G. R. No.

166876 March 24, 2006

ARTEMIO INIEGO,[1] Petitioner, vs. The HONORABLE JUDGE GUILLERMO G. PURGANAN, in his official
capacity as Presiding Judge of the Regional Trial Court, Branch 42, City of Manila, and FOKKER C.
SANTOS, Respondents.

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

DECISION

CHICO-NAZARIO, J.:

For this Court to grant this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner
has to persuade us on two engaging questions of law. First, he has to convince us that actions for damages
based on quasi-delict are actions that are capable of pecuniary estimation, and therefore would fall under the
jurisdiction of the municipal courts if the claim does not exceed the jurisdictional amount of P400,000.00 in Metro
Manila. Second, he has to convince us that the moral and exemplary damages claimed by the private respondent
should be excluded from the computation of the above-mentioned jurisdictional amount because they arose from
a cause of action other than the negligent act of the defendant.

Petitioner urges us to reverse the 28 October 2004 Decision and 26 January 2005 Resolution of the Court
of Appeals, Eighth Division, in CA-G.R. SP No. 76206 denying due course to the petition for certiorari filed by
petitioner under Rule 65, elevating the 21 October 2002 Omnibus Order and the 21 January 2003 Order of the
Regional Trial Court (RTC), Branch 42, City of Manila. The dispositive portion of the 28 October 2004 Decision of
the Court of Appeals reads:

WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED for lack of merit.[2]

The factual and procedural antecedents of this case are as follows:

On 1 March 2002, private respondent Fokker Santos filed a complaint for quasi-delict and damages
against Jimmy T. Pinion, the driver of a truck involved in a traffic accident, and against petitioner Artemio Iniego,
as owner of the said truck and employer of Pinion. The complaint stemmed from a vehicular accident that
happened on 11 December 1999, when a freight truck allegedly being driven by Pinion hit private respondents
jitney which private respondent was driving at the time of the accident.

On 24 August 2002, private respondent filed a Motion to Declare defendant in Default allegedly for failure of the
latter to file his answer within the final extended period. On 28 August 2002, petitioner filed a Motion to Admit and
a Motion to Dismiss the complaint on the ground, among other things, that the RTC has no jurisdiction over the
cause of action of the case.

On 21 October 2002, public respondent Judge Guillermo G. Purganan, acting as presiding judge of the
RTC, Branch 42, Manila, issued the assailed Omnibus Order denying the Motion to Dismiss of the petitioner and
the Motion to Declare Defendant in Default of the private respondent. Pertinent portions of the Omnibus Order
and the dispositive portion thereof read:

In his opposition to the motion to declare him in default and his Motion to Admit
defendant IEGO alleged that he never received the Order dated 12 August 2002. But believing in
good faith, without being presumptuous, that his 3rd Motion for additional Time to file or any
appropriate [pleading] would be granted, he filed the aforesaid Motion received by the Court
on 23 August 2002.

The explanation of defendant IEGO has merit. The order dated 12 August 2002 was sent
to a wrong address, thus defendant IEGO did not receive it. Since it was not received, he was not
aware that the court would grant no further extension. The Motion to Admit Motion to Dismiss has
to be granted and the Motion to declare Defendant IEGO [in default] has to be DENIED.

xxxx
 The plaintiff opines that this court has exclusive jurisdiction because the cause of action
is the claim for damages, which exceeds P400,000.00. The complaint prays for actual damages
in the amount of P40,000.00, moral damages in the amount of P300,000.00, and exemplary
damages in the amount of P150,000.00. Excluding attorneys fees in the amount of P50,000.00,
the total amount of damages being claimed is P490,000.00.

Proceeding on the assumption that the cause of action is the claim of (sic) for damages in
the total amount of P490,000.00, this court has jurisdiction. But is the main cause of action the
claim for damages?

This court is of the view that the main cause of action is not the claim for damages but
quasi-delict. Damages are being claimed only as a result of the alleged fault or negligence of both
defendants under Article 2176 of the Civil Code in the case of defendant Pinion and under Article
2180 also of the Civil Code in the case of defendant Iniego. But since fault or negligence (quasi-
delicts) could not be the subject of pecuniary estimation, this court has exclusive jurisdiction.

xxxx

WHEREFORE, in view of all the foregoing, the motion to declare defendant Iniego in
default and the said defendants motion to dismiss are denied.[3]

On 7 November 2002, petitioner filed a Motion for Reconsideration of the Omnibus Order of 21 October
2002. On 21 January 2003, public respondent issued an Order denying petitioners motion for reconsideration.
Pertinent portions of the 21 January 2003 Order are reproduced hereunder:

What this court referred to in its Order sought to be reconsidered as not capable of
pecuniary estimation is the CAUSE OF ACTION, which is quasi-delict and NOT the amount of
damage prayed for.

xxxx

WHEREFORE, in view of the foregoing, the motion for reconsideration is DENIED.[4]

Petitioner elevated the 21 October 2002 and 21 January 2003 Orders of the RTC to the Court of Appeals on
petition for certiorari under Rule 65 of the Rules of Court. On 28 October 2004, the Court of Appeals promulgated
the assailed Decision, the dispositive portion thereof reads:

WHEREFORE, the petition is DENIED DUE COURSE and dismissed for lack of merit.[5]

On 22 November 2004, petitioner moved for reconsideration, which was denied by the Court of Appeals
on 26 January 2005. Hence, this present petition.

Petitioner claims that actions for damages based on quasi-delict are actions that are capable of pecuniary
estimation; hence, the jurisdiction in such cases falls upon either the municipal courts (the Municipal Trial Courts,
Metropolitan Trial Courts, Municipal Trial Courts In Cities, And Municipal Circuit Trial Courts), or the Regional Trial
Courts, depending on the value of the damages claimed.

Petitioner argues further that should this Court find actions for damages capable of pecuniary estimation,
then the total amount of damages claimed by the private respondent must exceed P400,000.00 in order that it
may fall under the jurisdiction of the RTC. Petitioner asserts, however, that the moral and exemplary damages
claimed by private respondent be excluded from the computation of the total amount of damages for jurisdictional
purposes because the said moral and exemplary damages arose, not from the quasi-delict, but from the
petitioners refusal to pay the actual damages.

I
 Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery
of a sum of money for the damages suffered because of the defendants alleged tortious acts, and are
therefore capable of pecuniary estimation.

In a recent case,[6] we did affirm the jurisdiction of a Municipal Circuit Trial Court in actions for damages
based on quasi-delict, although the ground used to challenge said jurisdiction was an alleged forum shopping,
and not the applicability of Section 19(1) of Batas Pambansa Blg. 129.

According to respondent Judge, what he referred to in his assailed Order as not capable of pecuniary
estimation is the cause of action, which is a quasi-delict, and not the amount of damage prayed for.[7]From this,
respondent Judge concluded that since fault or negligence in quasi-delicts cannot be the subject of pecuniary
estimation, the RTC has jurisdiction. The Court of Appeals affirmed respondent Judge in this respect. [8]

Respondent Judges observation is erroneous. It is crystal clear from B.P. Blg. 129, as amended by
Republic Act No. 7691, that what must be determined to be capable or incapable of pecuniary estimation is not
the cause of action, but the subject matter of the action.[9] A cause of action is the delict or wrongful act or
omission committed by the defendant in violation of the primary rights of the plaintiff. [10] On the other hand, the
subject matter of the action is the physical facts, the thing real or personal, the money, lands, chattels, and the
like, in relation to which the suit is prosecuted, and not the delict or wrong committed by the defendant. [11]

The case of Lapitan v. Scandia, Inc., et al.,[12] has guided this Court time and again in determining whether the
subject matter of the action is capable of pecuniary estimation. In Lapitan, the Court spoke through the eminent
Mr. Justice Jose B.L. Reyes:

In determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance [now Regional Trial Courts] would
depend on the amount of the claim. However, where the basic issue is something other than
the right to recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought like suits to have the defendant perform his part of the
contract (specific performance) and in actions for support, or for annulment of a judgment or to
foreclose a mortgage, this court has considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first
instance [now Regional Trial Courts]. x x x.[13] (Emphasis supplied.)

Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery of a sum
of money for the damages suffered because of the defendants alleged tortious acts. The damages claimed in
such actions represent the monetary equivalent of the injury caused to the plaintiff by the defendant, which are
thus sought to be recovered by the plaintiff. This money claim is the principal relief sought, and is not merely
incidental thereto or a consequence thereof. It bears to point out that the complaint filed by private respondent
before the RTC actually bears the caption for DAMAGES.

Fault or negligence, which the Court of Appeals claims is not capable of pecuniary estimation, is not
actionable by itself. For such fault or negligence to be actionable, there must be a resulting damage to a third
person. The relief available to the offended party in such cases is for the reparation, restitution, or payment of
such damage, without which any alleged offended party has no cause of action or relief. The fault or negligence of
the defendant, therefore, is inextricably intertwined with the claim for damages, and there can be no action based
on quasi-delict without a claim for damages.

We therefore rule that the subject matter of actions for damages based on quasi-delict is capable of
pecuniary estimation.

II

The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all
kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for
damages arise from the same or from different causes of action.
 Despite our concurrence in petitioners claim that actions for damages based on quasi-delict are actions
that are capable of pecuniary estimation, we find that the total amount of damages claimed by the private
respondent nevertheless still exceeds the jurisdictional limit of P400,000.00 and remains under the jurisdiction of
the RTC.

Petitioner argues that in actions for damages based on quasi-delict, claims for damages arising from a
different cause of action (i.e., other than the fault or negligence of the defendant) should not be included in the
computation of the jurisdictional amount. According to petitioner, the moral and exemplary damages claimed by
the respondents in the case at bar are not direct and proximate consequences of the alleged negligent act.
Petitioner points out that the complaint itself stated that such moral and exemplary damages arose from the
alleged refusal of defendants to honor the demand for damages, and therefore there is no reasonable cause and
effect between the fault or negligence of the defendant and the claim for moral and exemplary damages. [14] If the
claims for moral and exemplary damages are not included in the computation for purposes of determining
jurisdiction, only the claim for actual damages in the amount of P40,000.00 will be considered, and the MeTC will
have jurisdiction.

We cannot give credence to petitioners arguments. The distinction he made between damages arising
directly from injuries in a quasi-delict and those arising from a refusal to admit liability for a quasi-delict is more
apparent than real, as the damages sought by respondent originate from the same cause of action: the quasi-
delict. The fault or negligence of the employee and the juris tantum presumption of negligence of his employer in
his selection and supervision are the seeds of the damages claimed, without distinction.

Even assuming, for the sake of argument, that the claims for moral and exemplary damages arose from a
cause of action other than the quasi-delict, their inclusion in the computation of damages for jurisdictional
purposes is still proper. All claims for damages should be considered in determining the jurisdiction of the court
regardless of whether they arose from a single cause of action or several causes of action. Rule 2, Section 5, of
the Rules of Court allows a party to assert as many causes of action as he may have against the opposing
party. Subsection (d) of said section provides that where the claims in all such joined causes of action are
principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction. [15]

Hence, whether or not the different claims for damages are based on a single cause of action or different
causes of action, it is the total amount thereof which shall govern. Jurisdiction in the case at bar remains with the
RTC, considering that the total amount claimed, inclusive of the moral and exemplary damages claimed,
is P490,000.00.

In sum, actions for damages based on quasi-delicts are actions that are capable of pecuniary
estimation. As such, they fall within the jurisdiction of either the RTC or the municipal courts, depending on the
amount of damages claimed. In this case, the amount of damages claimed is within the jurisdiction of the RTC,
since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts, whether the
claims for damages arise from the same or from different causes of action.

WHEREFORE, the petition for review on certiorari is hereby DENIED for lack of merit. The Decision and
Resolution of the Court of Appeals dated 28 October 2004 and 26 January 2005, respectively,
are AFFIRMED insofar as they held that the Regional Trial Court has jurisdiction. No costs.

SO ORDERED.
 [G.R. No. 145391. August 26, 2002]

AVELINO CASUPANAN and ROBERTO CAPITULO, petitioners, vs. MARIO LLAVORE

LAROYA, respondent.

DECISION
CARPIO, J.:

The Case

This is a petition for review on certiorari to set aside the Resolution [1] dated December 28, 1999 dismissing
the petition for certiorari and the Resolution[2] dated August 24, 2000 denying the motion for reconsideration, both
issued by the Regional Trial Court of Capas, Tarlac, Branch 66, in Special Civil Action No. 17-C (99).

The Facts

Two vehicles, one driven by respondent Mario Llavore Laroya (Laroya for brevity) and the other owned by
petitioner Roberto Capitulo (Capitulo for brevity) and driven by petitioner Avelino Casupanan (Casupanan for
brevity), figured in an accident. As a result, two cases were filed with the Municipal Circuit Trial Court (MCTC for
brevity) of Capas, Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting in
damage to property, docketed as Criminal Case No. 002-99. On the other hand, Casupanan and Capitulo filed a
civil case against Laroya for quasi-delict, docketed as Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its preliminary investigation stage. Laroya,
defendant in the civil case, filed a motion to dismiss the civil case on the ground of forum-shopping considering
the pendency of the criminal case. The MCTC granted the motion in the Order of March 26, 1999 and dismissed
the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case is a separate civil action
which can proceed independently of the criminal case. The MCTC denied the motion for reconsideration in the
Order of May 7, 1999. Casupanan and Capitulo filed a petition for certiorari under Rule 65 before the Regional
Trial Court (Capas RTC for brevity) of Capas, Tarlac, Branch 66, [3] assailing the MCTCs Order of dismissal.

The Trial Courts Ruling

The Capas RTC rendered judgment on December 28, 1999 dismissing the petition for certiorari for lack of
merit. The Capas RTC ruled that the order of dismissal issued by the MCTC is a final order which disposes of the
case and therefore the proper remedy should have been an appeal. The Capas RTC further held that a special
civil action for certiorari is not a substitute for a lost appeal. Finally, the Capas RTC declared that even on the
premise that the MCTC erred in dismissing the civil case, such error is a pure error of judgment and not an abuse
of discretion.
Casupanan and Capitulo filed a Motion for Reconsideration but the Capas RTC denied the same in the
Resolution of August 24, 2000.
Hence, this petition.

The Issue

The petition premises the legal issue in this wise:

In a certain vehicular accident involving two parties, each one of them may think and believe that the accident
was caused by the fault of the other. x x x [T]he first party, believing himself to be the aggrieved party, opted to file
a criminal case for reckless imprudence against the second party. On the other hand, the second party, together
with his operator, believing themselves to be the real aggrieved parties, opted in turn to file a civil case for quasi-
delict against the first party who is the very private complainant in the criminal case. [4]
Thus, the issue raised is whether an accused in a pending criminal case for reckless imprudence can validly
file, simultaneously and independently, a separate civil action for quasi-delict against the private complainant in
the criminal case.

The Courts Ruling

Casupanan and Capitulo assert that Civil Case No. 2089, which the MCTC dismissed on the ground of
forum-shopping, constitutes a counterclaim in the criminal case. Casupanan and Capitulo argue that if the
accused in a criminal case has a counterclaim against the private complainant, he may file the counterclaim in a
separate civil action at the proper time. They contend that an action on quasi-delict is different from an action
resulting from the crime of reckless imprudence, and an accused in a criminal case can be an aggrieved party in a
civil case arising from the same incident. They maintain that under Articles 31 and 2176 of the Civil Code, the civil
case can proceed independently of the criminal action. Finally, they point out that Casupanan was not the only
one who filed the independent civil action based on quasi-delict but also Capitulo, the owner-operator of the
vehicle, who was not a party in the criminal case.
In his Comment, Laroya claims that the petition is fatally defective as it does not state the real antecedents.
Laroya further alleges that Casupanan and Capitulo forfeited their right to question the order of dismissal when
they failed to avail of the proper remedy of appeal. Laroya argues that there is no question of law to be resolved
as the order of dismissal is already final and a petition for certiorari is not a substitute for a lapsed appeal.
In their Reply, Casupanan and Capitulo contend that the petition raises the legal question of whether there is
forum-shopping since they filed only one action - the independent civil action for quasi-delict against Laroya.
Nature of the Order of Dismissal
The MCTC dismissed the civil action for quasi-delict on the ground of forum-shopping under Supreme Court
Administrative Circular No. 04-94. The MCTC did not state in its order of dismissal[5] that the dismissal was with
prejudice. Under the Administrative Circular, the order of dismissal is without prejudice to refiling the complaint,
unless the order of dismissal expressly states it is with prejudice. [6] Absent a declaration that the dismissal is with
prejudice, the same is deemed without prejudice. Thus, the MCTCs dismissal, being silent on the matter, is a
dismissal without prejudice.
Section 1 of Rule 41[7] provides that an order dismissing an action without prejudice is not appealable. The
remedy of the aggrieved party is to file a special civil action under Rule 65. Section 1 of Rule 41 expressly states
that where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil
action under Rule 65. Clearly, the Capas RTCs order dismissing the petition for certiorari, on the ground that the
proper remedy is an ordinary appeal, is erroneous.
Forum-Shopping
The essence of forum-shopping is the filing of multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, to secure a favorable judgment. [8] Forum-shopping is present when
in the two or more cases pending, there is identity of parties, rights of action and reliefs sought. [9] However, there
is no forum-shopping in the instant case because the law and the rules expressly allow the filing of a separate civil
action which can proceed independently of the criminal action.
Laroya filed the criminal case for reckless imprudence resulting in damage to property based on the Revised
Penal Code while Casupanan and Capitulo filed the civil action for damages based on Article 2176 of the Civil
Code. Although these two actions arose from the same act or omission, they have different causes of action. The
criminal case is based on culpa criminal punishable under the Revised Penal Code while the civil case is based
on culpa aquiliana actionable under Articles 2176 and 2177 of the Civil Code. These articles on culpa aquiliana
read:

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

Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from
the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for
the same act or omission of the defendant.

Any aggrieved person can invoke these articles provided he proves, by preponderance of evidence, that he
has suffered damage because of the fault or negligence of another. Either the private complainant or the accused
can file a separate civil action under these articles. There is nothing in the law or rules that state only the private
complainant in a criminal case may invoke these articles.
Moreover, paragraph 6, Section 1, Rule 111 of the 2000 Rules on Criminal Procedure (2000 Rules for
brevity) expressly requires the accused to litigate his counterclaim in a separate civil action, to wit:

SECTION 1. Institution of criminal and civil actions. (a) x x x.

No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but any
cause of action which could have been the subject thereof may be litigated in a separate civil action. (Emphasis
supplied)

Since the present Rules require the accused in a criminal action to file his counterclaim in a separate civil action,
there can be no forum-shopping if the accused files such separate civil action.
Filing of a separate civil action
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure (1985 Rules for brevity), as amended in 1988,
allowed the filing of a separate civil action independently of the criminal action provided the offended party
reserved the right to file such civil action. Unless the offended party reserved the civil action before the
presentation of the evidence for the prosecution, all civil actions arising from the same act or omission were
deemed impliedly instituted in the criminal case. These civil actions referred to the recovery of civil liability ex-
delicto, the recovery of damages for quasi-delict, and the recovery of damages for violation of Articles 32, 33 and
34 of the Civil Code on Human Relations.
Thus, to file a separate and independent civil action for quasi-delict under the 1985 Rules, the offended party
had to reserve in the criminal action the right to bring such action. Otherwise, such civil action was deemed
impliedly instituted in the criminal action. Section 1, Rule 111 of the 1985 Rules provided as follows:

Section 1. Institution of criminal and civil actions. When a criminal action is instituted, the civil action for the
recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the action,
reserves his right to institute it separately, or institutes the civil action prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under
Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission of
the accused.

A waiver of any of the civil actions extinguishes the others. The institution of, or the reservation of the right to file,
any of said civil actions separately waives the others.

The reservation of the right to institute the separate civil actions shall be made before the prosecution starts to
present its evidence and under circumstances affording the offended party a reasonable opportunity to make such
reservation.

In no case may the offended party recover damages twice for the same act or omission of the accused.

x x x. (Emphasis supplied)

Section 1, Rule 111 of the 1985 Rules was amended on December 1, 2000 and now provides as follows:

SECTION 1. Institution of criminal and civil actions. (a) When a criminal action is instituted, the civil action
for the recovery of civil liability arising from the offense charged shall be deemed instituted with the
criminal action unless the offended party waives the civil action, reserves the right to institute it separately or
institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts
presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make
such reservation.

xxx

(b) x x x

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated
with the criminal action upon application with the court trying the latter case. If the application is granted, the trial
of both actions shall proceed in accordance with section 2 of this rule governing consolidation of the civil and
criminal actions. (Emphasis supplied)
 Under Section 1 of the present Rule 111, what is deemed instituted with the criminal action is only the action
to recover civil liability arising from the crime or ex-delicto. All the other civil actions under Articles 32, 33, 34 and
2176 of the Civil Code are no longer deemed instituted, and may be filed separately and prosecuted
independently even without any reservation in the criminal action. The failure to make a reservation in the criminal
action is not a waiver of the right to file a separate and independent civil action based on these articles of the Civil
Code. The prescriptive period on the civil actions based on these articles of the Civil Code continues to run even
with the filing of the criminal action. Verily, the civil actions based on these articles of the Civil Code are separate,
distinct and independent of the civil action deemed instituted in the criminal action. [10]
Under the present Rule 111, the offended party is still given the option to file a separate civil action to
recover civil liability ex-delicto by reserving such right in the criminal action before the prosecution presents its
evidence. Also, the offended party is deemed to make such reservation if he files a separate civil action before
filing the criminal action. If the civil action to recover civil liability ex-delicto is filed separately but its trial has not
yet commenced, the civil action may be consolidated with the criminal action. The consolidation under this Rule
does not apply to separate civil actions arising from the same act or omission filed under Articles 32, 33, 34 and
2176 of the Civil Code.[11]
Suspension of the Separate Civil Action
Under Section 2, Rule 111 of the amended 1985 Rules, a separate civil action, if reserved in the criminal
action, could not be filed until after final judgment was rendered in the criminal action. If the separate civil action
was filed before the commencement of the criminal action, the civil action, if still pending, was suspended upon
the filing of the criminal action until final judgment was rendered in the criminal action. This rule applied only to the
separate civil action filed to recover liability ex-delicto. The rule did not apply to independent civil actions based on
Articles 32, 33, 34 and 2176 of the Civil Code, which could proceed independently regardless of the filing of the
criminal action.
The amended provision of Section 2, Rule 111 of the 2000 Rules continues this procedure, to wit:

SEC. 2. When separate civil action is suspended. After the criminal action has been commenced, the separate
civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.

If the criminal action is filed after the said civil action has already been instituted, the latter shall be
suspended in whatever stage it may be found before judgment on the merits. The suspension shall last
until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits is
rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the criminal
action in the court trying the criminal action. In case of consolidation, the evidence already adduced in the civil
action shall be deemed automatically reproduced in the criminal action without prejudice to the right of the
prosecution to cross-examine the witnesses presented by the offended party in the criminal case and of the
parties to present additional evidence. The consolidated criminal and civil actions shall be tried and decided
jointly.

During the pendency of the criminal action, the running of the period of prescription of the civil action which
cannot be instituted separately or whose proceeding has been suspended shall be tolled.

x x x. (Emphasis supplied)

Thus, Section 2, Rule 111 of the present Rules did not change the rule that the separate civil action, filed to
recover damages ex-delicto, is suspended upon the filing of the criminal action. Section 2 of the present Rule 111
also prohibits the filing, after commencement of the criminal action, of a separate civil action to recover
damages ex-delicto.
When civil action may proceed independently
The crucial question now is whether Casupanan and Capitulo, who are not the offended parties in the
criminal case, can file a separate civil action against the offended party in the criminal case. Section 3, Rule 111
of the 2000 Rules provides as follows:

SEC 3. When civil action may proceed independently. - In the cases provided in Articles 32, 33, 34 and 2176 of
the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same act or omission charged in the criminal
action. (Emphasis supplied)

Section 3 of the present Rule 111, like its counterpart in the amended 1985 Rules, expressly allows the
offended party to bring an independent civil action under Articles 32, 33, 34 and 2176 of the Civil Code. As stated
in Section 3 of the present Rule 111, this civil action shall proceed independently of the criminal action and shall
require only a preponderance of evidence. In no case, however, may the offended party recover damages twice
for the same act or omission charged in the criminal action.
There is no question that the offended party in the criminal action can file an independent civil action for
quasi-delict against the accused. Section 3 of the present Rule 111 expressly states that the offended party may
bring such an action but the offended party may not recover damages twice for the same act or omission charged
in the criminal action. Clearly, Section 3 of Rule 111 refers to the offended party in the criminal action, not to the
accused.
Casupanan and Capitulo, however, invoke the ruling in Cabaero vs. Cantos[12] where the Court held that the
accused therein could validly institute a separate civil action for quasi-delict against the private complainant in the
criminal case. In Cabaero, the accused in the criminal case filed his Answer with Counterclaim for malicious
prosecution. At that time the Court noted the absence of clear-cut rules governing the prosecution on impliedly
instituted civil actions and the necessary consequences and implications thereof. Thus, the Court ruled that
the trial court should confine itself to the criminal aspect of the case and disregard any counterclaim for civil
liability. The Court further ruled that the accused may file a separate civil case against the offended party after the
criminal case is terminated and/or in accordance with the new Rules which may be promulgated.The Court
explained that a cross-claim, counterclaim or third-party complaint on the civil aspect will only unnecessarily
complicate the proceedings and delay the resolution of the criminal case.
Paragraph 6, Section 1 of the present Rule 111 was incorporated in the 2000 Rules precisely to address
the lacuna mentioned in Cabaero. Under this provision, the accused is barred from filing a counterclaim, cross-
claim or third-party complaint in the criminal case. However, the same provision states that any cause of action
which could have been the subject (of the counterclaim, cross-claim or third-party complaint) may be litigated in a
separate civil action. The present Rule 111 mandates the accused to file his counterclaim in a separate civil
action which shall proceed independently of the criminal action, even as the civil action of the offended party is
litigated in the criminal action.
Conclusion
Under Section 1 of the present Rule 111, the independent civil action in Articles 32, 33, 34 and 2176 of the
Civil Code is not deemed instituted with the criminal action but may be filed separately by the offended party even
without reservation. The commencement of the criminal action does not suspend the prosecution of the
independent civil action under these articles of the Civil Code. The suspension in Section 2 of the present Rule
111 refers only to the civil action arising from the crime, if such civil action is reserved or filed before the
commencement of the criminal action.
Thus, the offended party can file two separate suits for the same act or omission. The first a criminal case
where the civil action to recover civil liability ex-delicto is deemed instituted, and the other a civil case for quasi-
delict - without violating the rule on non-forum shopping. The two cases can proceed simultaneously and
independently of each other. The commencement or prosecution of the criminal action will not suspend the civil
action for quasi-delict. The only limitation is that the offended party cannot recover damages twice for the same
act or omission of the defendant. In most cases, the offended party will have no reason to file a second civil action
since he cannot recover damages twice for the same act or omission of the accused. In some instances, the
accused may be insolvent, necessitating the filing of another case against his employer or guardians.
Similarly, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in
the criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that
the counterclaim of the accused may be litigated in a separate civil action. This is only fair for two
reasons. First, the accused is prohibited from setting up any counterclaim in the civil aspect that is deemed
instituted in the criminal case. The accused is therefore forced to litigate separately his counterclaim against the
offended party. If the accused does not file a separate civil action for quasi-delict, the prescriptive period may set
in since the period continues to run until the civil action for quasi-delict is filed.
Second, the accused, who is presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the
same way that the offended party can avail of this remedy which is independent of the criminal action. To disallow
the accused from filing a separate civil action for quasi-delict, while refusing to recognize his counterclaim in the
criminal case, is to deny him due process of law, access to the courts, and equal protection of the law.
 Thus, the civil action based on quasi-delict filed separately by Casupanan and Capitulo is proper. The order
of dismissal by the MCTC of Civil Case No. 2089 on the ground of forum-shopping is erroneous.
We make this ruling aware of the possibility that the decision of the trial court in the criminal case may vary
with the decision of the trial court in the independent civil action. This possibility has always been recognized ever
since the Civil Code introduced in 1950 the concept of an independent civil action under Articles 32, 33, 34 and
2176 of the Code. But the law itself, in Article 31 of the Code, expressly provides that the independent civil action
may proceed independently of the criminal proceedings and regardless of the result of the latter. In Azucena vs.
Potenciano,[13] the Court declared:

x x x. There can indeed be no other logical conclusion than this, for to subordinate the civil action contemplated in
the said articles to the result of the criminal prosecution whether it be conviction or acquittal would render
meaningless the independent character of the civil action and the clear injunction in Article 31 that this action 'may
proceed independently of the criminal proceedings and regardless of the result of the latter.

More than half a century has passed since the Civil Code introduced the concept of a civil action separate
and independent from the criminal action although arising from the same act or omission. The Court, however,
has yet to encounter a case of conflicting and irreconcilable decisions of trial courts, one hearing the criminal case
and the other the civil action for quasi-delict. The fear of conflicting and irreconcilable decisions may be more
apparent than real. In any event, there are sufficient remedies under the Rules of Court to deal with such remote
possibilities.
One final point. The Revised Rules on Criminal Procedure took effect on December 1, 2000 while the MCTC
issued the order of dismissal on December 28, 1999 or before the amendment of the rules. The Revised Rules on
Criminal Procedure must be given retroactive effect considering the well-settled rule that -

x x x statutes regulating the procedure of the court will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent.[14]

WHEREFORE, the petition for review on certiorari is hereby GRANTED. The Resolutions dated December
28, 1999 and August 24, 2000 in Special Civil Action No. 17-C (99) are ANNULLED and Civil Case No. 2089 is
REINSTATED.
SO ORDERED.

[G.R. No. 108395. March 7, 1997]

HEIRS OF THE LATE TEODORO GUARING, JR., petitioners, vs. COURT OF APPEALS, PHILIPPINE
RABBIT BUS LINES, INC., and ANGELES CUEVAS, respondents.

DECISION
MENDOZA, J.:

This is a petition for review of the decision of the Court of Appeals, reversing the decision of the Regional
Trial Court of Manila, Branch 20, which ordered respondent Philippine Rabbit Bus Lines, Inc. and its driver,
Angeles Cuevas, to pay various amounts in damages to petitioners, the heirs of the late Teodoro Guaring, Jr.
This case arose from an unfortunate vehicular accident which happened on November 7, 1987, along the
North Expressway in San Rafael, Mexico, Pampanga. Involved in the accident were a Mitsubishi Lancer car
driven by Teodoro Guaring, Jr., who died as a result of the mishap, Philippine Rabbit Bus No. 415, driven by
Angeles Cuevas, and a Toyota Cressida car, driven by Eligio Enriquez. The Mitsubishi Lancer was heading north,
at the speed of 80 to 90 kilometers per hour. Following it was the Philippine Rabbit Bus No. 415, with Plate No.
CVD-584. On the other hand, the Toyota Cressida was cruising on the opposite lane, bound for Manila.
Petitioners, heirs of Teodoro Guaring, Jr., brought this action for damages, based on quasi delict, in the
Regional Trial Court of Manila. Their evidence tended to show that the Rabbit bus tried to overtake Guarings car
by passing on the right shoulder of the road and that in so doing it hit the right rear portion of Guarings Mitsubishi
Lancer. The impact caused the Lancer to swerve to the south-bound lane, as a result of which it collided with the
Toyota Cressida car coming from the opposite direction.
With Teodoro Guaring, Jr. in the Lancer, seated beside him in front, was Bonifacio Clemente. Riding in the
Toyota Cressida driven by Sgt. Eligio Enriquez was his mother, Dolores Enriquez, who was seated beside
him.Seated at the back were his daughter Katherine (who was directly behind him), his wife Lilian, and his
nephew Felix Candelaria.
Killed in the collision were Teodoro Guaring, Jr., who was driving the Lancer, and Dolores Enriquez, who
was riding in the Cressida, while injured were Bonifacio Clemente and the occupants of the Toyota Cressida.
Private respondents, on the other hand, presented evidence tending to show that the accident was due to
the negligence of the deceased Guaring. They claimed that it was Guaring who tried to overtake the vehicle
ahead of him on the highway and that in doing so he encroached on the south-bound lane and collided with the
oncoming Cressida of U.S. Air Force Sgt. Enriquez. Private respondents claim that as a result of the collision the
Lancer was thrown back to its lane where it crashed into the Rabbit bus.
On May 16, 1990, the Regional Trial Court rendered judgment finding Philippine Rabbit Bus Lines, Inc. and
its driver, Angeles Cuevas, at fault, and holding them solidarily liable for damages to petitioners. The dispositive
portion of its decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants,
ordering the latter to pay the former, jointly and severally, the sum of:

1. P500,000.00 for loss of earning capacity of the deceased Teodoro Guaring, Jr.;
2. P1,000,000.00 as moral damages;
3. P50,000.00 as and for attorneys fees; and
4. Costs of suit.

From this judgment, private respondent Philippine Rabbit Bus Lines, Inc. appealed, contending:
1. The lower court erred in not finding that the proximate cause of the collision was Guarings
negligence in attempting to overtake the car in front of him.
2. The lower court erred in not holding that PRBL exercised due diligence in the supervision of its
employees.
3. The lower court erred in awarding the amount of P500,000.00 in favor of plaintiffs-appellees
representing Guarings loss of earning capacity.
4. The lower court erred in awarding moral damages in favor of plaintiffs-appellees.
5. The lower court erred in awarding attorneys fees in favor of plaintiffs-appellees.
On December 16, 1992, the Court of Appeals rendered a decision, setting aside the decision of the Regional
Trial Court of Manila in the civil action for damages and dismissing the complaint against private respondents
Philippine Rabbit Bus Lines, Inc. and Cuevas, on the strength of a decision rendered by the Regional Trial Court
at San Fernando, Pampanga, in the criminal case, acquitting the bus driver Angeles Cuevas of reckless
imprudence resulting in damage to property and double homicide. The appellate court held that since the basis of
petitioners action was the alleged negligence of the bus driver, the latters acquittal in the criminal case rendered
the civil case based on quasi delict untenable.
Hence, this petition. Petitioners contend that
[1] EVIDENCE IN ONE CASE IS INADMISSIBLE IN ANOTHER CASE AGAINST A PERSON NOT A
PARTY IN THE FIRST CASE AND TO HOLD OTHERWISE IS VIOLATIVE OF PROCEDURAL DUE
PROCESS.
[2] THE DECISION OF THE COURT OF APPEALS WAS WITHOUT FACTUAL FINDINGS AND DID
NOT RESOLVE SQUARELY THE ASSIGNED ERRORS AND IS THEREFORE A VOID
JUDGMENT.
[3] ACQUITTAL OF THE ACCUSED IN THE CRIMINAL CASE, WHETHER ON REASONABLE DOUBT
OR NOT, IS NO BAR TO THE PROSECUTION FOR DAMAGES BASED ON QUASI-DELICT.
 The question is whether the judgment in the criminal case extinguished the liability of private respondent
Philippine Rabbit Bus Lines, Inc. and its driver, Angeles Cuevas, for damages for the death of Teodoro Guaring,
Jr. In absolving private respondents from liability, the Court of Appeals reasoned:[1]
Since the appellees civil action is predicated upon the negligence of the accused which does not exist
as found by the trial court in the said criminal case, it necessarily follows that the acquittal of the
accused in the criminal case carries with it the extinction of the civil responsibility arising
therefrom. Otherwise stated, the fact from which the civil action might arise, that is, the negligence of
the accused, did not exist.
The finding in the criminal case that accused Cuevas was not negligent and the proximate cause of the
accident was the act of deceased Guaring in overtaking another vehicle ahead of him likewise
exonerates PRB from any civil liability.
Although it did not say so expressly, the appellate court appears to have based its ruling on Rule 111, 2(b) of
the Rules of Criminal Procedure, which provides:
(b) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did not
exist.
This provision contemplates, however, a civil action arising from crime, whereas the present action was
instituted pursuant to Art. 2176 of the Civil Code, which provides:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
It is now settled that acquittal of the accused, even if based on a finding that he is not guilty, does not carry
with it the extinction of the civil liability based on quasi delict. Thus, in Tayag v. Alcantara,[2] it was held:
. . . a separate civil action lies against the offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is
actually charged also criminally, to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In
other words, the extinction of civil liability referred to in Par. (c), Section 3, Rule 111 [now Rule 111,
2(b)], refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas
the civil liability for the same act considered as a quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the criminal act charged has not happened
or has not been committed by the accused. . . .
It is noteworthy that the accident in that case also involved a Philippine Rabbit bus and that, as in this case,
the acquittal of the bus driver was based on reasonable doubt. We held that the civil case for damages was not
barred since the cause of action of the heirs was based on quasi delict.
Again, in Gula v. Dianala it was held:[3]
Since the cause of action of plaintiffs-appellants is based on culpa aquiliana and not culpa criminal,
thus precluding the application of the exception in Sec. 3(c) of Rule 111 [now Rule 111, 2(b)], and the
fact that it can be inferred from the criminal case that defendant-accused, Pedro Dianala, was acquitted
on reasonable doubt because of dearth of evidence and lack of veracity of the two principal witnesses,
the doctrine in Mendoza vs. Arrieta, 91 SCRA 113, will not find application. In that case, the acquittal
was not based on reasonable doubt and the cause of action was based on culpa criminal, for which
reason we held the suit for damages barred.
Even if damages are sought on the basis of crime and not quasi delict, the acquittal of the bus driver will not
bar recovery of damages because the acquittal was based not on a finding that he was not guilty but only on
reasonable doubt. Thus, it has been held:[4]
The judgment of acquittal extinguishes the liability of the accused for damages only when it includes a
declaration that the facts from which the civil might arise did not exist. Thus, the civil liability is not
extinguished by acquittal where the acquittal is based on reasonable doubt (PNB v. Catipon, 98 Phil.
286) as only preponderance of evidence is required in civil cases; where the court expressly declares
that the liability of the accused is not criminal but only civil in nature (De Guzman v. Alvia, 96 Phil. 558;
People v. Pantig, supra) as, for instance, in the felonies of estafa, theft, and malicious mischief
committed by certain relatives who thereby incur only civil liability (See Art. 332, Revised Penal Code);
 and, where the civil liability does not arise from or is not based upon the criminal act of which the
accused was acquitted (Castro v. Collector of Internal Revenue, 4 SCRA 1093; See Regalado,
Remedial Law Compendium, 1983 ed., p. 623).
In the present case, the dispositive portion of the decision of the RTC in the criminal case reads:
WHEREFORE, the Court, entertaining reasonable doubt as to his guilt, the accused is hereby
acquitted, of the offense of reckless imprudence resulting to double homicide and damage to property
as charged in the Information, without pronouncement as to costs.

