No
this ground is deemed to be an admission of the facts alleged in
neighborhood are only 2-1/2 meters high at most and cannot evidence on this point was adduced, but assuming the allegation
the complaint.
avoid the flames from leaping over it in case of fire. to be true certainly any unfavorable inference from the
admission may be taken against Boquiren it does not Caltex admits that it owned the gasoline station as well as the
Records show that there have been two cases of fire which extenuate his negligence. A decision of the Supreme Court of equipment therein, but claims that the business conducted at the
caused not only material damages but desperation and also Texas, upon facts analogous to those of the present case, states service station in question was owned and operated by Boquiren.
panic in the neighborhood. the rule which we find acceptable here. "It is the rule that those But Caltex did not present any contract with Boquiren that would
Although the soft drinks stand had been eliminated, this who distribute a dangerous article or agent, owe a degree of reveal the nature of their relationship at the time of the fire. There
gasoline service station is also used by its operator as a protection to the public proportionate to and commensurate with a must have been one in existence at that time. Instead, what was
garage and repair shop for his fleet of taxicabs numbering ten danger involved ... we think it is the generally accepted rule as presented was a license agreement manifestly tailored for
or more, adding another risk to the possible outbreak of fire at applied to torts that 'if the effects of the actor's negligent conduct purposes of this case, since it was entered into shortly before the
this already small but crowded gasoline station. actively and continuously operate to bring about harm to another, expiration of the one-year period it was intended to operate. This
the fact that the active and substantially simultaneous operation of so-called license agreement (Exhibit 5-Caltex) was executed on
The foregoing report, having been submitted by a police officer the effects of a third person's innocent, tortious or criminal act is November 29, 1948, but made effective as of January 1, 1948 so
in the performance of his duties on the basis of his own also a substantial factor in bringing about the harm, does not as to cover the date of the fire, namely, March 18, 1948. This
personal observation of the facts reported, may properly be protect the actor from liability.' (Restatement of the Law of Torts, retroactivity provision is quite significant, and gives rise to the
considered as an exception to the hearsay rule. These facts, vol. 2, p. 1184, #439). Stated in another way, "The intention of an conclusion that it was designed precisely to free Caltex from any
descriptive of the location and objective circumstances unforeseen and unexpected cause, is not sufficient to relieve a responsibility with respect to the fire, as shown by the clause that
surrounding the operation of the gasoline station in question, wrongdoer from consequences of negligence, if such negligence Caltex "shall not be liable for any injury to person or property while
strengthen the presumption of negligence under the doctrine directly and proximately cooperates with the independent cause in in the property herein licensed, it being understood and agreed
of res ipsa loquitur, since on their face they called for more the resulting injury." (MacAfee, et al. vs. Traver's Gas Corporation, that LICENSEE (Boquiren) is not an employee, representative or
stringent measures of caution than those which would satisfy 153 S.W. 2nd 442.) agent of LICENSOR (Caltex)."
the standard of due diligence under ordinary circumstances.
There is no more eloquent demonstration of this than the
26
But even if the license agreement were to govern, Boquiren independent contractor, and of avoiding liability for the negligence DECISION
can hardly be considered an independent contractor. Under of the employees about the station; but the company was not
PURISIMA, J.:
that agreement Boquiren would pay Caltex the purely nominal satisfied to allow such relationship to exist. The evidence shows
sum of P1.00 for the use of the premises and all the that it immediately assumed control, and proceeded to direct the At bar is a Petition for Review on Certiorari under Rule 45 of the
equipment therein. He could sell only Caltex Products. method by which the work contracted for should be performed. By Revised Rules of Court seeking a reversal of the decision of the
Maintenance of the station and its equipment was subject to reserving the right to terminate the contract at will, it retained the Court of Appeals[1] which affirmed the decision of the trial court of
the approval, in other words control, of Caltex. Boquiren could means of compelling submission to its orders. Having elected to origin finding the petitioner herein, Cebu Shipyard and
not assign or transfer his rights as licensee without the assume control and to direct the means and methods by which Engineering Works, Inc. (CSEW) negligent and liable for
consent of Caltex. The license agreement was supposed to be the work has to be performed, it must be held liable for the damages to the private respondent, William Lines, Inc., and to the
from January 1, 1948 to December 31, 1948, and thereafter negligence of those performing service under its direction. We insurer, Prudential Guarantee Assurance Company, Inc.
until terminated by Caltex upon two days prior written notice. think the evidence was sufficient to sustain the verdict of the jury.
Caltex could at any time cancel and terminate the agreement (Gulf Refining Company v. Rogers, 57 S.W. 2d, 183). The antecedent facts that matter are as follows:
in case Boquiren ceased to sell Caltex products, or did not Cebu Shipyard and Engineering Works, Inc. (CSEW) is a
Caltex further argues that the gasoline stored in the station
conduct the business with due diligence, in the judgment of domestic corporation engaged in the business of dry-docking and
belonged to Boquiren. But no cash invoices were presented to
Caltex. Termination of the contract was therefore a right repairing of marine vessels while the private respondent,
show that Boquiren had bought said gasoline from Caltex. Neither
granted only to Caltex but not to Boquiren. These provisions of Prudential Guarantee and Assurance, Inc. (Prudential), also a
was there a sales contract to prove the same.
the contract show the extent of the control of Caltex over domestic corporation is in the non-life insurance business.
Boquiren. The control was such that the latter was virtually an As found by the trial court the Africas sustained a loss of
employee of the former. P9,005.80, after deducting the amount of P2,000.00 collected by William Lines, Inc. (plaintiff below) is in the shipping business. It
them on the insurance of the house. The deduction is now was the owner of M/V Manila City, a luxury passenger-cargo
Taking into consideration the fact that the operator owed his vessel, which caught fire and sank on February 16, 1991. At the
challenged as erroneous on the ground that Article 2207 of the
position to the company and the latter could remove him or time of the unfortunate occurrence sued upon, subject vessel was
New Civil Code, which provides for the subrogation of the insurer
terminate his services at will; that the service station belonged insured with Prudential for P45,000,000.00 pesos for hull and
to the rights of the insured, was not yet in effect when the loss
to the company and bore its tradename and the operator sold machinery. The Hull Policy included an Additional Perils
took place. However, regardless of the silence of the law on this
only the products of the company; that the equipment used by (INCHMAREE) Clause covering loss of or damage to the vessel
point at that time, the amount that should be recovered be
the operator belonged to the company and were just loaned to through the negligence of, among others, ship repairmen. The
measured by the damages actually suffered, otherwise the
the operator and the company took charge of their repair and Policy provided as follows:
principle prohibiting unjust enrichment would be violated. With
maintenance; that an employee of the company supervised
respect to the claim of the heirs of Ong P7,500.00 was adjudged Subject to the conditions of this Policy, this insurance also covers
the operator and conducted periodic inspection of the
by the lower court on the basis of the assessed value of the loss of or damage to Vessel directly caused by the following:
company's gasoline and service station; that the price of the
property destroyed, namely, P1,500.00, disregarding the
products sold by the operator was fixed by the company and xxx
testimony of one of the Ong children that said property was worth
not by the operator; and that the receipts signed by the
P4,000.00. We agree that the court erred, since it is of common Negligence of Charterers and/or Repairers, provided such
operator indicated that he was a mere agent, the finding of the
knowledge that the assessment for taxation purposes is not an Charterers and/or Repairers are not an Assured hereunder.
