1.

Philippine National Bank vs. F. F. Cruz and CO., INC.

G.R. No. 173259; July 25, 2011

FACTS:

This petition for review arose from a case for damages filed by FF Cruz against PNB. Plaintiff FF Cruz
has open an account at PNB-Timog Ave. Branch, wherein its president and its secretary-treasurer were the
named signatories. Plaintiff FF Cruz, avers that PNB has been negligent to deduct the cashier’s and
manager’s checks amounting to Php9,950,000.00 and Php3,260,000.00, respectively, as the same were
unauthorized and fraudulently made by the company accountant Aurea Caparas as both the president and
the secretary were out of the country at that time. The plaintiff seeks to credit back and restore to its
account the value of the checks, to which the defendant bank refused as the defendant bank alleged that it
exercised due diligence in handling the account of FF Cruz, as the application of said checks have passed
a through standard bank procedures and it was only after finding that it has no infirmity that the checks
were given due course. The trial court rendered a Decision against defendant bank for not calling or
personally verifying from the authorized signatories the legitimacy of the subject withdrawals considering
that they were huge amounts. For this reason, defendant PNB had the last clear chance to prevent the
unauthorized debits from the FF Cruz account. And thus, PNB should bear the whole loss. On appeal, the
Court of Appeals affirmed the Decision of the trial court with modification on the award for damages that
PNB should only pay 60% of the actual damage and the Plaintiff FF Cruz should bear the remaining 40%
for its contributory negligence by giving authority to its company accountant to transact with defendant
bank PNB. Petitioner PNB appealed the Court of Appeals’ Decision.

ISSUE:

Whether or not the principle of last clear chance principle is applicable to held the defendant bank liable
for damages.

RULING:

The Court ruled that the finding of the appellate court that PNB failed to make a proper verification as the
manager’s check do not bear the signature of the bank verifier, thus casting doubt as whether the
signatures were indeed underwent the proper verification. In view of the foregoing, the Court ruled that
PNB was negligent in handling the FF Cruz account specifically with respect to PNB’s failure to detect
the forgeries in subject application for manager’s check which could have prevented the loss. It further
states, that PNB failed to meet the high standard of diligence re5uired by the circumstances to prevent the
frauds where the bank’s negligence is the proximate cause of the loss and the depositor is guilty of
contributory negligence, the damage between the bank and the depositor, a 60-40 ratio applies.
Wherefore, the petition was denied and the CA’s Decision is affirmed.
2.

Philippine National Railways vs Ethel Brundy and Juan Manuel Garcia

G.R. No. 169891

FACTS:
Rhonda Brundy visited the Philippines in 1980. Along with a Filipino host, in the person of Juan
Manuel Garcia, they traveled to Baguio City using a Mercedes Benz sedan driven by Rodolfo Mercelita.
It was about 2 AM when they were approaching a railroad crossing in Moncada, Tarlac. The car
was running at the speed of 70km/hr, and even drove past a vehicle. Unaware that they were about to
cross the railroad track, they collided with Philippine National Railways (PNR) Train. Mercelita was
instantly killed in the collision while Brundy and Garcia suffered serious physical injuries. Unfortunately,
it was not long when Brundy died in the hospital after her arrival. Garcia was able to survive the accident.
Ethel Brundy, mother of deceased Rhonda, and Garcia filed a complaint in the RTC Manila to
recover damages against PNR. They alleged that PNR was negligent for failing to provide adequate and
necessary public safety device and equipment within the area to warn and ensure the safety of motorists in
crossing the railroad track. PNR argued that they shall not be liable because they installed the proper
equipment in the area and that the driver of the sedan contributed negligence which gave way to the
mishap for driving the car at such speed. Also, since the car is practically given the freedom to maneuver
its path compared to the train, the complainants had the last clear chance to avoid the accident.
The RTC as well as the Appellate Court ruled in favor of Brundy and Garcia. Hence, this petition.
ISSUE:
Whether or not PNR should be liable for their negligence.
RULING:
Yes, they are liable.
PNR was negligent for failing to provide adequate, visible and clear warnings of safety
equipment. There were no flagbars, inadequate warning signals installed, and lack of proper lighting
within the area.
True, there was a contributory negligence on the part of the injured party. However, this does not
operate to wholly relieve PNR from liabilities, it only mitigates the liability.
The Supreme Court also held that the Last Clear Chance rule cannot be applied in the case
because the proximate cause of the injury have been established to be the negligence of PNR.
3.

FILCAR TRANSPORT SERVICES v. JOSE A. ESPINAS

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

FACTS:
On November 22, 1998, respondent Jose Espinas was driving his car along Leon Guinto Street in
Manila. While crossing the intersection of President Quirino Street, a car bumped respondent’s car. The
other car escaped from the scene of the incident, but respond was able to get its plate number.
Respondent verified with the Land Transportation Office and learned that the registered owner of
the said plate number is the petitioner 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. Espinas filed a complaint for damages against
Filcar and Carmen Flor the amount of ₱ 97,910.00. 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. Filcar further stated that when the incident happened, the car was being driven by Atty. Flor’s
personal driver, Timoteo Floresca. 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.
ISSUE:
Whether Filcar, as registered owner of the motor vehicle which figured in an accident, may be
held liable for the damages caused to Espinas.
RULING:
The court ruled that 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 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. Filcar cannot 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.
4.

EDNA A. RAYNERA, for herself and on behalf of the minors RIANNA and REIANNE RAYNERA,
petitioners, vs. FREDDIE HICETA and JIMMY ORPILLA, respondents
G.R. No. 120027. April 21, 1999

FACTS:

On March 23, 1989, Reynaldo Raynera was riding a motorcycle traveling on the southbound lane
of East Service Road, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per
hour. There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates. The
asphalt road was not well lighted. At some point on the road, Reynaldo Raynera crashed his motorcycle
into the left rear portion of the truck trailer, which was without taillights. Due to the collision, Reynaldo
sustained head injuries. The truck helper rushed him to the hospital and thereafter, Raynera was
pronounced dead on arrival.
The heirs of the deceased demanded from respondents the payment of damages. The respondents
refused to pay the claims. Petitioners, hence, filed the complaint for damages against the respondents. The
trial court rendered a decision in favor of petitioners while the Court of Appeals held that the victim's
bumping into the left rear portion of the truck was the proximate cause of his death.

ISSUE:
Whether the truck is responsible for the accident.
RULING:
No. It has been said under the doctrine of last clear chance that drivers of vehicles who bump the
rear of another vehicle are presumed to be the cause of the accident because the responsibility to avoid the
collision with the front vehicle lies with them, unless contradicted by other evidence. In the case at bar, no
other person was to blame but the victim himself since he was the one who bumped his motorcycle into
the rear of the Isuzu truck. He had the last clear chance of avoiding the accident. He was traversing the
service road where the prescribed speed limit was less than that in the highway. Hence, the truck is not
responsible for the accident.
5.

PHILIPPINE NATIONAL BANK VS SPS CHEAH CHEE CHONG and

OFELIA CAMACHO CHEAH G.R NO. 170865;

Facts:

Adelina Guarin’s friend, Filipina Tuazon, approached her to ask if she could have her check cleared and
encashed for a service fee of 2.5%. In turn, Adelina approached Ofelia Cheah and agreed to
accommodate Filipina’s request since she has a joint dollar savings account with her husband, Cheah
Chee Chong with PNB Buendia Branch. The parties went to PNB Loans Department wherein they met
Garin, PNB’s Division Chief, who informed about the 15- day clearing period. On Nov.4, 1992 Ofelia
deposited the said check. PNB sent the check for clearing
83through Philadelphia National Bank which had temporarily credited the same to PNB’s account as of
Nov.6, 1992. On the same day, Garin, PNB’s Division Chief, informed Ofelia that the check has already
been cleared and the same was credited to the account of Sps Cheah. He further allowed the withdrawal
of the amount on Nov 17-18, 1992. Filipina Tuazon, thereafter, received the proceeds. However, the
Cable Division of PNB Head Office received a message
From Philadelphia informing PNB for the return of the check for insufficiency of funds. Upon demand by
PNB Buendia to return the money withdrawn, Ofelia contacted Filipina to get the money back but the
same has been given to several people who asked for the check’s encashment. PNB filed a complaint
against the spouses and froze their peso and dollar deposits. RTC ruled in favour of the PNB and held the
spouses Cheah guilty of contributory negligence. The CA declared both parties equally negligent
and should suffer and shoulder the loss.

Issue:

Whether both parties are equally negligent, hence, should suffer the
loss.

Ruling:

Yes. PNB’s act of releasing the proceeds of the check prior to the lapse of the 15-day clearing was the
proximate cause. The disregard of its own banking policy amounts to gross negligence. It bears stressing
that the diligence required is more than that of a good father of a family. The highest degree of diligence
is expected. PNB failed to do its duty in exercising extraordinary diligence and reasonable business
practice. The Spouses Cheah is guilty of contributory negligence and hence should suffer the loss.
Contributory negligence is conduct on the part of the injured party; contributing as a legal cause to the
harm he has suffered which
falls below the standard to which he is required to conform for its protection. The fact that the check was
cleared only eight banking days, contrary to what Garin had informed them, they should have verified the
hastiness of the transaction considering that they are the ones would be put at risk and not the
accommodated party. Hence, the Court concurs with the findings of the CA that PNB and spouses Cheah
are equally negligent and should suffer the loss.
6.