SO ORDERED.[5]

It was thus error for the appellate court to skip the review of the evidence in this case and instead base its
decision on the findings of the trial court in the criminal case. In so doing, the appellate court disregarded the fact
that this case had been instituted independently of the criminal case and that petitioners herein took no part in the
criminal prosecution. In fact this action was filed below before the prosecution presented evidence in the criminal
action. The attention of the Court of Appeals was called to the decision in the criminal case, which was decided
on September 7, 1990, only when the decision of the trial court in this case was already pending review before it
(the Court of Appeals).
The appellate court did not even have before it the evidence in the criminal case. What it did was simply to
cite findings contained in the decision of the criminal court. Worse, what the criminal court considered was
reasonable doubt concerning the liability of the bus driver the appellate court regarded as a categorical finding
that the driver was not negligent and, on that basis, declared in this case that the proximate cause of the accident
was the act of deceased Guaring in overtaking another vehicle ahead of him. The notion that an action for quasi
delict is separate and distinct from the criminal action was thus set aside.
This case must be decided on the basis of the evidence in the civil case. This is important because the
criminal court appears to have based its decision, acquitting the bus driver on the ground of reasonable doubt,
solely on what it perceived to be the relative capacity for observation of the prosecution and defense
witnesses.[6] The prosecution did not call Bonifacio Clemente to testify despite the fact that shortly after the
accident he gave a statement to the police, pinning the blame for the accident on the Philippine Rabbit bus
driver. Indeed, the civil case involved a different set of witnesses. Petitioners presented Eligio Enriquez, who was
driving the Cressida, and Bonifacio Clemente, who was a passenger in Guarings car. Thus, both had full view of
the accident.
It is unfair to bind petitioners to the result of the criminal action when the fact is that they did not take part
therein. That the witnesses presented on behalf of the petitioners are different from those presented by the
prosecution should have brought home to the appellate court the fundamental unfairness of considering the
decision in the criminal case conclusive of the civil case.
Because the Court of Appeals did not consider the evidence in the civil case, this case should be remanded
to it so that it may render another decision in accordance with the law and the evidence. The issues raised by
petitioners are essentially factual and require the evaluation of evidence, which is the function of the Court of
Appeals in the exercise of its exclusive appellate jurisdiction. They cannot be decided in this Court.
WHEREFORE, the decision of the Court of Appeals is REVERSED and this case is REMANDED to the
Court of Appeals with instruction to render judgment with reasonable dispatch in accordance with law and the
evidence presented in Civil Case No. 88-43860.
SO ORDERED.
G.R. NO. 165732 December 14, 2006

SAFEGUARD SECURITY AGENCY, INC., and ADMER PAJARILLO, Petitioners, - versus - LAURO
TANGCO, VAL TANGCO, VERN LARRY TANGCO, VAN LAURO TANGCO, VON LARRIE TANGCO, VIEN
LARI TANGCO and VIVIEN LAURIZ TANGCO, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari filed by Safeguard Security Agency, Inc. (Safeguard)
and Admer Pajarillo (Pajarillo) assailing the Decision[1] dated July 16, 2004 and the Resolution[2]dated October 20,
2004 issued by the Court of Appeals (CA) in CA-G.R. CV No. 77462.
On November 3, 1997, at about 2:50 p.m., Evangeline Tangco (Evangeline) went to Ecology
Bank, Katipunan Branch, Quezon City, to renew her time deposit per advise of the banks cashier as she would
sign a specimen card. Evangeline, a duly licensed firearm holder with corresponding permit to carry the same
outside her residence, approached security guard Pajarillo, who was stationed outside the bank, and pulled out
her firearm from her bag to deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline with his service
shotgun hitting her in the abdomen instantly causing her death.

Lauro Tangco, Evangelines husband, together with his six minor children (respondents) filed with the Regional
Trial Court (RTC) of Quezon City, a criminal case of Homicide against Pajarillo, docketed as Criminal Case No. 0-
97-73806 and assigned to Branch 78. Respondents reserved their right to file a separate civil action in the said
criminal case. The RTC of Quezon City subsequently convicted Pajarillo of Homicide in its Decision
dated January 19, 2000.[3] On appeal to the CA, the RTC decision was affirmed with modification as to the penalty
in a Decision[4] dated July 31, 2000. Entry of Judgment was made on August 25, 2001.

Meanwhile, on January 14, 1998, respondents filed with RTC, Branch 273, Marikina City, a
complaint[5] for damages against Pajarillo for negligently shooting Evangeline and against Safeguard for failing to
observe the diligence of a good father of a family to prevent the damage committed by its security guard.
Respondents prayed for actual, moral and exemplary damages and attorneys fees.

In their Answer,[6] petitioners denied the material allegations in the complaint and alleged that Safeguard
exercised the diligence of a good father of a family in the selection and supervision of Pajarillo; that Evangelines
death was not due to Pajarillos negligence as the latter acted only in self-defense. Petitioners set up a compulsory
counterclaim for moral damages and attorneys fees.

Trial thereafter ensued. On January 10, 2003, the RTC rendered its Decision,[7] the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs, the heirs of

Evangeline Tangco, and against defendants Admer Pajarillo and Safeguard Security Agency, Inc.
ordering said defendants to pay the plaintiffs, jointly and severally, the following:

1. ONE HUNDRED FIFTY SEVEN THOUSAND FOUR HUNDRED THIRTY

PESOS (P157,430.00), as actual damages
2. FIFTY THOUSAND PESOS (P50,000.00) as death indemnity;
3. ONE MILLION PESOS (P1,000,000.00), as moral damages;
4. THREE HUNDRED THOUSAND PESOS (P300,000.00), as exemplary
damages;
5. THIRTY THOUSAND PESOS (P30,000.00), as attorneys fees; and
6. costs of suit.

For lack of merit, defendants counterclaim is hereby DISMISSED.

SO ORDERED. [8]

The RTC found respondents to be entitled to damages. It rejected Pajarillos claim that he merely acted in
self-defense. It gave no credence to Pajarillos bare claim that Evangeline was seen roaming around the area prior
to the shooting incident since Pajarillo had not made such report to the head office and the police authorities. The
RTC further ruled that being the guard on duty, the situation demanded that he should have exercised proper
prudence and necessary care by asking Evangeline for him to ascertain the matter instead of shooting her
instantly; that Pajarillo had already been convicted of Homicide in Criminal Case No. 0-97-73806; and that he also
failed to proffer proof negating liability in the instant case.

The RTC also found Safeguard as employer of Pajarillo to be jointly and severally liable with Pajarillo. It
ruled that while it may be conceded that Safeguard had perhaps exercised care in the selection of its employees,
particularly of Pajarillo, there was no sufficient evidence to show that Safeguard exercised the diligence of a good
father of a family in the supervision of its employee; that Safeguards evidence simply showed that it required its
guards to attend trainings and seminars which is not the supervision contemplated under the law; that supervision
includes not only the issuance of regulations and instructions designed for the protection of persons and property,
for the guidance of their servants and employees, but also the duty to see to it that such regulations and
instructions are faithfully complied with.
Petitioners appealed the RTC decision to the CA. On July 16, 2004, the CA issued its assailed Decision,
the dispositive portion of which reads:

IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby AFFIRMED, with
the modification that Safeguard Security Agency, Inc.s civil liability in this case is only subsidiary
under Art. 103 of the Revised Penal Code. No pronouncement as to costs.[9]

In finding that Safeguard is only subsidiarily liable, the CA held that the applicable provisions are not
Article 2180 in relation to Article 2176 of the Civil Code, on quasi-delicts, but the provisions on civil liability arising
from felonies under the Revised Penal Code; that since Pajarillo had been found guilty of Homicide in a final
and executory judgment and is said to be serving sentence in Muntinlupa, he must be adjudged civilly liable under
the provisions of Article 100 of the Revised Penal Code since the civil liability recoverable in the criminal action is
one solely dependent upon conviction, because said liability arises from the offense charged and no other; that
this is also the civil liability that is deemed extinguished with the extinction of the penal liability with a
pronouncement that the fact from which the civil action might proceed does not exist; that unlike in civil liability
arising from quasi-delict, the defense of diligence of a good father of a family in the employment and supervision
of employees is inapplicable and irrelevant in civil liabilities based on crimes or ex-delicto; that Article 103 of the
Revised Penal Code provides that the liability of an employer for the civil liability of their employees is only
subsidiary, not joint or solidary.

Petitioners filed their Motion for Reconsideration which the CA denied in a Resolution dated October 20,
2004.

Hence, the instant Petition for Review on Certiorari with the following assignment of errors, to wit:

The Honorable Court of Appeals gravely erred in finding petitioner Pajarillo liable to
respondents for the payment of damages and other money claims.

The Honorable Court of Appeals gravely erred when it applied Article 103 of the Revised
Penal Code in holding petitioner Safeguard solidarily [sic] liable with petitioner Pajarillo for the
payment of damages and other money claims.

The Honorable Court of Appeals gravely erred in failing to find that petitioner Safeguard
Security Agency, Inc. exercised due diligence in the selection and supervision of its employees,
hence, should be excused from any liability. [10]

The issues for resolution are whether (1) Pajarillo is guilty of negligence in shooting Evangeline; and (2)
Safeguard should be held solidarily liable for the damages awarded to respondents.
Safeguard insists that the claim for damages by respondents is based on culpa aquiliana under Article
2176[11] of the Civil Code, in which case, its liability is jointly and severally with Pajarillo.However, since it has
established that it had exercised due diligence in the selection and supervision of Pajarillo, it should be
exonerated from civil liability.

We will first resolve whether the CA correctly held that respondents, in filing a separate civil action against
petitioners are limited to the recovery of damages arising from a crime or delict, in which case the liability of
Safeguard as employer under Articles 102 and 103 of the Revised Penal Code [12] is subsidiary and the defense of
due diligence in the selection and supervision of employee is not available to it.

The CA erred in ruling that the liability of Safeguard is only subsidiary.

The law at the time the complaint for damages was filed is Rule 111 of the 1985 Rules on Criminal
Procedure, as amended, to wit:

SECTION 1. Institution of criminal and civil actions. - When a

criminal action is instituted, the civil action for the recovery of civil

liability is impliedly instituted with the criminal action, unless the offended party waives the civil
action, reserves his right to institute it separately, or institutes the civil action prior to the criminal
action.
Such civil action includes recovery of indemnity under the Revised Penal Code, and
damages under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from the
same act or omission of the accused.

Respondents reserved the right to file a separate civil action and in fact filed the same on January 14,
1998.

The CA found that the source of damages in the instant case must be the crime of homicide, for which he
had already been found guilty of and serving sentence thereof, thus must be governed by the Revised Penal
Code.

We do not agree.

An act or omission causing damage to another may give rise to two separate civil liabilities on the part of
the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised Penal Code; and (2) independent
civil liabilities, such as those (a) not arising from an act or omission complained of as a
felony, e.g., culpa contractual or obligations arising from law under Article 31 of the Civil Code, intentional torts
under Articles 32 and 34, and culpa aquiliana under Article 2176 of the Civil Code; or (b) where the injured
party is granted a right to file an action independent and distinct from the criminal action under Article 33 of the
Civil Code. Either of these liabilities may be enforced against the offender subject to the caveat under Article 2177
of the Civil Code that the offended party cannot recover damages twice for the same act or omission or under
both causes.[13]

It is important to determine the nature of respondents cause of action. The nature of a cause of action is
determined by the facts alleged in the complaint as constituting the cause of action. [14] The purpose of an action or
suit and the law to govern it is to be determined not by the claim of the party filing the action, made in his
argument or brief, but rather by the complaint itself, its allegations and prayer for relief.[15]

The pertinent portions of the complaint read:

7. That Defendant Admer A. Pajarillo was the guard assigned and posted in the Ecology
Bank Katipunan Branch, Quezon City, who was employed and under employment of Safeguard
Security Agency, Inc. hence there is employer-employee relationship between co-defendants.

The Safeguard Security Agency, Inc. failed to observe the diligence of a good father of a family to
prevent damage to herein plaintiffs.

8. That defendant Admer Pajarillo upon seeing Evangeline Tangco, who brought her
firearm out of her bag, suddenly without exercising necessary caution/care, and in idiotic manner,
with the use of his shotgun, fired andburst bullets upon Evangeline M. Tangco, killing her
instantly. x x x

xxxx
 16. That defendants, being employer and the employee are jointly and severally liable for
the death of Evangeline M. Tangco.[16]

Thus, a reading of respondents complaint shows that the latter are invoking their right to recover damages against
Safeguard for their vicarious responsibility for the injury caused by Pajarillos act of shooting and killing Evangeline
under Article 2176, Civil Code which provides:

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

The scope of Article 2176 is not limited to acts or omissions resulting from negligence. In Dulay v. Court
of Appeals,[17] we held:
x x x Well-entrenched is the doctrine that Article 2176 covers not only acts committed
with negligence, but also acts which are voluntary and intentional. As far back as the definitive
case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:
"x x x Article 2176, where it refers to "fault or negligence," covers not only acts "not
punishable by law" but also acts criminal in character, whether intentional and voluntary
or negligent. Consequently, a separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the
offended party is not allowed, if he is actually charged also criminally, to recover damages on
both scores, and would be entitled in such eventuality only to the bigger award of the two,
assuming the awards made in the two cases vary. In other words, the extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article
100 of the Revised Penal Code, whereas the civil liability for the same act considered as quasi-
delict only and not as a crime is not extinguished even by a declaration in the criminal case that
the criminal act charged has not happened or has not been committed by the accused. Briefly
stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and
negligent acts which may be punishable by law." (Emphasis supplied)

The civil action filed by respondents was not derived from the criminal liability of Pajarillo in the criminal
case but one based on culpa aquiliana or quasi-delict which is separate and distinct from the civil liability arising
from crime.[18] The source of the obligation sought to be enforced in the civil case is a quasi-delict not an act or
omission punishable by law.

In Bermudez v. Melencio-Herrera,[19] where the issue involved was whether the civil action filed by
plaintiff-appellants is founded on crime or on quasi-delict, we held:

x x x The trial court treated the case as an action based on a crime in view of the
reservation made by the offended party in the criminal case (Criminal Case No. 92944), also
pending before the court, to file a separate civil action. Said the trial court:

It would appear that plaintiffs instituted this action on the assumption that
defendant Pontino's negligence in the accident of May 10, 1969 constituted a quasi-delict. The
Court cannot accept the validity of that assumption. In Criminal Case No. 92944 of this Court,
plaintiffs had already appeared as complainants. While that case was pending, the offended
parties reserved the right to institute a separate civil action. If, in a criminal case, the right to file a
separate civil action for damages is reserved, such civil action is to be based on crime and not on
tort. That was the ruling in Joaquin vs. Aniceto, L-18719, Oct. 31, 1964.

We do not agree. The doctrine in the case cited by the trial court is inapplicable to the
instant case x x x.
xxxx
In cases of negligence, the injured party or his heirs has the choice between an action to
enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and an
 action for quasi-delict under Article 2176-2194 of the Civil Code. If a party chooses the latter, he
may hold the employer solidarily liable for the negligent act of his employee, subject to the
employer's defense of exercise of the diligence of a good father of the family.
In the case at bar, the action filed by appellant was an action for damages based
on quasi-delict. The fact that appellants reserved their right in the criminal case to file an
independent civil action did not preclude them from choosing to file a civil action
for quasi-delict.[20] (Emphasis supplied)

Although the judgment in the criminal case finding Pajarillo guilty of Homicide is already final
and executory, such judgment has no relevance or importance to this case. [21] It would have been entirely different
if respondents cause of action was for damages arising from a delict, in which case the CA is correct in finding
Safeguard to be only subsidiary liable pursuant to Article 103 of the Revised Penal Code. [22]

As clearly shown by the allegations in the complaint, respondents cause of action is based on quasi-
delict. Under Article 2180 of the Civil Code, when the injury is caused by the negligence of the employee, there
instantly arises a presumption of law that there was negligence on the part of the master or the employer either in
the selection of the servant or employee, or in the supervision over him after selection or both. The liability of the
employer under Article 2180 is direct and immediate. Therefore, it is incumbent upon petitioners to prove that they
exercised the diligence of a good father of a family in the selection and supervision of their employee.

We must first resolve the issue of whether Pajarillo was negligent in shooting Evangeline.

The issue of negligence is factual in nature. Whether a person is negligent or not is a question of fact,
which, as a general rule, we cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to
reviewing errors of law.[23] Generally, factual findings of the trial court, affirmed by the CA, are final and conclusive
and may not be reviewed on appeal. The established exceptions are: (1) when the inference made is manifestly
mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings are grounded
entirely on speculations, surmises or conjectures; (4) when the judgment of the CA is based on misapprehension
of facts; (5) when the findings of fact are conflicting; (6) when the CA, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the
findings of fact are conclusions without citation of specific evidence on which they are based; (8) when the CA
manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would
justify a different conclusion; and (9) when the findings of fact of the CA are premised on the absence of evidence
and are contradicted by the evidence on record. [24]

A thorough review of the records of the case fails to show any cogent reason for us to deviate from the
factual finding of the trial court and affirmed by the CA that petitioner Pajarillo was guilty of negligence in shooting
Evangeline.

Respondents evidence established that Evangelines purpose in going to the bank was to renew her time
deposit.[25] On the other hand, Pajarillo claims that Evangeline drew a gun from her bag and aimed the same at
him, thus, acting instinctively, he shot her in self-defense.

Pajarillo testified that when Evangeline aimed the gun at him at a distance of about one meter or one
arms length[26] he stepped backward, loaded the chamber of his gun and shot her.[27] It is however unimaginable
that petitioner Pajarillo could still make such movements if indeed the gun was already pointed at him. Any
movement could have prompted Evangeline to pull the trigger to shoot him.

Petitioner Pajarillo would like to justify his action in shooting Evangeline on his mere apprehension that
Evangeline will stage a bank robbery. However, such claim is befuddled by his own testimony.Pajarillo testified
that prior to the incident, he saw Evangeline roaming under the fly over which was about 10 meters away from the
bank[28] and saw her talking to a man thereat;[29] that she left the man under the fly-over, crossed the street and
approached the bank. However, except for the bare testimony of Pajarillo, the records do not show that indeed
Evangeline was seen roaming near the vicinity of the bank and acting suspiciously prior to the shooting incident.
In fact, there is no evidence that Pajarillo called the attention of his head guard or the banks branch manager
regarding his concerns or that he reported the same to the police authorities whose outpost is just about 15
meters from the bank.
Moreover, if Evangeline was already roaming the vicinity of the bank, she could have already apprised
herself that Pajarillo, who was posted outside the bank, was armed with a shotgun; that there were two guards
inside the bank[30] manning the entrance door. Thus, it is quite incredible that if she really had a companion, she
would leave him under the fly-over which is 10 meters far from the bank and stage a bank robbery all by herself
without a back-up. In fact, she would have known, after surveying the area, that aiming her gun at Pajarillo would
not ensure entrance to the bank as there were guards manning the entrance door.

Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be
credible in itself such as the common experience and observation of mankind can approve as probable under the
circumstances. We have no test of the truth of human testimony, except its conformity to our knowledge,
observation and experience. Whatever is repugnant to these belongs to the miraculous and is outside judicial
cognizance.[31]

That Evangeline just wanted to deposit her gun before entering the bank and was actually in the act of
pulling her gun from her bag when petitioner Pajarillo recklessly shot her, finds support from the contentions
raised in petitioners petition for review where they argued that when Evangeline approached the bank, she was
seen pulling a gun from inside her bag and petitioner Pajarillo who was suddenly beset by fear and perceived the
act as a dangerous threat, shot and killed the deceased out of pure instinct; [32] that the act of drawing a gun is a
threatening act, regardless of whether or not the gun was intended to be used against petitioner Pajarillo;[33] that
the fear that was created in the mind of petitioner Pajarillo as he saw Evangeline Tangco drawing a gun from her
purse was suddenly very real and the former merely reacted out of pure self-preservation.[34]

Considering that unlawful aggression on the part of Evangeline is absent, Pajarillos claim of self-defense
cannot be accepted specially when such claim was uncorroborated by any separate competent evidence other
than his testimony which was even doubtful. Pajarillos apprehension that Evangeline will shoot him to stage a
bank robbery has no basis at all. It is therefore clear that the alleged threat of bank robbery was just a figment
of Pajarillos imagination which caused such unfounded unlawful aggression on his part.

Petitioners argue that Evangeline was guilty of contributory negligence. Although she was a licensed
firearm holder, she had no business bringing the gun in such establishment where people would react instinctively
upon seeing the gun; that had Evangeline been prudent, she could have warned Pajarillo before drawing the gun
and did not conduct herself with suspicion by roaming outside the vicinity of the bank; that she should not have
held the gun with the nozzle pointed at Pajarillo who mistook the act as hold up or robbery.

We are not persuaded.

As we have earlier held, Pajarillo failed to substantiate his claim that Evangeline was seen roaming
outside the vicinity of the bank and acting suspiciously prior to the shooting incident. Evangelines death was
merely due to Pajarillos negligence in shooting her on his imagined threat that Evangeline will rob the bank.

Safeguard contends that it cannot be jointly held liable since it had adequately shown that it had
exercised the diligence required in the selection and supervision of its employees. It claims that it had required the
guards to undergo the necessary training and to submit the requisite qualifications and credentials which even the
RTC found to have been complied with; that the RTC erroneously found that it did not exercise the diligence
required in the supervision of its employee. Safeguard further claims that it conducts monitoring of the activities of
its personnel, wherein supervisors are assigned to routinely check the activities of the security guards which
include among others, whether or not they are in their proper post and with proper equipment, as well as regular
evaluations of the employees performances; that the fact that Pajarillo loaded his firearm contrary to Safeguards
operating procedure is not sufficient basis to say that Safeguard had failed its duty of proper supervision; that it
was likewise error to say that Safeguard was negligent in seeing to it that the procedures and policies were not
properly implemented by reason of one unfortunate event.

We are not convinced.

Article 2180 of the Civil Code provides:

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

xxxx

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

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

As the employer of Pajarillo, Safeguard is primarily and solidarily liable for the quasi-delict committed by
the former. Safeguard is presumed to be negligent in the selection and supervision of his employee by operation
of law. This presumption may be overcome only by satisfactorily showing that the employer exercised the care
and the diligence of a good father of a family in the selection and the supervision of its employee.

In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience, and service records.[35] On the other hand, due diligence in the supervision of
employees includes the formulation of suitable rules and regulations for the guidance of employees and the
issuance of proper instructions intended for the protection of the public and persons with whom the employer has
relations through his or its employees and the imposition of necessary disciplinary measures upon employees in
case of breach or as may be warranted to ensure the performance of acts indispensable to the business of and
beneficial to their employer. To this, we add that actual implementation and monitoring of consistent compliance
with said rules should be the constant concern of the employer, acting through dependable supervisors who
should regularly report on their supervisory functions. [36] To establish these factors in a trial involving the issue of
vicarious liability, employers must submit concrete proof, including documentary evidence.

We agree with the RTCs finding that Safeguard had exercised the diligence in the selection
of Pajarillo since the record shows that Pajarillo underwent a psychological and neuro-psychiatric evaluation
conducted by the St. Martin de Porres Center where no psychoses ideations were noted, submitted a certification
on the Pre-licensing training course for security guards, as well as police and NBI clearances.

The RTC did not err in ruling that Safeguard fell short of the diligence required in the supervision of its
employee, particularly Pajarillo. In this case, while Safeguard presented Capt. James Camero, its Director for
Operations, who testified on the issuance of company rules and regulations, such as the Guidelines of Guards
Who Will Be Assigned To Banks,[37] Weapons Training,[38] Safeguard Training Center Marksmanship Training
Lesson Plan,[39] Disciplinary/Corrective Sanctions,[40] it had also been established during Cameros cross-
examination that Pajarillo was not aware of such rules and regulations.[41]Notwithstanding Cameros clarification
on his re-direct examination that these company rules and regulations are lesson plans as a basis of guidelines of
the instructors during classroom instructions and not necessary to give students copy of the same, [42] the records
do not show that Pajarillo had attended such classroom instructions.
The records also failed to show that there was adequate training and continuous evaluation of the
security guards performance. Pajarillo had only attended an in-service training on March 1, 1997conducted by
Toyota Sta. Rosa, his first assignment as security guard of Safeguard, which was in collaboration with
Safeguard. It was established that the concept of such training was purely on security of equipments to be
guarded and protection of the life of the employees.[43]

It had not been established that after Pajarillos training in Toyota, Safeguard had ever conducted further
training of Pajarillo when he was later assigned to guard a bank which has a different nature of business with that
of Toyota. In fact, Pajarillo testified that being on duty in a bank is different from being on duty in a factory since a
bank is a very sensitive area.[44]

Moreover, considering his reactions to Evangelines act of just depositing her firearm for safekeeping, i.e.,
of immediately shooting her, confirms that there was no training or seminar given on how to handle bank clients
and on human psychology.

Furthermore, while Safeguard would like to show that there were inspectors who go around the bank two
times a day to see the daily performance of the security guards assigned therein, there was no record ever
presented of such daily inspections. In fact, if there was really such inspection made, the alleged suspicious act of
Evangeline could have been taken noticed and reported.

Turning now to the award of damages, we find that the award of actual damages in the
amount P157,430.00 which were the expenses incurred by respondents in connection with the burial of
Evangeline were supported by receipts. The award of P50,000.00 as civil indemnity for the death of Evangeline is
likewise in order.
 As to the award of moral damages, Article 2206 of the Civil Code provides that the spouse, legitimate
children and illegitimate descendants and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased. Moral damages are awarded to enable the injured party to obtain
means, diversions or amusements that will serve to alleviate the moral suffering he/she has undergone, by reason
of the defendants culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status
quo ante; thus it must be proportionate to the suffering inflicted.[45] The intensity of the pain experienced by the
relatives of the victim is proportionate to the intensity of affection for him and bears no relation whatsoever with
the wealth or means of the offender.[46]

In this case, respondents testified as to their moral suffering caused by Evangelines death was so sudden
causing respondent Lauro to lose a wife and a mother to six children who were all minors at the time of her death.
In People v. Teehankee, Jr.,[47] we awarded one million pesos as moral damages to the heirs of a seventeen-
year-old girl who was murdered. In Metro Manila Transit Corporation v. Court of Appeals,[48] we likewise awarded
the amount of one million pesos as moral damages to the parents of a third year high school student and who
was also their youngest child who died in a vehicular accident since the girls death left a void in their lives. Hence,
we hold that the respondents are also entitled to the amount of one million pesos as Evangelines death left a void
in the lives of her husband and minor children as they were deprived of her love and care by her untimely demise.

We likewise uphold the award of exemplary damages in the amount of P300,000.00. Under Article 2229
of the Civil Code, exemplary damages are imposed by way of example or correction for the public good, in
addition to moral, temperate, liquidated or compensatory damages.[49] It is awarded as a deterrent to socially
deleterious actions. In quasi-delict, exemplary damages may be granted if the defendant acted with gross
negligence.[50]

Pursuant to Article 2208 of the Civil Code, attorney's fees may be recovered when, as in the instant case,
exemplary damages are awarded. Hence, we affirm the award of attorney's fees in the amount of P30,000.00.

WHEREFORE, the petition for review is DENIED. The Decision dated July 16, 2004 of the Court of
Appeals is AFFIRMED with MODIFICATION that the civil liability of petitioner Safeguard Security Agency, Inc.
is SOLIDARY and PRIMARY under Article 2180 of the Civil Code.

SO ORDERED.

G.R. No. 199886 December 3, 2014

CAGAYAN II ELECTRIC COOPERATIVE, INC., represented by its General Manager and Chief Executive
Officer, GABRIEL A. TORDESILLAS, Petitioner, vs.
ALLAN RAPANAN and MARY GINE TANGONAN, Respondents.

DECISION

VILLARAMA, JR., J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the December 8, 2011 Decision1 of the Court of Appeals (CA) in C.A. G.R. CV No. 77659. The appellate
court granted the appeal of respondents Allan Rapanan and Mary Gine Tangonan and held petitioner Cagayan II
Electric Cooperative, Inc. liable for quasi-delict resulting in the death of Camilo Tangonan and physical injuries of
Rapanan, and ordering it to pay respondents damages and attorney's fees.

The antecedents of the case follow:

On October 31, 1998, around 9:00 p.m., a motorcycle with three passengers figured in a mishap along the
National Highway of Maddalero, Buguey, Cagayan. It was driven by its owner Camilo Tangonan who died from
the accident, while his companions respondent Rapanan and one Erwin

Coloma suffered injuries.

On March 29, 2000, Rapanan and Camilo’s common law wife, respondent Mary Gine Tangonan, filed before the
Regional Trial Court (RTC) of Aparri, Cagayan a complaint2 for damages against petitioner. They alleged that
while the victims were traversing the national highway, they were struck and electrocuted by a live tension wire
from one of the electric posts owned by petitioner. They contended that the mishap was due to petitioner’s
negligence when it failed to fix and change said live tension wire despite being immediately informed by residents
in the area that it might pose an immediate danger to persons, animals and vehicles passing along the national
highway.

Mary Gine prayed that she beawarded ₱50,000 civil indemnity, ₱25,000 burial expenses, ₱1,584,000 indemnity
for loss of earning capacity and ₱100,000 moral and exemplary damages. Rapanan, on the other hand, prayed
for ₱10,000 for his medical treatment and ₱50,000 moral and exemplary damages. Both Mary Gine and Rapanan
prayed for 30% of the total award representing attorney’s fees.

In its Answer,3 petitioner alleged that the typhoons that struck its areas of responsibility caused some of its electric
poles to fall and high tension wires to snap or cut-off which caused brownouts in said areas. It claimed that they
cannot be faulted for negligence if there were electric wires dangling along the national road since they were
caused by typhoons which are fortuitous events. It also alleged that it was able to clear the said areas of fallen
electric poles and dangling or hanging high tension wires immediately after the typhoons, to secure the safety of
persons and vehicles traveling in said areas. It likewise contended that the proximate cause of the mishap was
the victims’ negligence and imprudence in operating and driving the motorcycle they were riding on.

During the trial, respondents testified and also presented Dr. Triffany C. Hasim as witness. Mary Gine
testified4 that she is not married to Camilo but they are living together and that they have one child. She also
testified that she spent ₱20,776 for the funeral expenses of Camilo. She herself prepared an itemized list and
computation of said expenses. She also claimed that Camilo worked as a jeepney driver earning ₱150 per day
and that as a result of Camilo’s death, she suffered sleepless nights and lost weight.

Rapanan testified5 that he, Camilo and one Erwin Coloma were riding a motorcycle along the National Highway of
Maddalero, Buguey, Cagayan on October 31, 1998, around 9:00 in the evening. He claimed that they saw a wire
dangling from an electric post and because of a strong wind that blew, they got wound by said dangling wire. He
suffered physical injuries and electric burns and was hospitalized for seven days. He claimed to have spent
around ₱10,000 for his medicines, and also complained of sleepless nights because of the mishap.

Dr. Triffany C. Hasim, the physician who attended to the victims when they were rushed to the Alfonso Ponce
Enrile Memorial District Hospital, also testified6 for the respondents. According to Dr. Hasim, the abrasions of
Rapanan were caused by pressure when the body was hit by a hard object or by friction but she is uncertain as
towhether a live electric wire could have caused them. She further said that she did not find any electrical burns
on Rapanan. As with Camilo, she found abrasions and hematoma on his body and that the cause of death was
due to "cardio respiratory arrest secondary to strangulation." She also opined that the strangulation could have
been caused by an electric wire entangled around Camilo’s neck.

Petitioner, for its part, presented four witnesses among whom were SPO2 Pedro Tactac, Tranquilino Rasosand
Rodolfo Adviento.

SPO2 Tactac, who investigated the incident, testified7 that there was a skid mark on the cemented portion of the
road caused by the motorycle’s foot rest which was about 30 meters long. According to him, it appears that the
motorcycle was overspeeding because of said skid mark.

Rasos and Adviento, employees of petitioner, both testified8 that as a result of the onslaught of typhoons Iliang
and Loleng in Buguey and Sta. Ana, Cagayan, the power lines were cut off because the electric wires snapped
and the electric poles were destroyed. After the said typhoons, petitioner’s employees inspected the affected
areas. The dangling wires were then removed from the electric poles and were placed at the foot of the poles
which were located four to five meters from the road.

On December 9, 2002, the RTC rendered a decision9 in favor of petitioner and dismissed the complaint for
damages of respondents. It held that the proximate cause of the incident is the negligence and imprudence of
Camilo in driving the motorcycle. It further held that respondent Mary Gine has no legal personality to institute the
action since such right is only given to the legal heir of the deceased. Mary Gine is not a legal heir of Camilo since
she is only his common law wife.
On appeal, the CA reversed the RTC and held petitioner liable for quasi-delict. The fallo reads:

WHEREFORE, premises considered, the present appeal is GRANTED. The assailed decision dated December 9,
2002 of the Regional Trial Court of Appari, Cagayan, Branch 10 in Civil Case No. 10-305 is hereby REVERSED
and SET ASIDE and a NEW ONE ENTERED holding the defendant-appellee CAGEL[C]O II liable for quasi-delict
which resulted in the death of Camilo Tangonan and the physical injuries of Allan Rapanan, and ordering the
payment of 50% of the following damages, except the attorney’s fees which should be borne by the defendant-
appellant: To the plaintiff-appellant Allan Rapanan:

1. temperate damages in the amount of ₱10,000.00; and

2. moral damages in the amount of ₱50,000.00;

To the legal heirs of the deceased Camilo Tangonan:

1. indemnity for death in the amount of ₱50,000.00;

2. indemnity for loss of earning capacity in the amount of ₱1,062,000.00;

3. temperate damages in the amount of ₱20,000.00; and

[4.] moral damages in the amount of ₱50,000.00.

To both the plaintiff-appellant Allan Rapanan and the legal heirs of the deceased Camilo Tangonan:

1. exemplary damages in the amount [of] ₱50,000.00; and

2. attorney’s fees amounting to 20% of the total amount adjudged.

SO ORDERED.10

In ruling against petitioner, the CA found that despite the different versions of how the incident occurred, one fact
was consistent – the protruding or dangling CAGELCO wire to which the victims were strangled or trapped. It
likewise ruled that the police blotter and medical certificates together with the testimony of one of the passengers
of the motorcycle, respondent Rapanan, was able to establish the truth of the allegations of respondents – all of
which were not controverted by petitioner. The appellate court held that clearly, the cause of the mishap which
claimed the life of Camilo and injured Rapanan was the dangling wire which struck them. Without the dangling
wire which struck the victims, the CA held that they would not have fallen down and sustained injuries. The CA
found that if petitioner had not been negligent in maintaining its facilities, and making sure that every facility
needing repairs had been repaired, the mishap could have been prevented.