Court of Appeals that the operator was an agent of the
accurate gauge of fair market value, and in this case should not
company and not an independent contractor should not be
prevail over positive evidence of such value. The heirs of Ong are xxx
disturbed.
therefore entitled to P10,000.00.
provided such loss or damage has not resulted from want of due
To determine the nature of a contract courts do not have or are
Wherefore, the decision appealed from is reversed and diligence by the Assured, the Owners or Managers of the Vessel,
not bound to rely upon the name or title given it by the
respondents-appellees are held liable solidarily to appellants, and of any of them. Masters, Officers, Crew or Pilots are not to be
contracting parties, should thereby a controversy as to what
ordered to pay them the aforesaid sum of P9,005.80 and considered Owners within the meaning of this Clause should they
they really had intended to enter into, but the way the
P10,000.00, respectively, with interest from the filing of the hold shares in the Vessel.[2]
contracting parties do or perform their respective obligations
complaint, and costs.
stipulated or agreed upon may be shown and inquired into, Petitioner CSEW was also insured by Prudential for third party
and should such performance conflict with the name or title liability under a Shiprepairers Legal Liability Insurance Policy. The
given the contract by the parties, the former must prevail over policy was for P10 million only, under the limited liability clause, to
the latter. (Shell Company of the Philippines, Ltd. vs. [G.R. No. 132607. May 5, 1999] wit:
Firemens' Insurance Company of Newark, New Jersey, 100 CEBU SHIPYARD AND ENGINEERING WORKS, 7. Limit of Liability
Phil. 757). INC., petitioner, vs. WILLIAM LINES, INC. and PRUDENTIAL
GUARANTEE and ASSURANCE COMPANY, The limit of liability under this insurance, in respect of any one
The written contract was apparently drawn for the purpose of
INC., respondents. accident or series of accidents, arising out of one occurrence,
creating the apparent relationship of employer and

27
shall be [P10 million], including liability for costs and expense cabins as living quarters. Other employees hired by William Lines 6. To pay unto plaintiff William Lines, Inc. the sum of Five Hundred
which are either: to do repairs and maintenance work on the vessel were also Thousand (P500,000.00) Pesos in moral damages;
present during the dry-docking.
(a) incurred with the written consent of the underwriters 7. To pay unto plaintiff, William Lines, Inc. the amount of Ten
hereon; or On February 16, 1991, after subject vessel was transferred to the Million (P10,000,000.00) Pesos in attorneys fees; and to pay the
docking quay, it caught fire and sank, resulting to its eventual total costs of this suit.
(b) awarded against the Assured.[3]
loss.
CSEW (defendant below) appealed the aforesaid decision to the
On February 5, 1991, William Lines, Inc. brought its vessel,
On February 21, 1991, William Lines, Inc. filed a complaint for Court of Appeals. During the pendency of the appeal, CSEW and
M/V Manila City, to the Cebu Shipyard in Lapulapu City for
damages against CSEW, alleging that the fire which broke out in William Lines presented a Joint Motion for Partial Dismissal with
annual dry-docking and repair.
M/V Manila City was caused by CSEWs negligence and lack of prejudice, on the basis of the amicable settlement inked between
On February 6, 1991, an arrival conference was held between care. Cebu Shipyard and William Lines only.
representatives of William Lines, Inc. and CSEW to discuss
On July 15, 1991 was filed an Amended Complaint impleading On July 31, 1996, the Court of Appeals ordered the partial
the work to be undertaken on the M/V Manila City.
Prudential as co-plaintiff, after the latter had paid William Lines, dismissal of the case insofar as CSEW and William Lines were
The contracts, denominated as Work Orders, were signed Inc. the value of the hull and machinery insurance on the M/V concerned.
thereafter, with the following stipulations: Manila City. As a result of such payment Prudential was
On September 3, 1997, the Court of Appeals affirmed the
subrogated to the claim of P45 million, representing the value of
10. The Contractor shall replace at its own work and at its own appealed decision of the trial court, ruling thus:
the said insurance it paid.
cost any work or material which can be shown to be defective
WHEREFORE, the judgment of the lower court ordering the
and which is communicated in writing within one (1) month of On June 10, 1994, the trial court a quo came out with a judgment
defendant, Cebu Shipyard and Engineering Works, Inc. to pay the
redelivery of the vessel or if the vessel was not in the against CSEW, disposing as follows:
plaintiff Prudential Guarantee and Assurance, Inc., the subrogee,
Contractors Possession, the withdrawal of the Contractors
WHEREFORE, judgment is hereby rendered in favor of the the sum of P45 Million, with interest at the legal rate until full
workmen, or at its option to pay a sum equal to the cost of
plaintiffs and against the defendant, ordering the latter: payment is made, as contained in the decision of Civil Case No.
such replacement at its own works. These conditions shall
CEB-9935 is hereby AFFIRMED.
apply to any such replacements. 1. To pay unto plaintiff Prudential Guarantee and Assurance, Inc.,
the subrogee, the amount of Forty-five Million (P45 million) Pesos, With the denial of its motion for reconsideration by the Court of
11. Save as provided in Clause 10, the Contractor shall not be
with interest at the legal rate until full payment is made; Appeals Resolution dated February 13, 1998, CSEW found its
under any liability to the Customer either in contract or for
way to this court via the present petition, contending that:
delict or quasi-delict or otherwise except for negligence and 2. To pay unto plaintiff, William Lines, Inc., the amount of Fifty-six
such liability shall itself be subject to the following overriding Million Seven Hundred Fifteen Thousand (P56,715,000.00) Pesos I. THE COURT OF APPEALS COMMITTED REVERSIBLE
limitations and exceptions, namely: representing loss of income of M/V MANILA CITY, with interest at ERROR IN HOLDING THAT CSEW HAD MANAGEMENT AND
the legal rate until full payment is made; SUPERVISORY CONTROL OF THE M/V MANILA CITY AT THE
(a) The total liability of the Contractor to the Customer (over
TIME THE FIRE BROKE OUT.
and above the liability to replace under Clause 10) or of any 3. To pay unto plaintiff, William Lines, Inc. the amount of Eleven
sub-contractor shall be limited in respect of any defect or Million (P11 million) as payment, in addition to what it received II. THE COURT OF APPEALS COMMITTED REVERSIBLE
event (and a series of accidents arising out of the same defect from the insurance company to fully cover the injury or loss, in ERROR IN APPLYING THE DOCTRINE OF RES IPSA
or event shall constitute one defect or event) to the sum of order to replace the M/V MANILA CITY, with interest at the legal LOQUITUR AGAINST CSEW.