GSIS vs Pacific Airways Corporation

Facts:
On 2 April 1996, the Twin Otter aircraft of Philippine Airways Corporation (PAC) arrived at the Manila
International Airport from El Nido, Palawan. Upon touchdown, the Twin Otter taxied along the runway
and proceeded to the Soriano Hangar to disembark its passengers. After the last passenger disembarked,
PACs pilots started the engine of the Twin Otter in order to proceed to the PAC Hangar located at the
other end of the airport.

The Twin Otter was still 350 meters away from runway 13. Upon reaching runway 13, PACs pilots did
not make a full stop at the holding point to request clearance right before crossing runway 13. Without
such clearance, PACs pilots proceeded to cross runway 13.

Meanwhile, the Philippine Airlines (PAL) Boeing 737, was preparing for take-off along runway 13. The
PAL pilots requested clearance to push and start on runway 13 and the ATO issued the clearance. While
already on take-off roll, one of the pilots caught a glimpse of the Twin Otter on the left side of the Boeing
737 about to cross runway 13.The PAL pilots attempted to abort the take-off by reversing the thrust of the
aircraft. However, the Boeing 737 still collided with the Twin Otter.

Issue:
Whether or not who among the parties is liable for negligence.

Held:
To ascertain who among the parties is liable for negligence, the Rules of the Air of the Air Transportation
Office apply to all aircraft registered in the Philippines.

ATO for issuing clearances that turn out to be unsuitable, cannot be blame, because the pilots-in-
command have the final authority as to the disposition of the aircraft. It remained the primary
responsibility of the pilots-in-command to see to it that the respective clearances given were suitable.

PALs aircraft had the right of way at the time of collision, because under the Rules of the Air, being on
take-off roll undisputedly had the right of way. The fact that PACs pilots disregarded PALs right of way
and did not ask for updated clearance right before crossing an active runway was the proximate cause of
the collision. Were it not for such gross negligence on the part of PACs pilots, the collision would not
have happened.

Gross negligence is one that is characterized by the want of even slight care, acting or omitting to act in a
situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious
indifference to consequences insofar as other persons may be affected.
7.
LUDO AND LUYM CORPORATION, petitioner,
VS. COURT OF APPEALS, GABISAN SHIPPING LINES, INC.
and/or ANSELMO OLASIMAN, respondents.
G.R. No. 125483, February 1, 2001

FACTS:

Petitioner Ludo & Luym Corporation is a domestic corporation engaged in copra processing with
plant and business offices in Cebu City. Private Respondent Gabisan Shipping Lines was the registered
owner and operator of the motor vessel MV Miguela, while the other private respondent, Anselmo
Olasiman, was its captain. Petitioner owns and operates a private wharf used by vessels for loading and
unloading of copra and other processed products. Among its wharfs facilities are fender pile clusters for
docking and mooring.

On May 21, 1990, at around 1:30 P.M., while MV Miguela was docking at petitioner’s wharf, it
rammed and destroyed a fender pile cluster. Petitioner demanded damages from private respondents. The
latter refused. Hence, petitioner filed a complaint for damages before the Regional Trial Court of Cebu.

In an action for recovery of damages filed by Petitioner, the Regional Trial Court ruled against
respondents for incompetence and negligence. In an appeal the Court of Appeals reversed the lower
court’s decision, saying that the petitioner’s witness Naval was incompetent to testify on the negligence of
the crew and that petitioner’s evidence did not positively identify that MV Miguela caused the damage.

Thus, petitioner filed this petition for review.

ISSUE:
Whether or not the private respondents are responsible for the damage done to the pier by the ship
based on the doctrine of RES IPSA LOQUITOR.

RULING:
The Supreme Court sustained the Regional Trial Court decision partly on the ground that the
incompetence of eyewitness Naval was not an assigned error at the appellate court.

The doctrine of RES IPSA LOQUITOR says that when the thing that causes the damage is in the
control and management of the respondent, and in the ordinary course of things the accident does not
happen if those who have the management use proper care, it affords reasonable evidence, in the absence
of explanation, that the accident arose from want of care. The principle applies here. The MV Miguela
was in the exclusive control of respondent Olasiman, and aside from petitioner’s witness testimony that
the vessel rammed the pile cluster, respondent did not show persuasively other possible causes of the
damage.

Therefore, respondents were responsible for the damage. Petition is granted and the decision of
the Regional Trial Court reinstated.
8.

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD and KRISTINE, all
surnamed REYES, represented by their mother, LEAH ALESNA REYES,petitioners, vs.SISTERS
OF MERCY HOSPITAL, SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR. MARLYN
RICO, respondents.
[G.R. No. 130547. October 3, 2000]

Facts:

Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. Five days before the latter’s death, he
had been suffering from a recurring fever with chills which was not relieved by home medication. He was
taken by his wife to the Mercy Community Clinic and was attended by Dr. Marlyn Rico. Since typhoid
fever was common at that time, the Widal test was performed and he was found positive for typhoid fever.
Thereafter, Dr. Rico indorsed Jorge to Dr. Marvie Blanes. After conducting a physical examination and
suspecting that that Jorge had typhoid fever, Dr. Blanes ordered that Jorge be tested for compatibility with
chloromycetin, an antibiotic. As there was no adverse reaction, Dr. Blanes administered 500 mg of the
antibiotic. Another dose was given 3 hours later. Subsequently, Jorge Reyes developed high fever and
experienced vomiting and convulsions. He then turned blue due to deficiency in oxygen – cyanosis – and
died. The cause of death was stated to be “ventricular arrhythmia secondary to hyperpyrexia and typhoid
fever.”

On June 3, 1987, petitioners filed in RTC Cebu City a complaint for damages against the respondents.
They alleged that Jorge did not die of typhoid fever, but was due to the wrongful administration of
chloromycetin. They charged respondent clinic and its directress with negligence in failing to provide
adequate facilities and in hiring negligent doctors and nurses.

RTC ruled in favor of the respondents. The CA affirmed RTC decision. Hence, this appeal.

Issues:
 Whether or not the doctrine of Res Ipsa Loquitor is applicable in this case.
 Whether or not the respondents are guilty of medical malpractice.

Held:
 Res Ipsa Loquitor not applicable.
The doctrine of res ipsa loquitur can have no application in a suit against a physician or a surgeon
which involves the merits of a diagnosis or of a scientific treatment. The physician or surgeon is not
required at his peril to explain why any particular diagnosis was not correct, or why any particular
scientific treatment did not produce the desired result.

 Not guilty of medical malpractice.

The standard contemplated is not what is actually the average merit among all known practitioners
from the best to the worst and from the most to the least experienced, but the reasonable average merit
among the ordinarily good physician. In this case, the doctors did not depart from the reasonable standard
recommended by experts, and in fact observed due care required under the circumstances.
9.
LUZ PALANCA TAN VS. JAM TRANSIT, INC.
GR. NO. 183198,NOVEMBER 25 2009

Facts:

Luz Palanca Tan (Tan) alleged that she was the owner of a passenger-type jitney with plate number DKF-
168. On March 14, 1997, at around 5:00 a.m., the said jitney figured in an accident at an intersection
along Maharlika Highway, Barangay Bangyas, Calauan, Laguna, as it collided with a JAM Transit
passenger bus bound for Manila, bearing plate number DVG-557 and body number 8030. The bus was
driven by Eddie Dimayuga (Dimayuga). At the time of the collision, Tans jitney was loaded with quail
eggs and duck eggs (balot and salted eggs). It was driven by Alexander M. Ramirez (Ramirez). Tan
alleged that Dimayuga was reckless, negligent, imprudent, and not observing traffic rules and regulations,
causing the bus to collide with the jitney which was then, with care and proper light direction signals,
about to negotiate a left turn towards the feeder or barangay road of Barangay Bangyas, Calauan, Laguna
going to the Poblacion. The jeepney turned turtle along the shoulder of the road and the cargo of eggs was
destroyed. Ramirez and his helper were injured and hospitalized, incurring expenses for medical
treatment at the Pagamutang Pangmasain Bay, Laguna. In its Answer, respondent JAM Transit, Inc.
(JAM) admitted ownership of the subject passenger bus and that Dimayuga was under its employ.
However, it denied the allegations in the Complaint, and claimed that the accident occurred due to the
gross negligence of Ramirez. The RTC ruled in favor of Tan and the CA ruled in favor of JAM Transit,
there was no evidence as to who between Ramirez and Dimayuga was negligent in connection with the
vehicular accident. The CA held that the doctrine of res ipsa loquitur can only be invoked when direct
evidence is nonexistent or not accessible.