The appellate court nevertheless ruled that the victims were partly responsible for the injuries they sustained. At
the time of the mishap, they were over-speeding and were not wearing protective helmets. Moreover, the single
motorcycle being driven carried three persons. While said circumstances were not the proximate cause of
Camilo’s death and Rapanan’s injuries, they contributed to the occurrence of the unfortunate event.

Hence this petition raising the following arguments for this Court’s consideration:

1. THE CONCLUSION OF THE COURT OF APPEALS THAT PETITIONER WAS NEGLIGENT IN THE
MAINTENANCE OF ITS POWER LINES IS MANIFESTLY ABSURD AND PREMISED ON A SERIOUS
MISAPPREHENSION OF FACTS.

2. THE COURT OF APPEALS DISREGARDED THE EVIDENCE ON RECORD AND COMMITTED

SERIOUS MISAPPREHENSION OF FACTS AND GRAVE ABUSE OFDISCRETION WHEN IT
CONCLUDED THAT THE CAUSE OF THE MISHAP WAS A DANGLING ELECTRIC WIRE THAT
STRUCK AND WOUND UPON THE VICTIMS.
 3. THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION IN AWARDING DAMAGES TO THE HEIRS OF CAMILO TANGONAN
NOTWITHSTANDING THE FACT THAT THEY WERE NEVER IMPLEADED AS PARTIES TO THE
ACTION.

4. ASSUMING, FOR ARGUMENT’S SAKE, THAT THE PETITIONER CAN BE HELD LIABLE FOR THE
MISHAP, DAMAGES AND ATTORNEY’S FEES COULD NOT BE AWARDED TO THE HEIRS
OFCAMILO TANGONAN; AND THE AWARD OF MORAL, TEMPERATE AND EXEMPLARY DAMAGES,
AS WELL AS ATTORNEY’S FEES, TO ALLAN RAPANAN IS WITHOUT BASIS.11

Thus, there are two main issues that need to be resolved by this Court: (1) Was petitioner’s negligence in
maintenance of its facilities the proximate cause of the death of Camilo and the injuries of Rapanan? and (2) In
the event that petitioner’s negligence is found to be the proximate cause of the accident, should damages be
awarded in favor of Camilo’s heirs even if they were not impleaded?

Petitioner contends that it cannot be accused of negligence as its crew cleared the roads of fallen electric poles
and snapped wires to ensure the safety of motorists and pedestrians. They rolled the snapped wires and placed
them behind nearby electric polesaway from the roads as temporary remedy considering that the snapped wires
could not be collected all at once. It cites the report of SPO2 Pedro Tactac and testimony of Tranquilino Rasos
stating that the electric wire was placedat the shoulder of the road. The photograph of the wire also shows that it
was placed among banana plants which petitioner submits to be a clear indication that it was safely tucked away
from the road. Petitioner contends that the trial court correctly observed that Camilo drove the motorcycle at a
high speed causing it to careen to the shoulder of the road where the electric wire was and had Camilo driven the
motorcycle at an average speed, that would not have happened. Thus, petitioner submits, as found by the trial
court, the proximate cause of the mishap was dueto recklessness and imprudence of Camilo and not of petitioner.

Respondents, for their part, insist that the appellate court erred in ruling that it was petitioner’s negligence that
caused the mishap resulting to the death of Camilo and injuries of Rapanan. They argued that had petitioner
properly maintained its facilities by making sure that every facility needing restoration is repaired, the mishap
could have been prevented.

The petition is meritorious.

Negligence is defined as the failure to observe for the protection of the interest of another person that degree of
care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers
injury.12Article 2176 of the Civil Code provides that "[w]hoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is a quasi-delict." Under this provision, the elements necessary
to establish a quasi-delict case are: (1) damages to the plaintiff; (2) negligence, by act or omission, of the
defendant or by some person for whose acts the defendant must respond, was guilty; and (3) the connection of
cause and effect between such negligence and the damages.13

The presence of the first element is undisputed because the unfortunate incident brought about the death of
Camilo and physical injuries to Rapanan. This Court, however, finds that the second and third elements are
lacking thus precluding the award of damages in favor of respondents. Adviento, petitioner’s employee testified
that their electric poles along the highways, including the one where the mishap took place, were erected about
four to five meters from the shoulder of the road. Another employee of petitioner, Rasos, testified that after the
typhoons hit Cagayan, he together with his co-employees, after checking the damage to the electric lines, rolled
the fallen electric wires and placed them at the foot of the electric poles so as to prevent mishaps to pedestrians
and vehicles passing by. Their testimonies were corroborated by whatwas recorded in the Police Blotter of the
Buguey Police Station, Buguey, Cagayan after SPO2 Tactac investigated on the incident. The pertinent excerpt
from the blotter is quoted verbatim:

xxxx

TEAM LED BY SPO2 PEDRO R TACTAC JUMPED OFF AND PROCEEDED TO BRGY MADDALERO,
BUGUEY, CAGAYAN TO CONDUCT INVEST AT THE SAID VEHICULAR ACCIDENT AT THE SAME PLACE
AND RET STN WITH THE REPT THAT ON OR ABOUT 8:45 PM 31 OCTOBER 98 ONE MOTORCYCLE
SUZUKI X4 WITH TEMPORARY PLATE NUMBER 14592 DRIVEN BY ONE CAMILO TANGONAN y ROSETE
21 years old, MARRIED, DRIVER AND A RESIDENT OF BRGY MASI, STA TERESITA, CAGAYAN (DEAD ON
THE SPOT) AND TWO COMPANIONS EDWIN COLOMA y MABANAG, 23 YEARS OLD, MARRIED, DRIVER
AND A RESIDENT OF MASI AND ALLAN RAFANAN y GUILLERMO, 19 YEARS OLD, SINGLE,
CONDUCTORAND A RESIDENT OF BRGY BUYUN STA TERESITA CAGAYAN WAS ACCIDENTALLY
TRAPPED BY A PROTRUDING CAGELCO WIRE AT THE SHOULDER OF THE ROAD WHILE THEY WERE
BOUND TO STA TERESITA FROM APARRITHIS PROVINCE DUE TO THE OVER SPEED OF MOTOR
VEHICLE THE WIRE STRANGLED THE NECK OF THE VICTIMS WHICH CAUSED THE INSTANTANEOUS
DEATH OF THE DRIVER, CAMILOTANGONAN AND ABRASIONS ON DIFFERENT PARTS OF THE BODY OF
THE TWO OTHER VICTIMS THE SAID TWO OTHER VICTIMS WERE BROUGHT TO ALFONSO ENRILE
HOSPITAL, GONZAGA, CAGAYAN FOR MEDICAL TREATMENT.14 (Emphasis and underscoring supplied)

Thus, there is no negligence on the part of petitioner that was allegedly the proximate cause of Camilo’s death
and Rapanan’s injuries.1a\^/phi1 From the testimonies of petitioner’s employees and the excerpt from the police
blotter, this Court can reasonably conclude that, at the time of that fatal mishap, said wires were quietly sitting on
the shoulder of the road, far enough from the concrete portion so as not to pose any threat to passing motor
vehicles and even pedestrians. Hence, if the victims of the mishap were strangled by said wires, it can only mean
that either the motorcycle careened towards the shoulder or even more likely, since the police found the
motorcycle not on the shoulder butstill on the road, that the three passengers were thrown off from the motorcycle
to the shoulder of the road and caught up with the wires. As to how that happened cannot be blamed on petitioner
but should be attributed to Camilo’s over speeding as concluded by the police after it investigated the mishap.
SPO2 Tactac, in his testimony, explained how theymade such conclusion:

ATTY. TUMARU:

Q: x x x My question is, you said that the motor vehicle was overspeeding, when you went to the place, what
made you conclude that the motor vehicle where the three rode which caused the death of Camilo Tangonan,
was overspeeding? Please explain that before this court[.]

ATTY. RAPANAN:

Incompetent, you honor.

COURT:

Answer.

A: I stated in the police blotter over speeding when we went to investigate. We reflected in the report/police blotter
that there was over speeding because of the skid mark that lasted up to 30 meters from the start to the place
where the motorcycle fell, sir.

Q: In this skid mark that you have seen, at the point of the start of the skid mark to the place where you found the
motor vehicle, where was the motor vehicle that time?

A: It was at the road, sir.

Q: What road?

A: At the edge of the cemented pavement, sir.

Q: Where was the victim found?

ATTY. RAPANAN:

Immaterial, your honor.

COURT:
Sustained.

ATTY. TUMARU:

Q: And did you try to investigate what was the cause [of death] of the victim?

ATTY. RAPANAN:

Incompetent, your honor.

ATTY. TUMARU:

Q: Per your investigation, did you find out the cause of death of the victim and the others (sic)?

A: There was abrasion at the neck of the victim, sir.

COURT:

Q: Who among the victims?

A: The driver Camilo Tangonan, sir.

Q: What about the two others?

A: When we arrived at the scene, the two companions of the victim were brought to the Gonzaga Alfonso Ponce
Enrile hospital by the PNP of Sta. Teresitapolice station, sir.

xxxx

ATTY. RAPANAN:

Q: Do you know that a motorcycle is provided with the speedometer?

A: Yes, sir.

Q: When you arrived at the scene, you no longer bother yourself to see the speedometer of the motorcycle, is that
correct?

ATTY. TUMARU:

Incompetent, your honor.

COURT:

Answer.

A: I did not bother to see the speedometer, sir.

Q: You only conclude in saying that the driver of the motorcycle was running his motorcycle in a very speed[y]
manner because of the skid mark measuring 30 meters, you did not include that in your report?

ATTY. TUMARU:

The document is the best evidence, your honor.

ATTY. RAPANAN:

This is a new matter, your honor.

COURT:

Answer.

A: We saw the skid mark so we concluded that there was an over speeding due to the skid mark, sir.

Q: Do you know that a skid on the surface of a cemented road shows that something happened to the motorcycle
o[r] its [d]river?

ATTY. TUMARU:

That calls for an opinion, your honor.

COURT:

Answer.

A: There was an accident, sir.

Q: Do you know that when a vehicle even if running with slow speed if a driver suddenly applied a break, there
was always a skid mark on the road?

A: It is the footrest of the motorcycle that caused the skid mark, sir.

COURT:

Q: Which is which now, you found a skid mark of the tire and footrest or only the skid mark of the footrest?

A: The footrest, sir.

Q: How do you know that the skid mark was caused by the footrest?

A: Because the skid mark was caused by the footrest because the place where the motorcycle fell (sic),the
footrest was still pointing [to] the skid mark [on] the cemented road, sir.15

The foregoing shows that the motorcycle was probably running too fast that it lost control and started tilting and
sliding eventually which made its foot rest cause the skid mark on the road. Therefore, the mishap already
occurred even while they were on the road and away from petitioner's electric wires and was not caused by the
latter as alleged by respondents. It just so happened that after the motorcycle tilted and slid, the passengers were
thrown off to the shoulder where the electric wires were. This Court hence agrees with the trial court that the
proximate cause of the mishap was the negligence of Camilo. Had Camilo driven the motorcycle at an average
speed, the three passengers would not have been thrown off from the vehicle towards the shoulder and
eventually strangulated by the electric wires sitting thereon. Moreover, it was also negligent of Camilo to have
allowed two persons to ride with him and for Rapanan to ride with them when the maximum number of
passengers of a motorcycle is two including the driver. This most likely even aggravated the situation because the
motorcycle was overloaded which made it harder to drive and control. When the plaintiffs own negligence was the
immediate and proximate cause of his injury, he cannot recover damages.16

As to the second issue, assuming arguendo that petitioner was indeed negligent, the appellate court erred in
awarding damages in favor of Camilo' s legal heirs since they were not imp leaded in the case. It should be noted
that it was Mary Gine, the common law wife of Camilo, who is the complainant in the case. As a mere common
law wife of Camilo, she is not considered a legal heir of the latter, and hence, has no legal personality to institute
the action for damages due to Camilo' s death.
WHEREFORE, the petition is hereby GRANTED. The December 8, 2011 Decision of the Court of Appeals in C.A.
G.R. CV No. 77659 is hereby REVERSED and SET ASIDE. The December 9, 2002 Decision of the Regional Trial
Court of Aparri, Cagayan, Branch 10 in Civil Case No. 10-305 dismissing the complaint for damages of
respondents Allan Rapanan and Mary Gine Tangonan is REINSTATED.

No pronouncement as to costs.

SO ORDERED.

[G.R. No. 143008. June 10, 2002]

SMITH BELL DODWELL SHIPPING AGENCY CORPORATION, petitioner, vs. CATALINO BORJA and
INTERNATIONAL TO WAGE AND TRANSPORT CORPORATION, respondents.

DECISION
PANGANIBAN, J.:

The owner or the person in possession and control of a vessel is liable for all natural and proximate damages
caused to persons and property by reason of negligence in its management or navigation. The liability for the loss
of the earning capacity of the deceased is fixed by taking into account the net income of the victim at the time of
death -- of the incident in this case -- and that persons probable life expectancy.

The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the March 6,
2000 Decision[1] and the April 25, 2000 Resolution[2] of the Court of Appeals[3] (CA) in CA-GR CV No. 57470. The
assailed Decision disposed as follows:

WHEREFORE, premises considered, the instant appeal is hereby DENIED. The questioned decision of the lower
court is hereby AFFIRMED in toto. No pronouncement as to costs.[4]
Reconsideration was denied in the assailed Resolution.

The Facts

The facts of the case are set forth by the CA as follows:

It appears that on September 23, 1987, Smith Bell [herein petitioner] filed a written request with the Bureau of
Customs for the attendance of the latters inspection team on vessel M/T King Family which was due to arrive at
the port of Manila on September 24, 1987.

Said vessel contained 750 metric tons of alkyl benzene and methyl methacrylate monomer.

On the same day, Supervising Customs Inspector Manuel Ma. D. Nalgan instructed [Respondent Catalino Borja]
to board said vessel and perform his duties as inspector upon the vessels arrival until its departure. At that time,
[Borja] was a customs inspector of the Bureau of Customs receiving a salary of P31,188.25 per annum.

"At about 11 oclock in the morning on September 24, 1987, while M/T King Family was unloading chemicals unto
two (2) barges [--] ITTC 101 and CLC-1002 [--] owned by [Respondent] ITTC, a sudden explosion occurred
setting the vessels afire. Upon hearing the explosion, [Borja], who was at that time inside the cabin preparing
reports, ran outside to check what happened. Again, another explosion was heard.

Seeing the fire and fearing for his life, [Borja] hurriedly jumped over board to save himself. However, the [water]
[was] likewise on fire due mainly to the spilled chemicals. Despite the tremendous heat, [Borja] swam his way for
one (1) hour until he was rescued by the people living in the squatters area and sent to San Juan De Dios
Hospital.
After weeks of intensive care at the hospital, his attending physician diagnosed [Borja] to be permanently disabled
due to the incident. [Borja] made demands against Smith Bell and ITTC for the damages caused by the explosion.
However, both denied liabilities and attributed to each other negligence.[5]

The trial court[6] (RTC) ruled in favor of Respondent Borja and held petitioner liable for damages and loss of
income. The RTC disposed as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering [Petitioner] Smith Bell Dodwell
[S]hipping Agency Corporation to pay [Borja]:

1. The amount of P495,360.00 as actual damages for loss of earning capacity:

2. The amount of P100,000.00 for moral damages; and

3. The amount of P50,000.00 for and as reasonable attorneys fees.

The cross-claim of [Petitioner] Smith Bell Dodwell Shipping Agency Corporation against co-defendant
International Towage and Transport Corporation and the latters counterclaim against [Borja] and cross-claim with
compulsory counterclaim against Smith Bell are hereby ordered dismissed. [7]

Ruling of the Court of Appeals

Affirming the trial court, the CA rejected the plea of petitioner that it be exonerated from liability for
Respondent Borjas injuries. Contrary to the claim of petitioner that no physical evidence was shown to prove that
the explosion had originated from its vessel, the CA held that the fire had originated from M/T King Family. This
conclusion was amply supported by the testimonies of Borja and Eulogio Laurente (the eyewitness of
International Towage and Transport Corporation or ITTC) as well as by the investigation conducted by the Special
Board of Marine Inquiry and affirmed by the secretary of the Department of National Defense. On the other hand,
the RTC, which the CA sustained, had not given probative value to the evidence of petitioner, whose sole
eyewitness had not shown up for cross-examination.

Hence, this Petition.[8]

The Issues

In its Memorandum,[9] petitioner raises the following issues:

1. Whether petitioner should be held liable for the injuries of Respondent Catalino Borja.

2. Whether Respondent ITTC should be held liable for the injuries of Respondent Catalino Borja.

3. Assuming without admitting that Respondent Catalino Borja is entitled to damages, whether Respondent Borja
is entitled to the amount of damages awarded to him by the trial court. [10]

Simply put, these issues can be summed up in these two questions: (1) Who, if any, is liable for Borjas
injuries? (2) What is the proper amount of liability?

This Courts Ruling

The Petition is partly meritorious.

First Issue:
Responsibility for Injuries

Petitioner avers that both lower courts labored under a misapprehension of the facts. It claims that the
documents adduced in the RTC conclusively revealed that the explosion that caused the fire on M/T King
Family had originated from the barge ITTC-101, a conclusion based on three grounds. First, the Survey Report
(Exh. 10) dated October 21, 1987 submitted by the Admiral Surveyors and Adjusters, Inc., showed that no part
of M/T King Family sustained any sharp or violent damage that would otherwise be observed if indeed an
explosion had occurred on it. On the other hand, the fact that the vessel sustained cracks on its shell plating was
noted in two Survey Reports from Greutzman Divers Underwater Specialist, dated October 6, 1987 (Exh. 11), and
during the underwater inspection on the sunken barge ITTC-101.
Second, external fire damage on the hull of M/T King Family indicated that the fire had started from outside
the vessel and from ITTC-101. The port side of the vessel to which the ITTC barge was tied was completely
gutted by fire, while the starboard side to which the barge CLC-1002 was tied sustained only slight fire damage.
Third, testimonial evidence proved that the explosion came from the barge of the ITTC and not from its
vessel. Security Guard Vivencio Estrella testified that he had seen the sudden explosion of monomer on the
barge with fire that went up to about 60 meters. Third Mate Choi Seong Hwan and Second Mate Nam Bang
Choun of M/T King Family narrated that while they were discharging the chemicals, they saw and heard an
explosion from the barge ITTC-101. Chief Security Guard Reynaldo Patron, in turn, testified that he was 7 to 10
meters away from the barge when he heard the explosion from the port side of M/T King Family and saw the
barge already on fire.
We are not persuaded. Both the RTC and the CA ruled that the fire and the explosion had originated from
petitioners vessel. Said the trial court:

The attempts of [Petitioner] Smith Bell to shift the blame on x x x ITTC were all for naught. First, the testimony of
its alleged eyewitness was stricken off the record for his failure to appear for cross-examination (p. 361, Record).
Second, the documents offered to prove that the fire originated from barge ITTC-101 were all denied admission
by the [c]ourt for being, in effect, hearsay (pp. 335 and 362). x x x Thus, there is nothing in the record to support
[petitioners] contention that the fire and explosion originated from barge ITTC-101.[11]

We find no cogent reason to overturn these factual findings. Nothing is more settled in jurisprudence than
that this Court is bound by the factual findings of the Court of Appeals when these are supported by substantial
evidence and are not under any of the exceptions in Fuentes v. Court of Appeals;[12] more so, when such findings
affirm those of the trial court.[13] Verily, this Court reviews only issues of law.
Negligence is conduct that creates undue risk of harm to another. It is the failure to observe that degree of
care, precaution and vigilance that the circumstances justly demand, whereby that other person suffers
injury.[14] Petitioners vessel was carrying chemical cargo -- alkyl benzene and methyl methacrylate
monomer.[15] While knowing that their vessel was carrying dangerous inflammable chemicals, its officers and crew
failed to take all the necessary precautions to prevent an accident. Petitioner was, therefore, negligent.
The three elements of quasi delict are: (a) damages suffered by the plaintiff, (b) fault or negligence of the
defendant, and (c) the connection of cause and effect between the fault or negligence of the defendant and the
damages inflicted on the plaintiff.[16] All these elements were established in this case. Knowing fully well that it was
carrying dangerous chemicals, petitioner was negligent in not taking all the necessary precautions in transporting
the cargo.
As a result of the fire and the explosion during the unloading of the chemicals from petitioners vessel,
Respondent Borja suffered the following damage: and injuries: (1) chemical burns of the face and arms; (2)
inhalation of fumes from burning chemicals; (3) exposure to the elements [while] floating in sea water for about
three (3) hours; (4) homonymous hemianopsia or blurring of the right eye [which was of] possible toxic origin; and
(5) [c]erebral infract with neo-vascularization, left occipital region with right sided headache and the blurring of
vision of right eye.[17]
Hence, the owner or the person in possession and control of a vessel and the vessel are liable for all natural
and proximate damage caused to persons and property by reason of negligent management or navigation. [18]

Second Issue:
Amount of Liability

Petitioner insists that Borja is not entitled to the full amount of damages awarded by the lower courts. It
disputes the use of his gross earning as basis for the computation of the award for loss of earning capacity. Both
courts, in computing the value of such loss, used the remaining years of the victim as a government employee
and the amount he had been receiving per annum at the time of the incident.
Counsel for Respondent Borja, on the other hand, claims that petitioner had no cause to complain, because
the miscomputation had ironically been in its favor. The multiplier used in the computation was erroneously based
on the remaining years in government service, instead of the life expectancy, of the victim. Borjas counsel also
points out that the award was based on the formers meager salary in 1987, or about 23 years ago when the
foreign exchange was still P14 to $1. Hence, the questioned award is consistent with the primary purpose of
giving what is just, moral and legally due the victim as the aggrieved party.
Both parties have a point. In determining the reasonableness of the damages awarded under Article 1764 in
conjunction with Article 2206 of the Civil Code, the factors to be considered are: (1) life expectancy (considering
the health of the victim and the mortality table which is deemed conclusive) and loss of earning capacity; (b)
pecuniary loss, loss of support and service; and (c) moral and mental sufferings. [19] The loss of earning capacity is
based mainly on the number of years remaining in the persons expected life span. In turn, this number is the
basis of the damages that shall be computed and the rate at which the loss sustained by the heirs shall be
fixed.[20]
The formula for the computation of loss of earning capacity is as follows: [21]

Net earning capacity = Life expectancy x [Gross Annual Income - Living Expenses (50% of gross annual
income)], where life expectancy = 2/3 (80 - the age of the deceased).[22]

Petitioner is correct in arguing that it is net income (or gross income less living expenses) which is to be used
in the computation of the award for loss of income. Villa Rey Transit v. Court of Appeals[23] explained that the
amount recoverable is not the loss of the entire earning, but rather the loss of that portion of the earnings which
the beneficiary would have received. Hence, in fixing the amount of the said damages, the necessary expenses of
the deceased should be deducted from his earnings.
In other words, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings
less expenses necessary in the creation of such earnings or income, less living and other incidental expenses.
When there is no showing that the living expenses constituted a smaller percentage of the gross income, we fix
the living expenses at half of the gross income. To hold that one would have used only a small part of the income,
with the larger part going to the support of ones children, would be conjectural and unreasonable. [24]
Counsel for Respondent Borja is also correct in saying that life expectancy should not be based on the
retirement age of government employees, which is pegged at 65. In Negros Navigation Co, Inc. v. CA,[25] the
Court resolved that in calculating the life expectancy of an individual for the purpose of determining loss of
earning capacity under Article 2206(1) of the Civil Code, it is assumed that the deceased would have earned
income even after retirement from a particular job.
Respondent Borja should not be situated differently just because he was a government employee. Private
employees, given the retirement packages provided by their companies, usually retire earlier than government
employees; yet, the life expectancy of the former is not pegged at 65 years.
Petitioner avers that Respondent Borja died nine years after the incident and, hence, his life expectancy of
80 years should yield to the reality that he was only 59 when he actually died.
We disagree. The Court uses the American Experience/Expectancy Table of Mortality or the Actuarial or
Combined Experience Table of Mortality, which consistently pegs the life span of the average Filipino at 80 years,
from which it extrapolates the estimated income to be earned by the deceased had he or she not been killed. [26]
Respondent Borjas demise earlier than the estimated life span is of no moment. For purposes of determining
loss of earning capacity, life expectancy remains at 80. Otherwise, the computation of loss of earning capacity will
never become final, being always subject to the eventuality of the victims death. The computation should not
change even if Borja lived beyond 80 years. Fair is fair.
Based on the foregoing discussion, the award for loss of earning capacity should be computed as follows:

Loss of earning = [2 (80-50)] x [(P2,752x12)-16,512]

capacity 3

= P330,240

Having been duly proven, the moral damages and attorneys fees awarded are justified under the Civil Codes
Article 2219, paragraph 2; and Article 2208, paragraph 11, respectively.
WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision is AFFIRMED with the
following MODIFICATIONS: petitioner is ordered to pay the heirs of the victim damages in the amount
of P320,240 as loss of earning capacity, moral damages in the amount of P100,000, plus another P50,000 as
attorneys fees. Costs against petitioner.
SO ORDERED.
G.R. No. 218014, December 07, 2016

EDDIE CORTEL Y CARNA AND YELLOW BUS LINE, INC., Petitioners, v. CECILE GEPAYA-LIM, Respondent.

DECISION
CARPIO, J.:
The Case

Petitioners Eddie Cortel y Carna (Cortel) and Yellow Bus Line, Inc. (Yellow Bus Line) assail the 16 October 2014
Decision1 and 21 April 2015 Resolution2 of the Court of Appeals Cagayan de Oro City in CA-G.R. CV No. 02980.
The Court of Appeals affirmed with modification the Judgment,3 dated 27 April 2012, of the Regional Trial Court of
Midsayap, Cotabato, Branch 18 (trial court), finding petitioners jointly and severally liable to the heirs of SP03
Robert C. Lim (Lim) for the latter's death.chanroblesvirtuallawlibrary

The Antecedent Facts

The Court of Appeals narrated the facts as follows:cralawlawlibrary

On 29 October 2004, Cartel was driving a bus, operated by Yellow Bus Line, which was on its way from Marbel,
Koronadal to Davao City. At around 9:45 in the evening, as the bus was traversing Crossing Rubber in the
Municipality of Tupi, South Cotabato, Cortel noticed two trucks with glaring headlights coming from the opposite
direction. Cortel stated that he was driving at a speed of 40 to 50 kilometers per hour. He claimed that upon
noticing the trucks, he reduced his speed to 20 kilometers per hour. However, the bus hit a black motorcycle
which allegedly had no tail light reflectors. The impact dragged the motorcycle at a distance of three meters
before it came to a full stop. Lim, who was riding the motorcycle, was thrown upward and then slammed into the
bus, hitting the base of its right windshield wiper. The motorcycle got entangled with the broken bumper of the
bus. According to Cortel, Lim was wearing a black jacket and was riding without a helmet at the time of the
accident.

Felix Larang (Larang), the bus conductor, alighted from the bus to aid Lim. Larang gave instructions to Cortel to
move back to release Lim and the motorcycle from the front bumper of the bus. Two bystanders proceeded to the
scene to assist Lim. After reversing the bus and freeing Lim and the motorcycle, Cortel drove the bus away and
went to a nearby bus station where he surrendered to authorities. Cortel claimed that he left the scene of the
incident because he feared for his life.

Respondent Cecile Gepaya-Lim, Lim's widow, filed a complaint for damages against petitioners. The case was
docketed as Civil Case No. 05-010.

During trial, SPO4 Eddie S. Orencio (SPO4 Orencio), the officer who investigated the incident, testified that Lim
was driving a DT Yamaha 125 black motorcycle when the accident took place. Cortel's bus and the motorcycle
were going in the same direction. SPO4 Orencio testified that that the bus bumped the motorcycle from behind.
The motorcycle's engine and chassis were severely damaged, while its rear rim was totally damaged by the
accident.

Yellow Bus Line presented and offered in evidence photographs showing that the bus' right front windshield and
wiper were damaged. The bus' lower right side bumper was also perforated. During the preliminary conference,
Yellow Bus Line also presented Cortel's certificates showing that he attended the following seminars: (1) Basic
Tire Care Seminar; (2) Basic Tire Knowledge and Understanding Retreading; and (3) Traffic Rules and
Regulations, Defensive Driving and Road Courtesy Seminar.

However, the certificates were not offered in evidence during trial.

The Decision of the Trial Court

In its 27 April 2012 Judgment, the trial court established that Cortel was at fault. The trial court found that the bus
was running fast when it bumped the motorcycle ridden by Lim. The trial court ruled that the accident is the
proximate cause of Lim's death. The trial court also ruled that Yellow Bus Line failed to present sufficient evidence
to prove that it exercised due diligence in the selection and supervision of Cortel.

The dispositive portion of the trial court's decision reads:chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the Court hereby renders judgment against Defendants Eddie Cortely
Carna and likewise against the owners of the Yellow Bus Line, Inc., numbered bus with Body No. A-96, and
bearing Plate No. LWE-614, with PDL No. L05-30-002730; thus pursuant to [A]rticles 2176 and 2180 of the Civil
Code of the Philippines[,] said Defendants are ordered to pay jointly and severally to the plaintiffs the following
amount:cralawlawlibrary

In favor of the heirs of Robert C. Lim represented by Cecil[]e Gepaya Lim as the surviving spouse, and with [a]
living child, the death compensation of One Hundred Fifty Thousand Pesos (P150,000.00), plus x x x[:]

a) Funeral and burial expenses of Fifty Thousand Pesos (P50,000.00);ChanRoblesVirtualawlibrary

b) [C]ompensation for loss of earning capacity in the amount of P100,000.00;ChanRoblesVirtualawlibrary

(c) x x x Damages [to] the motorcycle in the amount of [Fifteen Thousand Pesos]
(P15,000.00);ChanRoblesVirtualawlibrary

d) Attorney's fees of Fifteen Thousand Pesos (P15,000.00);ChanRoblesVirtualawlibrary

e) Costs of suit.

SO ORDERED.4
chanrobleslaw
Petitioners appealed from the trial court's decision.

The Decision of the Court of Appeals

In its 16 October 2014 Decision, the Court of Appeals applied the doctrine of res ipsa loquitor.

The Court of Appeals ruled that Lim died because of the collision between the bus driven by Cortel and the
motorcycle Lim was riding. The Court of Appeals ruled that both vehicles were driving in the same lane and were
headed towards the same direction. The Court of Appeals noted that vehicles running on highways do not
normally collide unless one of the drivers is negligent. The Court of Appeals further ruled that Cortel had exclusive
control and management of the bus he was driving. The Court of Appeals found no evidence that Lim had any
contributory negligence in the accident that resulted to his death. The Court of Appeals ruled that petitioners failed
to prove that the motorcycle had no headlights or that Lim was not wearing a helmet. The Court of Appeals stated
that even if the motorcycle was black and Lim was wearing a black jacket, these were not prohibited by traffic
rules and regulations. The Court of Appeals noted that upon impact, Lim's body was thrown upward, indicating
that Cortel was driving at high speed. The damages to the motorcycle and the bus also disproved Cortel's
allegation that he was only driving at the speed of 20 kilometers per hour.

The Court of Appeals ruled that Yellow Bus Line failed to exercise the care and diligence of a good father of a
family in its selection and supervision of its employees. The Court of Appeals ruled that the certificates presented
by Yellow Bus Line were not admissible in evidence because the police officer who allegedly signed them was not
presented before the trial court. In addition, Yellow Bus Line did not offer the certificates as evidence during trial.

The Court of Appeals modified the amount of damages awarded to the heirs of Lim. Using the formula set by this
Court in The Heirs of Poe v. Malayan Insurance Company, Inc.5 and Villa Rey Transit, Inc. v. Court of
Appeals,6 the Court of Appeals recomputed Lim's lost earning capacity, as follows:chanRoblesvirtualLawlibrary
Life expectancy = 2/3 x [80- age of deceased at the time of death]

2/3 x (80-41]

2/3 x [39]
 FORMULA – NET EARNING CAPACITY (NEC)

If:cralawlawlibrary

Age at time of death of Robert Lim = 41

Monthly Income at time of death = 13,715.00
Gross Annual Income (GAI)= [(P13,715.00) (12)] = P164,580.00
Reasonable/Necessary Living Expenses (R/NLE) – 50% of GAI = P82,290

NEC = [2/3 (80-41)] [164,580-82,290]

= [2/3 (39)] [82,290]

= [26] [82,290]

= P2,139,540.00[7]
chanrobleslaw
Thus, the Court of Appeals found that the award of 100,000 as death compensation given by the trial court to the
heirs of Lim was inadequate. However, the Court of Appeals reduced the amount of death indemnity from
150,000 to 50,000. The Court of Appeals deleted the 15,000 awarded by the trial court for the damages to the
motorcycle for absence of proof but awarded 25,000 for funeral and burial expenses. In addition, the Court of
Appeals awarded 100,000 as moral damages to the heirs of Lim. The dispositive portion of the Court of Appeals'
decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, the Judgment dated 27 April 2012 of the Regional Trial Court (Branch 18), 12 th Judicial Region,
Midsayap, Cotabato, is AFFIRMED with MODIFICATION. Defendant[]-appellants Eddie Cortel and Yellow Bus
Line, Inc. are hereby ordered to pay jointly and severally plaintiff-appellee Cecile Gepaya-Lim the
following:cralawlawlibrary

(1) Funeral and burial expenses of P25,000.00;

(2) Actual damages for loss of earning capacity of P2,139,540.00;
(3) Moral damages amounting to P100,000.00;
(4) Death indemnity of P50,000.00; and
(5) Attorney's fees of P15,000.00

After this decision becomes final and executory, interest at 12% per annum shall additionally be imposed on the
total obligation until full payment.

No costs.

SO ORDERED.8
chanrobleslaw
Petitioners filed a motion for reconsideration. The Court of Appeals denied the motion in its 21 April 2015
Resolution.

Hence, the recourse before this Court.

The Issue

Whether the Court of Appeals committed a reversible error m affirming with modifications the decision of the trial
court.

The Ruling of this Court

We deny the petition.

Petitioners want this Court to review the factual findings of both the trial court and the Court of Appeals.
Petitioners allege that the trial court and the Court of Appeals erred in concluding that the bus driven by Cortel
was running fast when the accident occurred and in applying the doctrine of res ipsa loquitur in this case.

The rule is that the factual findings of the trial court, when affirmed by the Court of Appeals, are binding and
conclusive upon this Court.9 It is also settled that questions regarding the cause of vehicular accident and the
persons responsible for it are factual questions which this Court cannot pass upon, particularly when the findings
of the trial court and the Court of Appeals are completely in accord.10While there are exceptions to this rule, the
Court finds no justification that would make the present case fall under the exceptions.

As pointed out by the Court of Appeals, the result of the collision speaks for itself. If, indeed, the speed of the bus
was only 20 kilometers per hour as Cortel claimed, it would not bump the motorcycle traveling in the same
direction with such impact that it threw its rider upward before hitting the base of its right windshield wiper. If
Cortel was driving at 20 kilometers per hour, the bus would not drag the motorcycle for three meters after the
impact. The Court of Appeals likewise considered the damages sustained by both the motorcycle and the bus
which indicated that Cortel was driving fast at the time of the accident. As regards petitioners' allegation that Lim
was equally negligent because he was riding without a helmet and the motorcycle had no tail lights, the Court of
Appeals correctly found that it was self-serving because petitioner did not present any evidence to prove this
allegation.

We agree that res ipsa loquitur applies m this case. The Court explained this doctrine as
follows:chanRoblesvirtualLawlibrary
While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will
not generally give rise to an inference or presumption that it was due to negligence on defendant's part, under the
doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction,
that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such
as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some
other person who is charged with negligence.

x x x [W]here it is shown that the thing or instrumentality which caused the injury complained of was under the
control or management of the defendant, and that the occurrence resulting in the injury was such as in the
ordinary course of things would not happen if those who had its control or management used proper care, there is
sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the
defendant, that the injury arose from or was caused by the defendant's want of care.

xxxx

The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality
which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and
that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to
rely upon the proof of the happening of the accident in order to establish negligence. The inference which the
doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent,
is practically accessible to the defendant but inaccessible to the injured person. 11
chanrobleslaw
The elements of res ipsa loquitur are: (1) the accident is of such character as to warrant an inference that it would
not have happened except for the defendant's negligence; (2) the accident must have been caused by an agency
or instrumentality within the exclusive management or control of the person charged with the negligence
complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of
the person injured.12

In this case, Cortel had the exclusive control of the bus, including its speed. The bus and the motorcycle were
running in the same traffic direction and as such, the collision would not have happened without negligence on the
part of Cortel. It was established that the collision between the bus and the motorcycle caused Lim's death. Aside
from bare allegations that petitioners failed to prove, there was nothing to show that Lim had contributory
negligence to the accident.