Pesos Philippine Currency One Million only. rate until full payment is made;
III. THE COURT OF APPEALS RULING HOLDING CSEW
(b) In no circumstance whatsoever shall the liability of the 4. To pay unto plaintiff, William Lines, Inc. the sum of Nine NEGLIGENT AND THEREBY LIABLE FOR THE LOSS OF THE
Contractor or any Sub-Contractor include any sum in respect Hundred Twenty-Seven Thousand Thirty-nine (P927,039.00) M/V MANILA CITY IS BASED ON FINDINGS OF FACT NOT
of loss of profit or loss of use of the vessel or damages Pesos for the loss of fuel and lub (sic) oil on board the vessel SUPPORTED BY EVIDENCE.
consequential on such loss of use. when she was completely gutted by fire at defendant, Cebu
IV. THE COURT OF APPEALS COMMITTED A REVERSIBLE
Shipyards quay, with interest at the legal rate until full payment is
xxx ERROR IN RULING CSEWS EXPERT EVIDENCE AS
made;
INADMISSIBLE OR OF NO PROBATIVE VALUE.
20. The insurance on the vessel should be maintained by the
5. To pay unto plaintiff, William Lines, Inc. the sum of Three Million
customer and/or owner of the vessel during the period the V. THE COURT OF APPEALS COMMITTED A REVERSIBLE
Fifty-four Thousand Six Hundred Seventy-seven Pesos and
contract is in effect.[4] ERROR IN RULING THAT PRUDENTIAL HAS THE RIGHT OF
Ninety-five centavos (P3,054,677.95) as payment for the
SUBROGATION AGAINST ITS OWN INSURED.
While the M/V Manila City was undergoing dry-docking and spare parts and materials used in the M/V MANILA CITY during
repairs within the premises of CSEW, the master, officers and dry-docking with interest at the legal rate until full payment is VI. ASSUMING ARGUENDO THAT PRUDENTIAL HAS THE
crew of M/V Manila City stayed in the vessel, using their made; RIGHT OF SUBROGATION AND THAT CSEW WAS NEGLIGENT

28
IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER When M/V Manila City capsized, steel and angle bars were Time and again, this Court had occasion to reiterate the well-
THE SHIPREPAIR CONTRACTS, THE COURT OF APPEALS noticed to have been newly welded along the port side of the hull established rule that factual findings by the Court of Appeals are
COMMITTED A REVERSIBLE ERROR IN HOLDING THAT of the vessel, at the level of the crew cabins. William Lines did not conclusive on the parties and are not reviewable by this Court.
THE CONTRACTUAL PROVISIONS LIMITING CSEWS previously apply for a permit to do hotworks on the said portion of They are entitled to great weight and respect, even finality,
LIABILITY FOR NEGLIGENCE TO A MAXIMUM OF P1 the ship as it should have done pursuant to its work order with especially when, as in this case, the Court of Appeals affirmed the
MILLION IS NOT VALID, CONTRARY TO THE APPLICABLE CSEW.[5] factual findings arrived at by the trial court.[7] When supported by
RULINGS OF THIS HONORABLE COURT. sufficient evidence, findings of fact by the Court of Appeals
Respondent Prudential, on the other hand, theorized that the fire
affirming those of the trial court, are not to be disturbed on appeal.
Petitioners version of the events that led to the fire runs as broke out in the following manner :
The rationale behind this doctrine is that review of the findings of
follows:
At around eleven o clock in the morning of February 16, 1991, the fact of theCourt of Appeals is not a function that the Supreme
On February 13, 1991, the CSEW completed the drydocking Chief Mate of M/V Manila City was inspecting the various works Court normally undertakes.[8]
of M/V Manila City at its grave dock. It was then transferred to being done by CSEW on the vessel, when he saw that some
Here, the Court of Appeals and the Cebu Regional Trial Court of
the docking quay of CSEW where the remaining repair to be workers of CSEW were cropping out steel plates on Tank Top No.
origin are agreed that the fire which caused the total loss of
done was the replating of the top of Water Ballast Tank No. 12 12 using acetylene, oxygen and welding torch. He also observed
subject M/V Manila City was due to the negligence of the
(Tank Top No. 12) which was subcontracted by CSEW to JNB that the rubber insulation wire coming out of the air-conditioning
employees and workers of CSEW. Both courts found that the M/V
General Services. Tank Top No. 12 was at the rear section of unit was already burning, prompting him to scold the workers.
Manila City was under the custody and control of petitioner
the vessel, on level with the flooring of the crew cabins located
At 2:45 in the afternoon of the same day, witnesses saw CSEW, when the ill-fated vessel caught fire. The decisions of both
on the vessels second deck.
smoke coming from Tank No. 12. The vessels reeferman reported the lower court and the Court of Appeals set forth clearly the
At around seven o clock in the morning of February 16, 1991, such occurence to the Chief Mate who immediately assembled evidence sustaining their finding of actionable negligence on the
the JNB workers trimmed and cleaned the tank top framing the crew members to put out the fire. When it was too hot for them part of CSEW. This factual finding is accorded great weight and is
which involved minor hotworks (welding/cutting works). The to stay on board and seeing that the fire cannot be controlled, the conclusive on the parties. The court discerns no basis for
said work was completed at about 10:00 a. m. The JNB vessels crew were forced to withdraw from CSEWs docking quay. disturbing such finding firmly anchored on enough evidence. As
workers then proceeded to rig the steel plates, after which held in the case of Roblett Industrial Construction Corporation vs.
In the morning of February 17, 1991, M/V Manila City sank. As the Court of Appeals, in the absence of any showing that the trial court
they had their lunch break. The rigging was resumed at 1:00
vessel was insured with Prudential Guarantee, William Lines filed failed to appreciate facts and circumstances of weight and
p.m.
a claim for constructive total loss, and after a thorough substance that would have altered its conclusion, no compelling
While in the process of rigging the second steel plate, the JNB investigation of the surrounding circumstances of the tragedy, reason exists for the Court to impinge upon matters more
workers noticed smoke coming from the passageway along Prudential Guarantee found the said insurance claim to be appropriately within its province.[9]
the crew cabins. When one of the workers, Mr. Casas, meritorious and issued a check in favor of William Lines in the
proceeded to the passageway to ascertain the origin of the amount of P45 million pesos representing the total value of M/V Furthermore, in petitions for review on certiorari, only questions of
smoke, he noticed that smoke was gathering on the ceiling of Manila Citys hull and machinery insurance.[6] law may be put into issue. Questions of fact cannot be
the passageway but did not see any fire as the crew cabins on entertained. The finding of negligence by the Court of Appeals is a
The petition is unmeritorious. question which this Court cannot look into as it would entail going
either side of the passageway were locked. He immediately
sought out the proprietor of JNB, Mr. Buenavista, and the Petitioner CSEW faults the Court of Appeals for adjudging it into factual matters on which the finding of negligence was based.
Safety Officer of CSEW, Mr. Aves, who sounded the fire negligent and liable for damages to the respondents, William Such an approach cannot be allowed by this Court in the absence
alarm. CSEWs fire brigade immediately responded as well as Lines, Inc., and Prudential for the loss of M/V Manila City. It is of clear showing that the case falls under any of the
the other fire fighting units in Metro Cebu. However, there petitioners submission that the finding of negligence by the Court exceptions[10] to the well-established principle.
were no WLI representative, officer or crew to guide the of Appeals is not supported by the evidence on record, and The finding by the trial court and the Court of Appeals that M/V
firemen inside the vessel. contrary to what the Court of Appeals found, petitioner did not Manila City caught fire and sank by reason of the negligence of
have management and control over M/V Manila City. Although it the workers of CSEW, when the said vessel was under the
Despite the combined efforts of the firemen of the Lapulapu
was brought to the premises of CSEW for annual repair, William exclusive custody and control of CSEW is accordingly upheld.