Issue:
Whether direct evidence is needed to prove the omission or negligence of Jam Transit.
Holding:
No, Verily, although there was no direct evidence that the JAM passenger bus was overtaking the vehicles
running along the right lane of the highway from the left lane, the available evidence readily points to
such fact. There were two continuous yellow lines at the center of the highway, which meant that no
vehicle in the said area should overtake another on either side of the road. The double yellow center lines
regulation, which this Court takes judicial notice of as an internationally recognized pavement regulation,
was precisely intended to avoid accidents along highways, such as what happened in this case. This
prohibition finds support in Republic Act (R.A.) No. 4136 (Land Transportation and Traffic Code),
Section 41(e). Furthermore, it is observed that the area of collision was an intersection. Section 41(c) of
R.A. No. 4136, likewise, prohibits overtaking or passing any other vehicle proceeding in the same
direction at any intersection of highways, among others. Thus, by overtaking on the left lane, Dimayuga
was not only violating the double yellow center lines regulation, but also the prohibition on overtaking at
highway intersections. Consequently, negligence can be attributed only to him, which negligence was the
proximate cause of the injury sustained by petitioner. This prima facie finding of negligence was not
sufficiently rebutted or contradicted by Dimayuga. Therefore, a finding that he is liable for damages to
petitioner is warranted. Whenever an employee’s negligence causes damage or injury to another, there
instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris
families in the section (culpa in eligiendo) or supervision (culpa in vigilando)of its employees.

10.

OSCAR DEL CARMEN, JR. vs. GERONIMO BACOY

GR NO. 173870, APRIL 25, 2012

FACTS:

This Petition for Review on Certiorari, the registered owner of a motor vehicle challenges the
Decision 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. The Spouses
Monsalud and their daughter Glenda were on their way home when they were run over by a passenger
jeep driven by Allan Maglasang. The jeep was registered in the name of Oscar del Carmen Jr. as a result
of which a criminal case was filed against Allan wherein he was declared guilty of reckless imprudence
resulting in multiple homicide. During the pendency of the case, an independent civil action for damages
based on culpa aquiliana was filed against Allan, his employers Spouses Oscar Sr. and Norma del Carmen
and Oscar Jr. who was the registered owner of the jeep.

Oscar Jr. clarified that Allan was his jeep conductor and that it was the latter’s brother, Rodrigo
Maglasang (Rodrigo), who was employed as the driver. In any event, Allan’s employment as
conductor was already severed before the mishap occurred since he served as such conductor only for a
week. The RTC exculpated the Spouses Oscar Sr. and Norma del Carmen from civil liability however,
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. The ruling
however of the RTC was reversed on motion for reconsideration. On appeal, the CA granted the same and
reinstated the initial findings of the RTC.

ISSUE:

Whether the petitioner is liable for damages under the doctrine of res ipsa loquitor.

RULING:

Yes. The SC held the petitioner liable for quasi-delict resulting from his Jeep’s use, as all
requisites under the doctrine of res ipsa loquitur are present. 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
petitioner as its owner. When petitioner entrusted the ignition to Rodrigo (Allan’s friend), he had the
power to instruct him with regard to the specific restrictions of the jeep’s 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 voluntarily action or contribution on their
part.

11.

MALAYAN INSURANCE CO., INC. VS RODELIO ALBERTO and ENRICO ALBERTO REYES
2012-02-01 | G.R. No. 194320

FACTS:

Malayan Insurance issued a Car Insurance Policy in favor of First Malayan Leasing and Finance
Corporation (the assured), insuring a Mitsubishi Galant against third party liability, own damage and
theft, among others. The said Mitsubishi Galant figured in 4-way car accident with Fuzo Cargo Truck.
Maintaining that it has been subrogated to the rights and interests of the assured by operation of law,
Malayan Insurance sent several demand letters to respondents, the registered owner and the driver,
respectively, of the Fuzo Cargo Truck. The respondents refused to pay and this prompted Malayan
Insurance to file a complaint for damages for gross negligence in the RTC against respondents.
Respondents denied liability for the incident and asserted that the proximate cause was the reckless
driving of the Nissan Bus driver. The RTC ruled in favor of Malayan Insurance and declared respondents
liable for damages. On appeal, the Court of Appeals (CA) reversed and ruled in favor of respondents by
dismissing the complaint. The CA noted that the police report, which has been made part of the records of
the trial court, was not properly identified by the police officer who conducted the on-the-spot
investigation of the subject collision, hence, it cannot be given evidentiary value. Hence, the negligence
on the part of the respondents was not established. Motion for reconsideration was denied. Hence, this
petition.

ISSUE: WON the police report is admissible to prove gross negligence, notwithstanding the police
investigator who prepared the same did not actually testify in court thereon.

HELD:

Even if the Supreme Court considers the inadmissibility of the police report in evidence, still, respondents
cannot evade liability by virtue of the res ipsa loquitur doctrine. Res ipsa loquitur is a rule of necessity
and it applies where evidence is absent or not readily available, provided the following requisites are
present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2)
the instrumentality or agency which caused the injury was under the exclusive control of the person
charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or
contribution on the part of the person injured. The defendant’s negligence is presumed or inferred when
the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out
a prima facie case of all the elements, the burden then shifts to defendant to explain.

The Fuzo Cargo Truck would not have had hit the rear end of the Mitsubishi Galant unless someone is
negligent. Also, the Fuzo Cargo Truck was under the exclusive control of its driver, Reyes. Even if
respondents avert liability by putting the blame on the Nissan Bus driver, still, this allegation was self-
serving and totally unfounded. Finally, no contributory negligence was attributed to the driver of the
Mitsubishi Galant. Consequently, all the requisites for the application of the doctrine of res ipsa loquitur
are present, thereby creating a reasonable presumption of negligence on the part of respondents. It is
unfortunate, however, that respondents failed to present any evidence before the trial court to rebutt or
overcome the presumption of negligence. Thus, the presumption of negligence remains. Consequently, the
 CA erred in dismissing the complaint for Malayan Insurance’s adverted failure to prove negligence on the
part of respondents.

12.

VICENTE CALALAS, petitioner,vs.COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and

FRANCISCO SALVA, respondents.

Facts:

Eliza Jujeurche G. Sunga, a college freshman at the Siliman University, took a passenger jeepney owned
and operated by petitioner Vicente Calalas. Sunga was given by the conductor an "extension seat," at the
rear end of the vehicle. Sunga gave way to the outgoing passenger.Just as she was doing so, an Isuzu
truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the
jeepney. As a result, Sunga was injured and confinement in the hospital. Her attending physician certified
she would remain on a cast for a period of three months and would have to ambulate in crutches during
said period.Sunga filed a complaint for damages against Calalas, alleging violation of the contract
of carriage. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of
the Isuzu truck. The lower court rendered judgment against Salva as third-party defendant and absolved
Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident.
It took cognizance of another case, filed by Calalas against Salva and Verena, for quasi-delict, the same
court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney. On appeal to
the Court of Appeals, the ruling of the lower court was reversed and dismissed the third-party complaint
against Salva and adjudged Calalas liable for damages to Sunga. Hence this petition.

Issues:

(1)Whether or not the negligence of Verena was the proximate cause of the accident negates the liability
and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers.
(2) Whether or not the award of moral damages to Sunga is supported evidence.

Held:

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

(2) In this case, there is no legal basis for awarding moral damages since there was no factual finding by the
appellate court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga's
contention that petitioner's admission in open court that the driver of the jeepney failed to assist her in
going to a nearby hospital cannot be construed as an admission of bad faith. The fact that it was the driver
of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to the
plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at
fault for the accident.
13.

PHILTRANCO SERVICE ENTERPRISES, INC. VS. FELIX PARAS AND INLAND

TRAILWAYS, INC., AND HON. COURT OF APPEALS
G.R. No. 161909 April 25, 2012

FACTS:

Felix Paras is one of the passengers injured from an accident met by the bus operated by Inland Trail
ways and a bus operated by petitioner Philtranco Service. Felix went through number operations and was
unable to obtain sufficient financial assistance from Inland for the costs of his operations, hospitalization,
doctors’ fees and other miscellaneous expenses, thus, Paras filed a complaint for damages based on breach
of contract of carriage against Inland. Inland filed a third-party complaint against Philtranco and Apolinar
Miralles. In this third-party complaint, Inland sought for exoneration of its liabilities to Paras, asserting
that the latter’s cause of action should be directed against Philtranco considering that the accident was
caused by Miralles’ lack of care, negligence and reckless imprudence. The RTC then rendered a decision
declaring Philtranco and Apolinar jointly and severally liable for moral and actual damages. On appeal
the to the CA, it affirmed the RTC’s ruling that no trace of negligence at the time of the accident was
attributable to Inland’s driver, rendering Inland not guilty of breach of contract of carriage.

ISSUE:

Whether or not moral damages may be recovered although the complaint had been anchored on a breach
of contract?

RULING:

As a general rule, indeed, moral damages are not recoverable in an action predicated on a breach of
contract. This is because such action is not included in Article 2219 of the Civil Code as one of the
actions in which moral damages may be recovered. By way of exception, moral damages are recoverable
in an action predicated on a breach of contract: (a) where the mishap results in the death of a passenger, as
provided in Article 1764, in relation to Article 2206, (3), of the Civil Code; and (b) where the common
carrier has been guilty of fraud or bad faith, as provided in Article 2220 of the Civil Code.