The rule is when an employee causes damage due to his own negligence while performing his own duties, there
arises a presumption that his employer is negligent.13 This presumption can be rebutted only by proof of
observance by the employer of the diligence of a good father of a family in the selection and supervision of its
employees. In this case, we agree with the trial court and the Court of Appeals that Yellow Bus Line failed to
prove that it exercised due diligence of a good father of a family in the selection and supervision of its employees.
Cortel's certificates of attendance to seminars, which Yellow Bus Line did not even present as evidence in the trial
court, are not enough to prove otherwise.
We sustain the Court of Appeals in its award of loss of earning capacity and damages to respondent. The
increase in the award for loss of earning capacity is proper due to the computation of the award in accordance
with the following formula:chanRoblesvirtualLawlibrary
Net earning capacity Life Expectancy x [Gross Annual Income- Living Expenses (50% of gross annual income)],
where life expectancy 2/3 (80 - the age of the deceased).14
chanrobleslaw
We note that the Court of Appeals clearly intended to award to respondent temperate damages amounting to
P25,000 for burial and funeral expenses, instead of the P15,000 representing the actual damage to the
motorcycle awarded by the trial court, because no evidence was presented to prove the same. However, the term
"temperate damages" was inadvertently omitted in the dispositive portion of the Court of Appeals' decision
although it was stated that the amount was for funeral and burial expenses. We reduce the interest rate to 6% per
annum on all damages awarded from the date of finality of this Decision until fully paid.

WHEREFORE, we DENY the petition. We AFFIRM with MODIFICATION the 16 October 2014 Decision and 21
April 2015 Resolution of the Court of Appeals Cagayan de Oro City in CA-G.R. CV No. 02980.
We ORDER petitioners Eddie Cortel y Carna and Yellow Bus Line, Inc. to pay jointly and severally respondent
Cecile Gepaya-Lim the following:chanRoblesvirtualLawlibrary
(1) Award for loss of earning capacity amounting to P2,139,540;
(2) Temperate damages amounting to P25,000;
(3) Death indemnity amounting to P50,000;
(4) Moral damages amounting to P100,000; and
(5) Attorney's fees amounting to P15,000
chanrobleslaw
We impose an interest rate of 6% per annum on all damages awarded from the date of finality of this Decision
until fully paid.

SO ORDERED.Cha

G.R. No. 191033

THE ORCHARD GOLF & COUNTRY CLUB, INC., EXEQUIEL D. ROBLES, CARLO R.H. MAGNO, CONRADO
L. BENITEZ II, VICENTE R. SANTOS, HENRY CUA LOPING, MARIZA SANTOS-TAN, TOMAS B. CLEMENTE
III, and FRANCIS C. MONTALLANA, Petitioners,
vs. ERNESTO V. YU and MANUEL C. YUHICO, Respondents.

DECISION

PERALTA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court (Rules) seeks to reverse the Resolutions
dated September 16, 20091 and January 21, 20102 of the Court of Appeals (CA) in CA-G.R. SP No. 106918,
which reconsidered and set aside its Resolution dated January 15, 20093 granting petitioners a 15-day period
within which to file a petition for review under Rule 43 of the Rules.

The present case is a continuation of Yu v. The Orchard Gold & Country Club, Inc.4 decided by this Court on
March 1, 2007. For brevity, the relevant facts narrated therein are quoted as follows:

On May 28, 2000, a Sunday, [respondents] Ernesto Yu and Manuel Yuhico went to the Orchard Golf & Country
Club to play a round of golf with another member of the club. At the last minute, however, that other member
informed them that he could not play with them. Due to the "no twosome" policy of the Orchard contained in the
membership handbook prohibiting groups of less than three players from teeing off on weekends and public
holidays before 1:00 p.m., [respondents] requested management to look for another player to join them.

Because [Orchard] were unable to find their third player, [respondent] Yu tried to convince Francis Montallana,
Orchard’s assistant golf director, to allow them to play twosome, even if they had to tee off from hole no. 10 of the
Palmer golf course. Montallana refused, stating that the flights which started from the first nine holes might be
disrupted. [Respondent] Yu then shouted invectives at Montallana, at which point he told [respondent] Yuhico that
they should just tee off anyway, regardless of what management's reaction would be. [Respondents] then teed
off, without permission from Montallana. They were thus able to play, although they did so without securing a tee
time control slip before teeing off, again in disregard of a rule in the handbook. As a result of [respondents’]
actions, Montallana filed a report on the same day with the board of directors (the board).

In separate letters dated May 31, 2000, the board, through [petitioner] Clemente, requested [respondents] to
submit their written comments on Montallana’s incident report dated May 28, 2000. The reportwas submitted for
the consideration of the board.

Subsequently, on June 29, 2000, the board resolved to suspend [respondents] from July 16 to October 15, 2000,
and served notice thereof on them.

On July 11, 2000, [respondents] filed separate petitions for injunction with application for temporary restraining
order (TRO) and/or preliminary injunction with the Securities Investigation and Clearing Department (SICD) of the
Securities and Exchange Commission (SEC), at that time the tribunal vested by law with jurisdiction to hear and
decide intra-corporate controversies. The cases, in which [respondents] assailed the validity of their suspension,
were docketed as SEC Case Nos. 07-00-6680 and 07-00-6681. They were eventually consolidated.

After a joint summary hearing on the aforesaid petitions, the SEC-SICD, on July 14, 2000, issued a TRO effective
for 20 days from issuance, restraining and enjoining [petitioners], their agents or representatives from
implementing or executing the suspension of [respondents].

On August 1, 2000, the SEC en banc issued its "Guidelines on Intra-Corporate Cases Pending Before the SICD
and the Commission En Banc of the Securities and Exchange Commission" (guidelines). Sections 1 and 2 of
these guidelines provided:

Section 1. Intra-corporate and suspension of payments or rehabilitation cases may still be filed with the Securities
and Exchange Commission on or before August 8, 2000. However, the parties-litigants or their counsels or
representatives shall be advised that the jurisdiction of the Commission over these cases shall be eventually
transferred to the Regional Trial Courts upon effectivity of The Securities Regulation Code by August 9, 2000.

Section 2. Prayers for temporary restraining order or injunction or suspension of payment order contained in
cases filed under the preceding section may be acted upon favorably provided that the effectivity of the
corresponding order shall only be up to August 8, 2000. Prayers for other provisional remedies shall no longer
be acted upon by the Commission. In all these cases, the parties-litigants or their counsels or representatives
shall be advised that the said cases will eventually be transferred to the regular courts by August 9, 2000.
(Emphasis ours)

After hearing [respondents’] applications for preliminary injunction, the SEC-SICD issued an order dated August
2, 2000 directing the issuance of a writ of preliminary injunction enjoining the individual [petitioners], their agents
and representatives from suspending [respondents], upon the latter's posting of separate bonds of P40,000. This
[respondents] did on August 4, 2000.

On August 7, 2000, the SEC-SICD issued a writ of preliminary injunction against [petitioners] directing them to
strictly observe the order dated August 2, 2000.1âwphi1

On October 31, 2000, the board held a special meeting in which it resolved to implement the June 29, 2000 order
for the suspension of [respondents] in view of the fact that the writs of injunction issued by the SICD in their
respective cases had already [elapsed] on August 8, 2000 under the SEC guidelines.

In separate letters dated December 4, 2000 addressed to each [respondent], [petitioner] Clemente informed them
that the board was implementing their suspensions.

On December 12, 2000, [respondents] filed a petition for indirect contempt against [petitioners] in the Regional
Trial Court (RTC) of Dasmariñas, Cavite, docketed as Civil Case No. 2228-00.

In an order dated December 13, 2000, the Dasmariñas, Cavite RTC, Branch 90, through Judge Dolores [L.]
Español, directed the parties to maintain the "last, actual, peaceable and uncontested state of things," effectively
restoring the writ of preliminary injunction, and also ordered [petitioners] to file their answer to the petition.
[Petitioners] did not file a motion for reconsideration but filed a petition for certiorari and prohibition with the CA,
docketed as CA-G.R. SP No. 62309, contesting the propriety of the December 13, 2000 order of Judge Español.
They also prayed for the issuance of a TRO and writ of preliminary injunction.

The CA reversed the Dasmariñas, Cavite RTC in the x x x decision dated August 27, 2001.

In view of the CA's decision in CA-G.R. SP No. 62309, [petitioners] finally implemented [respondents’]
suspension.

In the meantime, [respondents] filed a motion ad cautelam dated August 30, 2001 in the RTC of Imus, Cavite,
Branch 21, praying for the issuance of a TRO and/or writ of injunction to enjoin [petitioners] from implementing the
suspension orders. They alleged that neither the CA nor this Court could afford them speedy and adequate relief,
hence[,] the case in the RTC of Imus, Cavite. The case was docketed as SEC Case Nos. 001-01 and 002-01.

On September 7, 2001, the Imus, Cavite RTC issued a TRO. [Petitioners] filed a motion for reconsideration on
September [11,] 2001.

It was after the issuance of this TRO that [respondents] filed, on September 12, 2001, a motion for
reconsideration of the CA’s decision in CA-G.R. SP No. 62309. In a resolution dated October 10, 2001, the CA
denied [respondents’] motion, prompting them to elevate the matter to this Court via petition for review
on certiorari, docketed as G.R. No. 150335.

In an order dated September 21, 2001, the Imus, Cavite RTC denied [petitioners’] motion for reconsideration and
directed the issuance of a writ of preliminary injunction. This prompted [petitioners] to file another petition
for certiorari in the Court of Appeals [docketed as CA-G.R. SP No. 67664] which x x x issued [on March 26, 2002]
a TRO against the Imus, Cavite RTC, enjoining it from implementing the writ of preliminary injunction.

At this point, [respondents] filed their second petition in this Court, this time a special civil action for certiorari,
docketed as G.R. No. 152687, which included a prayer for the issuance of a TRO and/or the issuance of a writ of
preliminary injunction to restrain the enforcement of the CA-issued TRO.

On May 6, 2002, the Court issued a resolution consolidating G.R. No. 152687 and G.R. No. 150335.

In G.R. No. 150335, the issue for consideration [was] whether Sections 1 and 2 of the SEC guidelines dated
August 1, 2000 shortened the life span of the writs of preliminary injunction issued on August 7, 2000 by the SEC-
SICD in SEC Case Nos. 07-00-6680 and 07-00-6681, thereby making them effective only until August 8, 2000.

At issue in G.R. No. 152687, on the other hand, [was] whether or not the CA committed grave abuse of discretion
amounting to lack of jurisdiction by issuing a TRO against the Imus, Cavite RTC and enjoining the implementation
of its writ of preliminary injunction against [petitioners].5

On March 1, 2007, the Court denied the petitions in G.R. Nos. 150335 and 152687. In G.R. No. 150335, it was
held that the parties were allowed to file their cases before August 8, 2000 but any provisional remedies the SEC
granted them were to be effective only until that date. Given that the SEC Order and Writ of Injunction were
issued on August 2 and 7, 2000, respectively, both were covered by the guidelines and the stated cut-off date. As
to G.R. No. 152687, We ruled that the petition became moot and academic because the TRO issued by the CA
on March 26, 2002 already expired, its lifetime under Rule 58 of the Rules being only 60 days, and petitioners
themselves admitted that the CA allowed its TRO to elapse.

Meanwhile, per Order dated September 24, 2002 of the Imus RTC, SEC Case Nos. 001-01 and 002-01 were set
for pre-trial conference.6 Trial on the merits thereafter ensued.

On December 4, 2008, the Imus RTC ruled in favor of respondents. The dispositive portion of the
Decision7 ordered:
WHEREFORE, premises considered, the decision of the Club’s Board of Directors suspending [respondents]
Ernesto V. Yu and Manuel C. Yuhico is hereby declared void and of no effect, and its’ (sic) enforcement
permanently enjoined. The writ of preliminary injunction is hereby declared permanent.

[Petitioners] are hereby directed to jointly and severally pay each of the [respondents] the following amounts:

(a) P2,000,000.00 as moral damages;

(b) P2,000,000.00 as exemplary damages;

(c) P500,000.00 as attorney’s fees[;] and

(d) P100,000.00 as costs of litigation.

SO ORDERED.8

Upon receiving a copy of the Imus RTC Decision on December 22, 2008, petitioners filed a Notice of Appeal
accompanied by the payment of docket fees on January 5, 2009. 9 Respondents then filed an Opposition to Notice
of Appeal with Motion for Issuance of Writ of Execution,10 arguing that the December 4, 2008 Decision already
became final and executory since no petition for review under Rule 43 of the Rules was filed before the CA
pursuant to Administrative Matter No. 04-9-07-SC.

Realizing the mistake, petitioners filed on January 13, 2009 an Urgent Motion for Extension of Time to File a
Petition.11 Before the Imus RTC, they also filed a Motion to Withdraw the Notice of Appeal. 12

On January 15, 2009, the CA resolved to give petitioners a 15-day period within which to file the petition,
but "[s]ubject to the timeliness of the filing of petitioners’ Urgent Motion for Extension of Time to File ‘Petition for
Review’ Under Rule 43 of the Rules of Court dated January 13, 2009."13 Afterwards, on January 21, 2009,
petitioners filed a Petition for Review.14

In the meantime, respondents filed an Opposition to Petitioners’ Urgent Motion. 15 Subsequently, they also filed a
motion for reconsideration of the CA’s Resolution dated January 15, 2009. 16

Before the Imus RTC, respondents’ motion for execution was granted on February 17, 2009. The trial court
opined that the proper appellate mode of review was not filed within the period prescribed by the Rules and that
the CA issued no restraining order.17 On March 2, 2009, the Writ of Execution was issued.18 Eventually, on March
30, 2009, the Sheriff received the total amount of P9,200,000.00, as evidenced by two manager’s check payable
to respondents in the amount of P4,600,000.00 each, which were turned over to respondents’ counsel. 19

On September 16, 2009, the CA granted respondents’ motion for reconsideration, setting aside its January 15,
2009 Resolution. It relied on Atty. Abrenica v. Law Firm of Abrenica, Tungol & Tibayan (Atty.
Abrenica)20 and Land Bank of the Philippines v. Ascot Holdings and Equities, Inc., (LBP),21 which respondents
cited in their Opposition to the Urgent Motion and Motion for Reconsideration. Petitioners moved to
reconsider,22 but it was denied on January 21, 2010; hence, this petition.

The Court initially denied the petition, but reinstated the same on October 6, 2010. 23

We grant the petition.

The cases of LBP and Atty. Abrenica are inapplicable. In LBP, the Court affirmed the CA’s denial of the bank’s
motion for extension of time to file a petition for review. Examination of said case revealed that the bank filed a
motion for reconsideration of the trial court’s adverse judgment dated March 15, 2006, in violation of Section 8(3),
Rule 1 of the Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799.
It was held that the filing of such prohibited pleading did not toll the reglementary period to appeal the
judgment via a petition for review under Rule 43 of the Rules. Thus, the CA already lacked jurisdiction to entertain
the petition which the bank intended to file, much less to grant the motion for extension of time that was belatedly
filed on July 25, 2006.
Also, in Atty. Abrenica, We found no compelling reasons to relax the stringent application of the rules on the
grounds as follows:

First, when petitioner received the trial court’s consolidated decision on December 16, 2004, A.M. No. 04-9-07-SC
was already in effect for more than two months.

Second, petitioner had known about the new rules on the second week of January, 2005 when he received a
copy of respondents’ Opposition (To Defendant’s Notice of Appeal) dated January 6, 2005. In their opposition,
respondents specifically pointed to the applicability of A.M. No. 04-9-07-SC to the instant case.

Third, petitioner originally insisted in his Reply with Manifestation (To the Opposition to Defendant’s Notice of
Appeal) that the correct mode of appeal was a "notice of appeal."

Petitioner reiterated in his Opposition to respondents’ motion for execution dated January 14, 2005 that a notice
of appeal was the correct remedy.

Finally, petitioner filed his Motion to Admit Attached Petition for Review only on June 10, 2005, or almost eight
months from the effectivity of A.M. No. 04-9-07-SC on October 15, 2004, after he received the trial court’s Order
of May 11, 2005.24

Unlike LBP and Atty. Abrenica, petitioners in this case committed an excusable delay of merely seven (7) days.
When they received a copy of the Imus RTC Decision on December 22, 2008, they filed before the CA an Urgent
Motion for Extension of Time to File a Petition on January 13, 2009. Meantime, they exhibited their desire to
appeal the case by filing a Notice of Appeal before the Imus RTC. Upon realizing their procedural faux pax,
petitioners exerted honest and earnest effort to file the proper pleading despite the expiration of the reglementary
period. In their urgent motion, they candidly admitted that a petition for review under Rule 43 and not a notice of
appeal under Rule 41 ought to have been filed. The material dates were also indicated. Hence, the CA was fully
aware that the 15-day reglementary period already elapsed when it granted the time to file the petition.

In general, procedural rules setting the period for perfecting an appeal or filing a petition for review are inviolable
considering that appeal is not a constitutional right but merely a statutory privilege and that perfection of an
appeal in the manner and within the period permitted by law is not only mandatory but jurisdictional.25 However,
procedural rules may be waived or dispensed with in order to serve and achieve substantial justice. 26 Relaxation
of the rules may be had when the appeal, on its face, appears to be absolutely meritorious or when there are
persuasive or compelling reasons to relieve a litigant of an injustice not commensurate with the degree of
thoughtlessness in not complying with the prescribed procedure. 27

Notably, under A.M. No. 04-9-07-SC (Re: Mode of Appeal in Cases Formerly Cognizable by the Securities and
Exchange Commission),28 while the petition for review under Rule 43 of the Rules should be filed within fifteen
(15) days from notice of the decision or final order of the RTC, the CA may actually grant an additional period of
fifteen (15) days within which to file the petition and a further extension of time not exceeding fifteen (15) days for
the most compelling reasons. This implies that the reglementary period is neither an impregnable nor an
unyielding rule.

Here, there is also no material prejudice to respondents had the CA allowed the filing of a petition for review.
When the Imus RTC declared as permanent the writ of preliminary injunction, the injunction became immediately
executory. Respondents’ suspension as Club members was effectively lifted; in effect, it restored their rights and
privileges unless curtailed by a temporary restraining order or preliminary injunction.

More importantly, the substantive merits of the case deserve Our utmost consideration.

In the present case, Yu acknowledged that there was an offense committed. 29 Similarly, Yuhico admitted that he
was aware or had prior knowledge of the Club’s "no twosome" policy as contained in the Club’s Membership
Handbook and that they teed off without the required tee time slip.30 Also, while Yu recognized telling
Montallana "kamote ka," Yuhico heard him also say that he (Montallana) is "gago."31

Respondents assert that the "no twosome" policy was relaxed by the management when a member or player
would not be prejudiced or, in the words of Yu, allowed when "maluwag."32 Yet a thorough reading of the
transcript of stenographic records (TSN) disclosed that such claim is based not on concrete examples. No specific
instance as to when and under what circumstance the supposed relaxation took place was cited. Yuhico roughly
recollected two incidents but, assuming them to be true, these happened only after May 28, 2000. 33 Further, the
tee pass or control slip and the Club’s Palmer Course Card,34 which was identified by respondents’ witness,
Pepito Dimabuyo, to prove that he and another member were allowed to play twosome on June 13, 2004, a
Sunday, indicated that they were allowed to tee off only at 1:45 p.m.35 Lastly, granting, for the sake of argument,
that the "no twosome" policy had been relaxed in the past, Montallana cannot be faulted in exercising his
prerogative to disallow respondents from playing since they made no prior reservation and that there were
standing flights waiting for tee time. Per Cipriano Santos’ Report, May 28, 2000 was a relatively busy day as it
had 200 registered players to accommodate as of 8:00 a.m.

It was averred that respondents teed off without the required tee time slip based on the thinking that it was no
longer necessary since Santos, the Club’s Manager, allowed them by waving his hands when Yuhico’s caddie
tried to pick up the slip in the registration office. Such excuse is flimsy because it ignored the reality that Santos, a
mere subordinate of Montallana who already earned the ire of Yu, was practically more helpless to contain the
stubborn insistence of respondents.

Definitely, the contentions that respondents were not stopped by the management when they teed off and that
they did not cause harm to other members playing golf at the time for absence of any complaints are completely
immaterial to the fact that transgressions to existing Club rules and regulations were committed. It is highly
probable that they were tolerated so as to restore the peace and avoid further confrontation and inconvenience to
the parties involved as well as to the Club members in general.

With regard to the purported damages they incurred, respondents testified during the trial to support their
respective allegations.1âwphi1 Yuhico stated that he distanced himself from his usual group (the "Alabang Boys")
and that he became the butt of jokes of fellow golfers.36 On the other hand, Yu represented that some of his
friends in the business like Freddy Lim, a certain Atty. Benjie, and Jun Ramos started to evade or refuse to have
dealings with him after his suspension.37 Apart from these self-serving declarations, respondents presented
neither testimonial nor documentary evidence to bolster their claims. Worse, Yu even admitted that Freddy Lim
and Atty. Benjie did not tell him that his suspension was the reason why they did not want to transact with him. 38

Records reveal that respondents were given due notice and opportunity to be heard before the Board of Directors
imposed the penalty of suspension as Club members. Respondent Yu was served with the May 31, 2000
letter39signed by then Acting General Manager Tomas B. Clemente III informing that he violated the "no twosome"
policy, teed off without the required tee time slip, and uttered derogatory remarks to Montallana in front of another
member and the caddies. In response, Yu’s counsel asked for a copy of Montallana’s report and a formal hearing
to confront the complainant and all the witnesses.40 Subsequently, on June 13, 2000, Yu, through counsel,
submitted his explanation that included an admission of the "no twosome" policy. 41 Finally, on September 15,
2000, Yu was advised of the Board resolution to give him another opportunity to present his side in a meeting
supposed to be held on September 20, 2000.42 It appears, however, that Yu refused to attend.43

Likewise, respondent Yuhico was given by Clemente a letter dated May 31, 2000 informing him of violating the
"no twosome" policy and teeing off without the required tee time slip.44 After receiving the same, Yuhico called up
Clemente to hear his side.45 Like Yu, however, Yuhico later refused to attend a meeting with the Board. 46

Respondents were suspended in accordance with the procedure set forth in the Club’s By-laws. There is no merit
on their insistence that their suspension is invalid on the ground that the affirmative vote of eight (8) members is
required to support a decision suspending or expelling a Club member. Both the provisions of Articles of
Incorporation47 and By-Laws48 of the Club expressly limit the number of directors to seven (7); hence, the
provision on suspension and expulsion of a member which requires the affirmative vote of eight (8) members is
obviously a result of an oversight. Former Senator Helena Z. Benitez, the Honorary Chairperson named in the
Membership Handbook, could not be included as a regular Board member since there was no evidence adduced
by respondents that she was elected as such pursuant to the Corporation Code and the By-laws of the Club or
that she had the right and authority to attend and vote in Board meetings. In addition, at the time the Board
resolved to suspend respondents, the affirmative votes of only six (6) Board members already sufficed. The
testimony of Jesus A. Liganor, who served as Assistant Corporate Secretary, that Rodrigo Francisco had not
attended a single Board meeting since 1997 remains uncontroverted. 49 The Court agrees with petitioners that the
Club should not be powerless to discipline its members and be helpless against acts inimical to its interest just
because one director had been suspended and refused to take part in the management affairs.
Lastly, contrary to respondents’ position, the recommendation of the House Committee 50 to suspend a Club
member is not a pre-requisite. Section 1, Article XIV,51 not Section 2 (b), Article XI,52 of the By-Laws governs as it
outlines the procedure for the suspension of a member. Even assuming that the recommendation of the House
Committee is mandatory, respondents failed to prove, as a matter of fact, that petitioners acted in bad faith in
relying on the subject provision, which employs the permissive word "may" in reference to the power of the House
Committee to recommend anytime the suspension of a Club member.

Way different from the trial court’s findings, there is, therefore, no factual and legal basis to grant moral and
exemplary damages, attorney’s fees and costs of suit in favor of respondents. The damages suffered, if there are
any, partake of the nature of a damnum absque injuria. As elaborated in Spouses Custodio v. CA:53

x x x [T]he mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant
the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and
damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute
a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or
wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is
the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm
was not the result of a violation of a legal duty. These situations are often called damnum absque injuria.

In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such
injuries resulted from a breach of duty which the defendant owed to the plaintiff – a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the
premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty
and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that
there should be tort liability merely because the plaintiff suffered some pain and suffering.

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another
but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In
such cases, the consequences must be borne by the injured person alone. The law affords no remedy for
damages resulting from an act which does not amount to a legal injury or wrong.

In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful,
but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual
damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or
omission which the law does not deem an injury, the damage is regarded as damnum absque injuria.

xxxx

The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act
may result in damage to another, for no legal right has been invaded. One may use any lawful means to
accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of action
arises in the latter’s favor. Any injury or damage occasioned thereby is damnum absque injuria. The courts can
give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful end by
lawful means.54

"One who makes use of his own legal right does no injury. Qui jure suo utitur nullum damnum facit. If damage
results from a person's exercising his legal rights, it is damnum absque injuria."55 In this case, respondents failed
to prove by preponderance of evidence that there is fault or negligence on the part of petitioners in order to oblige
them to pay for the alleged damage sustained as a result of their suspension as Club members. Certainly,
membership in the Club is a privilege.56 Regular members are entitled to use all the facilities and privileges of the
Club, subject to its rules and regulations.57 As correctly pointed out by petitioners, the mental anguish
respondents experienced, assuming to be true, was brought upon them by themselves for deliberately and
consciously violating the rules and regulations of the Club. Considering that respondents were validly suspended,
there is no reason for the Club to compensate them. Indeed, the penalty of suspension provided for in Section 1,
Article XIV of the By-Laws is a means to protect and preserve the interest and purposes of the Club. This being
so, the suspension of respondents does not fall under any of the provisions of the Civil Code pertaining to the
grant of moral and exemplary damages, attorney’s fees, and litigation costs.

WHEREFORE, premises considered, the petition is GRANTED. The Resolutions dated September 16, 2009 and
January 21, 2010 of the Court of Appeals in CA-G.R. SP No. 106918, which reconsidered and set aside its
Resolution dated January 15, 2009, granting petitioners a fifteen-day period within which to file a petition for
review under Rule 43 of the Rules, is ANNULLED AND SET ASIDE. SEC Case Nos. 001-0l and 002-0l filed and
raffled before the Regional Trial Court, Branch 21 of Imus, Cavite are hereby DISMISSED for lack of merit.
Respondents are ORDERED TO RETURN to petitioners the total amount of P9,200,000.00 or P4,600,000.00
each, within THIRTY (30) DAYS from the time this decision becomes final and executory. Thereafter, said amount
shall earn legal interest of six percent (6%) per annum until fully paid.

SO ORDERED.

G.R. No. 170631, February 10, 2016

CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC., Petitioner, v. ERMILINDA R. ABEJAR, Respondent.

DECISION

LEONEN, J.:

The plaintiff may first prove the employer's ownership of the vehicle involved in a mishap by presenting the
vehicle's registration in evidence. Thereafter, a disputable presumption that the requirements for an employer's
liability under Article 21801 of the Civil Code have been satisfied will arise. The burden of evidence then shifts to
the defendant to show that no liability under Article 2180 has ensued. This case, thus, harmonizes the
requirements of Article 2180, in relation to Article 2176 2 of the Civil Code, and the so-called registered-owner rule
as established in this court's rulings in Aguilar, Sr. v. Commercial Savings Bank,3Del Carmen, Jr. v. Bacoy,4Filcar
Transport Services v. Espinas,5 and Mendoza v. Spouses Gomez.6

Through this Petition for Review on Certiorari,7 Caravel Travel and Tours International, Inc. (Caravan) prays that
the Decision8 dated October 3, 2005 and the Resolution9 dated November 29, 2005 of the Court of Appeals
Twelfth Division be reversed and set aside.10

On July 13, 2000, Jesmariane R. Reyes (Reyes) was walking along the west-bound lane of Sampaguita Street,
United Parañaque Subdivision IV, Parañaque City.11 A Mitsubishi L-300 van with plate number PKM 19512 was
travelling along the east-bound lane, opposite Reyes.13 To avoid an incoming vehicle, the van swerved to its left
and hit Reyes.14 Alex Espinosa (Espinosa), a witness to the accident, went to her aid and loaded her in the back
of the van.15 Espinosa told the driver of the van, Jimmy Bautista (Bautista), to bring Reyes to the
hospital.16 Instead of doing so, Bautista appeared to have left the van parked inside a nearby subdivision with
Reyes still in the van.17 Fortunately for Reyes, an unidentified civilian came to help and drove Reyes to the
hospital.18

Upon investigation, it was found that the registered owner of the van was Caravan. 19 Caravan is a corporation
engaged in the business of organizing travels and tours.20 Bautista was Caravan's employee assigned to drive the
van as its service driver.21

Caravan shouldered the hospitalization expenses of Reyes. 22 Despite medical attendance, Reyes died two (2)
days after the accident.23

Respondent Ermilinda R. Abejar (Abejar), Reyes' paternal aunt and the person who raised her since she was nine
(9) years old,24 filed before the Regional Trial Court of Parañaque a Complaint25 for damages against Bautista
and Caravan. In her Complaint, Abejar alleged that Bautista was an employee of Caravan and that Caravan is the
registered owner of the van that hit Reyes.26

Summons could not be served on Bautista.27 Thus, Abejar moved to drop Bautista as a defendant.28 The
Regional Trial Court granted her Motion.29

After trial, the Regional Trial Court found that Bautista was grossly negligent in driving the vehicle. 30 It awarded
damages in favor of Abejar, as follows:
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WHEREFORE, considering that the [respondent] was able to provide by preponderance of evidence her cause of
action against the defendants, judgment is hereby rendered ordering defendants JIMMY BAUTISTA and
CARAVAN TRAVEL and TOURS[,] INC., to jointly and solidarity pay the plaintiff, the following, to wit:
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1. The amount of P35,000.00 representing actual damages;

2. The amount of P300,000.00 as moral damages;

3. The amount of P30,000.00 as exemplary damages;

4. The amount of P50,000.00 as and by way of attorney's fees; and

5. The cost of suit.

SO ORDERED.31ChanRoblesVirtualawlibrary
Caravan's Motion for Reconsideration32 was denied through the October 20, 2003 Order 33 of the Regional Trial
Court.

The Court of Appeals affirmed with modification the Regional Trial Court's July 31, 2003 Decision and October 20,
2003 Order, as follows:
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WHEREFORE, premises considered, the instant appeal is DENIED for lack of merit. The assailed Decision dated
31 July 2003 and Order dated 20 October 2003 of the Regional Trial Court, City of Para[ñ]aque, Branch 258, in
Civil Case No. 00-0447 are AFFIRMEDwith the following MODIFICATIONS:

1. Moral Damages is REDUCED to Php 200,000.00;

2. Death Indemnity of Php 50,000.00 is awarded;

3. The Php 35,000.00 actual damages, Php 200,000.00 moral damages, Php 30,000.00 exemplary
damages and Php 50,000.00 attorney's fees shall earn interest at the rate of 6% per annum computed
from 31 July 2003, the date of the [Regional Trial Court's] decision; and upon finality of this Decision, all
the amounts due shall earn interest at the rate of 12% per annum, in lieu of 6% per annum, until full
payment; and

4. The Php 50,000.00 death indemnity shall earn interest at the rate of 6% per annum computed from the
date of promulgation of this Decision; and upon finality of this Decision, the amount due shall earn interest
at the rate of 12% per annum, in lieu of 6% per annum, until full payment.

Costs against [Caravan].

SO ORDERED.34ChanRoblesVirtualawlibrary
Caravan filed a Motion for Reconsideration, but it was denied in the Court of Appeals' assailed November 29,
2005 Resolution.35

Hence, this Petition was filed.

Caravan argues that Abejar has no personality to bring this suit because she is not a real party in interest.
According to Caravan, Abejar does not exercise legal or substitute parental authority. She is also not the judicially
appointed guardian or the only living relative of the deceased.36 She is also not "the executor or administrator of
the estate of the deceased."37 According to Caravan, only the victim herself or her heirs can enforce an action
based on culpa aquiliana such as Abejar's action for damages.38

Caravan adds that Abejar offered no documentary or testimonial evidence to prove that Bautista, the driver, acted
"within the scope of his assigned tasks"39 when the accident occurred.40 According to Caravan, Bautista's tasks
only pertained to the transport of company personnel or products, and when the accident occurred, he had not
been transporting personnel or delivering products of and for the company. 41
Caravan also argues that "it exercised the diligence of a good father of a family in the selection and supervision of
its employees."42

Caravan further claims that Abejar should not have been awarded moral damages, actual damages, death
indemnity, exemplary damages, and attorney's fees.43 It questions the Certificate provided by Abejar as proof of
expenses since its signatory, a certain Julian Peñaloza (Peñaloza), was not presented in court, and Caravan was
denied the right to cross-examine him.44 Caravan argues that the statements in the Certification constitute
hearsay.45 It also contends that based on Article 2206(3)46 of the Civil Code, Abejar is not entitled to moral
damages.47 It insists that moral and exemplary damages should not have been awarded to Abejar because
Caravan acted in good faith.48 Considering that moral and exemplary damages are unwarranted, Caravan claims
that the award of attorney's fees should have also been removed.49

Lastly, Caravan argues that it should not be held solidarily liable with Bautista since Bautista was already dropped
as a party.50

Abejar counters that Caravan failed to provide proof that it exercised the requisite diligence in the selection and
supervision of Bautista.51 She adds that the Court of Appeals' ruling that Caravan is solidarily liable with Bautista
for moral damages, exemplary damages, civil indemnity ex delicto, and attorney's fees should be upheld.52 Abejar
argues that since Caravan is the registered owner of the van, it is directly, primarily, and solidarity liable for the
tortious acts of its driver.53

For resolution are the following issues:

First, whether respondent Ermilinda R. Abejar is a real party in interest who may bring an action for damages
against petitioner Caravan Travel and Tours International, Inc. on account of Jesmariane R. Reyes' death; and

Second, whether petitioner should be held liable as an employer, pursuant to Article 2180 of the Civil Code.

We deny the Petition.

Having exercised substitute parental authority, respondent suffered actual loss and is, thus, a real party in interest
in this case.

In her Complaint, respondent made allegations that would sustain her action for damages: that she exercised
substitute parental authority over Reyes; that Reyes' death was caused by the negligence of petitioner and its
driver; and that Reyes' death caused her damage.54 Respondent properly filed an action based on quasi-delict.
She is a real party in interest.

Rule 3, Section 2 of the 1997 Rules of Civil Procedure defines a real party in interest:
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RULE 3. Parties to Civil Actions

....

SECTION 2. Parties in Interest. — A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real party in interest.
"To qualify a person to be a real party in interest in whose name an action must be prosecuted, he [or she] must
appear to be the present real owner of the right sought to be enforced."55 Respondent's capacity to file a
complaint against petitioner stems from her having exercised substitute parental authority over Reyes.

Article 216 of the Family Code identifies the persons who exercise substitute parental authority:
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Art. 216. In default of parents or a judicially appointed guardian, the following persons shall exercise substitute
parental authority over the child in the order indicated:

(1) The surviving grandparent, as provided in Art. 214;56

(2) The oldest brother or sister, over twenty-one years of age, unless unfit or disqualified; and
(3) The child's actual custodian, over twenty-one years of age, unless unfit or disqualified.

Whenever the appointment or a judicial guardian over the property of the child becomes necessary, the same
order of preference shall be observed. (Emphasis supplied)
Article 233 of the Family Code provides for the extent of authority of persons exercising substitute parental
authority, that is, the same as those of actual parents:
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Art. 233. The person exercising substitute parental authority shall have the same authority over the person of the
child as the parents. (Emphasis supplied)
Both of Reyes' parents are already deceased.57 Reyes' paternal grandparents are also both deceased.58The
whereabouts of Reyes' maternal grandparents are unknown. 59 There is also no record that Reyes has brothers or
sisters. It was under these circumstances that respondent took custody of Reyes when she was a child, assumed
the role of Reyes' parents, and thus, exercised substitute parental authority over her. 60 As Reyes' custodian,
respondent exercised the full extent of the statutorily recognized rights and duties of a parent. Consistent with
Article 22061 of the Family Code, respondent supported Reyes' education62 and provided for her personal
needs.63 To echo respondent's words in her Complaint, she treated Reyes as if she were her own daughter. 64

Respondent's right to proceed against petitioner, therefore, is based on two grounds.

First, respondent suffered actual personal loss. With her affinity for Reyes, it stands to reason that when Reyes
died, respondent suffered the same anguish that a natural parent would have felt upon the loss of one's child. It is
for this injury — as authentic and personal as that of a natural parent — that respondent seeks to be indemnified.