City Fire Department, Mandaue Fire Department, Cordova
Lines, Inc. retained control over the vessel as the ship captain Under the circumstances of the case, the doctrine of res ipsa
Fire Department, Emergency Rescue Unit Foundation, and fire
remained in command and the ships crew were still present. loquitur applies. For the doctrine of res ipsa loquitur to apply to a
brigade of CSEW, the fire was not controlled until 2:00 a.m. of
While it imposed certain rules and regulations on William Lines, it given situation, the following conditions must concur: (1) the
the following day, February 17, 1991.
was in the exercise of due diligence and not an indication of accident was of a kind which does not ordinarily occur unless
On the early morning of February 17, 1991, gusty winds CSEWs exclusive control over subject vessel. Thus, CSEW someone is negligent; and (2) that the instrumentality or agency
rekindled the flames on the vessel and fire again broke maintains that it did not have exclusive control over the M/V which caused the injury was under the exclusive control of the
out. Then the huge amounts of water pumped into the vessel, Manila City and the trial court and the Court of Appeals erred in person charged with negligence.
coupled with the strong current, caused the vessel to tilt until it applying the doctrine of res ipsa loquitur.
capsized and sank
29
The facts and evidence on record reveal the concurrence of The word may signifies that the use of opinion of an expert Petitioner theorizes further that there can be no right of
said conditions in the case under scrutiny. First, the fire that witness as evidence is a prerogative of the courts. It is never subrogation as it is deemed a co-assured under the subject
occurred and consumed M/V Manila City would not have mandatory for judges to give substantial weight to expert insurance policy. To buttress its stance that it is a co-assured,
happened in the ordinary course of things if reasonable care testimonies. If from the facts and evidence on record, a petitioner placed reliance on Clause 20 of of the Work Order
and diligence had been exercised. In other words, some conclusion is readily ascertainable, there is no need for the judge which states:
negligence must have occurred. Second, the agency charged to resort to expert opinion evidence. In the case under
20. The insurance on the vessel should be maintained by the
with negligence, as found by the trial court and the Court of consideration, the testimonies of the fire experts were not the only
customer and/or owner of the vessel during the period the contract
Appeals and as shown by the records, is the herein petitioner, available evidence on the probable cause and origin of the fire.
is in effect.[13]
Cebu Shipyard and Engineering Works, Inc., which had There were witnesses who were actually on board the vessel
control over subject vessel when it was docked for annual when the fire occurred. Between the testimonies of the fire According to petitioner, under the aforecited clause, William Lines,
repairs. So also, as found by the regional trial court, other experts who merely based their findings and opinions on Inc., agreed to assume the risk of loss of the vessel while under
responsible causes, including the conduct of the plaintiff, and interviews and the testimonies of those present during the fire, the drydock or repair and to such extent, it is benefited and effectively
third persons, are sufficiently eliminated by the evidence.[11] latter are of more probative value. Verily, the trial court and the constituted as a co-assured under the policy.
Court of Appeals did not err in giving more weight to said
What is more, in the present case the trial court found direct This theory of petitioner is devoid of sustainable merit. Clause 20
testimonies.
evidence to prove that the workers and/or employees of of the Work Order in question is clear in the sense that it requires
CSEW were remiss in their duty of exercising due diligence in On the issue of subrogation, petitioner contends that Prudential is William Lines to maintain insurance on the vessel during the
the care of subject vessel. The direct evidence substantiates not entitled to be subrogated to the rights of William Lines, Inc., period of dry-docking or repair. Concededly, such a stipulation
the conclusion that CSEW was really negligent.Thus, even theorizing that (1) the fire which gutted M/V Manila City was an works to the benefit of CSEW as the shiprepairer. However, the
without applying the doctrine of res ipsa loquitur, in light of the excluded risk and (2) it is a co-assured under the Marine Hull fact that CSEW benefits from the said stipulation does not
direct evidence on record, the ineluctable conclusion is that Insurance Policy. automatically make it as a co-assured of William Lines. The
the petitioner, Cebu Shipyard and Engineering Works, Inc., intention of the parties to make each other a co-assured under an
It is petitioners submission that the loss of M/V Manila City or
was negligent and consequently liable for damages to the insurance policy is to be gleaned principally from the insurance
damage thereto is expressly excluded from the coverage of the
respondent, William Lines, Inc. contract or policy itself and not from any other contract or
insurance because the same resulted from want of due diligence
agreement because the insurance policy denominates the
Neither is there tenability in the contention of petitioner that the by the Assured, Owners or Managers which is not included in the
assured and the beneficiaries of the insurance. The hull and
Court of Appeals erroneously ruled on the inadmissibility of the risks insured against. Again, this theory of petitioner is bereft of
machinery insurance procured by William Lines, Inc. from
expert testimonies it (petitioner) introduced on the probable any factual or legal basis. It proceeds from a wrong premise that
Prudential named only William Lines, Inc. as the assured. There
cause and origin of the fire. Petitioner maintains that the Court the fire which gutted subject vessel was caused by the negligence
was no manifestation of any intention of William Lines, Inc. to
of Appeals erred in disregarding the testimonies of the fire of the employees of William Lines, Inc. To repeat, the issue of who
constitute CSEW as a co-assured under subject policy. It is
experts, Messrs. David Grey and Gregory Michael Southeard, between the parties was negligent has already been resolved
axiomatic that when the terms of a contract are clear its
who testified on the probable origin of the fire in M/V Manila against Cebu Shipyard and Engineering Works, Inc. Upon proof of
stipulations control.[14] Thus, when the insurance policy involved
City. Petitioner avers that since the said fire experts were one payment by Prudential to William Lines, Inc., the former was
named only William Lines, Inc. as the assured thereunder, the
in their opinion that the fire did not originate in the area of Tank subrogated to the right of the latter to indemnification from
claim of CSEW that it is a co-assured is unfounded.
Top No. 12 where the JNB workers were doing hotworks but CSEW. As aptly ruled by the Court of Appeals, the law on the
on the crew accommodation cabins on the portside No. 2 matter is succinct and clear, to wit: Then too, in the Additional Perils Clause of the same Marine
deck, the trial court and the Court of Appeals should have Insurance Policy, it is provided that:
Art. 2207. If the plaintiffs property has been insured, and he has
given weight to such finding based on the testimonies of fire
received indemnity from the insurance company for the injury or Subject to the conditions of this Policy, this insurance also covers
experts; petitioner argues.
loss arising out of the wrong or breach of contract complained of, loss of or damage to vessel directly caused by the following:
But courts are not bound by the testimonies of expert the insurance company shall be subrogated to the rights of the
witnesses. Although they may have probative value, reception insured against the wrongdoer or the person who has violated the xxx
in evidence of expert testimonies is within the discretion of the contract. If the amount paid by the insurance company does not Negligence of Charterers and/or Repairers, provided such
court. Section 49, Rule 130 of the Revised Rules of Court, fully cover the injury or loss, the aggrieved party shall be entitled Charterers and/or Repairers are not an Assured hereunder.
provides: to recover the deficiency from the person causing the loss or [15]
(emphasis supplied)
injury.[12]
SEC. 49. Opinion of expert witness. - The opinion of a witness As correctly pointed out by respondent Prudential, if CSEW were
on a matter requiring special knowledge, skill, experience or Thus, when Prudential, after due verification of the merit and deemed a co-assured under the policy, it would nullify any claim of
training which he is shown to possess, may be received in validity of the insurance claim of William Lines, Inc., paid the latter William Lines, Inc. from Prudential for any loss or damage caused
evidence. the total amount covered by its insurance policy, it was by the negligence of CSEW. Certainly, no shipowner would agree
subrogated to the right of the latter to recover the insured loss to make a shiprepairer a co-assured under such insurance policy;
from the liable party, CSEW.