Philtranco and its driver were brought into the action on the theory of liability that the proximate cause of
the collision between Inland’s bus and Philtranco’s bus had been “the negligent, reckless and imprudent
manner defendant Apolinar Miralles drove and operated his driven unit, the Philtranco Bus with Plate No.
259, owned and operated by third-party defendant Philtranco Service Enterprises, Inc.” Philtranco and its
driver were charged here as joint tortfeasors who would be jointly and severally be liable to Paras and
Inland.

Paras’ cause of action against Inland (breach of contract of carriage) did not need to be the same as the
cause of action of Inland against Philtranco and its driver (tort orquasi-delict) in the impleader. It is settled
that a defendant in a contract action may join as third-party defendants those who may be liable to him in
tort for the plaintiff’s claim against him, or even directly to the plaintiff. Nor was it a pre-requisite for
attachment of the liability to Philtranco and its driver that Inland be first declared and found liable to
Paras for the breach of its contract of carriage with him. It is worth adding that allowing the recovery of
damages by Paras based on quasi-delict, despite his complaint being upon contractual breach, served the
judicial policy of avoiding multiplicity of suits and circuity of actions by disposing of the entire subject
matter in a single litigation.
14.

Spouses Fernando Viloria and Lourdes Viloria v. Continental Airlines, Inc.

September 23, 2012
G.R. No. 188288

Facts:

In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel
agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent,
Margaret Mager, advised the couple that they cannot travel by train because it was already fully booked;
that they must purchase plane tickets for Continental Airlines; that if they won’t purchase plane tickets;
they’ll never reach their destination in time. The couple believed Mager’s representations and so they
purchased two plane tickets worth $800.00.

Later however, the spouses found out that the train trip wasn’t really fully booked and so they purchased
train tickets and went to their destination by train instead. Then they called up Mager to request for a
refund for the plane tickets. Mager referred the couple to Continental Airlines. As the couple were now in
the Philippines, they filed their request with Continental Airline’s office in Ayala. The spouses Viloria
alleged that Mager misled them into believing that the only way to travel was by plane and so they were
fooled into buying expensive plane tickets.

Continental Airlines refused to refund the amount of the tickets and so the spouses sued the airline
company for quasi-delict. In its defense, Continental Airlines claimed that the tickets sold to them by
Mager were non-refundable; that, if any, they were not bound by the misrepresentations of Mager because
there’s no contract of agency existing between Continental Airlines and Mager.

Issue:

Whether or not CAI is bound by the acts of Holiday Travel's agents and employees such as Mager.

Ruling :

The Supreme Court held in the negative stating that f the passenger’s cause of action against the airline
company is premised on culpa aquiliana or quasi-delict for a tort committed by the employee of the
airline company’s agent, there must be an independent showing that the airline company was at fault or
negligent or has contributed to the negligence or tortuous conduct committed by the employee of its
agent. The mere fact that the employee of the airline company’s agent has committed a tort is not
sufficient to hold the airline company liable. There is no vinculum juris between the airline company and
its agent’s employees and the contractual relationship between the airline company and its agent does not
operate to create a juridical tie between the airline company and its agent’s employees. Article 2180 of the
Civil Code does not make the principal vicariously liable for the tort committed by its agent’s employees
and the principal-agency relationship per se does not make the principal a party to such tort; hence, the
need to prove the principal’s own fault or negligence.

15.

(15) Spouses Fernandez and Lourdes Viloria vs. Continental Airlines, Inc.
G.R. No. 188288 January 16, 2012

Facts: Fernando agreed to buy airline tickets on board CAI after Margaret Mager of Holiday Travel (HT)
agency informed him that there were no available seats at Amtrak. Subsequently, Fernando requested
Mager to reschedule their flight. Mager informed him that flights to Newark, New Jersey, USA via CAI
were fully booked and offered the alternative flight via Frontier Air. Since alternative flight would be
more costly and would mean traveling by night, Fernando opted to request for a refund. Mager denied his
request as said tickets were non-refundable. When Fernando saw an Amtrak station nearby, he made
inquiries and was told that there were seats available anytime. Fernando confronted Mager with the
Amtrak tickets, telling her that she had misled them into buying CAI tickets by misrepresenting that
Amtrak was already fully booked. Fernando reiterated his demand for a refund but Mager denied it.

Fernando sent a letter to CAI demanding a refund. Continental Micronesia denied his request and advised
him that he may take said tickets to any CAI ticketing location for re-issuance of new tickets. When
Fernando went to CAI’s ticketing office to have the tickets replaced by a single round trip ticket to Los
Angeles under his name, he was informed that Lourdes’ ticket was non-transferable, thus, cannot be used
for the purchase of a ticket in his favor.

Sps. Viloria filed a complaint against CAI. Citing Articles 1868 and 1869 of the Civil Code, RTC-
Antipolo City ruled that Mager was CAI’s agent, hence, bound by her bad faith and misrepresentation. On
appeal, the Court of Appeals (CA) reversed RTC-Antipolo City’s decision and ruled that CAI cannot be
held liable for Mager’s act in the absence of any proof that a principal-agent relationship existed between
CAI and HT, as the contract was not an agency but that of a sale. Hence, this petition.

Issue: Whether or not a principal-agent relationship existed between CAI and Holiday Travel; and
assuming that an agency relationship existed between the two, would CAI be bound by the acts of HT’s
agents and employees such as Mager?

Ruling: Yes. All the elements of an agency are present, to wit: (a) there is consent, express or implied of
the parties to establish the relationship, (b) the object is the execution of a juridical act in relation to a
third person. (c) the agent acts as a representative and not for himself, and (4) the agent acts within the
scope of his authority. The first and second elements are present as Continental Airlines does not deny that
it concluded an agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would
enter into contracts of carriage with third persons on the airlines’ behalf. The third element is also present
as it is undisputed that Holiday Travel merely acted in a representative capacity and it is Continental
Airlines and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel
on its behalf. The fourth element is also present considering that Continental Airlines has not made any
allegation that Holiday Travel exceeded the authority that was granted to it.

As to the subsequent issue on whether or not CAI would be bound by the acts of HT’s agents, the
Supreme Court laid down the basis whether the liability sought to be enforced is based on culpa aquiliana
or on culpa contractual. If the passenger’s cause of action against the airline company is premised on
culpa aquiliana or quasi-delict for a tort committed by the employee of the airline company’s agent, there
must be an independent showing that the airline company was at fault or negligent or has contributed to
the negligence or tortious conduct committed by the employee of its agent. On the other hand, if the
passenger’s cause of action for damages against the airline company is based on contractual breach or
culpa contractual, it is not necessary that there be evidence of the airline company’s fault or negligence.
All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier.
Petitioners failed to show evidence showing breach of contract by CAI as its refusal to accept Lourdes’
ticket for the purchase of a new ticket for Fernando is only a causal breach, and therefore not sufficient to
cause a rescission. Supreme Court denied petition.
16.

Jarcia vs People of the Philippines

GR No. 187926 February 15, 2012

Facts: Belinda Santiago lodged a complaint with the National Bureau of Investigation (NBI) against the
petitioners, Dr. Emanuel Jarcia and Dr. Marilou Bastan, for their alleged neglect of professional duty
which caused her son, Roy Alfonso Santiago, to suffer physical injuries. Upon investigation, the NBI
found that Roy Jr. was hit by a taxicab; that he was rushed to the Manila Doctors Hospital for an
emergency medical treatment; that an X-ray of the victim’s ankle was ordered; that the X-ray result
showed no fracture as read by Dr. Jarcia; that Dr. Bastan entered the emergency room and, after
conducting her own examination of the victim, informed Mrs. Santiago that since it was only the ankle
that was hit there was no need to examine the upper leg; that 11 days later, Roy developed fever, swelling
of the right leg and misalignment of the right foot; that Mrs. Santiago brought him back to the hospital;
and that the x-ray revealed a right mid-tibial fracture and a linear hairline fracture in the shaft of the bone.
A complaint for reckless imprudence resulting physical injuries was filed against the petitioners for the
alleged misconduct in the handling of the illness of Roy.
Issue: Whether or not the petitioners failed to exercise the degree of care expected of them as doctors and
are liable for negligence to the private respondent.
Held: Yes. The doctrine of res ipsa liquitor as a rule of evidence is unusual to the law of negligence
which recognizes that prima facie negligencce may be established without direct proof and furnishes a
substitute for specific proof of negligence. The doctrine however, is not a rule of substantive law, but
merely a mode of proof or a mere procedural convenience the rule when applicable to the facts and
circumstances of a given case, is not meant to and does not dispense with the requirement of proof of
culpable negligence on the party charged. It merely determines and regulates what shall be prima
facie evidence thereof and helps the plaintiff in proving a breach of duty. The doctrine can be invoked
when and only when, under the circumstances involved, direct evidence is absolute and not readily
available.
The requisites for the application of the doctrine of res ipsa liquitor are:
 The accident was of a kind which does not ordinarily occur unless someone is negligent;
 The instrumentality or agency which caused the injury was under the exclusive control of the
person in charge; and
 The injury suffered must not have been due to any voluntary action or contribution of the person
injured.
Negligence is defined as the failure to observe for the protection of the interests of another person that
degree of care, precaution and vigilance which the circumstances justly demand whereby such other
person suffers injury.
Reckless imprudence consists of voluntarily doing or failing to do, without malice, an act from which
material damage results by reason of an inexcusable lack of precaution on the part of the person
performing or failing to perform such act.
In failing to perform an extensive medical examination to determine the extent of Roy’s injuries, Dr.
Jarcia and Dr. Bastan were remiss of their duties as members of the medical profession. Assuming for the
sake of argument that they did not have the capacity to make such thorough evaluation at that stage they
should have referred the patient to another doctor with sufficient training and experience instead of
assuring him and his mother that everything was all right.
17.
ROGELIO P NOGALES VS CAPITOL MEDICAL CENTER
G.R. No. 14262, 19 December 2006