Second, respondent is capacitated to do what Reyes' actual parents would have been capacitated to do.

In Metro Manila Transit Corporation v. Court of Appeals,65Tapdasan, Jr. v. People,66 and Aguilar, Sr. v.
Commercial Savings Bank,67 this court allowed natural parents of victims to recover damages for the death of
their children. Inasmuch as persons exercising substitute parental authority have the full range of competencies of
a child's actual parents, nothing prevents persons exercising substitute parental authority from similarly
possessing the right to be indemnified for their ward's death.

We note that Reyes was already 18 years old when she died. Having reached the age of majority, she was
already emancipated upon her death. While parental authority is terminated upon emancipation, 68respondent
continued to support and care for Reyes even after she turned 18.69 Except for the legal technicality of Reyes'
emancipation, her relationship with respondent remained the same. The anguish and damage caused to
respondent by Reyes' death was no different because of Reyes' emancipation.

In any case, the termination of respondent's parental authority is not an insurmountable legal bar that precludes
the filing of her Complaint. In interpreting Article 190270 of the old Civil Code, which is substantially similar to the
first sentence of Article 217671 of the Civil Code, this court in The Receiver For North Negros Sugar Company,
Inc. v. Ybañez, et al.72 ruled that brothers and sisters may recover damages, except moral damages, for the death
of their sibling.73 This court declared that Article 1902 of the old Civil Code (now Article 2176) is broad enough to
accommodate even plaintiffs who are not relatives of the deceased, thus: 74
This Court said: "Article 1902 of the Civil Code declares that any person who by an act or omission, characterized
by fault or negligence, causes damage to another shall be liable for the damage done ... a person is liable for
damage done to another by any culpable act; and by any culpable act is meant any act which is blameworthy
when judged by accepted legal standards. The idea thus expressed is undoubtedly broad enough to include any
rational conception of liability for the tortious acts likely to be developed in any society." The word "damage" in
said article, comprehending as it does all that are embraced in its meaning, includes any and all damages that a
human being may suffer in any and all the manifestations of his life: physical or material, moral or psychological,
mental or spiritual, financial, economic, social, political, and religious.

It is particularly noticeable that Article 1902 stresses the passive subject of the obligation to pay damages caused
by his fault or negligence. The article does not limit or specify the active subjects, much less the relation that must
exist between the victim of the culpa aquiliana and the person who may recover damages, thus warranting the
inference that, in principle, anybody who suffers any damage from culpa aquiliana, whether a relative or not of
the victim, may recover damages from the person responsible therefor[.]75(Emphasis supplied, citations omitted)
II

Respondent's Complaint is anchored on an employer's liability for quasi-delict provided in Article 2180, in relation
to Article 2176 of the Civil Code. Articles 2176 and 2180 read:
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ARTICLE 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

.....

ARTICLE 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions,
but also for those of persons for whom one is responsible.

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

Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority
and live in their company.

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by
their employees in the service of the branches in which the latter are employed or on the occasion of their
functions.

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

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

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

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage. (Emphasis supplied)
Contrary to petitioner's position, it was not fatal to respondent's cause that she herself did not adduce proof that
Bautista acted within the scope of his authority. It was sufficient that Abejar proved that petitioner was the
registered owner of the van that hit Reyes.

The resolution of this case must consider two (2) rules. First, Article 2180's specification that "[e]mployers shall be
liable for the damages caused by their employees . . . acting within the scope of their assigned tasks[.]" Second,
the operation of the registered-owner rule that registered owners are liable for death or injuries caused by the
operation of their vehicles.76

These rules appear to be in conflict when it comes to cases in which the employer is also the registered owner of
a vehicle. Article 2180 requires proof of two things: first, an employment relationship between the driver and the
owner; and second, that the driver acted within the scope of his or her assigned tasks. On the other hand,
applying the registered-owner rule only requires the plaintiff to prove that the defendant-employer is the registered
owner of the vehicle.

The registered-owner rule was articulated as early as 1957 in Erezo, et al. v. Jepte,77 where this court explained
that the registration of motor vehicles, as required by Section 5(a) 78 of Republic Act No. 4136, the Land
Transportation and Traffic Code, was necessary "not to make said registration the operative act by which
ownership in vehicles is transferred, . . . but to permit the use and operation of the vehicle upon any public
highway[.]"79 Its "main aim . . . is to identify the owner so that if any accident happens, or that any damage or
injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual,
the registered owner."80

Erezo notwithstanding, Castilex Industrial Corporation v. Vasquez, Jr.81 relied on Article 2180 of the Civil Code
even though the employer was also the registered owner of the vehicle.82 The registered-owner rule was not
mentioned.

In Castilex, Benjamin Abad (Abad) was a manager of Castilex Industrial Corporation (Castilex). Castilex was also
the registered owner of a Toyota Hi-Lux pick-up truck. While Abad was driving the pick-up truck, it collided with a
motorcycle driven by Romeo Vasquez (Vasquez). Vasquez died a few days after. Vasquez's parents filed a case
for damages against Abad and Castilex.83 Castilex denied liability, arguing that Abad was acting in his private
capacity at the time of the accident.84

This court absolved Castilex of liability, reasoning that it was incumbent upon the plaintiff to prove that the
negligent employee was acting within the scope of his assigned tasks.85 Vasquez's parents failed to prove
this.86 This court outlined the process necessary for an employer to be held liable for the acts of its employees
and applied the process to the case:

Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is
liable for the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish
the employer-employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that
the employee was acting within the scope of his assigned task when the tort complained of was committed. It is
only then that the employer may find it necessary to interpose the defense of due diligence in the selection and
supervision of the employee.

....

Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him,
petitioner CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing
ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the
consequences of the negligence of ABAD in driving its vehicle. (Emphasis supplied, citations
omitted)87ChanRoblesVirtualawlibrary
Aguilar, Sr. v. Commercial Savings Bank recognized the seeming conflict between Article 2180 and the
registered-owner rule and applied the latter.88

In Aguilar, Sr., a Mitsubishi Lancer, registered in the name of Commercial Savings Bank and driven by the bank's
assistant vice-president Ferdinand Borja, hit Conrado Aguilar, Jr. The impact killed Conrado Aguilar, Jr. His
father, Conrado Aguilar, Sr. filed a case for damages against Ferdinand Borja and Commercial Savings Bank.
The Regional Trial Court found Commercial Savings Bank solidarity liable with Ferdinand Borja. 89

However, the Court of Appeals disagreed with the trial court's Decision and dismissed the complaint against the
bank. The Court of Appeals reasoned that Article 2180 requires the plaintiff to prove that at the time of the
accident, the employee was acting within the scope of his or her assigned tasks. The Court of Appeals found no
evidence that Ferdinand Borja was acting as the bank's assistant vice-president at the time of the accident.90

The Court of Appeals' ruling was reversed by this court.91Aguilar, Sr. reiterated the following pronouncements
made in Erezo in ruling that the bank, as the registered owner of the vehicle, was primarily liable to the plaintiff:92
The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any
damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner....

....

A victim of recklessness on the public highways is usually without means to discover or identify the person
actually causing the injury or damage. He has no means other than by a recourse to the registration in the Motor
Vehicles Office to determine who is the owner. The protection that the law aims to extend to him would become
illusory were the registered owner given the opportunity to escape liability by disproving his
ownership.93ChanRoblesVirtualawlibrary
Thus, Aguilar, Sr. concluded:

In our view, respondent bank, as the registered owner of the vehicle, is primarily liable for Aguilar, Jr.'s death. The
Court of Appeals erred when it concluded that the bank was not liable simply because (a) petitioner did not prove
that Borja was acting as the bank's vice president at the time of the accident; and (b) Borja had, according to
respondent bank, already bought the car at the time of the mishap. For as long as the respondent bank remained
the registered owner of the car involved in the vehicular accident, it could not escape primary liability for the death
of petitioner's son.94 (Emphasis supplied)
Preference for the registered-owner rule became more pronounced in Del Carmen, Jr. v. Bacoy:95
Without disputing the factual finding of the [Court of Appeals] that Allan was still his employee at the time of the
accident, a finding which we see no reason to disturb, Oscar Jr. contends that Allan drove the jeep in his private
capacity and thus, an employer's vicarious liability for the employee's fault under Article 2180 of the Civil Code
cannot apply to him.

The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank, the car of therein respondent bank
caused the death of Conrado Aguilar, Jr. while being driven by its assistant vice president. Despite Article 2180,
we still held the bank liable for damages for the accident as said provision should defer to the settled doctrine
concerning accidents involving registered motor vehicles, i.e., that the registered owner of any vehicle, even
if not used for public service, would primarily be responsible to the public or to third persons for injuries caused
the latter while the vehicle was being driven on the highways or streets. We have already ratiocinated that:

The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any
damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner. Instances are numerous where vehicles running on public highways caused
accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with
very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the
public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons
responsible for damages or injuries caused on public highways.96 (Emphasis supplied, citations omitted)
Filcar Transport Services v. Espinas97 stated that the registered owner of a vehicle can no longer use the
defenses found in Article 2180:98
Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the employee acts
beyond the scope of his assigned task or that it exercised the due diligence of a good father of a family to prevent
damage - because the motor vehicle registration law, to a certain extent, modified Article 2180 of the Civil Code
by making these defenses unavailable to the registered owner of the motor vehicle. Thus, for as long as Filcar is
the registered owner of the car involved in the vehicular accident, it could not escape primary liability for the
damages caused to Espinas.99ChanRoblesVirtualawlibrary
Mendoza v. Spouses Gomez100 reiterated this doctrine.

However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that Article 2180 of the Civil
Code should be completely discarded in cases where the registered-owner rule finds application.

As acknowledged in Filcar, there is no categorical statutory pronouncement in the Land Transportation and Traffic
Code stipulating the liability of a registered owner.101 The source of a registered owner's liability is not a distinct
statutory provision, but remains to be Articles 2176 and 2180 of the Civil Code:

While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain any provision on the
liability of registered owners in case of motor vehicle mishaps, Article 2176, in relation with Article 2180, of the
Civil Code imposes an obligation upon Filcar, as registered owner, to answer for the damages caused to Espinas'
car.102ChanRoblesVirtualawlibrary
Thus, it is imperative to apply the registered-owner rule in a manner that harmonizes it with Articles 2176 and
2180 of the Civil Code. Rules must be construed in a manner that will harmonize them with other rules so as to
form a uniform and consistent system of jurisprudence.103 In light of this, the words used in Del Carmen are
particularly notable. There, this court stated that Article 2180 "should defer to"104 the registered-owner rule. It
never stated that Article 2180 should be totally abandoned.

Therefore, the appropriate approach is that in cases where both the registered-owner rule and Article 2180 apply,
the plaintiff must first establish that the employer is the registered owner of the vehicle in question. Once the
plaintiff successfully proves ownership, there arises a disputable presumption that the requirements of Article
2180 have been proven. As a consequence, the burden of proof shifts to the defendant to show that no liability
under Article 2180 has arisen.

This disputable presumption, insofar as the registered owner of the vehicle in relation to the actual driver is
concerned, recognizes that between the owner and the victim, it is the former that should carry the costs of
moving forward with the evidence. The victim is, in many cases, a hapless pedestrian or motorist with hardly any
means to uncover the employment relationship of the owner and the driver, or any act that the owner may have
done in relation to that employment.

The registration of the vehicle, on the other hand, is accessible to the public.

Here, respondent presented a copy of the Certificate of Registration105 of the van that hit Reyes.106 The Certificate
attests to petitioner's ownership of the van. Petitioner itself did not dispute its ownership of the van. Consistent
with the rule we have just stated, a presumption that the requirements of Article 2180 have been satisfied arises.
It is now up to petitioner to establish that it incurred no liability under Article 2180. This it can do by presenting
proof of any of the following: first, that it had no employment relationship with Bautista; second, that Bautista
acted outside the scope of his assigned tasks; or third, that it exercised the diligence of a good father of a family
in the selection and supervision of Bautista.107

On the first, petitioner admitted that Bautista was its employee at the time of the accident. 108

On the second, petitioner was unable to prove that Bautista was not acting within the scope of his assigned tasks
at the time of the accident. When asked by the court why Bautista was at the place of the accident when it
occurred, Sally Bellido, petitioner's accountant and supervisor, 109 testified that she did not "have the personal
capacity to answer [the question]"110 and that she had no knowledge to answer it:

COURT : Madam Witness, do you know the reason why your driver, Jimmy Bautista, at around 10:00 o'
clock in the morning of July 13, 2000 was in the vicinity of Barangay Marcelo Green, United
Parañaque Subdivision 4?

WITNESS : I don't have the personal capacity to answer that, Sir.

Q : So you don't have any knowledge why he was there?

A : Yes, Sir.111 (Emphasis supplied)

Sally Bellido's testimony does not affect the presumption that Article 2180's requirements have been satisfied.
Mere disavowals are not proof that suffice to overturn a presumption. To this end, evidence must be adduced.
However, petitioner presented no positive evidence to show that Bautista was acting in his private capacity at the
time of the incident.

On the third, petitioner likewise failed to prove that it exercised the requisite diligence in the selection and
supervision of Bautista.

In its selection of Bautista as a service driver, petitioner contented itself with Bautista's submission of a non-
professional driver's license.112 Hence, in Sally Balledo's cross-examination:

Q : . . . when he was promoted as service driver, of course, there were certain requirements and among
other else, you made mention about a driver's license.

A : Yes, Sir.

Q : Would you be able to show to this Honorable Court whether indeed this person did submit a driver's
license to your company?

A : Yes, Sir.

....

Q : Do you recall what kind of driver's license is this?

A : The Land Transportation Office.

Q : Is it a professional driver's license or non-proffesional [sic] driver's license?

A : Non-professional.

Q : You are not sure?

COURT : Non professional, professional?

A : It's a non-professional.113 (Emphasis supplied)

Employing a person holding a non-professional driver's license to operate another's motor vehicle violates Section
24 of the Land Transportation and Traffic Code, which provides:

SEC. 24. Use of driver's license and badge. — ...

....

No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the
person sought to be employed is a duly licensed professional driver.
Evidently, petitioner did not only fail to exercise due diligence when it selected Bautista as service driver; it also
committed an actual violation of law.

To prove that it exercised the required diligence in supervising Bautista, petitioner presented copies of several
memoranda and company rules.114 These, however, are insufficient because petitioner failed to prove actual
compliance. Metro Manila Transit Corporation v. Court of Appeals115 emphasized that to establish diligence in the
supervision of employees, the issuance of company policies must be coupled with proof of compliance:

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

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

We emphatically reiterate our holding, as a warning to all employers, that "(t)he mere formulation of various
company policies on safety without showing that they were being complied with is not sufficient to exempt
petitioner from liability arising from negligence of its employees. It is incumbent upon petitioner to show that in
recruiting and employing the erring driver the recruitment procedures and company policies on efficiency and
safety were followed." Paying lip-service to these injunctions or merely going through the motions of compliance
therewith will warrant stern sanctions from the Court.116(Emphasis supplied, citations omitted)
For failing to overturn the presumption that the requirements of Article 2180 have been satisfied, petitioner must
be held liable.

III

Petitioner's argument that it should be excused from liability because Bautista was already dropped as a party is
equally unmeritorious. The liability imposed on the registered owner is direct and primary. 117 It does not depend
on the inclusion of the negligent driver in the action. Agreeing to petitioner's assertion would render impotent the
rationale of the motor registration law in fixing liability on a definite person.

Bautista, the driver, was not an indispensable party under Rule 3, Section 7118 of the 1997 Rules of Civil
Procedure. Rather, he was a necessary party under Rule 3, Section 8.119 Instead of insisting that Bautista — who
was nothing more than a necessary party — should not have been dropped as a defendant, or that petitioner,
along with Bautista, should have been dropped, petitioner (as a co-defendant insisting that the action must
proceed with Bautista as party) could have opted to file a cross-claim against Bautista as its remedy.

The 1997 Rules of Civil Procedure spell out the rules on joinder of indispensable and necessary parties. These
are intended to afford "a complete determination of all possible issues, not only between the parties themselves
but also as regards to other persons who may be affected by the judgment." 120

However, while an exhaustive resolution of disputes is desired in every case, the distinction between
indispensable parties and necessary parties delineates a court's capacity to render effective judgment. As defined
by Rule 3, Section 7, indispensable parties are "[p]arties in interest without whom no final determination can be
had of an action[.]" Thus, their non-inclusion is debilitating: "the presence of indispensable parties is a condition
for the exercise of juridical power and when an indispensable party is not before the court, the action should be
dismissed."121

In contrast, a necessary party's presence is not imperative, and his or her absence is not debilitating.
Nevertheless, it is preferred that they be included in order that relief may be complete.

The concept of indispensable parties, as against parties whose inclusion only allows complete relief, was
explained in Arcelona v. Court of Appeals:122
An indispensable party is a party who has such an interest in the controversy or subject matter that a final
adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only
an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree
cannot be made without affecting his interest or leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity and good conscience. It has also been considered that an
indispensable party is a person in whose absence there cannot be a determination between the parties already
before the court which is effective, complete, or equitable. Further, an indispensable party is one who must be
included in an action before it may properly go forward.

A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable
from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree
which does complete justice between them. Also, a person is not an indispensable party if his presence would
merely permit complete relief between him and those already parties to the action, or if he has no interest in the
subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his
presence will avoid multiple litigation.123ChanRoblesVirtualawlibrary
Petitioner's interest and liability is distinct from that of its driver. Regardless of petitioner's employer-employee
relationship with Bautista, liability attaches to petitioner on account of its being the registered owner of a vehicle
that figures in a mishap. This alone suffices. A determination of its liability as owner can proceed independently of
a consideration of how Bautista conducted himself as a driver. While certainly it is desirable that a determination
of Bautista's liability be made alongside that of the owner of the van he was driving, his non-inclusion in these
proceedings does not absolutely hamper a judicious resolution of respondent's plea for relief.

IV

The Court of Appeals committed no reversible error when it awarded actual damages to respondent.
Respondent's claim for actual damages was based on the Certificate124 issued and signed by a certain Peñaloza
showing that respondent paid Peñaloza P35,000.00 for funeral expenses.

Contrary to petitioner's claim, this Certificate is not hearsay. Evidence is hearsay when its probative value is
based on the personal knowledge of a person other than the person actually testifying. 125 Here, the Certificate
sought to establish that respondent herself paid Peñaloza P35,000.00 as funeral expenses for Reyes' death:126

3. Na ang aking kontrata ay nagkakahalaga ng P35,000-00 [sic] sa lahat ng nagamit na materiales at labor
nito kasama ang lote na ibinayad sa akin ni Gng. ERMILINDA REYES ABEJAR na siyang aking
kakontrata sa pagsasagawa ng naturang paglilibingan.127 (Emphasis supplied)

It was respondent herself who identified the Certificate. She testified that she incurred funeral expenses
amounting to P35,000.00, that she paid this amount to Peñaloza, and that she was present when Peñaloza
signed the Certificate:

[ATTY. LIM] Did you incur any expenses?

:

A: Meron po.

Q: How much did you spend for the death of Jesmarian [sic] Reyes?

A: 'Yun pong P35,000.00 na pagpapalibing at saka...

Q: You said that you spent P35,000.00. Do you have any evidence or proof that you spent that
amount?

A: Meron po.

Q: Showing to you this sort of certification. What relation has this...

A: 'Yan po' yung contractor nagumawa.

Q: Contractor of what?

A: 'Yan po' yung mismong binilhan ko ng lupa at nitso.

....

ATTY. LIM : There is a signature at the top of the printed name Julian Penalosa [sic]. Whose signature is this?

A: 'Yan po' yung mismong contractor.

....

Q: Did you see him sign this?

A: Opo.128 (Emphasis supplied)

Respondent had personal knowledge of the facts sought to be proved by the Certificate, i.e. that she spent
P35,000.00 for the funeral expenses of Reyes. Thus, the Certificate that she identified and testified to is not
hearsay. It was not an error to admit this Certificate as evidence and basis for awarding P35,000.00 as actual
damages to respondent.

The Court of Appeals likewise did not err in awarding civil indemnity and exemplary damages.

Article 2206 of the Civil Code provides:

ARTICLE 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances[.]
Further, Article 2231 of the Civil Code provides:

ARTICLE 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.
Both the Court of Appeals and the Regional Trial Court found Bautista grossly negligent in driving the van and
concluded that Bautista's gross negligence was the proximate cause of Reyes' death. Negligence and causation
are factual issues.129 Findings of fact, when established by the trial court and affirmed by the Court of Appeals,
are binding on this court unless they are patently unsupported by evidence or unless the judgment is grounded on
a misapprehension of facts.130 Considering that petitioner has not presented any evidence disputing the findings
of the lower courts regarding Bautista's negligence, these findings cannot be disturbed in this appeal. The
evidentiary bases for the award of civil indemnity and exemplary damages stand. As such, petitioner must pay the
exemplary damages arising from the negligence of its driver.131 For the same reasons, the award of P50,000.00
by way of civil indemnity is justified.132

The award of moral damages is likewise proper.

Article 2206(3) of the Civil Code provides:

ARTICLE 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. In addition:

(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased. (Emphasis supplied)
For deaths caused by quasi-delict, the recovery of moral damages is limited to the spouse, legitimate and
illegitimate descendants, and ascendants of the deceased.133

Persons exercising substitute parental authority are to be considered ascendants for the purpose of awarding
moral damages. Persons exercising substitute parental authority are intended to stand in place of a child's
parents in order to ensure the well-being and welfare of a child.134 Like natural parents, persons exercising
substitute parental authority are required to, among others, keep their wards in their company,135 provide for their
upbringing,136 show them love and affection,137 give them advice and counsel,138 and provide them with
companionship and understanding.139 For their part, wards shall always observe respect and obedience towards
the person exercising parental authority.140 The law forges a relationship between the ward and the person
exercising substitute parental authority such that the death or injury of one results in the damage or prejudice of
the other.

Moral damages are awarded to compensate the claimant for his or her actual injury, and not to penalize the
wrongdoer.141 Moral damages enable the injured party to alleviate the moral suffering resulting from the
defendant's actions.142 It aims to restore — to the extent possible — "the spiritual status quo ante[.]"143

Given the policy underlying Articles 216 and 220 of the Family Code as well as the purposes for awarding moral
damages, a person exercising substitute parental authority is rightly considered an ascendant of the deceased,
within the meaning of Article 2206(3) of the Civil Code. Hence, respondent is entitled to moral damages.

As exemplary damages have been awarded and as respondent was compelled to litigate in order to protect her
interests, she is rightly entitled to attorney's fees.144

However, the award of interest should be modified. This modification must be consistent with Nacar v. Gallery
Frames,145 in which we ruled:

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the
demand can be established with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or
 extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only from the date the judgment of the court is
made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from
such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.146 (Emphasis supplied)

WHEREFORE, the Decision of the Court of Appeals dated October 3, 2005 is AFFIRMED with the
following MODIFICATIONS: (a) actual damages in the amount of P35,000.00 shall earn interest at the rate of 6%
per annum from the time it was judicially or extrajudicially demanded from petitioner Caravan Travel and Tours
International, Inc. until full satisfaction; (b) moral damages, exemplary damages, and attorney's fees shall earn
interest at the rate of 6% per annum from the date of the Regional Trial Court Decision until full satisfaction; and
(c) civil indemnity shall earn interest at the rate of 6% per annum from the date of the Court of Appeals Decision
until full satisfaction.

SO ORDERED.

G.R. No. 173988 October 8, 2014

FELINA ROSALDES, Petitioner, vs.

PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BERSAMIN, J.:

The petitioner, a public schoolteacher, was charged with and found guilty of child abuse, a violation of Republic
Act No. 7610.1 The victim was her own Grade 1 pupil whom she physically maltreated for having accidentally
bumped her knee while she was drowsing off on a bamboo sofa as he entered the classroom. Her maltreatment
left him with physical injuries, as duly certified by a physician.

Whether or not the petitioner thereby committed child abuse is the question that this appeal must determine, in
light of the Court's pronouncement in Bongalon v. People of the Philippines 2 that:

Not every instance of the laying of hands on a child constitutes the crime of child abuse under Section 10 (a) of
Republic Act No. 7610. Only when the laying of hands is shown beyond reasonable doubt to be intended by the
accused to debase, degrade or demean the intrinsic worth and dignity of the child as a human being should it be
punished as child abuse. Otherwise, it is punished under the Revised Penal Code.

Antecedents

The State, through the Office ofthe Solicitor General, summed up the factual antecedents in its comment,3 as
follows:

On February 13, 1996, seven yearold Michael Ryan Gonzales, then a Grade 1 pupil at Pughanan Elementary
School located in the Municipality of Lambunao, Iloilo, was hurriedly entering his classroom when he accidentally
bumped the knee of his teacher, petitioner Felina Rosaldes, who was then asleep on a bamboo sofa (TSN, March
14, 1997, pp. 5-6). Roused from sleep, petitioner asked Michael Ryan to apologize to her. When Michael did not
obey but instead proceeded to his seat (TSN, March 14, 1997, p. 6), petitioner went to Michael and pinched him
on his thigh. Then, she held him up by his armpits and pushed him to the floor. As he fell, Michael Ryan’s body hit
a desk. As a result, he lost consciousness. Petitioner proceeded topick Michael Ryan up by his ears and
repeatedly slammed him down on the floor. Michael Ryan cried (TSN, March 14, 1997, p. 6; TSN, November 13,
1997, p. 7).
After the incident, petitioner proceeded to teach her class. During lunch break, Michael Ryan, accompanied by
two of his classmates, Louella Loredo and Jonalyn Gonzales, went home crying and told his mother about the
incident (TSN, March 14, 1997, p. 7). His mother and his Aunt Evangeline Gonzales reported the incident to their
Barangay Captain, Gonzalo Larroza (TSN, February 1, 1999, p. 4) who advised them to have Michael Ryan
examined by a doctor. Michael Ryan’s aunt and Barangay Councilman Ernesto Ligante brought him to the Dr.
Ricardo Y. Ladrido Hospital where he was examined by Dr. Teresita Castigador. They, likewise, reported the
incident to the Police Station (TSN, July 27, 1997, p. 6; TSN, February 1, 1999, p. 4).

The medical certificate issued by Dr. Teresita Castigador reads, in part:

1. Petechiae and tenderness of both external ears 1x2 cm. and 1x1 cm.;

2. Lumbar pains and tenderness at area of L3-L4;

3. Contusions at left inner thigh 1x1 and 1x1 cm.;

4. Tenderness and painful on walking especially at the area of femoral head.

The petitioner was criminally charged with child abusein the Regional Trial Court in Iloilo City (RTC), and the case
was assigned to Branch 27 of that court. The information alleged as follows: The Provincial Prosecutor of Iloilo,
upon approval and Directive of the Deputy OMBUDSMAN for the Visayas accuses FELINA ROSALDES of the
crime of VIOLATION OF CHILD ABUSE LAW

(Section 10 (a) of R.A. 7610), committed as follows:

That on or about the 13th day of February 1996, in the Municipality of Lambunao, Province of Iloilo, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, being a public school teacher in
Grade 1 of Pughanan Elementary School, with a Salary Grade below 26, under the DECS, did then and there
willfully, unlawfully and feloniously maltreat her pupil Michael Ryan Gonzales, a seven year old child, by pinching
him on different parts of his body, and thereafter slumping him to the ground, thereby causing Michael Ryan
Gonzales to lose his consciousness and has suffered injuries on different parts of his body.

CONTRARY TO LAW.4

On June 26, 2003, the RTC rendered judgment convicting the petitioner of child abuse,5 disposing as follows:

WHEREFORE, finding the accused guilty beyond reasonable doubt of Violation of Section 10 (a), Article VI of
R.A. 7610, the Court sentences her to an indeterminate prison term ranging from four (4) years, two (2) months
and one (1) day of prision correccional, as minimum, to six (6) years and one (1) day of prision mayor, as
maximum, and to pay the costs.

No pronouncement as to civil liability, the same not having been proved.

SO ORDERED.6

On appeal, the CA affirmed the conviction of the petitioner through its assailed decision promulgated on May 11,
2005,7 with a modification of the penalty, viz: WHEREFORE, premises considered, judgment is hereby rendered
by us DISMISSING the appeal filed in this case and AFFIRMING the decision rendered on June 26, 2003 by the
court a quo in Criminal Case No. 46893 with the MODIFICATION that the accusedappellant is sentenced to suffer
the indeterminate penalty of four (4) years, two (2) months and one (1) day of prision correccional, as the
minimum of it, to ten (10) years and one (1) day of prision mayor, as the maximum thereof.

IT IS SO ORDERED.8

In her petition for review on certiorari,9 the petitioner submits that:

I
The Court of Appeals erred in convicting the petitioner by holding that the acts of the petitioner constitute child
abuse penalized under Section 10 (a) of Republic Act No. 7610[,] and notunder the Revised Penal Code.

II

The Court of Appeals erred in convicting the petitioner by holding that petitioner’s constitutional right to due
process and her right to be informed of the nature and cause of the accusation against her was not violated when
the essential elements of the crime charged were not properly recited in the information. 10

Countering, the State, through the OSG, insists that the issues the petitioner is raising are mainly factual and,
therefore, not reviewable under the mode of appeal chosen; that the affirmance of her conviction by the CA was in
accord with the pertinent law and jurisprudence, and supported by the overwhelming evidence of the trial; and
that the information charging her with child abuse was sufficient in form and substance. 11

Ruling of the Court

The appeal lacks merit.

First of all, the State correctly contends that the petitioner could raise only questions of law in her present
recourse. Under Rule 45 of the Rules of Court, the appeal is limited to questionsof law. The immediate implication
of the limitation is to have the findings of fact by the CA, which affirmed the findings of fact by the trial court,
conclude the Court by virtue of its not being a trier of fact. As such, the Court cannot analyze or weigh the
evidence all over again.

It is true that the limitation of the review to errors of law admits of exceptions. Under Section 4, Rule 3 of the
Internal Rules of the Supreme Court, the following situations are the exceptions in which the Court may review
findings of fact by the lower courts, to wit: (a) the conclusion is a finding grounded entirely on speculation, surmise
and conjecture; (b) the inference made is manifestly mistaken; (c) there is grave abuse of discretion; (d) the
judgment is based on a misapprehension of facts; (e) the findings of fact are conflicting; (f) the collegial appellate
courts went beyond the issues of the case, and their findings are contrary to the admissions of both appellant and
appellee; (g) the findings of fact of the collegial appellate courts are contrary to those of the trial court; (h) said
findings of fact are conclusions without citation of specific evidence on which they are based; (i) the facts set forth
in the petition aswell as in the petitioner’s main and reply briefs are not disputed by the respondents; (j) the
findings of fact of the collegial appellate courts are premised on the supposed evidence, but are contradicted by
the evidence on record; and (k) all other similar and exceptional cases warranting a review of the lower courts’
findings of fact. A further exception is recognized when the CA manifestly overlooked certain relevant facts not
disputed bythe parties, which, if properly considered, would justify a different conclusion.12 Yet, none of the
exceptions applies herein.

Secondly, the petitioner contends that she did not deliberately inflict the physical injuries suffered by MichaelRyan
to maltreat or malign him in a manner that would debase, demean or degrade his dignity. She characterizes her
maltreatment as anact of discipline that she as a school teacher could reasonably do towards the development of
the child. She insists that her act further came under the doctrine of in loco parentis.

The contention of the petitioner is utterly bereft of merit.

Although the petitioner, as a school teacher, could duly discipline Michael Ryan as her pupil, her infliction of the
physical injuries on him was unnecessary, violent and excessive. The boy even fainted from the violence suffered
at her hands.13 She could not justifiably claim that she acted only for the sake of disciplining him. Her physical
maltreatment of him was precisely prohibited by no less than the Family Code, which has expressly banned the
infliction of corporal punishmentby a school administrator, teacher or individual engaged in child care exercising
special parental authority (i.e., in loco parentis), viz:

Article 233. The person exercising substitute parental authority shall have the same authority over the person of
the child as the parents.

In no case shall the school administrator, teacher or individual engaged in child care exercising special parental
authority inflict corporal punishment upon the child. (n)
Proof of the severe results of the petitioner’s physical maltreatment of Michael Ryan was provided by Dr. Teresita
Castigador, the Medico-Legal Officer of the Dr. Ricardo Y. Ladrido Memorial Hospital in Iloilo who examined the
victim at about 1:00 o’clock in the afternoon of February 13, 1996, barely three hours from the timethe boy had
sustained his injuries. Her Medical Report stated as follows:

1. Petechiae and tenderness of both external ears 1x2 cm. and 1x1 cm.;

2. Lumbar pains and tenderness at area of L3-L4;

3. Contusions at left inner thigh 1x1 and 1x1 cm.;

4. Tenderness and painful on walking especially at the area of femoral head.

Reflecting her impressions of the physical injuries based on the testimonial explanations of Dr. Castigador, the
trial judge observed in the decision of June 26, 2003:

A petechiae (wound no. 1), according to Dr. Castigador is a discoloration of the skin caused by the extravasation
of blood beneath it. She opined that the petechiae and tenderness of the ears of the victim could have been
caused by pinching. As to the lumbar pain and tenderness at the third and fourth level of the vertebrae (wound no.
2), the doctor testified that during her examination of the victim the latter felt pain when she put pressure on the
said area. She stated that this could be caused by pressure or contact with a hard object. Wound No. 3 is located
on the victim’sleft inner thigh. According to her this could not have been caused by ordinary pinching with
pressure. Wound No. 4 is located on the upper part of the left thigh. Dr. Castigador testified that she noticed that
the boy was limping as he walked.14

Section 3 of RepublicAct No. 7610 defines child abusethusly:

xxxx

(b) "Child abuse" refers to the maltreatment, whether habitual or not, of the child which includes any of the
following:

(1) Psychological and physical abuse, neglect, cruelty, sexual abuse and emotional maltreatment;

(2) Any act by deeds or words which debases, degrades or demeans the intrinsic worth and dignity of a
child as a human being;

(3) Unreasonable deprivation of his basic needs for survival, such as food and shelter; or

(4) Failure to immediately give medical treatment to an injured child resulting in serious impairment of his
growth and development or in his permanent incapacity or death.

xxxx

In the crime charged against the petitioner, therefore, the maltreatment may consist of an act by deedsor by
wordsthat debases, degrades or demeans the intrinsic worth and dignity of a child as a human being. The act
need not be habitual. The CA concluded that the petitioner "went overboard in disciplining Michael Ryan, a
helpless and weak 7-year old boy, when she pinched hard Michael Ryan on the left thigh and when she held him
in the armpits and threw him on the floor[; and as] the boy fell down, his body hit the desk causing him to lose
consciousness [but instead] of feeling a sense of remorse, the accused-appellant further held the boy up by his
ears and pushed him down on the floor."15 On her part, the trial judge said that the physical pain experienced by
the victim had been aggravated by an emotional trauma that caused him to stop going to school altogether out of
fear of the petitioner, compelling his parents to transfer him to another school where he had to adjust
again.16 Such established circumstances proved beyond reasonable doubt thatthe petitioner was guilty of child
abuse by deeds that degraded and demeaned the intrinsic worth and dignity of Michael Ryan as a human being.
It was also shown that Michael Ryan’s physical maltreatment by the petitioner was neither her first or only
maltreatment of a child. Prosecution witness Louella Loredo revealed on cross examination that she had also
experienced the petitioner’s cruelty.17 The petitioner was also convicted by the RTC in Iloilo City (Branch 39) in
Criminal Case No. 348921 for maltreatment of another childnamed Dariel Legayada. 18 Such previous incidents
manifested that the petitioner had "a propensity for violence," as the trial judge stated in her decision of June 26,
2003.19

Thirdly, the petitioner submits that the information charging her with child abuse was insufficient in form and
substance, in that the essential elements of the crime charged were not properly alleged therein; and that her
constitutional and statutory right to due process of law was consequently violated.

The petitioner’s submission deserves scant consideration.

Under Section 6, Rule 110 of the Rules of Court, the information is sufficient if it states the name of the accused;
the designation of the offense given by the statute; the acts or omissions complained of as constituting the
offense; the name of the offended party; the proximate date of the commission of the offense; and the place
where the offense was committed.

The information explicitly averred the offense of child abusecharged against the petitioner in the context of the
statutory definition of child abuse found in Section 3 (b) of Republic Act No. 7610, supra, and thus complied with
the requirements of Section 6, Rule 110 of the Rules of Court. Moreover, the Court should no longer entertain the
petitioner’s challenge against the sufficiency of the information in form and substance. Her last chance to pose the
challenge was prior to the time she pleaded to the information through a motion to quash on the ground that the
information did not conform substantially to the prescribed form, or did not charge an offense. She did not do so,
resulting in her waiver of the challenge.