30
otherwise, any claim for loss or damage under the policy WHEREFORE, for want of merit, the petition is hereby DENIED not defamatory. The telegram sent through its facilities was
would be invalidated. Such result could not have been and the decision, dated September 3, 1997, and Resolution, received in its station at Legaspi City. Nobody other than the
intended by William Lines, Inc. dated February 13, 1998, of the Court of Appeals AFFIRMED. No operator manned the teletype machine which automatically
pronouncement as to costs. receives telegrams being transmitted. The said telegram was
Finally, CSEW argues that even assuming that it was
detached from the machine and placed inside a sealed envelope
negligent and therefore liable to William Lines, Inc., by SO ORDERED.
and delivered to plaintiff, obviously as is. The additional words in
stipulation in the Contract or Work Order its liability is limited to
Tagalog were never noticed and were included in the telegram
One Million (P1,000,000.00) Pesos only, and Prudential a
when delivered.
mere subrogee of William Lines, Inc., should only be entitled G.R. No. L-44748 August 29, 1986
to collect the sum stipulated in the said contract. The trial court in finding for the plaintiff ruled as follows:
RADIO COMMUNICATIONS OF THE PHILS., INC.
Although in this jurisdiction, contracts of adhesion have been (RCPI). petitioner, There is no question that the additional words in Tagalog are
consistently upheld as valid per se; as binding as an ordinary vs. libelous. They clearly impute a vice or defect of the plaintiff.
contract, the Court recognizes instances when reliance on COURT OF APPEALS and LORETO DIONELA, respondents. Whether or not they were intended for the plaintiff, the effect on
such contracts cannot be favored especially where the facts the plaintiff is the same. Any person reading the additional words
and circumstances warrant that subject stipulations be O. Pythogoras Oliver for respondents. in Tagalog will naturally think that they refer to the addressee, the
disregarded.[16] Thus, in ruling on the validity and applicability plaintiff. There is no indication from the face of the telegram that
of the stipulation limiting the liability of CSEW for negligence to the additional words in Tagalog were sent as a private joke
One Million (P1,000,000.00) Pesos only, the facts and PARAS, J.: between the operators of the defendant.
circumstances vis-a-vis the nature of the provision sought to
Before Us, is a Petition for Review by certiorari of the decision of The defendant is sued directly not as an employer. The business
be enforced should be considered, bearing in mind the
the Court of Appeals, modifying the decision of the trial court in a of the defendant is to transmit telegrams. It will open the door to
principles of equity and fair play.
civil case for recovery of damages against petitioner corporation frauds and allow the defendant to act with impunity if it can escape
It is worthy to note that M/V Manila City was insured with by reducing the award to private respondent Loreto Dionela of liability by the simple expedient of showing that its employees
Prudential for Forty Five Million (P45,000,000.00) Pesos. To moral damages from P40,000 to Pl5,000, and attorney's fees from acted beyond the scope of their assigned tasks.
determine the validity and sustainability of the claim of William P3,000 to P2,000.
The liability of the defendant is predicated not only on Article 33 of
Lines, Inc., for a total loss, Prudential conducted its own
The basis of the complaint against the defendant corporation is a the Civil Code of the Philippines but on the following articles of
inquiry. Upon thorough investigation by its hull surveyor, M/V
telegram sent through its Manila Office to the offended party, said Code:
Manila City was found to be beyond economical salvage and
Loreto Dionela, reading as follows:
repair.[17] The evaluation of the average adjuster also reported ART. 19.- Every person must, in the exercise of his rights and in
a constructive total loss.[18] The said claim of William Lines, 176 AS JR 1215PM 9 PAID MANDALUYONG JUL 22-66 the performance of his duties, act with justice, give everyone his
Inc., was then found to be valid and compensable such that LORETO DIONELA CABANGAN LEGASPI CITY due, and observe honesty and good faith.
Prudential paid the latter the total value of its insurance claim.
Furthermore, it was ascertained that the replacement cost of WIRE ARRIVAL OF CHECK FER ART. 20.-Every person who, contrary to law, wilfully or negligently
the vessel (the price of a vessel similar to M/V Manila City), causes damage to another, shall indemnify the latter for the same.
LORETO DIONELA-CABANGAN-WIRE ARRIVAL OF CHECK-
amounts to Fifty-five Million (P55,000,000.00) Pesos.[19] PER There is sufficient publication of the libelous Tagalog words. The
Considering the aforestated circumstances, let alone the fact office file of the defendant containing copies of telegrams received
115 PM
that negligence on the part of petitioner has been sufficiently are open and held together only by a metal fastener. Moreover,
proven, it would indeed be unfair and inequitable to limit the SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA- they are open to view and inspection by third parties.
liability of petitioner to One Million Pesos only. As aptly held by KANG PADALA DITO KAHIT BULBUL MO
It follows that the plaintiff is entitled to damages and attorney's
the trial court, it is rather unconscionable if not overstrained. (p. 19, Annex "A") fees. The plaintiff is a businessman. The libelous Tagalog words
To allow CSEW to limit its liability to One Million Pesos must have affected his business and social standing in the
notwithstanding the fact that the total loss suffered by the Plaintiff-respondent Loreto Dionela alleges that the defamatory community. The Court fixes the amount of P40,000.00 as the
assured and paid for by Prudential amounted to Forty Five words on the telegram sent to him not only wounded his feelings reasonable amount of moral damages and the amount of
Million (P45,000,000.00) Pesos would sanction the exercise of but also caused him undue embarrassment and affected P3,000.00 as attorney's fee which the defendant should pay the
a degree of diligence short of what is ordinarily required adversely his business as well because other people have come plaintiff. (pp. 15-16, Record on Appeal)
because, then, it would not be difficult for petitioner to escape to know of said defamatory words. Defendant corporation as a
liability by the simple expedient of paying an amount very defense, alleges that the additional words in Tagalog was a The respondent appellate court in its assailed decision confirming
much lower than the actual damage or loss suffered by private joke between the sending and receiving operators and that the aforegoing findings of the lower court stated:
William Lines, Inc. they were not addressed to or intended for plaintiff and therefore
did not form part of the telegram and that the Tagalog words are
31
The proximate cause, therefore, resulting in injury to appellee, The Honorable Court of Appeals erred in awarding Atty's. fees. (p. The present case comes by direct appeal from a decision of the
was the failure of the appellant to take the necessary or 4, Record) Court of First Instance of Manila (Case No. 44572) adjudging the
precautionary steps to avoid the occurrence of the humiliating defendant-appellant, Luzon Stevedoring Corporation, liable in
Petitioner's contentions do not merit our consideration. The action
incident now complained of. The company had not imposed damages to the plaintiff-appellee Republic of the Philippines.