Facts:

Pregnant with her fourth child, Corazon nogales (Corazon), who was then 37 years old, was
under the exclusive prenatal care of Dr. Oscar Estrada (Dr. Estrada) beginning on her fourth month of
pregnancy or as early as December 1975. Around midnight of 25 May 1976, Corazon started to
experience mild labor pains prompting Corazon and Rogelio Nogales (Spouses Nogales) to see Dr.
Estrada at his home. After examining Corazon, Dr.Estrada advised her immediate admission to the
Capitol medical center (CMC). At 6:13 a.m., Corazon started to experience convulsions at 6:22 a.m., Dr.
Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon’s baby. In the process, a 1.0 x 2.5
cm. piece of cervical tissue was allegedly torn. At 6:27 a.m., Corazon began to manifest moderate vaginal
bleedin which rapidly became profuse. Corazon died at 9:15 a.m. The cause of death was haemorrhage,
post-partum.

Issue:

Whether or not CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Private hospital, hire, fire and exercise real control over their attending and visiting consultant
staff. The basis for holding an employer solidarily responsible for the negligence of its employee is found
in article 2180 of the civil code which considers a person accountable not only for his own acts but also
for those of others based on the former’s responsibility under a relationship of patria potestas.

In general, a hospital is not liable fo the negligence of an independent contractor physician. There
is, however, an exception to this principle. The hospital may be liable if the physician is the ostensible
agent of the hospital. This exception is also known as the doctrine of apparent authority.

For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that:

 The hospital, or its agent, acted in a manner that would lead a reasonable person to conclude
that the individual who was alleed to be negligent was an employee or agent of the hospital;
 Where the acts of the agenet create the appearance of authority, the plaintiff must also prove
that the hospital had knowledge of and acquiesced in them; and
 The plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with
ordinary care and prudence. In the instant case, CMC impliedly held out Dr. Estrada as a
member of its medical staff. Through CMC’s acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the spouses Nogales to believe that Dr. Estrada was an employee or
agent of CMC.
18.
ROGELIO ENGADA
v.
HON. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES
G.R. No. 140698 June 20, 2003

Lessons Applicable: Last Clear Chance, Emergency Rule (Torts and Damages)

Laws Applicable: Section 41, paragraph (a) of R.A. 4136

FACTS:

November 29, 1989 1:30 pm: Edwin Iran was driving a blue Toyota Tamaraw jeepney with the owner
Sheila Seyan as passenger.

The speeding Isuzu pick-up truck driven by Rogelio Engada came from the opposing direction and
swerved to its left encroaching upon the lane of the Tamaraw. In attempt to avoid the pick-up, Seyan
shouted at Iran to swerve to the left but the Engada also swerved to its right hitting the Tamaraw at its
right front passenger side causing its head and chassis to separate from its body.

Seyan was thrown out of the Tamaraw and landed on a rice field. Seyan and Iran were brought to Barotac
Nuevo Medicare Hospital. Seyan suffered a fracture on the right femur, lacerated wound on the right
foot, multiple contusions, abrasions, blunt abdominal injury, and lacerations of the upper-lower pole of
the right kidney. Upon discharge, she Seyan incurred P130,000 in medical expenses. The Toyota
Tamaraw jeepney ended up in the junk heap totalling a loss of P80,000

MTC: Engada guilty of damage to property through reckless imprudence with serious physical injuries

CA: Affirmed MTC

Engada appealed alleging that CA failed to consider that he already relayed his intention to go back to his
lane by flashing the pick-up’s right signal light. He submits that at that moment Iran, the driver of the
Tamaraw, had no more reason to swerve to his left

ISSUE: W/N under the doctrine of last clear chance Iran should be liable.

HELD: NO. CA affirmed. Engada's negligence was the proximate cause of the collision; in abandoning
his lane, he did not see to it first that the opposite lane was free of oncoming traffic and was available for
a safe passage; after seeing the Tamaraw jeepney ahead, he did not slow down.

An individual who suddenly finds himself in a situation of danger and is required to act without much
time to consider the best means that may be adopted to avoid the impending danger, is not guilty of
negligence if he fails to undertake what subsequently and upon reflection may appear to be a better
solution, unless the emergency was brought by his own negligence - Iran cannot be faulted; at a distance
of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the Tamaraw, denied
Iran time and opportunity to ponder the situation at all. There was no clear chance to speak of.

19.

DR. HUANG v. PHILIPPINE HOTELIERS, INC. G.R. No. 180440; December 5, 2012 Second
Division
Topic: /Petition for Review on Certiorari under Rule 45 assailing the Decision of the affirming the
Decision of RTC of Makati City in Civil Case, dismissing for lack of merit Dr. Genevieve L. Huang’s
Complaint for Damages. Assailed as well is the Court of Appeals Resolutiondenying for lack of merit
petitioners Motion for Reconsideration.
FACTS:
A Complaint for Damages was filed by Dr. Huang against Dusit Hotel alleging negligence of Hotel’s
staff, in the untimely putting out all the lights within the hotel’s swimming pool area as well as the
locking of the main entrance door of the area, prompting petitioner to grope for a way out. While doing
so, a folding wooden counter top, which she lifted as she reached for a hotel phone, fell on her head
causing her serious brain injury.The trial court ruled that Huang’s own negligence was the immediate and
proximate cause of her injury, she cannot recover damages. Huang elevated the matter to the CA which
affirmed the decision of trial court. Huang on Appeal contended that an implied contract existed between
them in view of the fact that the hotel guest status extends to all those who avail of its service sits patrons
and invitees. It follows then that all those who patronize the hotel and its facilities, including those who
are invited to partake of those facilities, like her, are generally regarded as guests of the hotel. As such,
Dusit Hotel is responsible by implied contract for the safety and welfare of Huang while the latter was
inside their premises by exercising due care, which they failed to do. She argues that a person who goes in
a hotel without a "bukol" or hematoma and comes out of it with a "bukol" or hematoma is a clear case of
res ipsa loquitur.
ISSUE:
 Whether or not the complaint is one for violation of an Implied Contract so that res ipsa loquitur
is applicable in this case?
 Whether or not respondents are liable for the injury sustained by the petitioner based on the
theory of quasi-delict?
RULING:
 No. The allegations in Huang’s Complaint constitute a cause of action for quasi-delict, which
under the New Civil Code is defined as an act, or omission which causes damage to another, there
being fault or negligence.
 Huang utterly failed to prove the alleged negligence of Dusit Hotel. Her own Complaint affirmed
that Dusit Hotel afforded medical assistance to her after she met the unfortunate accident inside
the hotel’s swimming pool facility. It was established that petitioner stayed in the hotel’s
swimming pool facility beyond its closing hours; she lifted the folding counter top that eventually
hit her head; and Dusit Hotel extended medical assistance to her. As such, no negligence can be
attributed to the respondents or to their staff.
20.
Dra. Leila A. Dela Llana vs. Rebecca Biong,

doing business under the name and style of Pongkay Trading

G. R. No. 182356

December 4, 2013

FACTS:

On March 30, 2000, Juan dela Llana was driving a car along North Avenue, Quezon City. His
sister, Dra. Dela Llana, was seated at the front passenger seat while a certain Calimlim was at the
backseat. Juan stopped the car when the signal light turned red. A few seconds after the car halted, a dump
truck owned by Rebecca Biong and driven by Joel Primero containing sand and gravel suddenly rammed
the car's rear end and collapsed and its rear windshield was shattered. Glass splinters flew, puncturing
Dra. Dela Llana. Apart from these minor wounds, Dra. Dela Llana did not appear to have suffered from
any other visible physical injuries.

In the first week of May 2000, Dra. Dela Llana began to feel mild to moderate pain on the left
side of her neck and shoulder. The pain became more intense and severe as days passed by and her health
deteriorated that she could no longer move her arm. She consulted Dr. Rosalinda Milla on June 9, 2000, a
rehabilitation medicine specialist and told her that she suffered from a whiplash injury which is caused by
a compression of a nerve running to her left hand. Despite three months of extensive physical therapy as
per doctor's advise, Dra. Dela Llana's condition did not improve. She consulted other doctors and a
certain Dr. Flores, a neuro-surgeon, suggested a cervical spine surgery to release the compression. She
underwent the operation; it released the impingement of the nerve but left her incapacitated from her
practice of profession.