Fourthly, the RTC did not grant civil damages as civil liability ex delictobecause no evidence had been adduced
thereon.20 The CA saw nothing wrong with the omission by the trial court. The explanation tendered by the trial
judge for the omission was misplaced, however, because even without proof of the actual expenses, or testimony
on the victim’s feelings, the lower courts still had the authority to define and allow civil liability arising from the
offense and the means to fix their extent. The child abuse surely inflicted on Michael Ryan physical and emotional
trauma as well as moral injury. It cannot also be denied that his parents necessarily spent for his treatment. We
hold that both lower courts committed a plain error that demands correction by the Court. Indeed, as the Court
pointed out in Bacolod v. People,21 it was "imperative that the courts prescribe the proper penalties when
convicting the accused, and determine the civil liability to be imposed on the accused, unless there has been a
reservation of the action to recover civil liability or a waiver of its recovery," explaining the reason for doing so in
the following manner:

It is not amiss to stress that both the RTC and the CA disregarded their express mandate under Section 2, Rule
120 of the Rules of Courtto have the judgment, if it was of conviction, state: "(1) the legal qualification of the
offense constituted by the acts committed by the accused and the aggravating or mitigating circumstances which
attended its commission; (2) the participation ofthe accused in the offense, whether as principal, accomplice, or
accessory after the fact; (3) the penalty imposed upon the accused; and (4) the civil liability or damages caused
by his wrongful act or omission to be recovered from the accused by the offended party, if there is any, unless the
enforcement of the civil liability by a separate civil action has been reserved or waived." Their disregard compels
us to actas we now do lest the Court be unreasonably seen as tolerant of their omission. That the Spouses
Cogtas did not themselves seek the correction of the omission by an appeal is no hindrance to this action
because the Court, as the final reviewing tribunal, has not only the authority but also the duty to correct at any
time a matter of law and justice.1âwphi1

We also pointedly remind all trial and appellate courts to avoid omitting reliefs that the parties are properly entitled
to by law or in equity under the established facts. Their judgments will not be worthy of the name unless they
thereby fully determine the rights and obligations of the litigants. It cannot be otherwise, for only by a full
determination of such rights and obligations would they betrue to the judicial office of administering justice and
equity for all. Courts should then be alert and cautious in their rendition of judgments of conviction in criminal
cases. They should prescribe the legal penalties, which is what the Constitution and the law require and expect
them to do. Their prescription of the wrong penalties will be invalid and ineffectual for being done without
jurisdiction or in manifest grave abuse of discretion amounting to lack of jurisdiction. They should also determine
and set the civil liability ex delictoof the accused, in order to do justice to the complaining victims who are always
entitled to them. The Rules of Court mandates them to do so unless the enforcement of the civil liability by
separate actions has been reserved or waived.22

Moral damages should be awarded to assuage the moral and emotional sufferings of the victim, and in that
respect the Court believes and holds that ₱20,000.00 is reasonable. The victim was likewise entitled to exemplary
damages, considering that Article 2230 of the Civil Code authorizes such damages if at least one aggravating
circumstance attended the commission of the crime. The child abuse committed by the petitioner was aggravated
her being a public school teacher, a factor in raising the penalty to its maximum period pursuantto Section 31(e)
of Republic Act No. 7610. The amount of ₱20,000.00 as exemplary damages is imposed on in order to set an
example for the public good and as a deterrent to other public school teachers who violate the ban imposed by
Article 233 of the Family Code, supra, against the infliction of corporal punishment on children under their
substitute parental authority. The lack of proof of the actual expenses for the victim’s treatmentshould not hinder
the granting of a measure of compensation in the formof temperate damages, which, according to Article 2224 of
the Civil Code, may be recovered when some pecuniary loss has been suffered butits amount cannot be proved
with certainty. There being no question aboutthe injuries sustained requiring medical treatment, temperate
damages ofat least ₱20,000.00 are warranted, for it would be inequitable not to recognize the need for the
treatment. Lastly, interest of 6% per annum shall be charged on all the items of civil liability, to be reckoned from
the finality of this decision until full payment.

The penalty for the child abusecommitted by the petitioner is that prescribed in Section 10(a) of Republic Act No.
7610, viz:

Section 10. Other Acts of Neglect, Abuse, Cruelty or Exploitation and Other Conditions Prejudicial to the Child's
Development. –

(a) Any person who shall commit any other acts of child abuse, cruelty or exploitation or to be responsible for
other conditions prejudicial to the child's development including those covered by Atiicle 59 of Presidential Decree
No. 603, as amended, but not covered by the Revised Penal Code, as amended, shall suffer the penalty of prision
mayor in its minimum period.

xxxx

The CA revised the penalty fixed by the R TC by imposing the indeterminate penalty of four years, two months
and one day of prision correccional, as minimum, to 10 years and one day of prision mayor, as the maximum, on
the ground that the offense was aggravated by the petitioner being a public schoolteacher. 23 It cited Section 3 l(e)
of Republic Act No. 7610, which commands that the penalty provided in the Act "shall be imposed in its maximum
period if the offender is a public officer or employee." Her being a public schoolteacher was alleged in the
information and established by evidence as well as admitted by her. The revised penalty was erroneous,
however, because Section 10 (a) of Republic Act No. 7610 punishes the crime committed by the petitioner with
prision mayor in its minimum period, whose three periods are six years and one day to six years and eight
months, for the minimum period; six years, eight months and one day to seven years and four months, for the
medium period; and seven years, four months and one day to eight years, for the maximum period. The maximum
of the indeterminate sentence should come from the maximum period, therefore, and the Court fixes it at seven
years, four months and one day of prision mayor. The minimum of the indeterminate sentence should come from
prision correccional in the maximum period, the penalty next lower than prision mayor in its minimum period,
whose range is from four years, two months and one day to six years.1âwphi1 Accordingly, the minimum of the
indeterminate sentence is four years, nine months and 11 days, and the maximum is seven years, four months
and one day of prision mayor.

WHEREFORE, the Court AFFIRMS the decision promulgated on May 11, 2005, subject to the MODIFICATIONS
that: (a) the petitioner shall suffer the indeterminate penalty of four (4) years, nine (9) months and eleven (11)
days of prision correccional, as minimum, to seven (7) years, four (4) months and one (1) day of pr is ion mayor,
as the maximum; (b) the petitioner shall pay to Michael Ryan Gonzales ₱20,000.00 as moral damages,
₱20,000.00 as exemplary damages, and ₱20,000.00 as temperate damages, plus interest at the rate of 6% per
annum on each item of the civil liability reckoned from the finality of this decision until full payment; and (c) the
petitioner shall pay the costs of suit.

SO ORDERED.
G.R. No. 174156 June 20, 2012

FILCAR TRANSPORT SERVICES, Petitioner, - versus - JOSE A. ESPINAS, Respondent.

BRION, J.:

We resolve the present petition for review on certiorari[1] filed by petitioner Filcar Transport Services (Filcar),
challenging the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 86603.

The facts of the case, gathered from the records, are briefly summarized below.

On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car along Leon Guinto
Street in Manila. Upon reaching the intersection of Leon Guinto and President Quirino Streets, Espinas stopped
his car. When the signal light turned green, he proceeded to cross the intersection. He was already in the middle
of the intersection when another car, traversing President Quirino Street and going to Roxas Boulevard, suddenly
hit and bumped his car. As a result of the impact, Espinas car turned clockwise. The other car escaped from the
scene of the incident, but Espinas was able to get its plate number.

After verifying with the Land Transportation Office, Espinas learned that the owner of the other car, with plate
number UCF-545, is Filcar.

Espinas sent several letters to Filcar and to its President and General Manager Carmen Flor, demanding payment
for the damages sustained by his car. On May 31, 2001, Espinas filed a complaint for damages against Filcar and
Carmen Flor before the Metropolitan Trial Court (MeTC) of Manila, and the case was raffled to Branch 13. In the
complaint, Espinas demanded that Filcar and Carmen Flor pay the amount of P97,910.00, representing actual
damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped Espinas car, the car was
assigned to its Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar further stated that
when the incident happened, the car was being driven by Atty. Flors personal driver, Timoteo Floresca.

Atty. Flor, for his part, alleged that when the incident occurred, he was attending a birthday celebration at
a nearby hotel, and it was only later that night when he noticed a small dent on and the cracked signal light of the
car. On seeing the dent and the crack, Atty. Flor allegedly asked Floresca what happened, and the driver replied
that it was a result of a hit and run while the car was parked in front of Bogota on Pedro Gil Avenue, Manila.

Filcar denied any liability to Espinas and claimed that the incident was not due to its fault or negligence
since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen Flor both said that they always
exercised the due diligence required of a good father of a family in leasing or assigning their vehicles to third
parties.

The MeTC Decision

The MeTC, in its decision dated January 20, 2004,[4] ruled in favor of Espinas, and ordered Filcar and Carmen
Flor, jointly and severally, to pay Espinas P97,910.00 as actual damages, representing the cost of repair, with
interest at 6% per annum from the date the complaint was filed; P50,000.00 as moral damages; P20,000.00 as
exemplary damages; and P20,000.00 as attorneys fees. The MeTC ruled that Filcar, as the registered owner of
the vehicle, is primarily responsible for damages resulting from the vehicles operation.

The RTC Decision

The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate jurisdiction, affirmed the
MeTC decision.[5] The RTC ruled that Filcar failed to prove that Floresca was not its employee as no proof was
adduced that Floresca was personally hired by Atty. Flor. The RTC agreed with the MeTC that the registered
owner of a vehicle is directly and primarily liable for the damages sustained by third persons as a consequence of
the negligent or careless operation of a vehicle registered in its name. The RTC added that the victim of
recklessness on the public highways is without means to discover or identify the person actually causing the injury
or damage. Thus, the only recourse is to determine the owner, through the vehicles registration, and to hold him
responsible for the damages.

The CA Decision

On appeal, the CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC decision by ruling that
Carmen Flor, President and General Manager of Filcar, is not personally liable to Espinas. The appellate court
pointed out that, subject to recognized exceptions, the liability of a corporation is not the liability of its corporate
officers because a corporate entity subject to well-recognized exceptions has a separate and distinct personality
from its officers and shareholders. Since the circumstances in the case at bar do not fall under the exceptions
recognized by law, the CA concluded that the liability for damages cannot attach to Carmen Flor.

The CA, however, affirmed the liability of Filcar to pay Espinas damages. According to the CA, even
assuming that there had been no employer-employee relationship between Filcar and the driver of the vehicle,
Floresca, the former can be held liable under the registered owner rule.

The CA relied on the rule that the registered owner of a vehicle is directly and primarily responsible to the
public and to third persons while the vehicle is being operated. Citing Erezo, et al. v. Jepte,[6]the CA said that the
rationale behind the rule is to avoid circumstances where vehicles running on public highways cause accidents or
injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant
means of identification. In Erezo, the Court said that the main aim of motor vehicle registration is to identify the
owner, so that if a vehicle causes damage or injury to pedestrians or other vehicles, responsibility can be traced to
a definite individual and that individual is the registered owner of the vehicle. [7]

The CA did not accept Filcars argument that it cannot be held liable for damages because the driver of
the vehicle was not its employee. In so ruling, the CA cited the case of Villanueva v. Domingo[8]where the Court
said that the question of whether the driver was authorized by the actual owner is irrelevant in determining the
primary and direct responsibility of the registered owner of a vehicle for accidents, injuries and deaths caused by
the operation of his vehicle.

Filcar filed a motion for reconsideration which the CA denied in its Resolution dated July 6, 2006.

Hence, the present petition.

The Issue
Simply stated, the issue for the consideration of this Court is: whether Filcar, as registered owner of the
motor vehicle which figured in an accident, may be held liable for the damages caused to Espinas.

Our Ruling

The petition is without merit.

Filcar, as registered owner, is deemed the employer of the driver,

Floresca, and is thus vicariously liable under Article 2176 in
relation with Article 2180 of the Civil Code

It is undisputed that Filcar is the registered owner of the motor vehicle which hit and caused damage to
Espinas car; and it is on the basis of this fact that we hold Filcar primarily and directly liable to Espinas for
damages.

As a general rule, one is only responsible for his own act or omission. [9] Thus, a person will generally be
held liable only for the torts committed by himself and not by another. This general rule is laid down in Article 2176
of the Civil Code, which provides to wit:
 Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

Based on the above-cited article, the obligation to indemnify another for damage caused by ones act or omission
is imposed upon the tortfeasor himself, i.e., the person who committed the negligent act or omission. The law,
however, provides for exceptions when it makes certain persons liable for the act or omission of another.

One exception is an employer who is made vicariously liable for the tort committed by his employee.
Article 2180 of the Civil Code states:

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

xxxx

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

xxxx

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

Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated on an employees
act or omission may be instituted against the employer who is held liable for the negligent act or omission
committed by his employee.

Although the employer is not the actual tortfeasor, the law makes him vicariously liable on the basis of the
civil law principle of pater familias for failure to exercise due care and vigilance over the acts of ones subordinates
to prevent damage to another.[10] In the last paragraph of Article 2180 of the Civil Code, the employer may invoke
the defense that he observed all the diligence of a good father of a family to prevent damage.

As its core defense, Filcar contends that Article 2176, in relation with Article 2180, of the Civil Code is
inapplicable because it presupposes the existence of an employer-employee relationship. According to Filcar, it
cannot be held liable under the subject provisions because the driver of its vehicle at the time of the accident,
Floresca, is not its employee but that of its Corporate Secretary, Atty. Flor.

We cannot agree. It is well settled that in case of motor vehicle mishaps, the registered owner of the
motor vehicle is considered as the employer of the tortfeasor-driver, and is made primarily liable for the tort
committed by the latter under Article 2176, in relation with Article 2180, of the Civil Code.

In Equitable Leasing Corporation v. Suyom,[11] we ruled that in so far as third persons are concerned, the
registered owner of the motor vehicle is the employer of the negligent driver, and the actual employer is
considered merely as an agent of such owner.
In that case, a tractor registered in the name of Equitable Leasing Corporation (Equitable) figured in an
accident, killing and seriously injuring several persons. As part of its defense, Equitable claimed that the tractor
was initially leased to Mr. Edwin Lim under a Lease Agreement, which agreement has been overtaken by a Deed
of Sale entered into by Equitable and Ecatine Corporation (Ecatine). Equitable argued that it cannot be held liable
for damages because the tractor had already been sold to Ecatine at the time of the accident and the negligent
driver was not its employee but of Ecatine.

In upholding the liability of Equitable, as registered owner of the tractor, this Court said that regardless of
sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons
are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. [12] The
Court further stated that [i]n contemplation of law, the owner/operator of record is the employer of the
driver, the actual operator and employer being considered as merely its agent.[13] Thus, Equitable, as the
registered owner of the tractor, was considered under the law on quasi delict to be the employer of the driver,
Raul Tutor; Ecatine, Tutors actual employer, was deemed merely as an agent of Equitable.

Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle primarily and
directly liable for damages under Article 2176, in relation with Article 2180, of the Civil Code, the existence of an
employer-employee relationship, as it is understood in labor relations law, is not required. It is sufficient to
establish that Filcar is the registered owner of the motor vehicle causing damage in order that it may be held
vicariously liable under Article 2180 of the Civil Code.

Rationale for holding the registered owner vicariously liable

The rationale for the rule that a registered owner is vicariously liable for damages caused by the operation
of his motor vehicle is explained by the principle behind motor vehicle registration, which has been discussed by
this Court in Erezo, and cited by the CA in its decision:

The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public highways caused accidents or
injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or
with very scant means of identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of
the determination of persons responsible for damages or injuries caused on public
highways. [emphasis ours]

Thus, whether there is an employer-employee relationship between the registered owner and the driver is
irrelevant in determining the liability of the registered owner who the law holds primarily and directly
responsible for any accident, injury or death caused by the operation of the vehicle in the streets and highways.

As explained by this Court in Erezo, the general public policy involved in motor vehicle registration is the
protection of innocent third persons who may have no means of identifying public road malefactors and, therefore,
would find it difficult if not impossible to seek redress for damages they may sustain in accidents resulting in
deaths, injuries and other damages; by fixing the person held primarily and directly liable for the damages
sustained by victims of road mishaps, the law ensures that relief will always be available to them.

To identify the person primarily and directly responsible for the damages would also prevent a situation
where a registered owner of a motor vehicle can easily escape liability by passing on the blame to another who
may have no means to answer for the damages caused, thereby defeating the claims of victims of road accidents.
We take note that some motor vehicles running on our roads are driven not by their registered owners, but by
employed drivers who, in most instances, do not have the financial means to pay for the damages caused in case
of accidents.

These same principles apply by analogy to the case at bar. Filcar should not be permitted to evade its
liability for damages by conveniently passing on the blame to another party; in this case, its Corporate Secretary,
Atty. Flor and his alleged driver, Floresca. Following our reasoning in Equitable, the agreement between Filcar
and Atty. Flor to assign the motor vehicle to the latter does not bind Espinas who was not a party to and has no
knowledge of the agreement, and whose only recourse is to the motor vehicle registration.

Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the employee
acts beyond the scope of his assigned task or that it exercised the due diligence of a good father of a family to
prevent damage - because the motor vehicle registration law, to a certain extent, modified Article 2180 of the Civil
Code by making these defenses unavailable to the registered owner of the motor vehicle. Thus, for as long as
Filcar is the registered owner of the car involved in the vehicular accident, it could not escape primary liability for
the damages caused to Espinas.

The public interest involved in this case must not be underestimated. Road safety is one of the most
common problems that must be addressed in this country. We are not unaware of news of road accidents
involving reckless drivers victimizing our citizens. Just recently, such pervasive recklessness among most drivers
took the life of a professor of our state university. [14] What is most disturbing is that our existing laws do not seem
to deter these road malefactors from committing acts of recklessness.

We understand that the solution to the problem does not stop with legislation. An effective administration
and enforcement of the laws must be ensured to reinforce discipline among drivers and to remind owners of
motor vehicles to exercise due diligence and vigilance over the acts of their drivers to prevent damage to others.
Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is irrelevant in arriving at the
conclusion that Filcar is primarily and directly liable for the damages sustained by Espinas. While Republic Act
No. 4136 or the Land Transportation and Traffic Code does not contain any provision on the liability of registered
owners in case of motor vehicle mishaps, Article 2176, in relation with Article 2180, of the Civil Code imposes an
obligation upon Filcar, as registered owner, to answer for the damages caused to Espinas car. This interpretation
is consistent with the strong public policy of maintaining road safety, thereby reinforcing the aim of the State to
promote the responsible operation of motor vehicles by its citizens.

This does not mean, however, that Filcar is left without any recourse against the actual employer of the driver and
the driver himself. Under the civil law principle of unjust enrichment, the registered owner of the motor vehicle has
a right to be indemnified by the actual employer of the driver of the amount that he may be required to pay as
damages for the injury caused to another.

The set-up may be inconvenient for the registered owner of the motor vehicle, but the inconvenience cannot
outweigh the more important public policy being advanced by the law in this case which is the protection of
innocent persons who may be victims of reckless drivers and irresponsible motor vehicle owners.

WHEREFORE, the petition is DENIED. The decision dated February 16, 2006 and the resolution dated July 6,
2006 of the Court of Appeals are AFFIRMED. Costs against petitioner Filcar Transport Services.

SO ORDERED.

G.R. No. 182353 June 29, 2010

ST. JOSEPHS COLLEGE, SR. JOSEPHINI AMBATALI, SFIC, and ROSALINDA TABUGO, Petitioners, - versus
- JAYSON MIRANDA, represented by his father, RODOLFO S. MIRANDA, Respondent.

NACHURA, J.:

This petition for review on certiorari seeks to set aside the Decision[1] of the Court of Appeals (CA) in CA-G.R. CV
No. 68367, which affirmed in toto the decision[2] of the Regional Trial Court (RTC), Branch 221, Quezon City, in
Civil Case No. Q-95-22889.

The facts, as found by the CA, follow:

On November 17, 1994, at around 1:30 in the afternoon inside St. Joseph Colleges [SJCs]
premises, the class to which [respondent Jayson Val Miranda] belonged was conducting a
science experiment about fusion of sulphur powder and iron fillings under the tutelage of
[petitioner] Rosalinda Tabugo, she being the subject teacher and employee of [petitioner] SJC.
The adviser of [Jaysons] class is x x x Estefania Abdan.

Tabugo left her class while it was doing the experiment without having adequately secured it from
any untoward incident or occurrence. In the middle of the experiment, [Jayson], who was the
assistant leader of one of the class groups, checked the result of the experiment by looking into
the test tube with magnifying glass. The test tube was being held by one of his group mates who
moved it close and towards the eye of [Jayson]. At that instance, the compound in the test tube
spurted out and several particles of which hit [Jaysons] eye and the different parts of the bodies
of some of his group mates. As a result thereof, [Jaysons] eyes were chemically burned,
particularly his left eye, for which he had to undergo surgery and had to spend for his medication.
Upon filing of this case [in] the lower court, [Jaysons] wound had not completely healed and still
had to undergo another surgery.

Upon learning of the incident and because of the need for finances, [Jaysons] mother, who was
 working abroad, had to rush back home for which she spent P36,070.00 for her fares and had to
forego her salary from November 23, 1994 to December 26, 1994, in the amount of at
least P40,000.00.

Then, too, [Jayson] and his parents suffered sleepless nights, mental anguish and wounded
feelings as a result of his injury due to [petitioners] fault and failure to exercise the degree of care
and diligence incumbent upon each one of them. Thus, they should be held liable for moral
damages. Also, [Jayson] sent a demand letter to [petitioners] for the payment of his medical
expenses as well as other expenses incidental thereto, which the latter failed to heed. Hence,
[Jayson] was constrained to file the complaint for damages. [Petitioners], therefore, should
likewise compensate [Jayson] for litigation expenses, including attorneys fees.

On the other hand, [petitioners SJC, Sr. Josephini Ambatali, SFIC, and Tabugo] alleged that
[Jayson] was a grade six pupil of SJC in the school year 1994-1995. On November 17, 1994, at
about 1:30 in the afternoon, the class to which [Jayson] belong[s] was conducting a science
experiment under the guidance and supervision of Tabugo, the class science teacher, about
fusion of sulphur powder and iron fillings by combining these elements in a test tube and heating
the same. Before the science experiment was conducted, [Jayson] and his classmates were
given strict instructions to follow the written procedure for the experiment and not to look into the
test tube until the heated compound had cooled off. [Jayson], however, a person of sufficient age
and discretion and completely capable of understanding the English language and the
instructions of his teacher, without waiting for the heated compound to cool off, as required in the
written procedure for the experiment and as repeatedly explained by the teacher, violated such
instructions and took a magnifying glass and looked at the compound, which at that moment
spurted out of the test tube, a small particle hitting one of [Jaysons] eyes.

Jayson was rushed by the school employees to the school clinic and thereafter transferred to St.
Lukes Medical Center for treatment. At the hospital, when Tabago visited [Jayson], the latter cried
and apologized to his teacher for violating her instructions not to look into the test tube until the
compound had cooled off.

After the treatment, [Jayson] was pronounced ready for discharge and an eye test showed that
his vision had not been impaired or affected. In order to avoid additional hospital charges due to
the delay in [Jaysons] discharge, Rodolfo S. Miranda, [Jaysons] father, requested SJC to
advance the amount of P26,176.35 representing [Jaysons] hospital bill until his wife could arrive
from abroad and pay back the money. SJC acceded to the request.

On December 6, 1994, however, the parents of [Jayson], through counsel, wrote SJC a letter
demanding that it should shoulder all the medical expenses of [Jayson] that had been incurred
and will be incurred further arising from the accident caused by the science experiment. In a letter
dated December 14, 1994, the counsel for SJC, represented by Sr. Josephini Ambatali, SFIC,
explained that the school cannot accede to the demand because the accident occurred by reason
of [Jaysons] failure to comply with the written procedure for the experiment and his teachers
repeated warnings and instruction that no student must face, much less look into, the opening of
the test tube until the heated compound has cooled.[3]

Since SJC did not accede to the demand, Rodolfo, Jaysons father, on Jaysons behalf, sued petitioners
for damages.
After trial, the RTC rendered judgment, to wit:

WHEREFORE, premises considered, judgment is hereby rendered in favor of [Jayson] and

against [petitioners]. This Court orders and holds the [petitioners] joint[ly] and solidarily liable to
pay [Jayson] the following amount:

1. To pay [Jayson] the amount of P77,338.25 as actual damages; However,

[Jayson] is ordered to reimburse [petitioner] St. Joseph College the amount
of P26,176.36 representing the advances given to pay [Jaysons] initial hospital
expenses or in the alternative to deduct said amount of P26,176.36 from
the P77,338.25 actual damages herein awarded by way of legal compensation;

2. To pay [Jayson] the sum of P50,000.00 as mitigated moral damages;

 3. To pay [Jayson] the sum of P30,000.00 as reasonable attorneys fees;

4. To pay the costs of suit.

SO ORDERED.[4]

Aggrieved, petitioners appealed to the CA. However, as previously adverted to, the CA affirmed in toto the ruling
of the RTC, thus:

WHEREFORE, in view of the foregoing, the assailed decision of the RTC of Quezon City, Branch
221 dated September 6, 2000 is hereby AFFIRMED IN TOTO. Costs against [petitioners].[5]

Undaunted, petitioners appealed` by certiorari to this Court, adamant that the CA grievously erred, thus:

I. THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT FINDING THAT THE PROXIMATE
CAUSE OF JAYSONS INJURY WAS HIS OWN ACT OF LOOKING AT THE HEATED TEST
TUBE BEFORE THE COMPOUND HAD COOLED IN COMPLETE DISREGARD OF
INSTRUCTIONS GIVEN PRIOR TO THE EXPERIMENT.

II. THE COURT OF APPEALS FAILED TO APPRECIATE THAT, IN LIGHT OF THE RULING IN
THE CASE OF ST. MARYS COLLEGE V. WILLIAM CARPITANOS, x x x JAYSONS
CONTRIBUTORY NEGLIGENCE OF PEEKING INTO THE TEST TUBE WAS IN FACT THE
PROXIMATE CAUSE OF HIS INJURY FOR WHICH THE PETITIONERS SHOULD NOT BE
HELD LIABLE.

III. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE AWARD OF ACTUAL
DAMAGES DESPITE THE ABSENCE OF PROOF TO SUPPORT THE SAME.

IV. THE LOWER COURT GRIEVOUSLY ERRED IN AWARDING MORAL DAMAGES TO

[JAYSON].

V. THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE AWARD OF

ATTORNEYS FEES TO [JAYSON].

VI. THE LOWER COURT GRIEVOUSLY ERRED IN DENYING THE PETITIONERS

COUNTERCLAIM.[6]
We find no reason to depart from the uniform rulings of the lower courts that petitioners were negligent since they
all failed to exercise the required reasonable care, prudence, caution and foresight to prevent or avoid injuries to
the students.

Jurisprudence dictates that factual findings of the trial court, especially when affirmed by the appellate
court, are accorded the highest degree of respect and are considered conclusive between the parties. [7] A review
of such findings by this Court is not warranted except for highly meritorious circumstances when: (1) the findings
of a trial court are grounded entirely on speculation, surmises or conjectures; (2) a lower courts inference from its
factual findings is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion in the
appreciation of facts; (4) the findings of the appellate court go beyond the issues of the case, or fail to notice
certain relevant facts which, if properly considered, will justify a different conclusion; (5) there is a misappreciation
of facts; (6) the findings of fact are conclusions without mention of the specific evidence on which they are based,
are premised on the absence of evidence, or are contradicted by evidence on record. [8] None of the foregoing
exceptions which would warrant a reversal of the assailed decision obtains in this instance.
Yet, petitioners maintain that the proximate cause of Jaysons injury was his own negligence in disregarding the
instructions given by Tabugo prior to the experiment and peeking into the test tube. Petitioners invoke our ruling
in St. Marys Academy v. Carpitanos[9] which absolved St. Marys Academy from liability for the untimely death of its
student during a school sanctioned activity, declaring that the negligence of petitioner St. Marys Academy was
only a remote cause of the accident.

We are not convinced.

Contrary to petitioners assertions, the lower courts conclusions are borne out by the records of this case. Both
courts correctly concluded that the immediate and proximate cause of the accident which caused injury to Jayson
was the sudden and unexpected explosion of the chemicals, independent of any intervening cause. The assailed
Decision of the CA quotes with favor the RTC decision, thus:

In this case, [petitioners] failed to show that the negligence of [Jayson] was the proximate cause
of the latters injury. We find that the immediate cause of the accident was not the negligence of
[Jayson] when he curiously looked into the test tube when the chemicals suddenly exploded
which caused his injury, but the sudden and unexpected explosion of the chemicals independent
of any intervening cause. [Petitioners] could have prevented the mishap if they exercised a higher
degree of care, caution and foresight. The court a quo correctly ruled that:

All of the [petitioners] are equally at fault and are liable for negligence because all
of them are responsible for exercising the required reasonable care, prudence,
caution and foresight to prevent or avoid injuries to the students. The individual
[petitioners] are persons charged with the teaching and vigilance over their
students as well as the supervision and ensuring of their well-being. Based on
the facts presented before this Court, these [petitioners] were remiss in their
responsibilities and lacking in the degree of vigilance expected of them.
[Petitioner] subject teacher Rosalinda Tabugo was inside the classroom when the
class undertook the science experiment although [Jayson] insisted that said
[petitioner] left the classroom. No evidence, however, was presented to establish
that [petitioner] Tabugo was inside the classroom for the whole duration of the
experiment. It was unnatural in the ordinary course of events that [Jayson] was
brought to the school clinic for immediate treatment not by [petitioner] subject
teacher Rosalinda Tabugo but by somebody else. The Court is inclined to believe
that [petitioner] subject teacher Tabugo was not inside the classroom at the time
the accident happened. The Court is also perplexed why none of the other
students (who were eyewitnesses to the incident) testified in Court to corroborate
the story of the [petitioners]. The Court, however, understands that these other
students cannot testify for [Jayson] because [Jayson] is no longer enrolled in said
school and testifying for [Jayson] would incur the ire of school authorities.
Estefania Abdan is equally at fault as the subject adviser or teacher in charge
because she exercised control and supervision over [petitioner] Tabugo and the
students themselves. It was her obligation to insure that nothing would go wrong
and that the science experiment would be conducted safely and without any
harm or injury to the students. [Petitioner] Sr. Josephini Ambatali is likewise
culpable under the doctrine of command responsibility because the other
individual [petitioners] were under her direct control and supervision. The
negligent acts of the other individual [petitioners] were done within the scope of
their assigned tasks.

xxxx

The defense of due diligence of a good father of a family raised by [petitioner] St.
Joseph College will not exculpate it from liability because it has been shown that
it was guilty of inexcusable laxity in the supervision of its teachers (despite an
apparent rigid screening process for hiring) and in the maintenance of what
should have been a safe and secured environment for conducting dangerous
experiments. [Petitioner] school is still liable for the wrongful acts of the teachers
and employees because it had full information on the nature of dangerous
science experiments but did not take affirmative steps to avert damage and injury
to students. The fact that there has never been any accident in the past during
the conduct of science experiments is not a justification to be complacent in just
preserving the status quo and do away with creative foresight to install safety
measures to protect the students. Schools should not simply install safety
reminders and distribute safety instructional manuals. More importantly, schools
should provide protective gears and devices to shield students from expected
risks and anticipated dangers.
Ordinarily, the liability of teachers does not extend to the school or university
itself, although an educational institution may be held liable under the principle of
RESPONDENT SUPERIOR. It has also been held that the liability of the
 employer for the [tortuous] acts or negligence of its employees is primary and
solidary, direct and immediate and not conditioned upon the insolvency of or prior
recourse against the negligent employee.[10]

Under the foregoing circumstances, we are hard pressed to disturb the findings of the RTC, which the CA
affirmed.

Nonetheless, petitioners make much of the fact that Tabugo specifically instructed her students, including Jayson,
at the start of the experiment, not to look into the heated test tube before the compound had cooled off.
Petitioners would allocate all liability and place all blame for the accident on a twelve (12)-year-old student, herein
respondent Jayson.

We disagree.

As found by both lower courts, the proximate cause of Jaysons injury was the concurrent failure of petitioners to
prevent the foreseeable mishap that occurred during the conduct of the science experiment. Petitioners were
negligent by failing to exercise the higher degree of care, caution and foresight incumbent upon the school, its
administrators and teachers.

Article 218 of the Family Code, in relation to Article 2180 of the Civil Code, bestows special parental authority on
the following persons with the corresponding obligation, thus:

Art. 218. The school, its administrators and teachers, or the individual, entity or institution
engaged in child care shall have special parental authority and responsibility over the minor child
while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or outside the
premises of the school, entity or institution.

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

xxxx

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

Petitioners negligence and failure to exercise the requisite degree of care and caution is demonstrated by
the following:

1. Petitioner school did not take affirmative steps to avert damage and injury to its students although it
had full information on the nature of dangerous science experiments conducted by the students during class;

2. Petitioner school did not install safety measures to protect the students who conduct experiments in
class;

3. Petitioner school did not provide protective gears and devices, specifically goggles, to shield students
from expected risks and dangers; and

4. Petitioner Tabugo was not inside the classroom the whole time her class conducted the experiment,
specifically, when the accident involving Jayson occurred. In any event, the size of the classfifty (50) students
conducting the experiment is difficult to monitor.

Moreover, petitioners cannot simply deflect their negligence and liability by insisting that petitioner Tabugo gave
specific instructions to her science class not to look directly into the heated compound. Neither does our ruling
in St. Marys preclude their liability in this case.

Unfortunately for petitioners, St. Marys is not in point. In that case, respondents thereat admitted the documentary
exhibits establishing that the cause of the accident was a mechanical defect and not the recklessness of the
minor, James Daniel II, in driving the jeep. We held, thus:

Significantly, respondents did not present any evidence to show that the proximate cause of the
accident was the negligence of the school authorities, or the reckless driving of James Daniel II. x
x x.

Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive
the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent
Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and
he allowed James Daniel II, a minor, to drive the jeep at the time of the accident.

Hence, liability for the accident, whether caused by the negligence of the minor driver or
mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minors
parents primarily. The negligence of petitioner St. Marys Academy was only a remote cause of
the accident. Between the remote cause and the injury, there intervened the negligence of the
minors parents or the detachment of the steering wheel guide of the jeep.[11]

In marked contrast, both the lower courts similarly concluded that the mishap which happened during the science
experiment was foreseeable by the school, its officials and teachers. This neglect in preventing a foreseeable
injury and damage equates to neglect in exercising the utmost degree of diligence required of schools, its
administrators and teachers, and, ultimately, was the proximate cause of the damage and injury to Jayson. As we
have held in St. Marys, for petitioner [St. Marys Academy] to be liable, there must be a finding that the act or
omission considered as negligent was the proximate cause of the injury caused because the negligence must
have a causal connection to the accident.[12]

As regards the contributory negligence of Jayson, we see no need to disturb the lower courts identical rulings
thereon:

As earlier discussed, the proximate cause of [Jaysons] injury was the explosion of the heated
compound independent of any efficient intervening cause. The negligence on the part of
[petitioner] Tabugo in not making sure that the science experiment was correctly conducted was
the proximate cause or reason why the heated compound exploded and injured not only [Jayson]
but his classmates as well. However, [Jayson] is partly responsible for his own injury, hence, he
should not be entitled to recover damages in full but must likewise bear the consequences of his
own negligence. [Petitioners], therefore, should be held liable only for the damages actually
caused by their negligence.[13]

Lastly, given our foregoing ruling, we likewise affirm the lower courts award of actual and moral damages,
and grant of attorneys fees. The denial of petitioners counterclaim is also in order.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 68367
is AFFIRMED. Costs against petitioners.

SO ORDERED.

G.R. No. 173870 April 25, 2012

OSCAR DEL CARMEN, JR., Petitioner, - versus - GERONIMO BACOY, Guardian and representing the children,
namely: MARY MARJORIE B. MONSALUD, ERIC B. MONSALUD, METZIE ANN. MONSALUD, KAREEN B.
MONSALUD, LEONARDO B. MONSALUD, JR., and CRISTINA B. MONSALUD, Respondents.

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

DECISION

DEL CASTILLO, J.:

In this Petition for Review on Certiorari,[1] the registered owner of a motor vehicle challenges the Decision[2] dated July 11,
2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67764 which held him liable for damages to the heirs of the victims
who were run over by the said vehicle.