for damages was filed in the lower court directly against
any safeguard against such eventualities and this void in its
respondent corporation not as an employer subsidiarily liable In the early afternoon of August 17, 1960, barge L-1892, owned by
operating procedure does not speak well of its concern for
under the provisions of Article 1161 of the New Civil Code in the Luzon Stevedoring Corporation was being towed down the
their clientele's interests. Negligence here is very patent. This
relation to Art. 103 of the Revised Penal Code. The cause of Pasig river by tugboats "Bangus" and "Barbero"1 also belonging to
negligence is imputable to appellant and not to its employees.
action of the private respondent is based on Arts. 19 and 20 of the the same corporation, when the barge rammed against one of the
The claim that there was no publication of the libelous words New Civil Code (supra). As well as on respondent's breach of wooden piles of the Nagtahan bailey bridge, smashing the posts
in Tagalog is also without merit. The fact that a carbon copy of contract thru the negligence of its own employees. 1 and causing the bridge to list. The river, at the time, was swollen
the telegram was filed among other telegrams and left to hang and the current swift, on account of the heavy downpour of Manila
Petitioner is a domestic corporation engaged in the business of
for the public to see, open for inspection by a third party is and the surrounding provinces on August 15 and 16, 1960.
receiving and transmitting messages. Everytime a person
sufficient publication. It would have been otherwise perhaps
transmits a message through the facilities of the petitioner, a Sued by the Republic of the Philippines for actual and
had the telegram been placed and kept in a secured place
contract is entered into. Upon receipt of the rate or fee fixed, the consequential damage caused by its employees, amounting to
where no one may have had a chance to read it without
petitioner undertakes to transmit the message accurately. There is P200,000 (Civil Case No. 44562, CFI of Manila), defendant Luzon
appellee's permission.
no question that in the case at bar, libelous matters were included Stevedoring Corporation disclaimed liability therefor, on the
The additional Tagalog words at the bottom of the telegram in the message transmitted, without the consent or knowledge of grounds that it had exercised due diligence in the selection and
are, as correctly found by the lower court, libelous per se, and the sender. There is a clear case of breach of contract by the supervision of its employees; that the damages to the bridge were
from which malice may be presumed in the absence of any petitioner in adding extraneous and libelous matters in the caused by force majeure; that plaintiff has no capacity to sue; and
showing of good intention and justifiable motive on the part of message sent to the private respondent. As a corporation, the that the Nagtahan bailey bridge is an obstruction to navigation.
the appellant. The law implies damages in this instance petitioner can act only through its employees. Hence the acts of
After due trial, the court rendered judgment on June 11, 1963,
(Quemel vs. Court of Appeals, L-22794, January 16, 1968; 22 its employees in receiving and transmitting messages are the acts
holding the defendant liable for the damage caused by its
SCRA 44). The award of P40,000.00 as moral damages is of the petitioner. To hold that the petitioner is not liable directly for
employees and ordering it to pay to plaintiff the actual cost of the
hereby reduced to P15,000.00 and for attorney's fees the the acts of its employees in the pursuit of petitioner's business is
repair of the Nagtahan bailey bridge which amounted to
amount of P2,000.00 is awarded. (pp. 22-23, record) to deprive the general public availing of the services of the
P192,561.72, with legal interest thereon from the date of the filing
petitioner of an effective and adequate remedy. In most cases,
After a motion for reconsideration was denied by the appellate of the complaint.
negligence must be proved in order that plaintiff may recover.
court, petitioner came to Us with the following:
However, since negligence may be hard to substantiate in some Defendant appealed directly to this Court assigning the following
ASSIGNMENT OF ERRORS cases, we may apply the doctrine of RES IPSA LOQUITUR (the errors allegedly committed by the court a quo, to wit:
thing speaks for itself), by considering the presence of facts or
I circumstances surrounding the injury. I The lower court erred in not holding that the herein defendant-
appellant had exercised the diligence required of it in the selection
The Honorable Court of Appeals erred in holding that WHEREFORE, premises considered, the judgment of the and supervision of its personnel to prevent damage or injury to
Petitioner-employer should answer directly and primarily for appellate court is hereby AFFIRMED. others.1awphl.nt
the civil liability arising from the criminal act of its employee.
SO ORDERED. II The lower court erred in not holding that the ramming of the
II
Nagtahan bailey bridge by barge L-1892 was caused by force
The Honorable Court of Appeals erred in holding that there majeure.
was sufficient publication of the alleged libelous telegram in E. ASSUMPTION OF RISK (ART. 2178) III The lower court erred in not holding that the Nagtahan bailey
question, as contemplated by law on libel.
G.R. No. L-21749 September 29, 1967 bridge is an obstruction, if not a menace, to navigation in the
III Pasig river.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,
The Honorable Court of Appeals erred in holding that the vs. IV The lower court erred in not blaming the damage sustained
liability of petitioner-company-employer is predicated on LUZON STEVEDORING CORPORATION, defendant-appellant. by the Nagtahan bailey bridge to the improper placement of the
Articles 19 and 20 of the Civil Code, Articles on Human dolphins.
Relations. Office of the Solicitor General for plaintiff-appellee.
H. San Luis and L.V. Simbulan for defendant-appellant. V The lower court erred in granting plaintiff's motion to adduce
IV further evidence in chief after it has rested its case.
REYES, J.B.L., J.:

32
VI The lower court erred in finding the plaintiff entitled to the The appellant strongly stresses the precautions taken by it on the We find no merit in the contention. Whether or not further
amount of P192,561.72 for damages which is clearly day in question: that it assigned two of its most powerful tugboats evidence will be allowed after a party offering the evidence has
exorbitant and without any factual basis. to tow down river its barge L-1892; that it assigned to the task the rested his case, lies within the sound discretion of the trial Judge,
more competent and experienced among its patrons, had the and this discretion will not be reviewed except in clear case of
However, it must be recalled that the established rule in this
towlines, engines and equipment double-checked and inspected; abuse.3
jurisdiction is that when a party appeals directly to the
that it instructed its patrons to take extra precautions; and
Supreme Court, and submits his case there for decision, he is In the present case, no abuse of that discretion is shown. What
concludes that it had done all it was called to do, and that the
deemed to have waived the right to dispute any finding of fact was allowed to be introduced, after plaintiff had rested its
accident, therefore, should be held due to force majeure or
made by the trial Court. The only questions that may be raised evidence in chief, were vouchers and papers to support an item of
fortuitous event.
are those of law (Savellano vs. Diaz, L-17441, July 31, 1963; P1,558.00 allegedly spent for the reinforcement of the panel of the
Aballe vs. Santiago, L-16307, April 30, 1963; G.S.I.S. vs. These very precautions, however, completely destroy the bailey bridge, and which item already appeared in Exhibit GG.