On October 16, 2000, Dra. Dela Llana demanded from Rebecca Biong compensation for her
injuries but she refused to pay. Thus on May 8, 2001, Dra. Dela Llana sued Rebecca for damages before
the RTC of Quezon City. She alleged that she lost the mobility if her arm as a result of the vehicular
accident and claimed Php 150, 000 for her medical expenses (as of the filing of the complaint) and an
average monthly income of Php 30, 000. 00 since June, 2000. She furthered prayed for actual, moral, and
exemplary damages as well as attorney's fees since the driver's negligence was the proximate cause of
her whiplash injury.
ISSUE:

Whether Joel's reckless driving is the proximate cause of Dra. Dela Llana's whiplash injury.

RULING:

The SC held that reckless driving was not the proximate cause of Dra. Dela Llana's injury. She
failed to establish her case by preponderance of evidence. She failed to show the chain of causation
between Joel's reckless driving and her whiplash injury. The evidence she presented, mainly pictures of
the accident, a medical certificate, and her testimony, did not show the causal relation between the
vehicular accident and the whiplash injury. In order to establish liability for a quasi-delict, a
preponderance of evidence showing the three (3) elements must be shown, mainly: Damage to the
plaintiff, Negligence, and the Connection of cause and effect between such negligence and the damages.

The evidence presented failed to show these elements. The pictures of her damaged car only
demonstrate the massive impact of the collision, but it is a farfetched assumption that the whiplash injury
can also be inferred from the pictures. The medical certificate cannot be admitted because it is hearsay.
Evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal
knowledge of the witness but on the knowledge of another person who is not on the witness stand.
Despite the fact that she is a doctor, Dra. Dela Llana's testimony has no probative value because she was
not presented as an expert witness. The opinion of an expert witness may be received in evidence on a
matter requiring special knowledge, skill, experience or training which he shown to possess.
21.
RUKS KONSULT AND CONSTRUCTION, Petitioner, vs. ADWORLD SIGN AND ADVERTISING
CORPORATION and TRANSWORLD MEDIA ADS, INC., Respondents.
A complaint for damages was filed by Adworld Sign and Advertising Corporation(Adworld)
against Transworld Media Ads, Inc. (Transworld) and Comark International Corporation (Comark)
alleging that it is the owner of a billboard structure located at EDSA, which was misaligned and its
foundation impaired the adjacent billboard structure owned by Transworld and used by Comark collapsed
and crashed against it. Transworld after several demands from Adworld refused and failed to pay damages
instead it filed a Third-Party Complaint against Ruks, the company which built the collapsed billboard
structure. In the ruling of both the RTC and CA, the RTC explained that Transworld was made aware by
Ruks that the initial construction of the lower structure of its billboard did not have the proper foundation
and would require additional columns and pedestals to support the structure. The RTC then concluded and
concurred by the CA that these negligent acts were the direct and proximate cause of the damages
suffered by Adworld’s billboard.
Issue: Whether or not Transworld and Ruks are jointly and severally liable for damages sustained by
Adworld.
Ruling:
Yes. Jurisprudence defines negligence as the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do. Both Transworld and Ruks were
fully aware that the foundation for the former’s billboard was weak; yet, neither of them took any positive
step to reinforce the same. As joint tortfeasors, therefore, they are solidarily liable to Adworld. Verily,
"Joint tortfeasors are those who command, instigate, promote, encourage, advise, countenance, cooperate
in, aid or abet the commission of a tort, or approve of it after it is done, if done for their benefit. Where
the concurrent or successive negligent acts or omissions of two or more persons, although acting
independently, are in combination the direct and proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each contributed to the injury and either of them is
responsible for the whole injury. Therefore, Transworld and Ruks are jointly and severally liable for
damages against Adworld.
22.
Cagayan II Electric Cooperative, Inc. v. Tangonan
GR No. 199886 Dec 3, 2014

FACTS:

9:00 pm – a motorcycle incident with 3 passengers figured in mishap along the National Highway of
Maddalero, Buguey, Cagayan. It was driven by Camilio Tangonan (Camilio) who died from the accident,
while his companions Allan Rapanan (Rapanan) and Erwin Coloma (Coloma) suffered injuries. The
common law wife of Camilio, Mary Gine Tangonan (Mary) filed before the RTC a complaint for damages
against Cagayan II Electric Cooperative, Inc. (CECI) for damages. Rapanan and Coloma alleged that they
were hit by a live tension wire due to strong winds from one of the electric posts owned by CECI. The
mishap was due the failure of CECI to fix said 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 highway. Due to such incident they suffered physical injuries including burns from the live
tension wire. On the other hand, CECI alleges that it was due to the storm that the poles fell and the wires
cut, that they moved them to the side 5m away from the road, and that it was probably due to the
negligence pf Camilio. The Rapanan and Coloma, along with the body of Camilio were brought to
Alfonso Ponce Medical Memorial District Hospital and were attended by Dr. Tiffany Hassim (Dr.
Hassim) who alleged that there were no burn marks as alleged by Rapanan and Coloma, and the autopsy
of Camilio also did not show burn marks but instead strangle marks, probably due to the wires. For
CECI’s witnesses they presented SPO2 Pedro Tactac (Tactac) who testified that there was a skid mark
30m from the motorcycle and that it was caused by the foot rest and was probably due to the motorcycle
over speeding. Tranquilino (Rasos) and Rodolfo (Adviento) corroborated that there was a typhoon and the
lines were cut and poles fell, and that they moved the debris 5m away from the road. The RTC ruled in
favor of CECI, but CA reversed said decision.

ISSUE:
Whether it was CECI’s negligence in maintenance of its facilities the proximate cause of the death of
Camilio and injuries of Rapanan.

RULING:
No. 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 caused 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 plaintiff’s own negligence was the immediate and proximate
cause of his injury, he cannot recover damages.
23.
Mariano Mendoza and Elvira Lim vs Leonora and Gabriel Gomez
G.R. No. 160110

Facts:
Around 5:30 AM, an Isuzu Elf Truck owned by Leonora Gomez (respondent) was hit by Mayamy
Transportation bus which was registered under the name of Elvira Lim (petitioner) and was driven at that
time by Mariano Mendoza.
According to the investigation conducted by Police officer Melchor Rosales, the bus was
traversing the opposite lane of the respondent when it eventually intruded and collided with the
respondent’s truck. This resulted to the infliction of injuries to respondent as well as to the helpers on
board the truck.
Respondents filed a complaint to recover damages against the petitioner following their expenses
for the injuries sustained, the damage done to their Isuzu truck, and their unrealized profits. They alleged
that the mishap was the result of the intrusion by the petitioner on the opposite lane which itself was a
traffic violation.
Petitioners argued that the real owner of the bus was Cirilo Enriquez and that the bus was only
attached to Mayamy Transportation Company under the so-called “kabit system.” The case should be
dismissed for the reason that the real owner was not impleaded by the respondents in the case.
Notwithstanding their argument, the RTC relied on the Certificate of Registration issued by the
Land Transportation office which confirmed that petitioner Gomez was the registered owner of the bus.
RTC ruled in favor of the respondent and the Court of Appeals affirmed it with modification by deleting
the award of unrealized profits. Displeased with the decision, petitioner filed this petition.
Issue:
Whether or not petitioner is liable.
Ruling:
Yes, petitioner is liable.
Following their violation of the traffic rule, petitioner is presumed to be negligent. Unfortunately,
they were not able to overcome such presumption of negligence. Their argument as to the real owner of
the bus is immaterial because it has been the rule in this jurisdiction that the registered owner of the motor
vehicle is the employer of the negligent driver, the latter merely an agent of the former. The main aim of
Registered owner rule is to identify the owner so that if any accident happens, or that any damage is
caused by the vehicles on the public highways, responsibility can therefore be fixed on a definite
individual, the registered owner.
In this case, petitioner Leonora Gomez is vicariously liable as an employer pursuant to Article
2176 in relation to Article 2180.
24.