Factual Antecedents

At dawn on New Years Day of 1993, Emilia Bacoy Monsalud (Emilia), along with her spouse Leonardo Monsalud, Sr. and
their daughter Glenda Monsalud, were on their way home from a Christmas party they attended in Poblacion,
Sominot, Zamboanga Del Sur. Upon reaching Purok Paglaom in Sominot, they were run over by a Fuso passenger jeep
bearing plate number UV-PEK-600 that was being driven by Allan Maglasang (Allan). The jeep was registered in the name of
petitioner Oscar del Carmen, Jr. (Oscar Jr.) and used as a public utility vehicle plying the Molave, Zamboanga del Sur to
Sominot, Zamboanga del Sur and vice versa route.

Because of the unfortunate incident, Criminal Case No. 93-10347[3] for Reckless Imprudence Resulting in Multiple
Homicide was filed against Allan before the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23. In a Decision
dated March 13, 1997, said court declared Allan guilty beyond reasonable doubt of the crime charged.[4]

During the pendency of said criminal case, Emilias father, Geronimo Bacoy (Geronimo), in behalf of the six minor
children[5] of the Monsaluds, filed Civil Case No. 96-20219,[6] an independent civil action for damages based on culpa
aquiliana. Aside from Allan, also impleaded therein were his alleged employers, namely, the spouses Oscar del Carmen, Sr.
(Oscar Sr.) and Norma del Carmen (Spouses del Carmen) and the registered owner of the jeep, their son Oscar
Jr. Geronimo prayed for the reimbursement of funeral and burial expenses, as well as the award of attorneys fees, moral and
exemplary damages resulting from the death of the three victims, and loss of net income earnings of Emilia who was
employed as a public school teacher at the time of her death.[7]

Defendants refused to assume civil liability for the victims deaths. Oscar Sr. averred that the Monsaluds have no
cause of action against them because he and his wife do not own the jeep and that they were never the employers of
Allan.[8] For his part, Oscar Jr. claimed to be a victim himself. He alleged that Allan and his friends[9] stole his jeep while it was
parked beside his drivers rented house to take it for a joyride. Both he and a vehicle mechanic testified that the subject jeep
can easily be started by mere pushing sans the ignition key. The vehicles engine shall then run but without any headlights
on.[10] And implying that this was the manner by which the vehicle was illegally taken, Oscar Jr. submitted as part of his
documentary evidence the statements[11] of Jemar Alarcon (Jemar) and Benjamin Andujar (Benjamin). The two, who were
with Allan in the jeep at the time of the accident, declared before the investigating officer that during said time, the vehicles
headlights were off. Because of this allegation, Oscar Jr. even filed before the same trial court a carnapping case against
Allan and his companions docketed as Criminal Case No. 93-10380.[12] The case was, however, dismissed for insufficiency
of evidence.[13]

Oscar Jr. clarified that Allan was his jeep conductor and that it was the latters brother, Rodrigo Maglasang (Rodrigo),
who was employed as the driver.[14] In any event, Allans employment as conductor was already severed before the mishap
occurred on January 1, 1993 since he served as such conductor only from the first week of December until December 14,
1992.[15] In support of this, Oscar Jr. presented as witnesses Faustino Sismundo (Faustino) and Cresencio Junior Baobao
(Cresencio). Faustino, a resident of Molave, testified that when he boarded the jeep heading to Sominot on December 31,
1992, it was Cresencio who was the conductor. He also believed that Crecencio started to work as such at around
December 15 or 16, 1992.[16] Cresencio, for his part, testified that he worked as Oscar Jr.s conductor from December 15,
1992 to January 1, 1993 and that Rodrigo was his driver.[17] He stated that upon learning that the jeep figured in an accident,
he never bothered to verify the news. Instead, he went to Midsalip to work there as a conductor for his brothers vehicle,
thereby terminating his employment with Oscar Jr.[18]

Oscar Jr. likewise testified that it was routinary that after a days trip, the jeep would be parked beside Rodrigos
rented house[19] for the next early-morning operation.

Geronimo, on the other hand, averred that Allan was still Oscar Jr.s employee subsequent to December 14,
1992. To prove this, he presented as witnesses Saturnino Jumawan (Saturnino) and Jose Navarro (Jose).Saturnino testified
that he would pay his fare to Allan every time he would board the jeep in going to Molave and that the last time he rode the
subject vehicle was on December 23, 1992. He also claimed that immediately before January 1, 1993, Rodrigo and Allan
used to park the jeep at the yard of his house.[20] Jose likewise attested that Allan was still the jeep conductor during the said
period as he had ridden the jeep many times in mid-December of 1992.[21]
Ruling of the Regional Trial Court

In its Decision[22] dated April 17, 2000, the RTC exculpated the spouses del Carmen from civil liability for
insufficiency of evidence. However, their son Oscar Jr. was held civilly liable in a subsidiary capacity. The RTC anchored its
ruling primarily on the principle of res ipsa loquitur, i.e., that a presumption of negligence on the part of a defendant may be
inferred if the thing that caused an injury is shown to be under his management and that in the ordinary course of things, the
accident would not have happened had there been an exercise of care. Said court ratiocinated that Oscar Jr., as the
registered owner of the jeep, managed and controlled the same through his driver Rodrigo, in whose house the jeep was
usually parked. Since both Oscar Jr. and Rodrigo were well aware that the jeep could easily be started by a mere push even
without the ignition key, they should have taken the necessary precaution to prevent the vehicle from being used by
unauthorized persons like Allan. The RTC thus concluded that such lack of proper precaution, due care and foresight
constitute negligence making the registered owner of the vehicle civilly liable for the damage caused by the same.

The RTC disposed of the case as follows:

Wherefore, judgment is hereby entered in favor of the plaintiffs and against the defendants Allan
Maglasang and Oscar del Carmen, Jr. ordering

1. Defendant ALLAN MAGLASANG to pay the plaintiffs, and in case of insolvency, for defendant
OSCAR DEL CARMEN, JR., to pay the plaintiffs, the following sums:

a. P73,112.00 for their funeral and burial expenses;

b. P1,000,000.00 moral damages for the death of the late Emilia Monsalud;
c. P250,000.00 moral damages for the death of the late Leonardo Monsalud, Sr.;
d. P250,000.00 moral damages for the death of the late Glenda Monsalud;
e. P40, 000.00, for exemplary damages;
f. P20,000.00 attorneys fees; and
g. The cost of this proceedings.

2. The dismissal of the complaint as against the spouses OSCAR DEL CARMEN SR. and
NORMA DEL CARMEN.

SO ORDERED.[23]

Oscar Jr. moved for reconsideration[24] contending that the provision on vicarious liability of the employer under
Article 2180 of the Civil Code[25] requires the existence of employer-employee relationship and that the employee was acting
within the scope of his employment when the tort occurred. He stressed that even assuming that Allan was his employee, he
was hired not as a driver but as a conductor. Hence, Allan acted beyond the scope of his employment when he drove the
jeep.

Oscar Jr. also stressed that the fact that the jeep was running without its headlights on at the time of the accident
indubitably shows that the same was stolen. He further alleged that the jeep could not have been taken by only one
person. As Rodrigo declared in Criminal Case No. 93-10380 (carnapping case), based on his experience, the jeep cannot be
pushed by only one person but by at least five people in order for it to start. This was due to the vehicles mass and the deep
canal which separates the parking area from the curved road that was obstructed by a house.[26]

Setting aside its earlier decision, the lower court in its Order[27] dated June 21, 2000 granted the Motion for
Reconsideration and absolved Oscar Jr. from civil liability. It cited Article 103 of the Revised Penal Code which provides that
for an employer to be subsidiarily liable for the criminal acts of his employee, the latter should have committed the same in
the discharge of his duties. The court agreed with Oscar Jr. that this condition is wanting in Allans case as he was not acting
in the discharge of his duties as a conductor when he drove the jeep.
The court also declared the doctrine of res ipsa loquitur inapplicable since the property owner cannot be made
responsible for the damages caused by his property by reason of the criminal acts of another. It then adjudged that only Allan
should bear the consequences of his criminal acts. Thus:

WHEREFORE, premises considered, the MOTION FOR

RECONSIDERATION is granted, and defendant OSCAR DEL CARMEN JR. is hereby absolved from all
civil liability arising from the felonious acts of convicted accused ALLAN MAGLASANG.

IT IS SO ORDERED.[28]
 Geronimo appealed.

Ruling of the Court of Appeals

In its July 11, 2006 Decision,[29] the CA granted the appeal.

In resolving the case, the CA first determined the preliminary issue of whether there was an employer-employee
relationship between Oscar Jr. and Allan at the time of the accident. It ruled in the affirmative and gave more credence to the
testimonies of Geronimos witnesses than to those of Oscar Jr.s witnesses, Faustino and Cresencio. The CA ratiocinated that
unlike the witness presented by Geronimo, Faustino never resided in Poblacionand thus has limited knowledge of the
place. His testimony was also unreliable considering that he only rode the subject jeep twice[30] during the last two weeks of
December 1992. As regards Cresencios testimony, the appellate court found it puzzling why he appeared to have acted
uninterested upon learning that the jeep was the subject of an accident when it was his bread and butter. Said court likewise
considered questionable Oscar Jr.s asseveration that Cresencio replaced Allan as conductor when Cresencio testified that
he replaced a certain Sumagang Jr.[31]

With regard to the main issue, the CA adjudged Oscar Jr. liable to the heirs of the victims based on the principle that
the registered owner of a vehicle is directly and primarily responsible for the injuries or death of third parties caused by the
operation of such vehicle. It disbelieved Oscar Jr.s defense that the jeep was stolen not only because the carnapping case
filed against Allan and his companions was dismissed but also because, given the circumstances, Oscar Jr. is deemed to
have given Allan the implied permission to use the subject vehicle. To support its conclusion, the CA cited the following
circumstances: siblings Rodrigo and Allan were both employees assigned to the said jeep; after a days work, said vehicle
would be parked just beside Rodrigos house where Allan also lived; the jeep could easily be started even without the use of
an ignition key; the said parking area was not fenced or secured to prevent the unauthorized use of the vehicle which can be
started even without the ignition key.

The dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the instant appeal is GRANTED. The assailed Order
dated 21 June 2000 of the Regional Trial Court (Branch 23), Molave, Zamboanga del Sur, in Civil Case No.
96-20,219 is SET ASIDE and a new one is hereby entered. OSCAR DEL CARMEN, Jr. and ALLAN
MAGLASANG are held primarily liable, jointly and severally, to pay plaintiffs-appellants:

1. Civil indemnity for the death of Emilia Bacoy Monsalud, Leonardo Monsalud Sr., and Glenda
Monsalud in the amount of Fifty thousand pesos (P50,000.00) each or for the total amount of One hundred
fifty thousand pesos (P150,000.00);

2. Temperate damages in the amount of Twenty-five Thousand Pesos (P25,000.00) each for the
death of Emilia Monsalud, Leonardo Monsalud Sr., and Glenda Monsalud (collectively the Monsaluds) or
for the total amount of Seventy-five thousand pesos (P75,000.00);

3. Moral damages in the amount of Fifty Thousand Pesos (P50,000.00) each for the death
of the Monsaluds or for a total amount of One Hundred Fifty Thousand Pesos (P150,000.00);

4. Exemplary damages of Forty Thousand Pesos (P40,000.00).

No pronouncement as to costs.

SO ORDERED. [32]

Issues

As a result of the adverse judgment, Oscar Jr. filed this Petition for Review on Certiorari alleging that the CA erred in:

1. x x x basing its conclusions and findings on speculations, surmises and conjectures;

misapprehension of facts which are in conflict with the findings of the trial court;
 2. x x x declaring a question of substance not in accord with law and with the applicable
decisions of the Supreme Court;

3. x x x departing from the regular course of the judicial proceedings in the disposition of the
appeal and [in going] beyond the issues of the case.[33]

Oscar Jr. points out that the CA failed to consider the RTCs ruling in its June 21, 2000 Order which was in accord
with Article 2180 of the Civil Code, i.e., that the tort committed by an employee should have been done within the scope of his
assigned tasks for an employer to be held liable under culpa aquiliana. However, the CA never touched upon this matter
even if it was glaring that Allans driving the subject vehicle was not within the scope of his previous employment as
conductor. Moreover, Oscar Jr. insists that his jeep was stolen and stresses that the liability of a registered owner of a vehicle
as to third persons, as well as the doctrine of res ipsa loquitur,should not apply to him. He asserts that although Allan and his
companions were not found to have committed the crime of carnapping beyond reasonable doubt, it was nevertheless
established that the jeep was illicitly taken by them from a well secured area. This is considering that the vehicle was running
without its headlights on at the time of the accident, a proof that it was started without the ignition key.

Our Ruling

Petitioners own evidence casts doubt on his claim that his jeep was
stolen by Allan and his alleged cohorts. Negligence is presumed under
the doctrine of res ipsa loquitur.

Oscar Jr.s core defense to release him from responsibility for the death of the Monsaluds is that his jeep was stolen. He
highlights that the unauthorized taking of the jeep from the parking area was indeed carried out by the clandestine and
concerted efforts of Allan and his five companions, notwithstanding the obstacles surrounding the parking area and the
weight of the jeep.

Notably, the carnapping case filed against Allan and his group was already dismissed by the RTC for insufficiency of
evidence. But even in this civil case and as correctly concluded by the CA, the evidentiary standard of preponderance of
evidence required was likewise not met to support Oscar Jr.s claim that his jeep was unlawfully taken.

Two of Allans co-accused in the carnapping case, Jemar and Benjamin, declared before the police that when Allan
invited them to ride with him, he was already driving the jeep:

04. Q- On that night, on or about 11:30 oclock on December 31, 1992, where were you?
A- I went to the disco near [the] Public Market[,] Sominot, Zamboanga del Sur.

05. Q- While you were in disco place, do you know if there was an incident [that] happened?
A- No sir but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1, 1993, Allan
Maglasang arrived driving the jeep and he invited me to ride together with Benjamin Andujar,
Dioscoro Sol, Arniel Rezada and Joven Orot.[34]

xxxx

04. Q- On that night, on or about 9:00 oclock in the evening more or less on December 31, 1992, where
were you?
A- I went to the disco at [the] Public Market[,] Sominot, Zamboanga del Sur.
05. Q- While you were in the disco place, do you know if there was an incident [that] happened?
A- No, sir, but when I was in the disco place, at about 3:30 at dawn more or less[,] January 1, 1993, Allan
Maglasang arrive[d] driving the jeep and he invited me to ride together with Jemar Alarcon,
Dioscoro Sol, Arniel Rizada and Joven Orot.[35]

There were six accused in the carnapping case. If Jemar and Benjamin were fetched by Allan who was driving the jeep, this
would mean that only three men pushed the jeep contrary to Rodrigos testimony in Criminal Case No. 93-10380 that it has to
be pushed by at least five people so that it could start without the ignition key.
On direct examination,[36] Oscar Jr. was asked as to what Rodrigo, his driver who had informed him about the accident on
January 1, 1993 at around 7:00 a.m., turned over to him after the incident, viz:

Q: When Rodrigo Maglasang, your driver informed you about the accident, what did he carry with him if
any and turned over to you?
A: The OR (Official Receipt) and the CR (Certificate of Registration) Sir.

Q: How about the key of the vehicle?

A: It was not turned over, Sir.[37]

Assuming arguendo that Allan stole the jeep by having the same pushed by a group, the ignition key should then be with
Rodrigo as he was entrusted with the jeeps possession. Thus, at the time Rodrigo faced his employer hours after the
incident, it is reasonable to expect that the driver should have also returned the key to the operator together with the Official
Receipt and Certificate of Registration. Notably, Rodrigo did not do so and instead, the key was allegedly handed over to the
police for reasons unexplained and not available from the records. Interestingly, Oscar Jr. never presented Rodrigo as his
witness. Neither was he able to attest on cross-examination that Allan really stole the jeep by pushing or that the key was
handed over to him by Rodrigo:

Q: On December 31, 1992, you did not know that it was Rodrigo Maglasang who gave the key to Allan
Maglasang. Is that correct?
A: I was not there. So, I do not know but he had an affidavit to show that he turned it over to the police.
Q: What I was asking you is that, [o]n the night of December 31, 1992, when it was driven by Allan
Maglasang, you did not know that the key was voluntarily given by Rodrigo Maglasang to Allan
Maglasang?
A: I was not there.

Q: So, you could not testify on that, is that correct?

A: Yes Sir, I was not there.[38]

Furthermore, Oscar Jr. acknowledged the dismissal of the carnapping case, thus:

Q: Now, there was a case filed against Allan Maglasang and [his] x x x co-accused x x x [n]amely:
Benjamin Andojar, Dioscoro Sol, Joven Orot, [Jemar Azarcon] and [Arniel] Rizada, for
carnapping. Is that correct?
A: Yes Sir.

Q: That case was filed by you because you alleged that on December 31, 1992, your jeep was carnapped
by Allan Maglasang and his co-accused, the said mentioned, is that correct?
A: Yes Sir.

Q: You testified on the case in Aurora, is that correct?

A: Yes, Sir.

Q: And you could well remember that this representation is the counsel of the co-accused of Allan
Maglasang, is that correct?
A: Yes Sir.

Q: And that case for carnapping was dismissed, is that correct?

A: Yes Sir.

Q: Even the case of Allan Maglasang, was also dismissed, is that correct
A: Yes Sir.

Q: Because there was no sufficient evidence to establish that the jeep was carnapped, is that correct?
A: Yes Sir.[39]

While Oscar Jr. highlights that the headlights were not on to support his claim that his jeep was stolen, this
circumstance by itself will not prove that it really was stolen. The reason why the headlights were not on at the time of the
accident was not sufficiently established during the trial. Besides, the fact that the headlights were not on cannot be
exclusively attributed to the lack of ignition key in starting the jeep as there may be other possibilities such as electrical
problems, broken headlights, or that they were simply turned off.

Hence, sans the testimony of witnesses and other relevant evidence to support the defense of unauthorized taking,
we cannot subscribe to Oscar Jr.s claim that his jeep was stolen. The evidence on record brings forth more questions than
clear-cut answers.

Oscar Jr. alleges that the presumption of negligence under the doctrine of res ipsa loquitur (literally, the thing speaks for itself)
should not have been applied because he was vigilant in securing his vehicle. He claims that the jeep was parked in a well
secured area not remote to the watchful senses of its driver Rodrigo.

Under the doctrine of res ipsa loquitur, [w]here the thing that caused the injury complained of is shown to be under
the management of the defendant or his servants; and the accident, in the ordinary course of things, would not happen if
those who had management or control used proper care, it affords reasonable evidence in the absence of a sufficient,
reasonable and logical explanation by defendant that the accident arose from or was caused by the defendants want of
care.[40] Res ipsa loquitur is merely evidentiary, a mode of proof, or a mere procedural convenience, since it furnishes a
substitute for, and relieves a plaintiff of, the burden of producing a specific proof of negligence.[41] It recognizes that parties
may establish prima facie negligence without direct proof, thus, it allows the principle to substitute for specific proof of
negligence. It permits the plaintiff to present along with proof of the accident, enough of the attending circumstances to invoke
the doctrine, create an inference or presumption of negligence and thereby place on the defendant the burden of proving that
there was no negligence on his part.[42] The doctrine is based partly on the theory that the defendant in charge of the
instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it
while the plaintiff has no such knowledge, and is therefore compelled to allege negligence in general terms.[43]

The requisites of the doctrine of res ipsa loquitur as established by jurisprudence are as follows:

1) the accident is of a kind which does not ordinarily occur unless someone is negligent;

2) the cause of the injury was under the exclusive control of the person in charge and

3) the injury suffered must not have been due to any voluntary action or contribution on the part of
the person injured.[44]

The above requisites are all present in this case. First, no person just
walking along the road would suddenly be sideswiped and run over by an on-rushing vehicle unless the one in charge of the
said vehicle had been negligent. Second, the jeep which caused the injury was under the exclusive control of Oscar Jr. as its
owner. When Oscar Jr. entrusted the ignition key to Rodrigo, he had the power to instruct him with regard to the specific
restrictions of the jeeps use, including who or who may not drive it. As he is aware that the jeep may run without the ignition
key, he also has the responsibility to park it safely and securely and to instruct his driver Rodrigo to observe the same
precaution. Lastly, there was no showing that the death of the victims was due to any voluntary action or contribution on their
part.
The aforementioned requisites having been met, there now arises a presumption of negligence against Oscar Jr.
which he could have overcome by evidence that he exercised due care and diligence in preventing strangers from using his
jeep. Unfortunately, he failed to do so.

What this Court instead finds worthy of credence is the CAs conclusion that Oscar Jr. gave his implied permission
for Allan to use the jeep. This is in view of Oscar Jr.s failure to provide solid proof that he ensured that the parking area is well
secured and that he had expressly imposed restrictions as to the use of the jeep when he entrusted the same to his driver
Rodrigo. As fittingly inferred by the CA, the jeep could have been endorsed to Allan by his brother Rodrigo since as already
mentioned, Oscar Jr. did not give Rodrigo any specific and strict instructions on matters regarding its use. Rodrigo therefore
is deemed to have been given the absolute discretion as to the vehicles operation, including the discretion to allow his brother
Allan to use it.

The operator on record of a vehicle is primarily responsible to third

persons for the deaths or injuries consequent to its operation,
regardless of whether the employee drove the registered owners
vehicle in connection with his employment.

Without disputing the factual finding of the CA that Allan was still his
employee at the time of the accident, a finding which we see no reason to disturb, Oscar Jr. contends that Allan drove the
jeep in his private capacity and thus, an employers vicarious liability for the employees fault under Article 2180 of the Civil
Code cannot apply to him.

The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank,[45] the car of therein respondent bank
caused the death of Conrado Aguilar, Jr. while being driven by its assistant vice president. Despite Article 2180, we still held
the bank liable for damages for the accident as said provision should defer to the settled doctrine concerning accidents
involving registered motor vehicles, i.e., that the registered owner of any vehicle, even if not used for public service, would
primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle was being driven on the
highways or streets.[46] We have already ratiocinated that:

The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that
any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner. Instances are numerous where vehicles running on public
highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the
owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or injuries caused on public highways.[47]

Absent the circumstance of unauthorized use[48] or that the subject vehicle was stolen[49] which are valid defenses
available to a registered owner, Oscar Jr. cannot escape liability for quasi-delict resulting from his jeeps use.

All told and considering that the amounts of damages awarded are in accordance with prevailing jurisprudence, the
Court concurs with the findings of the CA and sustains the awards made. In addition, pursuant to Eastern Shipping Lines,
Inc. v. Court of Appeals,[50] an interest of six percent (6%) per annum on the amounts awarded shall be imposed, computed
from the time the judgment of the RTC is rendered on April 17, 2000 and twelve percent (12%) per annum on such amount
upon finality of this Decision until the payment thereof.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated July 11, 2006 of the Court
of Appeals in CA-G.R. CV No. 67764 is hereby AFFIRMED with further MODIFICATIONthat an interest of six percent (6%)
per annum on the amounts awarded shall be imposed, computed from the time the judgment of the Regional Trial Court,
Branch 23, Molave, Zamboanga del Sur is rendered on April 17, 2000 and twelve percent (12%) per annum on such amount
upon finality of this Decision until the payment thereof.

SO ORDERED.

[G.R. No. 149149. October 23, 2003]

ERNESTO SYKI, petitioner, vs. SALVADOR BEGASA, respondent.

DECISION
CORONA, J.:

Assailed in the instantthis petition for review under Rule 45 of the Rules of Court is the
decision[1] dated January 31, 2001 of the Court of Appeals, affirming the decision dated May 5, 1998 of the
Regional Trial Court of Negros Occidental, Branch 48, Bacolod City, in Civil Case No. 7458 for damages. The trial
court awarded actual and moral damages to herein respondent Salvador Begasa who suffered injuries in an
accident due to the negligence of Elizalde Sablayan, the truck driver of petitioner Ernesto Syki.
The facts follow.
On June 22, 1992, around 11:20 a.m., near the corner of Araneta and Magsaysay Streets, Bacolod City,
respondent Salvador Begasa and his three companions flagged down a passenger jeepney driven by Joaquin
Espina and owned by Aurora Pisuena. While respondent was boarding the passenger jeepney (his right foot
already inside while his left foot still on the boarding step of the passenger jeepney), a truck driven by Elizalde
Sablayan and owned by petitioner Ernesto Syki bumped the rear end of the passenger jeepney. Respondent fell
and fractured his left thigh bone (femur). He also suffered lacerations and abrasions in his left leg, thusas follows:

1. Fracture left femur, junction of middle and distal third, comminuted.

2. Lacerated wounds, left poplitial 10 cm. left leg anterior 2.5 cm.

3. Abrasion left knee.[2]

On October 29, 1992, respondent filed a complaint for damages for breach of common carriers contractual
obligations and quasi-delict against Aurora Pisuena, the owner of the passenger jeepney;, herein petitioner
Ernesto Syki, the owner of the truck;, and Elizalde Sablayan, the driver of the truck.
After hearing, the trial court dismissed the complaint against Aurora Pisuena, the owner and operator of the
passenger jeepney, but ordered petitioner Ernesto Syki and his truck driver, Elizalde Sablayan, to pay respondent
Salvador Begasa, jointly and severally, actual and moral damages plus attorneys fees as follows:

1. Actual damages of P48,308.20 less the financial assistance given by defendant Ernesto Syki to
plaintiff Salvador Begasa in the amount of P4,152.55 or a total amount of P44,155.65;

2. The amount of P30,000.00 as moral damages;

3. The amount of P20,000.00 as reasonable attorneys fees.[3]

Petitioner Syki and his driver appealed to the Court of Appeals. However, the appellate court found no
reversible error in the decision of the trial court and affirmed the same in toto.[4] The appellate court also denied
their motion for reconsideration.[5]
Aggrieved, petitioner Ernesto Syki filed the instant petition for review, arguing that the Court of Appeals erred
in not finding respondent Begasa guilty of contributory negligence. Hence, the damages awarded to him
(respondent) should have been decreased or mitigated. Petitioner also contends that the appellate court erred in
ruling that he failed to observe the diligence of a good father of a family in the selection and supervision of his
driver. He asserts that he presented sufficient evidence to prove that he observed the diligence of a good father of
a family in selecting and supervising the said employee, thus he should not be held liable for the injuries
sustained by respondent.
The petition has no merit.
Article 2180 of the Civil Code provides:
. . . . . . . . .x x x x x x x x x

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

xxxxxxxxx

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

From the above provision, when an injury is caused by the negligence of an employee, a legal presumption
instantly arises that the employer was negligent, either or both, in the selection and/or supervision of his said
employeeduties. The said presumption may be rebutted only by a clear showing on the part of the employer that
he had exercised the diligence of a good father of a family in the selection and supervision of his employee. If the
employer successfully overcomes the legal presumption of negligence, he is relieved of liability. [6] In other words,
the burden of proof is on the employer.
The question is: how does an employer prove that he had indeed exercised the diligence of a good father of
a family in the selection and supervision of his employee? The case of Metro Manila Transit Corporation vs. Court
of Appeals[7] is instructive:

In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of
presenting at the trial such amount of evidence required by law to obtain a favorable judgment. . .In making proof
in its or his case, it is paramount that the best and most complete evidence is formally entered.
Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must
be corroborated by documentary evidence, inasmuch as the witnesses testimonies dwelt on mere generalities, we
cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the
selection and supervision of employees. Petitioners attempt to prove its deligentissimi patris familias in the
selection and supervision of employees through oral evidence must fail as it was unable to buttress the same with
any other evidence, object or documentary, which might obviate the apparent biased nature of the testimony.

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

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

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

The above 1993 ruling in Metro Manila Transit Corporation vs. Court of Appeals was reiterated in a recent
case again involving the Metro Manila Transit Corporation,[8] thus:

In the selection of prospective employees, employers are required to examine them as to their qualifications,
experience, and service records. On the other hand, with respect to the supervision of employees, employers
should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures
for breaches thereof. To establish these factors in a trial involving the issue of vicarious liability, employers must
submit concrete proof, including documentary evidence.

In this case, MMTC sought to prove that it exercised the diligence of a good father of a family with respect to the
selection of employees by presenting mainly testimonial evidence on its hiring procedure. According to MMTC,
applicants are required to submit professional driving licenses, certifications of work experience, and clearances
from the National Bureau of Investigation; to undergo tests of their driving skills, concentration, reflexes, and
vision; and, to complete training programs on traffic rules, vehicle maintenance, and standard operating
procedures during emergency cases.

. . . . . . . . .x x x x x x x x x

Although testimonies were offered that in the case of Pedro Musa all these precautions were followed, the records
of his interview, of the results of his examinations, and of his service were not presented. . . [T]here is no record
that Musa attended such training programs and passed the said examinations before he was employed. No proof
was presented that Musa did not have any record of traffic violations. Nor were records of daily inspections,
allegedly conducted by supervisors, ever presented. . . The failure of MMTC to present such documentary proof
puts in doubt the credibility of its witnesses.

x x x x x x x x x. . . . . . . . .

It is noteworthy that, in another case involving MMTC, testimonial evidence of identical content, which MMTC
presented to show that it exercised the diligence of a good father of a family in the selection and supervision of
employees and thus avoid vicarious liability for the negligent acts of its employees, was held to be insufficient to
overcome the presumption of negligence against it. (emphasis ours)
 Based therefore on jurisprudential law, the employer must not merely present testimonial evidence to prove
that he had observed the diligence of a good father of a family in the selection and supervision of his employee,
but he must also support such testimonial evidence with concrete or documentary evidence. The reason for this is
to obviate the biased nature of the employers testimony or that of his witnesses. [9]
In this case, petitioners evidence consisted entirely of testimonial evidence. He testified that before he hired
Elizalde Sablayan, he required him to submit a police clearance in order to determine if he was ever involved in
any vehicular accident. He also required Sablayan to undergo a driving test with conducted by his mechanic,
Esteban Jaca. Petitioner claimed that he, in fact, accompanied Sablayan during the driving test and that during
the test, Sablayan was taught to read and understand traffic signs like Do Not Enter, One Way, Left Turn, and
Right Turn.
Petitioners mechanic, Esteban Jaca, on the other hand, testified that Sablayan passed the driving test
and had never figured in any vehicular accident except the one in question. He also testified that he maintained in
good condition all the trucks of petitioner by checking the brakes, horns and tires thereof before leaving
forproviding hauling services.[10]
Petitioner, however, never presented the alleged police clearance given to him by Sablayan, nor the results
of Sablayans driving test. Petitioner also did not present records of the regular inspections that his mechanic
allegedly conducted. The unsubstantiated and self-serving testimonies of petitioner and his mechanic arewere,
without doubt, insufficient to overcome the legal presumption that petitioner was negligent in the selection and
supervision of his driver. Accordingly, we affirm the ruling of the Court of Appeals that petitioner is liable for the
injuries suffered by respondent.
It should be emphasized that the legal obligation of employers to observe due diligence in the selection and
supervision of their employees provided under in Article 2180 of the Civil Code is not an empty provision or a
mere formalism since the non-observance thereof actually becomes the basis of the employers vicarious
liability.[11] Employers should thus seriously observe such a degree of diligence (and must presentprove it in court
bysufficient and concrete evidence) in court showing such observance in order to be freethat would exculpate
them from liability.
Petitioner next contends that, even if he is liable, the award of damages given to respondent should be
decreased or mitigated because respondent was guilty of contributory negligence. Petitioner claims that his driver
was allegedly caught unaware when the passenger jeepney hailed by respondent suddenly stopped at the
intersection of a national highway. Petitioner argues that, had respondent flagged down the passenger jeepney at
the proper place, the accident could have been avoided.[12]
Petitioners contention has no merit.
Article 2179 provides:

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

The underlying precept of the above article on contributory negligence is that a plaintiff who is partly
responsible for his own injury should not be and is not entitled to recover damages in full but must bear the
consequences of his own negligence. Inferrably, tThe defendant must thus be held liable only for the damages
actually caused by his negligence.[13]
In the present case, was respondent partly negligent and thus, should not recover the full amount of the
damages awarded by the trial court? We rule in the negative.
There was no evidence that respondent Begasa and his three companions flagged down the passenger
jeepney at in a prohibited area. All Tthe facts only showed was that the passenger jeepney was near the corner of
Araneta and Magsaysay Streets, Bacolod City when petitioners driver bumped it from the rear. No city resolution,
traffic regulation or DPWH memorandum were was presented to show that the passenger jeepney picked up
respondent and his three companions at in a prohibited area. In fact, the trial court dismissed the case against the
driver and/or owner of the passenger jeepney on the ground that they were not liable, which meansing,that no
negligence could be attributed to them. The trial court also found no negligence on the part of respondent
Begasa. This factual finding was affirmed in toto by the Court of Appeals.[14]
 It must be emphasized that petitions for review under Rule 45 of the Rules of Court should deals only with
questions of law. The factual conclusions of the Court of Appeals are given great weight and even finality by the
Supreme Court, especially when, as in the present case, the appellate court upholds the findings of fact of the trial
court. The factual findings of the Court of Appeals can only be overturned if it is shown that such findings are
obviously whimsical, capricious and arbitrary, or are contrary with to the factual findings of the trial court.[15] In this
case, we find no reason to overturn the factual findings of the Court of Appeals. Thus, we affirm the appellate
courts finding that there was no contributory negligence on the part of respondent.
In sum, the sole and proximate cause of the accident was the negligence of petitioners driver who, as found
by the lower courts, did not slow down even when he was already approaching a busy intersection within the city
proper.[16] The passenger jeepney had long stopped to pick up respondent and his three companions and, in fact,
respondent was already partly inside the jeepney, when petitioners driver bumped the rear end ofrear-ended it.
The impact was so strong such that respondent fell and fractured his left thigh bone (femur),
and suffered severely woundeds in his left knee and leg. No doubt that respondentpetitioners driver was
recklessspeeding.
Since the negligence of petitioners driver was the sole and proximate cause of the accident, in the present
case, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to respondent Begasa for the
injuries sustained by latterhim.
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals is AFFIRMED.
SO ORDERED.

G.R. No. 171050 July 4, 2012

FAR EAST BANK AND TRUST COMPANY (now Bank of the Philippine Islands), Petitioner, - versus -
TENTMAKERS GROUP, INC., GREGORIA PILARES SANTOS and RHOEL P. SANTOS, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the July 28,
2005 Decision[1] and the January 6, 2006 Resolution[2] of the Court of Appeals (CA) in CA-GR No. CV-71543
entitled Far East Bank and Trust Company v. Tentmakers Group, Inc., Gregoria Pilares Santos & Rhoel P.
Santos. The CA reversed and set aside the June 11, 2001 Decision of the Regional Trial Court, Branch
60, Makati City (RTC), and dismissed petitioners complaint in Civil Case No. 98-910.

THE FACTS

The signatures of respondents, Gregoria Pilares Santos (Gregoria) and Rhoel P. Santos (Rhoel), President and
Treasurer of respondent Tentmakers Group, Inc. (TGI) respectively, appeared on the three (3) promissory notes
for loans contracted with petitioner Far East Bank and Trust Company (FEBTC), now known as Bank of the
Philippine Islands (BPI). The first two (2) promissory notes were signed by both of them on July 5, 1996, as
evidenced by Promissory Note No. 2-038-965034[3] for ₱255,000.00 and Promissory Note No. 2-038-965040[4] for
₱155,000.00. Gregoria and Rhoel alleged that they did sign on blank promissory notes intended for future
use. The sixty (60)-day notes became due and demandable on September 3, 1996.

On August 7, 1996, Promissory Note No. 2-038-965003[5] for ₱140,000.00, a thirty (30)-day note, was executed
allegedly in the same manner as the first two promissory notes.

After a futile demand, FEBTC filed a Complaint[6] before the RTC for the payment of the principal of the
promissory notes which amounted to a total of ₱887,613.37 inclusive of interest, penalty charges and attorneys
fees. In the said complaint, Gregoria and Rhoel were impleaded to be jointly and severally liable with TGI for the
unpaid promissory notes.

In defense, the respondents alleged that FEBTC had no right at all to demand from them the amount
being claimed; that records would show the absence of any resolution coming from the Board of Directors of TGI,
authorizing the signatories to receive the proceeds and the FEBTC to release any loan; that FEBTC violated the
rules and regulations of the Central Bank as well as its own policy when it failed to require the respondents to
submit the said board resolution, it allegedly being a condition sine qua non before granting a loan to a corporate
entity, for the protection of the depositors/borrowers; that it was FEBTCs branch manager, a certain Liza Liwanag,
who represented to Gregoria and Rhoel that they could avail of additional working capital for TGI by having them
sign the promissory notes in advance, which were blank at the time, so they would be ready for future use; that
Liza Liwanags act of not requiring the aforesaid board resolution was against bank policy; that this irregularity
caused damage to FEBTC with its own employee defrauding the bank; that the respondents had no knowledge
that a loan had been taken out in its name; and that FEBTC could not present any proof that the respondents duly
received the various amounts reflected in the three (3) promissory notes. [7]
In the Answer with Counterclaim and Cross-claim,[8] the respondents alleged that Salvador Bernardo, Jr.
and Luisa Bernardo of Eliezer Crafts, who were erroneously impleaded as cross-defendants,[9]were the ones who
received the proceeds of the promissory notes.