Cloribel, L-22236, June 22, 1965). A converso, a party who appellant's defense. For caso fortuito or force majeure(which in Appellant, in fact, has no reason to charge the trial court of being
resorts to the Court of Appeals, and submits his case for law are identical in so far as they exempt an obligor from unfair, because it was also able to secure, upon written motion, a
decision there, is barred from contending later that his claim liability)2 by definition, are extraordinary events not foreseeable or similar order dated November 24, 1962, allowing reception of
was beyond the jurisdiction of the aforesaid Court. The reason avoidable, "events that could not be foreseen, or which, though additional evidence for the said defendant-appellant.4
is that a contrary rule would encourage the undesirable foreseen, were inevitable" (Art. 1174, Civ. Code of the
WHEREFORE, finding no error in the decision of the lower Court
practice of appellants' submitting their cases for decision to Philippines). It is, therefore, not enough that the event should not
appealed from, the same is hereby affirmed. Costs against the
either court in expectation of favorable judgment, but with have been foreseen or anticipated, as is commonly believed, but it
defendant-appellant.
intent of attacking its jurisdiction should the decision be must be one impossible to foresee or to avoid. The
unfavorable (Tyson Tan, et al. vs. Filipinas Compaia de mere difficulty to foresee the happening is not impossibility to
Seguros) et al., L-10096, Res. on Motion to Reconsider, March foresee the same: "un hecho no constituye caso fortuito por la
23, 1966). Consequently, we are limited in this appeal to the sola circunstancia de que su existencia haga mas dificil o mas G.R. No. L-25906 May 28, 1970
issues of law raised in the appellant's brief. onerosa la accion diligente del presento ofensor" (Peirano PEDRO D. DIOQUINO, plaintiff-appellee, vs. FEDERICO
Facio, Responsibilidad Extra-contractual, p. 465; Mazeaud Trait LAUREANO, AIDA DE LAUREANO and JUANITO
Taking the aforesaid rules into account, it can be seen that the
de la Responsibilite Civil, Vol. 2, sec. 1569). The very measures LAUREANO, defendants-appellants.
only reviewable issues in this appeal are reduced to two:
adopted by appellant prove that the possibility of danger was not
1) Whether or not the collision of appellant's barge with the only foreseeable, but actually foreseen, and was not caso fortuito. FERNANDO, J.:
supports or piers of the Nagtahan bridge was in law caused by The present lawsuit had its origin in a relationship, if it could be
Otherwise stated, the appellant, Luzon Stevedoring Corporation,
fortuitous event or force majeure, and called such, the use of a car owned by plaintiff Pedro D. Dioquino
knowing and appreciating the perils posed by the swollen stream
2) Whether or not it was error for the Court to have permitted and its swift current, voluntarily entered into a situation involving by defendant Federico Laureano, clearly of a character casual and
the plaintiff-appellee to introduce additional evidence of obvious danger; it therefore assured the risk, and can not shed temporary but unfortunately married by an occurrence resulting in
damages after said party had rested its case. responsibility merely because the precautions it adopted turned its windshield being damaged. A stone thrown by a boy who, with
out to be insufficient. Hence, the lower Court committed no error his other companions, was thus engaged in what undoubtedly for
As to the first question, considering that the Nagtahan bridge in holding it negligent in not suspending operations and in holding them must have been mistakenly thought to be a none too harmful
was an immovable and stationary object and uncontrovertedly it liable for the damages caused. prank did not miss its mark. Plaintiff would hold defendant
provided with adequate openings for the passage of water Federico Laureano accountable for the loss thus sustained,
craft, including barges like of appellant's, it is undeniable that It avails the appellant naught to argue that the dolphins, like the including in the action filed the wife, Aida de Laureano, and the
the unusual event that the barge, exclusively controlled by bridge, were improperly located. Even if true, these circumstances father, Juanito Laureano. Plaintiff prevail in the lower court, the
appellant, rammed the bridge supports raises a presumption would merely emphasize the need of even higher degree of care judgment however going only against the principal defendant, his
of negligence on the part of appellant or its employees on appellant's part in the situation involved in the present case. spouse and his father being absolved of any responsibility.
manning the barge or the tugs that towed it. For in the ordinary The appellant, whose barges and tugs travel up and down the Nonetheless, all three of them appealed directly to us, raising two
course of events, such a thing does not happen if proper care river everyday, could not safely ignore the danger posed by these questions of law, the first being the failure of the lower court to
is used. In Anglo American Jurisprudence, the inference arises allegedly improper constructions that had been erected, and in dismiss such a suit as no liability could have been incurred as a
by what is known as the "res ipsa loquitur" rule (Scott vs. place, for years. result of a fortuitous event and the other being its failure to award
London Docks Co., 2 H & C 596; San Juan Light & Transit Co. damages against plaintiff for the unwarranted inclusion of the wife
On the second point: appellant charges the lower court with
vs. Requena, 224 U.S. 89, 56 L. Ed., 680; Whitwell vs. Wolf, and the father in this litigation. We agree that the lower court
having abused its discretion in the admission of plaintiff's
127 Minn. 529, 149 N.W. 299; Bryne vs. Great Atlantic & ought to have dismissed the suit, but it does not follow that
additional evidence after the latter had rested its case. There is an
Pacific Tea Co., 269 Mass. 130; 168 N.E. 540; Gribsby vs. thereby damages for the inclusion of the above two other parties
insinuation that the delay was deliberate to enable the
Smith, 146 S.W. 2d 719). in the complaint should have been awarded appellants.
manipulation of evidence to prejudice defendant-appellant.

33
The facts as found by the lower court follow: "Attorney Pedro for those events which could not be, foreseen, or which, though more competent and experienced among its patrons, had the
Dioquino, a practicing lawyer of Masbate, is the owner of a foreseen were inevitable." Even under the old Civil Code then, as towlines, engines and equipment double-checked and inspected;
car. On March 31, 1964, he went to the office of the MVO, stressed by us in the first decision dating back to 1908, in an that it instructed its patrons to take extra-precautions; and
Masbate, to register the same. He met the defendant Federico opinion by Justice Mapa, the rule was well-settled that in the concludes that it had done all it was called to do, and that the
Laureano, a patrol officer of said MVO office, who was waiting absence of a legal provision or an express covenant, "no one accident, therefore, should be held due to force majeure or
for a jeepney to take him to the office of the Provincial should be held to account for fortuitous cases."3 Its basis, as fortuitous event." Its next paragraph explained clearly why the
Commander, PC, Masbate. Attorney Dioquino requested the Justice Moreland stressed, is the Roman law principle major defense of caso fortuito or force majeure does not lie. Thus:
defendant Federico Laureano to introduce him to one of the casus est, cui humana infirmitas resistere non potest.4 Authorities "These very precautions, however, completely destroy the
clerks in the MVO Office, who could facilitate the registration of repute are in agreement, more specifically concerning an appellant's defense. For caso fortuito or force majeure (which in
of his car and the request was graciously attended to. obligation arising from contract "that some extraordinary law are identical in so far as they exempt an obligor from liability)
Defendant Laureano rode on the car of Atty. Dioquino on his circumstance independent of the will of the obligor, or of his by definition, are extraordinary events not foreseeable or
way to the P.C. Barracks at Masbate. While about to reach employees, is an essential element of a caso fortuito."5 If it could avoidable, 'events that could not be foreseen, or which, though
their destination, the car driven by plaintiff's driver and with be shown that such indeed was the case, liability is ruled out. foreseen, were inevitable' (Art. 1174, Civil Code of the
defendant Federico Laureano as the sole passenger was There is no requirement of "diligence beyond what human care Philippines). It is, therefore, not enough that the event should not
stoned by some 'mischievous boys,' and its windshield was and foresight can provide."6 have been foreseen or participated, as is commonly believed, but
broken. Defendant Federico Laureano chased the boys and it must be one impossible to foresee or to avoid. The mere
The error committed by the lower court in holding defendant
he was able to catch one of them. The boy was taken to Atty. difficulty to foresee the happening is not impossibility to foresee
Federico Laureano liable appears to be thus obvious. Its own
Dioquino [and] admitted having thrown the stone that broke the same: un hecho no constituye caso fortuito por la sola
findings of fact repel the motion that he should be made to
the car's windshield. The plaintiff and the defendant Federico circunstancia de que su existencia haga mas dificil o mas onerosa
respond in damages to the plaintiff for the broken windshield.