Spouses Dionisio Estrada and Jovita R. Estrada v. Philippine Rabbit Bus Lines, Inc. and Eduardo
R. Saylan
G.R. No. 203902, July 19, 2017
FACTS:
A collision occurred between a bus of the Philippine Rabbit Bus Lines, Inc., driven by Eduardo
Saylan, and and Isuzu Truck driven by Willy Urez and registered in the name of Rogelio Cuyton, Jr. The
bus was was closely following a jeepney and when it stopped, the bus swevered to the left encroaching
upon the rightful lane of the Isuzu Truck. A passenger of the bus named Dionesio Estrada, one of the
petitioners, was injured in the said incident. His right arm was amputated as a consequence of the
accident. Dinisio sued the Philippine Rabbit Bus for a breach of contract of carriage. Philipine Rabbit Bus
denied any liability and averred that it carried Dionisio safely as far as human care and foresight could
provide with utmost diligence of a very cautious person and the incident was independent of it’s drivers
action or a fortuitous event. Philippine Rabbit believes that petitioner has no cause of action.
The trial court ruled in favor of the petitioners but was modified by the CA, deleting the award
for moral damages and attorney’s fee.
ISSUE:
Whether or not the CA there was no evidence of fraud or bad faith on Philippine Rabbit’s part.
RULING:
No. The Court finds no persuasive proof of such fraud or bad faith. Fraud or bad faith must be one
which attended the contractual breach or one which induced Dionisio to enter into contract of carriage.
The fraud or bad faith that must be convincingly proved by petitioners should be one which was
committed by Philippine Rabbit in breaching its contract of carriage with Dionisio. It was not shown that
Philippine Rabbit's breach of its known duty, which was to transport Dionisio was attended by some
motive, interest, or ill will. Thus, no fraud or bad faith can be attributed to Philippine Rabbit and moral
damages cannot be awarded to the petitioners.
25.
BJDC CONSTRUCTION, REPRESENTED BY ITS MANAGER/PROPRIETOR JANET S. DELA
CRUZ, Petitioner vs. NENA E. LANUZO, CLAUDETTE E. LANUZO, JANET E. LANUZO,
JOAN BERNABE E. LANUZO, AND RYAN JOSE E. LANUZO, Respondents
G.R. No. 161151, March 24, 2014

FACTS:

This case involves a claim for damages arising from the death of a motorcycle rider in a night-
time accident due to the supposed negligence of a construction company then undertaking re–blocking
work on a national highway. The plaintiffs insisted that the accident happened because the construction
company did not provide adequate lighting on the site, but the latter countered that the fatal accident was
caused by the negligence of the motorcycle rider himself.
According to Balbino’s wife, the former’s motorcycle sideswiped the road barricade placed by
the company in the right lane portion of the road, causing him to lose control of his motorcycle and crash,
resulting in his instant death; and that the company’s failure to place illuminated warning signs on the site
was the proximate cause of the death of Balbino.
BJDC denied the allegations of negligence, insisting that it had installed warning signs and
lights along the highway; that at the time of the incident, the lights were working and switched on; that its
project was found to have satisfactorily taken measures to ensure the safety of motorists.
ISSUE:
Whether the doctrine of res ipsa loquitur is applicable here.
HELD:
No, the doctrine of res ipsa loquitur has no application here. Under the law, for this doctrine to
apply, the following requirements must be shown to exist, namely: (a) the accident is of a kind that
ordinarily does not occur in the absence of someone's negligence; (b) it is caused by an instrumentality
within the exclusive control of the defendant or defendants; and (c) the possibility of contributing conduct
that would make the plaintiff responsible is eliminated.
Based on the evidence adduced, negligence cannot be fairly ascribed to the company considering
that it has shown its installation of the necessary warning signs and lights in the project site. Balbino had
the exclusive control of how he operated and managed his motorcycle. All the established circumstances
showed that the proximate and immediate cause of the death of Balbino was his own negligence. Hence,
the Lanuzo heirs could not recover damages.
26.
Atty. Reyes G. Geromo, Florencio Buentipo, Jr., Ernaldo Yambot and Lydia Bustamante,
petitioners Vs. La Paz Housing and Development Corporation and Government Service Insurance
System, respondents

Facts:

Year 1987, Atty. Geromo, Bustamante and Yambot started occupying their respective residential units
from Adelina 1−A subdivision in San Pedro, Laguna from La Paz, through GSIS financing. The properties
were all situated along the old Litlit Creek. After more than two (2) years of occupation, cracks started to
appear on the floor and walls on their houses. The petitioners, through the President of the Adelina 1−A
Homeowners Association, requested La Paz, being the owner/developer to take remedial action. They
collectively decided to construct a riprap/retaining wall in which La Paz contributed P3,000 for each but
despite of this retaining wall, the condition of their housing units worsened as the years passed.

May 2002, upon the request of the petitioners, the Municipal Engineer of San Pedro and the Mines and
Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR) found
that there was “differential settlement of the area where the affected units were constructed”. On the basis
thereof, Atty. Geromo filed a complaint for breach of contract with damages against La Paz and GSIS
before Housing and Land Regulatory Board (HLURB) on May 3, 2003, Buentipo, Yambot and
Bustamante filed a similar complaint against La Paz and GSIS. They asserted that La Paz was liable for
implied warranty against hidden defects and it was negligent in building their houses on unstable land. La
Paz averred that it had secured the necessary permits and licenses for the subdivision project. The GSIS
moved for the dismissal of the complaint for its only participation in the transaction was to grant loans to
the petitioners for the purchase of their respective properties.

Issue:

Whether La Paz should be held liable for the structural defects on its implied warranty against hidden
defects.

Held:

Yes, La Paz is liable for the structural defects on its implied warranty against hidden defects. Under Civil
Code Article 1561, The vendor shall be responsible for warranty against the hidden defects which the
thing sold may have, should they render it unfit for the use for which it is intended, or should they
diminish its fitness for such use to such an extent that, had the vendee been aware thereof, he would not
have acquired it or would have given a lower price for it; but said vendor shall not be answerable for
patent defects or those which may be visible, or for those which are not visible if the vendee is an expert
who, by reason of this trade or profession, should have known them. And under Article 1566 of the Civil
Code, the vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even
though he was not aware thereof.

Wherefore, the petition is GRANTED. The August 9, 2004 Decision of the HLURD Arbiter is hereby
REINSTATED with MODIFICATION to read as follows: (1) Ordering respondent La Paz Housing and
Development Corporation to immediately undertake and cause the necessary repairs/construction of the
subject units to make it suitable for human habitation for which it was originally intended; (2) In the
alternative, if it would no longer possible for the said units to be repaired to make it suitable for human
habitation, ordering respondent La Paz to give each petitioner another property of the same nature and
size, more or less, within the subdivision project or in any project owned and develop by La Paz in San
Pedro, Laguna, or pay the monetary equivalent thereof; and (3) Ordering respondent La Paz to pay each
of the petitioners: a. the sum P200,000.00 as temperate damages; b. the sum of P150,000.00 as moral
damages; c. the sum of P150,000.00 as exemplary damages; d. the sum of P100,000.00 as attorney’s fees;
and e. cost of suit. All awards shall earn legal interest at the rate of six percent per annum from the finality
of the judgment until full payment, in line with recent jurisprudence. SO ORDERED.

27.
UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY, SAMSUN SHIPPING LTD., AND
INTER-ASIA MARINE TRANSPORT, INC., vs ASIAN TERMINALS, INC.

FACTS:
On 25 January 1997, the cargo ship M/V “China Joy” (the Vessel) arrived at the Mariveles Grain
Terminal Wharf, operated by plaintiff [ATI].

According to the Berth Term Grain Bills of Lading, the Vessel carried soybean meal that had been
shipped by ContiQuincyBunge L.L.C[.] (ContiQuincyBunge), an exporter of soybean meal and related
products, in favor of several consignees in the Philippines.

Under the Charter Party Agreement over M/V “China Joy,” ContiQuincyBunge represented itself as the
Charterer of the Vessel, with San Miguel Foods, Inc. as Co-Charterer, and defendant [Samsun]
represented itself as the Agent of the Shipowners. Samsun is a foreign corporation not doing business in
the Philippines.

On 3 February 1997[,] ATI used its Siwertell Unloader No. 2 to unload the soybean meal from the
Vessel’s Hold No. 2. The Siwertell Unloader is a pneumatic vacubator that uses compressed gas to
vertically move heavy bulk grain from within the hatch of the ship in order to unload it off the ship.

The unloading operations were suddenly halted when the head of Unloader No. 2 hit a flat low-carbon or
“mild” steel bar measuring around 8 to 10 inches in length, 4 inches in width, and 1 ¼ inch in thickness
that was in the middle of the mass of soybean meal. The flat steel bar lodged itself between the vertical
screws of Unloader No. 2, causing portions of screw numbers 2 and 3 to crack and be sheared off under
the torsional load.

According to the quotation of BMH Marine AB Sweden, the sole manufacturer of Siwertell unloaders, the
replacement cost of each screw is US$12,395.00 or US$24,790.00 for the 2 screws plus freight. The labor
cost to remove and re-assemble the screws is estimated at US$2,000.00.

On 4 February 1997, ATI sent a Note of Protest to the Master of the Vessel for the damages sustained by
its unloading equipment as a result of encountering the flat steel bar among the soybean meal. However,
the Vessel’s Master wrote a note on the Protest stating that it is not their responsibility because the metal
piece came from the cargo and not from the vessel itself.

On 5 March 1997, ATI sent a claim to defendant [Inter-Asia] for the amount of US$37,185.00 plus
US$2,000.00 labor cost representing the damages sustained by its unloading equipment.

Inter-Asia rejected ATI’s claim for the alleged reason that it is not the Shipowner’s Agent. Inter-Asia
informed ATI that its principal is Samsun. Moreover, according to Inter-Asia, the owner of the Vessel is
Trans-Pacific Shipping Co., c/o Lasco Shipping Company. Inter-Asia, however, offered to relay ATI’s
claim to Trans-Pacific through Samsun.

As previously noted, the Charter Party Agreement states Samsun to be the Agent of the Ship owners, but
since Samsun is a foreign corporation not licensed to do business in the Philippines, it transacted its
business through Inter-Asia. Hence, Inter-Asia is the Agent of the Agent of the Ship owners.