The respondents failed to appear during the pre-trial. Thereafter, FEBTC was allowed to present evidence ex-
parte. The respondents filed their motion for reconsideration, but the same was denied by the RTC. A subsequent
attempt to have their pre-trial brief admitted was also denied.[10]

After trial, the RTC rendered its decision[11] in favor of FEBTC, the dispositive portion of which states:

WHEREFORE, in view of the foregoing, the Complaint filed is herein

GRANTED. Defendants Tentmakers Group, Inc., Gregoria P. Santos and Rhoel P. Santos are
held jointly and severally liable to pay plaintiff Far East Bank and Trust Co. in the amount
of ₱1,181,764.68 plus attorneys fees equivalent to 10% of the total amount claimed.

SO ORDERED.[12]

The RTC found sufficient basis to award FEBTCs claim. It ruled that the liability of the individual
respondents, Gregoria and Rhoel, was based on their having assumed personal and solidary liability for the
amounts represented under the promissory notes as shown by their respective signatures appearing in the
aforesaid documents. It upheld the validity and binding effect of the said promissory notes as the respondents did
not deny the due execution thereof or their signatures appearing therein.

As earlier stated, in its July 28, 2005 Decision, the CA reversed and set aside the RTC judgment. The
decretal portion of the CA decision reads:

WHEREFORE, premises considered, the Regional Trial Court of Makati, Branch

60s June 11, 2001 Decision is hereby REVERSED and SET ASIDE. The Complaint filed on April
17, 1998 is hereby DISMISSED.

SO ORDERED.[13]

The CA, taking judicial notice of the usual banking practice involving loan agreements, held that although
there were promissory notes, there was no board resolution/corporate secretarys certificate designating the
signatories for the corporation, and there was no disclosure that the signatories acted as agents thereof. There
were no collaterals either to ensure the payment of the loan. In the conferment of such unsecured loans, FEBTC,
its bank manager in particular, also failed to comply with the guidelines set forth under the Manual of Regulations
for Banks,[14] when it allegedly approved and released the subject loans to Gregoria and Rhoel. These
deficiencies, according to the CA, cast doubt on the loan transaction which appeared more like an inside job with
the branch manager or bank employee securing the signatures of Gregoria and Rhoel, after which the said
manager/employee simply filled in the blanks.[15]

The CA held that [b]anks should always have adequate audit mechanisms to make sure that their employees
follow accepted banking rules and practices to safeguard the interest of the investing public and preserve the
public confidence on banks.[16]

Further, the CA found that there was no evidence presented to prove that Gregoria and Rhoel or TGI
received the proceeds of the three (3) promissory notes.
 FEBTC filed a motion for reconsideration[17] of the said decision. The CA, however, in its January 6,
2006 Resolution, denied the motion for lack of merit.

Hence, FEBTC interposes the present petition before this Court anchored on the following

GROUNDS

(A)
IN ITS 28 JULY 2005 DECISION, THE COURT OF APPEALS, ERRED IN RULING THAT
PETITIONER DID NOT COMPLY WITH THE GUIDELINES UNDER THE MANUAL OF
REGULATION FOR BANKS, THAT THERE WAS NO BOARD RESOLUTION/CORPORATE
SECRETARYS CERTIFICATE DESIGNATING THE SIGNATORIES FOR THE CORPORATION;
THERE WAS NO DISCLOSURE THAT THE SIGNATORIES ACTED AS AGENTS; THAT
THERE WERE NO COLLATERALS/CHATTEL MORTGAGE/REAL ESTATE
MORTGAGE/PLEDGES TO ENSURE PAYMENT OF THE LOAN.THIS FACTUAL FINDING
EXPRESSLY CONFLICTS WITH THE FINDING OF THE TRIAL COURT AND
CONTRADICTED BY THE EVIDENCE ON RECORD.

(B)
IN ITS 28 JULY 2005 DECISION, THE COURT OF APPEALS, MADE A CONCLUSION THAT
IS GROUNDED ENTIRELY ON SPECULATIONS, SURMISES, OR CONJECTURES. THERE IS
NO EVIDENCE ON RECORD THAT WARRANTS AN INFERENCE OF AN INSIDE JOB WITH
THE BRANCH MANAGER OR BANK EMPLOYEE HAVING SECURED THE SIGNATURES OF
RESPONDENTS [DEFENDANTS-APPELLANTS] GREGORIA AND RHOEL AFTER WHICH
THE MANAGER AND EMPLOYEE SIMPLY FILLED IN THE BLANKS THIS FACTUAL
FINDING, EXPRESSLY CONFLICTS WITH THE FINDING OF THE TRIAL COURT AND
CONTRADICTED BY THE EVIDENCE ON RECORD, EXHIBITS, G H AND I BEFORE THE
TRIAL COURT.

(C)
IN ITS 28 JULY 2005 DECISION, THE COURT OF APPEALS, MADE A CONCLUSION THAT
IS GROUNDED ENTIRELY ON SPECULATIONS, SURMISES, OR CONJECTURES. THERE IS
NO EVIDENCE ON RECORD THAT WARRANTS AN INFERENCE THAT THE BANK [HEREIN
PETITIONER, THEN PLAINTIFF-APPELLEE], IN FACT, DID NOT DENY NOR DISPROVE
THAT THIRD PERSONS HAD RECEIVED THE PROCEEDS OF THE THREE PROMISSORY
NOTES; NAMELY, SALVADOR BERNARDO, JR. AND LUISA BERNARDO OF ELIEZER
CRAFTS WHO WERE NOT CONNECTED WITH TGI. NO DEMAND ON THEM WAS EVER
MADE FOR [THE] RETURN OF THE PROCEEDS THEY HAD RECEIVED. THIS FACTUAL
FINDING, EXPRESSLY CONFLICTS WITH THE FINDING OF THE TRIAL COURT AND
CONTRADICTED BY THE EVIDENCE ON RECORD, EXHIBITS A TO K OF PETITIONER
[THEN PLAINTIFF-APPELLEE] BEFORE THE TRIAL COURT.[18]

The issue to be resolved is whether the CA rendered a decision that is grounded entirely on speculations,
surmises, or conjectures when it ruled in favor of the respondents.

FEBTC contends that the evidence on record showed its compliance with the banking rules and
regulations through board resolutions issued by TGI fully authorizing Gregoria and Rhoel to transact business
with it. It submits that the materiality of the said board resolutions was already ruled upon by the RTC. It asserts
that Gregoria and Rhoel were solidarily liable for the amounts represented under the three promissory notes
having signed the same. It adds that there was no specific denial, under oath, of the genuineness and due
execution of the said documents as required under Section 8, Rule 8 of the Rules of Court. According to FEBTC,
it merely acted within its rights as creditor in demanding payment of the overdue obligation from the solidary
creditors, which included Gregoria and Rhoel. It argues that the inference of an inside job by the CA was a mere
speculation not supported by any credible evidence. It further argues that the CA erred when it gave weight to the
allegation that third persons had received the proceeds of the promissory notes because the proceeds were
credited to the account of TGI. There was no evidence on record that such proceeds were credited to the account
of an entity called Eliezer Crafts.
In their Comment,[19] the respondents counter that they did not receive the proceeds of the three promissory
notes. The same argument was reiterated in their Memorandum. [20] The respondents posit that it is true that they
signed the Promissory Notes, but they vehemently deny having received the amounts reflected thereon. They
aver that FEBTC miserably failed to present any check, voucher, or any document to show actual receipt by them
of the aforementioned amounts from the bank. They argue that the RTC gravely erred in finding Gregoria and
Rhoel personally liable for the amounts under the promissory notes, they being mere signatories of the companys
account, acting in behalf of TGI, which was the one principally transacting business with FEBTC. This, the
respondents say, was very clear from the wordings of the Certificate of Board Resolution of TGI submitted to
FEBTC.

The petition is bereft of merit.

It should be noted that the questions raised in this petition involve the correctness of the factual findings
of the CA. In petitions for review on certiorari under Rule 45, only questions of law may be raised by the parties
and passed upon by this Court. An inquiry into the veracity of the factual findings and conclusions of the CA is not
the function of this Court, for this Court is not a trier of facts. Neither is it its function to reexamine and weigh anew
the respective evidence of the parties.[21]
The factual findings of the CA are generally binding on this Court.[22] There are recognized
exceptions[23] to this rule. FEBTC, however, has failed to satisfactorily show the applicability of any of those
exceptions in this case to warrant a reexamination of the findings.

In any case, even granting that factual issues may be considered, the facts would not make a good case
for FEBTC because there was no evidence adduced to prove that the respondents received the amount
demanded in its complaint. Contrary to the claim of FEBTC, nowhere in the records of this case can one find a
document evidencing that Gregoria and Rhoel, or TGI for that matter, received the proceeds of the three (3)
promissory notes. Moreover, FEBTC violated the rules and regulations of the Bangko Sentral ng
Pilipinas (BSP) by its failure to strictly follow the guidelines in the conferment of unsecured loans set forth under
the Manual of Regulations for Banks (MORB), to quote:

Sec. X319 Loans Against Personal Security. The following regulations shall govern credit
accommodations against personal security granted by banks.[24]

X319.1 General guidelines. Before granting credit accommodations against personal security,
banks must exercise proper caution by ascertaining that the borrowers, co-makers, endorsers,
sureties and/or guarantors possess good credit standing and are financially capable of fulfilling
their commitments to the bank. For this purpose, banks shall keep records containing information
on the credit standing and financial capacity of credit applicants.

X319.2 Proof of financial capacity of borrower. In addition to the usual personal information
sheet about the borrower, banks shall require that an application for a credit accommodation
against personal security be accompanied by:

a. A copy of the latest income tax returns of the borrower and his co-maker duly stamped as
received by the BIR; and

b. If the credit accommodation exceeds ₱500,000.00, a copy of the borrowers balance sheet duly
certified by an Independent Certified Public Accountant (CPA), and in case he is engaged in
business, also a copy of the profit and loss statement duly certified by a CPA.

The above documents shall be required to be submitted annually for as long as the credit
accommodation is outstanding.

A perusal of the evidentiary records discloses that none of the above-enumerated guidelines was
complied with by FEBTC, particularly the bank manager. As the CA stated, banking institutions usually require the
following documentations involving loan agreements to be presented before approving any loan or release of the
proceeds thereof:

1) Promissory Notes duly signed by the parties;

2) Evidence of Receipt of Proceeds of the Promissory Notes;

 3) If a corporation is involved, the appropriate copy of the Board Resolution and a duly notarized
Corporate Secretarys Certificate is required to indicate who the authorized signatories are;

4) If agents sign, they must disclose their principal; and

5) Real Estate Mortgage/Chattel Mortgage/Pledges to secure the payment of the loan.

In this case, although there were promissory notes, there was no proof of receipt by the respondents of
the same amounts reflected in the said promissory notes. There was no Board Resolution/Corporate Secretarys
Certificate either, designating the authorized signatories for the corporation specifically for the loan covered by the
Promissory Notes. Even granting arguendo that the two Board Resolutions (Exhibits A and B) dated March 3,
1995 and April 11, 1995, respectively, authorizing Gregoria and Rhoel to transact business with FEBTC, were
binding, still the petition would not prosper as there was no evidence of crediting of the proceeds of the
promissory notes. Further, there were no collaterals, real estate mortgage, chattel mortgage or pledges to ensure
the payment of the loan. The Court is in accord with the CA when the latter wrote:

The bank was remiss in the surveillance of its people because the bank auditors could
have easily spotted the anomaly that the loan transaction: (1) did not have any Board
Resolution/Corporate Secretarys Certificate; (2) did not have collateral/Real Estate
Mortgage/Chattel Mortgage/Pledge and was given clean; and (3) there was no disclosure that
TGI was the principal involved as borrower all in violation of accepted banking rules and
practices.

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

The laxity of the bank cannot be allowed to prejudice the clients of the bank who may
unsuspectingly become victims of fraud most likely perpetrated by insiders or employees of the
bank, which is made possible when the bank did not follow accepted banking rules and practices
and prescribed requirements by the Bangko Sentral in dealing with loan transactions. [25]

The CA was, thus, correct when it dismissed FEBTCs complaint against the respondents.

As to the allegation that there is no evidence on record that warrants an inference that the transaction
was attended by irregularities purely orchestrated by FEBTCs branch manager, the Court gives credence to the
respondents stance that:

xxx. Those are material facts which have not been refuted by the petitioner especially the
issue of irregularities orchestrated by the petitioners Branch Manager Liza Liwanag. Not even an
Affidavit of Denial was adduced by the petitioner. The banks silence on this point is tantamount to
acquiescence to respondents position, more so on the sudden disappearance of the said Bank
Manager which under the law and jurisprudence that flight being an evidence/indication of guilt.[26]
Evidently, this is a case where the respondents are being used as a scapegoat to answer for the damage and
prejudice brought about by the negligence of FEBTCs own employees. The branch manager should have
appeared and explained the circumstances. Thus, the CA cannot be faulted for making such a ruling.

The bottom line is that FEBTC miserably failed to present any document that would serve as basis for its
claim that the proceeds of the three promissory notes were indeed credited to the account of the respondents.
Indeed, the Court finds no evidentiary basis to sustain the RTCs finding of actual receipt by TGI of the amounts
stated in the promissory notes. Accordingly, the Court affirms the CA decision for being more in accord with the
facts and evidence on record.

On a final note, FEBTC should have been more circumspect in dealing with its clients. It cannot be over
emphasized that the banking business is impressed with public interest. Of paramount importance is the trust and
confidence of the public in general in the banking industry. Consequently, the diligence required of banks is more
than that of a Roman pater familias or a good father of a family. The highest degree of diligence is expected. [27] In
handling loan transactions, banks are under obligation to ensure compliance by the clients with all the
documentary requirements pertaining to the approval and release of the loan applications. For failure of its branch
manager to exercise the requisite diligence in abiding by the MORB and the banking rules and practices, FEBTC
was negligent in the selection and supervision of its employees. In Equitable PCI Bank v. Tan,[28] the Court ruled:

xxx. Banks handle daily transactions involving millions of pesos. By the very nature of their works the
degree of responsibility, care and trustworthiness expected of their employees and officials is far
greater than those of ordinary clerks and employees. Banks are expected to exercise the highest
degree of diligence in the selection and supervision of their employees. [29]

For the loss suffered by FEBTC due to its laxity and carelessness to police its own personnel, the bank
has no one to blame but itself. As correctly concluded by the CA, this situation partakes of the nature of damnum
absque injuria.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated July 28, 2005 and its
Resolution of January 6, 2006, are AFFIRMED.

SO ORDERED.

[G.R. No. 141910. August 6, 2002]

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO TRUCKING CORPORATION and
LAMBERT M. EROLES, respondents.

DECISION
VITUG, J.:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of
Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of
Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon
Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway in
Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal,
resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value
of the covered cargoes in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests of
Concepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since the
trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage
against GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer,
respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it
was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage
was purely accidental.
The issues having thus been joined, FGU presented its evidence, establishing the extent of damage to the
cargoes and the amount it had paid to the assured. GPS, instead of submitting its evidence, filed with leave of
court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to
prove that it was a common carrier.
The trial court, in its order of 30 April 1996,[1] granted the motion to dismiss, explaining thusly:

Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party must prove his own affirmative
allegation, xxx.

In the instant case, plaintiff did not present any single evidence that would prove that defendant is a common
carrier.

xxxxxxxxx
Accordingly, the application of the law on common carriers is not warranted and the presumption of fault or
negligence on the part of a common carrier in case of loss, damage or deterioration of goods during transport
under 1735 of the Civil Code is not availing.

Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and
the owner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as
well as the law on quasi delicts.

Under the law on obligation and contract, negligence or fault is not presumed. The law on quasi delict provides for
some presumption of negligence but only upon the attendance of some circumstances. Thus, Article 2185
provides:

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

Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the
presumption of negligence is not obtaining.

Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendants driver was
the one negligent, defendant cannot be made liable for the damages of the subject cargoes. [2]

The subsequent motion for reconsideration having been denied, [3] plaintiff interposed an appeal to the Court
of Appeals, contending that the trial court had erred (a) in holding that the appellee corporation was not a
common carrier defined under the law and existing jurisprudence; and (b) in dismissing the complaint on a
demurrer to evidence.
The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate court, in its
decision of 10 June 1999, [4] discoursed, among other things, that -

"x x x in order for the presumption of negligence provided for under the law governing common carrier (Article
1735, Civil Code) to arise, the appellant must first prove that the appellee is a common carrier. Should the
appellant fail to prove that the appellee is a common carrier, the presumption would not arise; consequently, the
appellant would have to prove that the carrier was negligent.

"x x x x x x x x x

"Because it is the appellant who insists that the appellees can still be considered as a common carrier, despite its
`limited clientele, (assuming it was really a common carrier), it follows that it (appellant) has the burden of proving
the same. It (plaintiff-appellant) `must establish his case by a preponderance of evidence, which means that the
evidence as a whole adduced by one side is superior to that of the other. (Summa Insurance Corporation vs.
Court of Appeals, 243 SCRA 175).This, unfortunately, the appellant failed to do -- hence, the dismissal of the
plaintiffs complaint by the trial court is justified.

"x x x x x x x x x

"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation
has been `its exclusive contractor, hauler since 1970, defendant has no choice but to comply with the directive of
its principal, the inevitable conclusion is that the appellee is a private carrier.

"x x x x x x x x x

"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the
presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of
good[s] during transport under [article] 1735 of the Civil Code is not availing.' x x x.

"Finally, We advert to the long established rule that conclusions and findings of fact of a trial court are entitled to
great weight on appeal and should not be disturbed unless for strong and valid reasons."[5]
 Petitioner's motion for reconsideration was likewise denied; [6] hence, the instant petition,[7] raising the
following issues:
I

WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER

THE LAW AND EXISTING JURISPRUDENCE.

II

WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE

PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY
WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.

III

WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE INSTANT CASE.

On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be amply
justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering its
services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons,
corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for hire or compensation, offering their services to the public,[8] whether to the public
in general or to a limited clientele in particular, but never on an exclusive basis. [9] The true test of a common
carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its
transportation service for a fee.[10] Given accepted standards, GPS scarcely falls within the term common carrier.
The above conclusion nothwithstanding, GPS cannot escape from liability.
In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion
Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance justify, prima facie,
a corresponding right of relief.[11] The law, recognizing the obligatory force of contracts,[12] will not permit a party to
be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the
tenor thereof.[13] A breach upon the contract confers upon the injured party a valid cause for recovering that which
may have been lost or suffered. The remedy serves to preserve the interests of the promisee that may include his
expectation interest, which is his interest in having the benefit of his bargain by being put in as good a position as
he would have been in had the contract been performed, or his reliance interest, which is his interest in being
reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been
in had the contract not been made; or his restitution interest, which is his interest in having restored to him any
benefit that he has conferred on the other party.[14] Indeed, agreements can accomplish little, either for their
makers or for society, unless they are made the basis for action.[15] The effect of every infraction is to create a
new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his
contractual obligation[16] unless he can show extenuating circumstances, like proof of his exercise of due diligence
(normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the
case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him
from his ensuing liability.
Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioners
assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In
such a situation, a default on, or failure of compliance with, the obligation in this case, the delivery of the goods in
its custody to the place of destination - gives rise to a presumption of lack of care and corresponding liability on
the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.
Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be
ordered to pay petitioner. The driver, not being a party to the contract of carriage between petitioners principal
and defendant, may not be held liable under the agreement. A contract can only bind the parties who have
entered into it or their successors who have assumed their personality or their juridical position. [17] Consonantly
with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third
person. Petitioners civil action against the driver can only be based on culpa aquiliana, which, unlike culpa
contractual, would require the claimant for damages to prove negligence or fault on the part of the defendant. [18]
 A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant liable where
the thing which caused the injury complained of is shown to be under the latters management and the accident is
such that, in the ordinary course of things, cannot be expected to happen if those who have its management or
control use proper care. It affords reasonable evidence, in the absence of explanation by the defendant, that the
accident arose from want of care.[19] It is not a rule of substantive law and, as such, it does not create an
independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience
since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of
negligence. The maxim simply places on the defendant the burden of going forward with the proof. [20]Resort to the
doctrine, however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the
absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are
sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty
to the plaintiff.[21] Thus, it is not applicable when an unexplained accident may be attributable to one of several
causes, for some of which the defendant could not be responsible. [22]
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the
plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the
occurrence and not from the nature of the relation of the parties.[23] Nevertheless, the requirement that responsible
causes other than those due to defendants conduct must first be eliminated, for the doctrine to apply, should be
understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of
negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or
its tenor. In the case of the truck driver, whose liability in a civil action is predicated on culpa acquiliana, while he
admittedly can be said to have been in control and management of the vehicle which figured in the accident, it is
not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that
can allow, forthwith, res ipsa loquitur to work against him.
If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be
deemed to have waived the right to present evidence. [24] Thus, respondent corporation may no longer offer proof
to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a
remand of the case to the trial court.
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of Makati City, and the
decision, dated 10 June 1999, of the Court of Appeals, are AFFIRMED only insofar as respondent Lambert M.
Eroles is concerned, but said assailed order of the trial court and decision of the appellate court are REVERSED
as regards G.P. Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Insurance
Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs.
SO ORDERED.

G.R. No. 147746 October 25, 2005

PERLA COMPANIA DE SEGUROS, INC. and BIENVENIDO S. PASCUAL, Petitioners, - versus -

SPS. GAUDENCIO SARANGAYA III and PRIMITIVA B. SARANGAYA, Respondents.

CORONA, J.:

This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking to annul the
decisions of the Court of Appeals (CA) dated June 29, 2000 and March 31, 2001, respectively, which affirmed the
decision of the Regional Trial Court (RTC), Branch 21 of Santiago, Isabela.

In 1986, respondent spouses Gaudencio Sarangaya III and Primitiva Sarangaya erected a semi-concrete,
semi-narra, one-storey commercial building fronting the provincial road of Santiago, Isabela. The building was
known as Super A Building and was subdivided into three doors, each of which was leased out. The two-storey
residence of the Sarangayas was behind the second and third doors of the building. On the left side of the
commercial building stood the office of the Matsushita Electric Philippine Corporation (Matsushita).

In 1988, petitioner Perla Compania de Seguros, Inc. (petitioner-corporation), through its branch manager
and co-petitioner Bienvenido Pascual, entered into a contract of lease of the first door of the Super A Building,
abutting the office of Matsushita. Petitioner-corporation renovated its rented space and divided it into two. The left
side was converted into an office while the right was used by Pascual as a garage for a 1981 model 4-door Ford
Cortina, a company-provided vehicle he used in covering the different towns within his area of supervision.
 On July 7, 1988, Pascual left for San Fernando, Pampanga but did not bring the car with him. Three days
later, he returned to Santiago and, after checking his appointments the next day, decided to warm up the car.
When he pulled up the handbrake and switched on the ignition key, the engine made an odd sound and did not
start. Thinking it was just the gasoline percolating into the engine, he again stepped on the accelerator and
started the car. This revved the engine but petitioner again heard an unusual sound. He then saw a small flame
coming out of the engine. Startled, he turned it off, alighted from the vehicle and started to push it out of the
garage when suddenly, fire spewed out of its rear compartment and engulfed the whole garage. Pascual was
trapped inside and suffered burns on his face, legs and arms.

Meanwhile, respondents were busy watching television when they heard two loud explosions. The smell
of gasoline permeated the air and, in no time, fire spread inside their house, destroying all their belongings,
furniture and appliances.

The city fire marshall conducted an investigation and thereafter submitted a report to the provincial fire
marshall. He concluded that the fire was accidental. The report also disclosed that petitioner-corporation had no
fire permit as required by law.
Based on the same report, a criminal complaint for Reckless Imprudence Resulting to (sic) Damage in
(sic) Property[1] was filed against petitioner Pascual. On the other hand, petitioner-corporation was asked to pay
the amount of P7,992,350, inclusive of the value of the commercial building. At the prosecutors office, petitioner
Pascual moved for the withdrawal of the complaint, which was granted.

Respondents later on filed a civil complaint based on quasi-delict against petitioners for a sum of money
and damages, alleging that Pascual acted with gross negligence while petitioner-corporation lacked the required
diligence in the selection and supervision of Pascual as its employee. They prayed for payment of the following
damages:

1. P2,070,000.00 - representing the value of the 2-storey residential building and the 3-
door apartment;

2. P5,922,350.00 - representing the value of the jewelries, appliances, [furniture],

fixtures and cash;

3. P8,300.00 a month for [lost rental] income from July 1995 until such time that the
premises is restored to its former condition or payment for its value, whichever comes first;

4. P2,000,000.00 for moral damages;

5. P1,000,000.00 for exemplary damages, and

6. Attorneys fees equivalent to 15% of the total amount to be awarded to the

plaintiffs.[2]
During the trial, respondents presented witnesses who testified that a few days before the incident,
Pascual was seen buying gasoline in a container from a nearby gas station. He then placed the container in the
rear compartment of the car.

In his answer, Pascual insisted that the fire was purely an accident, a caso fortuito, hence, he was not
liable for damages. He also denied putting a container of gasoline in the cars rear compartment. For its part,
petitioner-corporation refused liability for the accident on the ground that it exercised due diligence of a good
father of a family in the selection and supervision of Pascual as its branch manager.

After the trial, the court a quo ruled in favor of respondents. The decretal portion of the decision read:

WHEREFORE, in the light of the foregoing considerations judgment is hereby rendered

ORDERING the defendants, Bienvenido Pascual and Perla Compania de Seguros, Inc. to
pay jointly and solidarily to the plaintiffs spouses Gaudencio and Primitiva Sarangaya the total
sum of Two Million Nine Hundred Four Thousand Eight Hundred and Eighty Pesos
([P]2,904,880.00) as actual damages with legal interest thereon from December 12, 1995 until
fully paid.[3] (emphasis supplied)
 The court a quo declared that, although the respondents failed to prove the precise cause of the fire that
engulfed the garage, Pascual was nevertheless negligent based on the doctrine of res ipsa loquitur.[4] It did not,
however, categorically rule that the gasoline container allegedly placed in the rear compartment of the car caused
the fire. The trial court instead declared that both petitioners failed to adduce sufficient evidence to prove that they
employed the necessary care and diligence in the upkeep of the car. [5] Contrary to the claims of petitioner-
corporation, the trial court also found that it failed to employ the diligence of a good father of a family, as required
by law, in the selection and supervision of Pascual.
With respect to the amount of damages, the trial court awarded to respondents no more than their claim
for actual damages covering the cost of the 2-storey residential building and the commercial building, including
their personal properties. It explained:

According to the plaintiff Gaudencio Sarangaya III, he made a list of what was lost. His
list includes the commercial building that was burned which he valued at P2,070,000.00. The
defendants take exception to the value given by the plaintiff and for this purpose they submitted
the tax declaration of the building which states that the market value is P183,770.00. The Court
takes judicial notice that the valuation appearing on the tax declaration of property is always lower
[than] the correct value thereof. Considering that the building that was burned was a two-storey
residential house with a commercial building annex with a total floor area of 241 square meters as
stated in the tax declaration, mostly concrete mixed with narra and other lumber materials, the
value given by the plaintiffs of P2,070,000.00 is reasonable and credible and it shall be awarded
to the plaintiffs.

The other items listed are assorted [furniture] and fixtures totaling P307,000.00 assorted
appliances worth P358,350.00; two filing cabinets worth P7,000.00 and clothing and other
personal effects costing P350,000.00, household utensils costing P15,000.00. The Court finds
them reasonable and credible considering the social and financial stature of the plaintiffs who are
businessmen. There could be no question that they were able to acquire and own quite a lot of
home furnishings and personal belongings. The costing however is high considering that these
belongings were already used for quite some time so a 20% depreciation should be equitably
deducted from the cost of acquisition submitted by plaintiffs. Thus, the total amount recoverable
would be P1,037,350.00 less 20% or a total of P829,880.00. The P5,000.00 representing
foodstock can also be ordered paid to the plaintiffs. x x x.[6]

On appeal to the Court of Appeals, the appellate court again ruled in favor of respondents but modified the
amount of damages awarded by the trial court. It held:

x x x the Decision of the Court a quo is AFFIRMED, with the modification that the Appellants are
hereby ordered to pay the Appellees, jointly and severally, the total amount of P600,000.00 by
way of nominal damages under Articles 2222 and 2223 of the New Civil Code, with interest
thereon, at the rate of 6% per annum from the date of the Decision of this Court. [7]

The appellate court was in accord with the trial courts findings that the doctrine of res ipsa loquitur was
correctly applied in determining the liability of Pascual and that petitioner-corporation, as the employer, was
vicariously liable to respondents. Nonetheless, for respondents failure to substantiate their actual loss, the
appellate court granted nominal damages of P600,000 to them.

Petitioners and respondents filed their respective motions for reconsideration.

In their MR, petitioners contested the findings of fact of the appellate court. They denied any liability
whatsoever to respondents but this was rejected by the CA for lack of merit. Thus, the present appeal.

Respondents, on the other hand, argued in their MR that the award of nominal damages was erroneous.
They prayed that, in lieu of the award of nominal damages, the case should instead be remanded to the trial court
for reception of additional evidence on their claim for actual damages. The CA granted respondents MR. Hence
they did not appeal the CAs decision to us. According to the CA:

Anent Plaintiffs-Appellees plea that, in lieu of the Courts award of nominal damages, the
case be remanded to the Court a quo, in the interest of justice, to enable them to adduce
evidence to prove their claim for actual damages, we find the same meritorious.
 Accordingly, the Decision of the Court is hereby amended to read as follows:

IN THE LIGHT OF ALL THE FOREGOING, the Decision of the Court a quo appealed
from is AFFIRMED. The award of nominal damages is set aside. Let the records be
remanded to the Court a quo for the reception of additional evidence by the Plaintiffs-
Appellees and the Defendants-Appellants anent Plaintiffs-Appellees claim for actual
damages.[8] (emphasis supplied)

Via this petition, petitioners ascribe the following errors to the appellate court:

(a) THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF [RES IPSA
LOQUITUR] IN THE PRESENT CASE;

(b) THE COURT OF APPEALS ERRED WHEN IT FOUND PERLA NEGLIGENT IN THE
SUPERVISION OF PASCUAL, AND CONSEQUENTLY, VICARIOUSLY LIABLE FOR
THE FIRE BECAUSE PERLA FAILED TO ADDUCE EVIDENCE OF SUPERVISION OF
EMPLOYEES CARE AND UPKEEP OF COMPANY VEHICLES REQUIRED BY THE
SUPREME COURT ON TRANSPORTATION COMPANIES; AND

(c) THE COURT OF APPEALS ERRED WHEN IT ORDERED THE REMAND OF THE CASE
TO RTC ISABELA FOR RECEPTION OF ADDITIONAL EVIDENCE BY THE
SARANGAYA SPOUSES ON THEIR CLAIM FOR ACTUAL DAMAGES.[9]

Res ipsa loquitur is a Latin phrase which literally means the thing or the transaction speaks for itself. [10] It
relates to the fact of an injury that sets out an inference to the cause thereof or establishes the plaintiffs prima
facie case.[11] The doctrine rests on inference and not on presumption.[12] The facts of the occurrence warrant the
supposition of negligence and they furnish circumstantial evidence of negligence when direct evidence is
lacking.[13]

The doctrine is based on the theory that the defendant either knows the cause of the accident or has the
best opportunity of ascertaining it and the plaintiff, having no knowledge thereof, is compelled to allege negligence
in general terms.[14] In such instance, the plaintiff relies on proof of the happening of the accident alone to
establish negligence.[15]

The doctrine provides a means by which a plaintiff can pin liability on a defendant who, if innocent, should
be able to explain the care he exercised to prevent the incident complained of. Thus, it is the defendants
responsibility to show that there was no negligence on his part. [16]

To sustain the allegation of negligence based on the doctrine of res ipsa loquitur, the following requisites
must concur:

1) the accident is of a kind which does not ordinarily occur unless someone is negligent;

2) the cause of the injury was under the exclusive control of the person in charge and

3) the injury suffered must not have been due to any voluntary action or contribution on
the part of the person injured.[17]

Under the first requisite, the occurrence must be one that does not ordinarily occur unless there is
negligence. Ordinary refers to the usual course of events. [18]Flames spewing out of a car engine, when it is
switched on, is obviously not a normal event. Neither does an explosion usually occur when a car engine is
revved. Hence, in this case, without any direct evidence as to the cause of the accident, the doctrine of res ipsa
loquitur comes into play and, from it, we draw the inference that based on the evidence at hand, someone was in
fact negligent and responsible for the accident.

The test to determine the existence of negligence in a particular case may be stated as follows: did the
defendant in committing the alleged negligent act, use reasonable care and caution which an ordinarily prudent
person in the same situation would have employed?[19] If not, then he is guilty of negligence.
 Here, the fact that Pascual, as the caretaker of the car, failed to submit any proof that he had it
periodically checked (as its year-model and condition required) revealed his negligence. A prudent man should
have known that a 14-year-old car, constantly used in provincial trips, was definitely prone to damage and other
defects. For failing to prove care and diligence in the maintenance of the vehicle, the necessary inference was
that Pascual had been negligent in the upkeep of the car.

Pascual attempted to exculpate himself from liability by insisting that the incident was a caso fortuito. We
disagree.

The exempting circumstance of caso fortuito may be availed only when: (a) the cause of the unforeseen
and unexpected occurrence was independent of the human will; (b) it was impossible to foresee the event which
constituted the caso fortuito or, if it could be foreseen, it was impossible to avoid; (c) the occurrence must be such
as to render it impossible to perform an obligation in a normal manner and (d) the person tasked to perform the
obligation must not have participated in any course of conduct that aggravated the accident.[20]

In fine, human agency must be entirely excluded as the proximate cause or contributory cause of the
injury or loss.[21] In a vehicular accident, for example, a mechanical defect will not release the defendant from
liability if it is shown that the accident could have been prevented had he properly maintained and taken good
care of the vehicle.[22]

The circumstances on record do not support the defense of Pascual. Clearly, there was no caso
fortuito because of his want of care and prudence in maintaining the car.

Under the second requisite, the instrumentality or agency that triggered the occurrence must be one that
falls under the exclusive control of the person in charge thereof. In this case, the car where the fire originated was
under the control of Pascual. Being its caretaker, he alone had the responsibility to maintain it and ensure its
proper functioning. No other person, not even the respondents, was charged with that obligation except him.

Where the circumstances which caused the accident are shown to have been under the management or
control of a certain person and, in the normal course of events, the incident would not have happened had that
person used proper care, the inference is that it occurred because of lack of such care.[23] The burden of evidence
is thus shifted to defendant to establish that he observed all that was necessary to prevent the accident from
happening. In this aspect, Pascual utterly failed.

Under the third requisite, there is nothing in the records to show that respondents contributed to the
incident. They had no access to the car and had no responsibility regarding its maintenance even if it was parked
in a building they owned.

On the second assigned error, we find no reason to reverse the decision of the Court of Appeals. The
relationship between the two petitioners was based on the principle of pater familias according to which the
employer becomes liable to the party aggrieved by its employee if he fails to prove due diligence of a good father
of a family in the selection and supervision of his employees. [24] The burden of proof that such diligence was
observed devolves on the employer who formulated the rules and procedures for the selection and hiring of his
employees.

In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience and service records.[25] While the petitioner-corporation does not appear to have erred
in considering Pascual for his position, its lack of supervision over him made it jointly and solidarily liable for the
fire.

In the supervision of employees, the employer must formulate standard operating procedures, monitor
their implementation and impose disciplinary measures for the breach thereof.[26] To fend off vicarious liability,
employers must submit concrete proof, including documentary evidence, that they complied with everything that
was incumbent on them.[27] Here, petitioner-corporations evidence hardly included any rule or regulation that
Pascual should have observed in performing his functions. It also did not have any guidelines for the maintenance
and upkeep of company property like the vehicle that caught fire. Petitioner-corporation did not require periodic
reports on or inventories of its properties either. Based on these circumstances, petitioner-corporation clearly did
not exert effort to be apprised of the condition of Pascuals car or its serviceability.

Petitioner-corporations argument that the liability attached to employers only applies in cases involving
the supervision of employees in the transportation business is incorrect. Article 2180 of the Civil Code states that
employers shall be liable for the damage caused by their employees. The liability is imposed on all those who by
their industry, profession or other enterprise have other persons in their service or supervision. [28] Nowhere does it
state that the liability is limited to employers in the transportation business.

WHEREFORE, the petition is hereby DENIED and the decision[29] of the Court of Appeals affirmed in toto.
Costs against petitioners. SO ORDERED.