Laureano with the boy returned to the P.C. barracks and the la accion diligente del presente ofensor' (Peirano
What happened was clearly unforeseen. It was a fortuitous event
father of the boy was called, but no satisfactory arrangements Facio, Responsibilidad Extra-contractual, p. 465; Mazeaud, Traite
resulting in a loss which must be borne by the owner of the car.
[were] made about the damage to the de la Responsibilite Civile, Vol. 2, sec. 1569). The very measures
An element of reasonableness in the law would be manifestly
windshield."1 adopted by appellant prove that the possibility of danger was not
lacking if, on the circumstances as thus disclosed, legal
only foreseeable, but actually foreseen, and was not caso fortuito."
It was likewise noted in the decision now on appeal: "The responsibility could be imputed to an individual in the situation of
defendant Federico Laureano refused to file any charges defendant Laureano. Art. 1174 of the Civil Code guards against In that case then, the risk was quite evident and the nature of the
against the boy and his parents because he thought that the the possibility of its being visited with such a reproach. obligation such that a party could rightfully be deemed as having
stone-throwing was merely accidental and that it was due Unfortunately, the lower court was of a different mind and thus assumed it. It is not so in the case before us. It is anything but
to force majeure. So he did not want to take any action and failed to heed its command. that. If the lower court, therefore, were duly mindful of what this
after delaying the settlement, after perhaps consulting a particular legal provision contemplates, it could not have reached
It was misled, apparently, by the inclusion of the exemption from
lawyer, the defendant Federico Laureano refused to pay the the conclusion that defendant Federico Laureano could be held
the operation of such a provision of a party assuming the risk,
windshield himself and challenged that the case be brought to liable. To repeat, that was clear error on its part.
considering the nature of the obligation undertaken. A more
court for judicial adjudication. There is no question that the
careful analysis would have led the lower court to a different and 2. Appellants do not stop there. It does not suffice for them that
plaintiff tried to convince the defendant Federico Laureano just
correct interpretation. The very wording of the law dispels any defendant Federico Laureano would be freed from liability. They
to pay the value of the windshield and he even came to the
doubt that what is therein contemplated is the resulting liability would go farther. They would take plaintiff to task for his complaint
extent of asking the wife to convince her husband to settle the
even if caused by a fortuitous event where the party charged may having joined the wife, Aida de Laureano, and the father, Juanita
matter amicably but the defendant Federico Laureano refused
be considered as having assumed the risk incident in the nature Laureano. They were far from satisfied with the lower court's
to make any settlement, clinging [to] the belief that he could
of the obligation to be performed. It would be an affront, not only absolving these two from any financial responsibility. Appellants
not be held liable because a minor child threw a stone
to the logic but to the realities of the situation, if in the light of what would have plaintiff pay damages for their inclusion in this
accidentally on the windshield and therefore, the same was
transpired, as found by the lower court, defendant Federico litigation. We are not disposed to view the matter thus.
due to force majeure."2
Laureano could be held as bound to assume a risk of this nature.
It is to be admitted, of course, that plaintiff, who is a member of
1. The law being what it is, such a belief on the part of There was no such obligation on his part.
the bar, ought to have exercised greater care in selecting the
defendant Federico Laureano was justified. The express
Reference to the leading case of Republic v. Luzon Stevedoring parties against whom he would proceed. It may be said that his
language of Art. 1174 of the present Civil Code which is a
Corp.7 will illustrate when the nature of the obligation is such that view of the law that would consider defendant Federico Laureano
restatement of Art. 1105 of the Old Civil Code, except for the
the risk could be considered as having been assumed. As noted liable on the facts as thus disclosed, while erroneous, is not bereft
addition of the nature of an obligation requiring the assumption
in the opinion of Justice J.B.L. Reyes, speaking for the Court: of plausibility. Even the lower court, mistakenly of course,
of risk, compels such a conclusion. It reads thus: "Except in
"The appellant strongly stresses the precautions taken by it on the entertained similar view. For plaintiff, however, to have included
cases expressly specified by the law, or when it is otherwise
day in question: that it assigned two of its most powerful tugboats the wife and the father would seem to indicate that his
declared by stipulation, or when the nature of the obligation
to tow down river its barge L-1892; that it assigned to the task the understanding of the law is not all that it ought to have been.
requires the assumption of risk, no person shall be responsible
34
Plaintiff apparently was not entirely unaware that the inclusion
in the suit filed by him was characterized by unorthodoxy. He
did attempt to lend some color of justification by explicitly
setting forth that the father was joined as party defendant in
the case as he was the administrator of the inheritance of an
undivided property to which defendant Federico Laureano
could lay claim and that the wife was likewise proceeded
against because the conjugal partnership would be made to
respond for whatever liability would be adjudicated against the
husband.
It cannot be said that such an attempt at justification is
impressed with a high persuasive quality. Far from it.
Nonetheless, mistaken as plaintiff apparently was, it cannot be
concluded that he was prompted solely by the desire to inflict
needless and unjustified vexation on them. Considering the
equities of the situation, plaintiff having suffered a pecuniary
loss which, while resulting from a fortuitous event, perhaps
would not have occurred at all had not defendant Federico
Laureano borrowed his car, we, feel that he is not to be
penalized further by his mistaken view of the law in including
them in his complaint. Well-worth paraphrasing is the thought
expressed in a United States Supreme Court decision as to
the existence of an abiding and fundamental principle that the
expenses and annoyance of litigation form part of the social
burden of living in a society which seeks to attain social control
through law.8
WHEREFORE, the decision of the lower court of November 2,
1965 insofar as it orders defendant Federico Laureano to pay
plaintiff the amount of P30,000.00 as damages plus the
payment of costs, is hereby reversed. It is affirmed insofar as it
dismissed the case against the other two defendants, Juanita
Laureano and Aida de Laureano, and declared that no moral
damages should be awarded the parties. Without
pronouncement as to costs.

35