When negotiations for settlement failed, ATI filed the instant Complaint for Damages against Samsun,
Inter-Asia and the “Unknown Owner of the Vessel M/V ‘China Joy’” on 9 March 1999.

In the joint Answer, Inter-Asia reiterated that it is not the Agent of the Shipowners. Defendants further
averred that the soybean meal was shipped on board the M/V “China Joy” under a Free-In-and-Out-
Stowed-and-Trimmed (FIOST) Clause, which supposedly means that the Shipper/Charterer itself
(ContiQuincyBunge LLC) loaded the cargo on board the Vessel, and the latter and her complement had no
participation therein except to provide the use of the Vessel’s gear. Similarly, under the FIOST clause, the
discharge of the cargo was to be done by the consignees’ designated personnel without any participation
of the Vessel and her complement.

Defendants argued that since the metal foreign object was found in the middle of the cargo, it could not
have come from the bottom of the hatch because the hatch had been inspected and found clean prior to
loading. Defendants further averred that neither could the metal bar have been part of the Vessel that had
broken off and fallen into the hatch because tests conducted on the metal piece revealed that said metal
bar was not part of the Vessel.

Defendants concluded that the metal bar could only have been already co-mingled with the soybean meal
upon loading by ContiQuincyBunge at loadport, and, therefore, defendants are not liable for the damages
sustained by the unloader of ATI.

In support thereof, the petitioners emphasize that the foreign metal object was found in the middle of the
cargo. Hence, it is logical to conclude that the metal came in with the cargo and could not have fallen off
from some appurtenance of the vessel before or after loading. The petitioners likewise claim that because
of the Free-In-and-Out Clause under which the cargo was carried, the charterer chose who were to effect
the loading, unloading and discharge of the goods, which tasks were performed without the participation
of the vessel and its complement. Besides, notwithstanding Clause 22 of the Charter Party Agreement, the
Master of the Vessel’s control is figurative and pertains merely to the maintenance of the vessel’s
seaworthiness, and not to acts of covert negligence which could have been committed without even the
charterer’s own knowledge. Further, while it is true that in a contract of affreightment, the charterer is free
from liability to third persons in respect of the ship, in the instant petition, the offending factor which
caused the damage was not the vessel, but the cargo itself, thus, the liability should instead rest upon the
cargo owner, who was not even impleaded as a party to the case. The doctrine of res ipsa loquitur hence
finds application herein but in support of the petitioners’ lack of culpability since they possessed neither
the knowledge nor the opportunity of ascertaining the presence of the foreign metal object lodged in the
middle of the soybean meal cargo.hanroblesvirtuallawlibrary

In its Comment,21 ATI contends that “the law does not distinguish between ‘covert’ and ‘evident’
negligence in determining whether the doctrine of res ipsa loquitur applies.”22 An unusual event occurred
because proper care was not observed. The event took place in Hold No. 2 of M/V China Joy, which was
within the shipowner’s exclusive control. There is likewise no evidence of ATI’s negligence, which could
have contributed to the damage of its own unloader. Besides, ATI did not witness the loading of the
soybean meal cargo into M/V China Joy at the Port of New Orleans, United States of America. Hence,
ATI cannot furnish direct evidence on whether or not the hold or hatch containing the cargo was inspected
and found clean prior to loading, and sealed thereafter.

ATI also asserts that the petitioners presented no evidence conclusively proving that the foreign metal
object was indeed in the middle and not at the top or bottom of the soybean meal cargo. Moreover, the
petitioners’ only witness, Alejandro Gilhang, the former Operations Manager of Inter-Asia, admitted that
he was not present during the loading, thus, he could not have seen if the cargo was free of any foreign
metal object.cnroblesvirtuallawlibrary

ATI likewise points out that the petitioners have not explicitly quoted in verbatim any provision in the
Charter Party Agreement, which the latter invoke to vaguely argue that the loading of the cargo pertains
exclusively to the charterer. Therefore, the petitioners have nary a legal basis for their assertion that the
shipowner has no liability insofar as the loading operations are concerned. Besides, even if such provision
in fact exists, ATI is not privy to the Charter Party Agreement.

ISSUES:

Whether or not the CA erred in (a) applying the doctrine of res ipsa loquitur, and (b) rejecting the
argument that “the petitioners had no participation in the loading and discharge of the bulk cargo except
to provide use of the vessel’s gear.chanro

HELD:

The Court agrees with the CA that the petitioners are liable to ATI for the damage sustained by the latter’s
unloader. However, the Court finds the petitioners’ liability to be based on quasi-delict and not on a
contract of carriage. The Court likewise deems it proper to modify the rate of interests on the amount of
damages imposed by the CA upon the petitioners.

The Court notes that the shipowner and shipowner’s agent, Samsun, are all juridical entities not registered
and not doing business in the Philippines. It was the charterer’s agent, Inter-Asia, a duly-registered
domestic corporation, which had filed the instant petition for itself and on behalf of the shipowner and
Samsun. In the course of the proceedings too, none of the parties had raised issues anent the validity of
the service of summons and the courts’ acquisition of jurisdiction over the persons of the petitioners.

The petitioners present two issues for the Court’s resolution, to wit: (a) the applicability of the doctrine
of res ipsa loquitur in the case at bar; and (b) who participated and should thus assume liability for the
loading of the soybean meal cargo.

In its Decision dated January 30, 2009, the RTC declared that while ATI indeed sustained damages to its
unloader, liability therefor cannot, however, be established with certainty.

In the assailed decision, the CA, on the other hand, discussed in detail why and how the three requisites to
the application of the doctrine of res ipsa loquitur are found to be attendant in the case at bar. First, the
co-mingling of the two foreign metal objects with the soybean meal cargo and the consequent damage to
ATI’s unloader is an accident which ordinarily does not occur in the absence of someone’s
negligence. Second, the foreign metal objects were found in the vessel’s Hold No. 2, which is within the
exclusive control of the petitioners. Third, records do not show that ATI’s negligence had in any way
contributed to the damage caused to its unloader.

The Court agrees with the CA anent ATI’s entitlement to the payment of damages from the petitioners and
the applicability of the doctrine of res ipsa loquitur. However, the Court finds as misplaced the CA’s
application of the laws on maritime commerce and contracts of carriage for reasons discussed below.

There is no contract of carriage between the petitioners and ATI.

There is no contract of carriage between ATI, on one hand, and the shipowner, Samsun,
ContiQuincyBunge L.L.C., and Inter-Asia, on the other. It likewise bears stressing that the subject of the
complaint, from which the instant petition arose, is not the damage caused to the cargo, but to the
equipment of an arrastre operator. Further, ATI’s contractual relation is not with the petitioners, but with
the consignee and with the Philippine Ports Authority (PPA).

28.
DR. FERNANDO P. SOLIDUM, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent. |
G.R. No. 192123, March 10, 2014
Facts:
Gerald Albert Gercayo was born on June 2, 1992 with an imperforate anus. Two days after his birth,
Gerald underwent colostomy, a surgical procedure to bring one end of the large intestine out through the
abdominal walls, enabling him to excrete through a colostomy bag attached to the side of his body. May
17, 1995, Gerald was admitted at the Ospital ng Maynila for a pull-through operation. Dr. Leandro
Resurreccion headed the surgical team, and was assisted by Dr. Joselito Lucerio, Dr.Donatella Valeria and
Dr. Joseph Tibio. The anesthesiologist included Drs. Abella, Razon and Solidum. During the operation,
Gerald experienced bradycardia and went into a coma. His coma lasted for two weeks, but he regained
consciousness only after a month. He could no longer see, hear, or move. A complaint for reckless
imprudence resulting in serious physical injuries were filed by Gerald’s parents against the
anesthesiologist Dr. Solidum, alleging that there was failure in monitoring the anesthesia administered to
Gerald.

The Regional Trial Court convicted Dr. Solidum guilty of the crime. He then submitted the decision
for review at the Court of Appeals but the same contention was affirmed. Hence, this case at the Supreme
Court.

Issues:
 Whether or not petitioner, Dr. Solidum is liable for medical negligence.
 Whether or not res ipsa loquitur can be resorted to in the case at bar.

Held:

No, the Prosecution failed to prove the existence of the elements of reckless imprudence beyond
reasonable doubt. Gaid v. People, G.R. No. 171636 defined negligence as the failure to observe for the
protection of the interests of another person that degree of care, precaution, and vigilance that the
circumstances justly demand, whereby such other person suffers injury. The following are the elements of
medical negligence: (1) the duty owed by the physician to the patient, as created by the physician-patient
relationship, to act in accordance with the specific norms or standards established by his profession; (2)
the breach of the duty by the physician failing to act in accordance with the applicable standard of care;
(3) the causation, i.e., there must be a reasonably close and causal connection between the negligent act or
omission and the resulting injury; and (4) the damages suffered by the patient. In the case at bar, there
were no witnesses with special medical qualifications in anesthesia presented. Hence, it is difficult to
assess whether the first three elements of medical negligence were present.
No, the Court held that the application of the doctrine of res ipsa loquitr is inappropriate. Res ipsa
loquitur is literally translated as the thing or the transaction speaks for itself. The requisites for the
doctrine to apply are as follows: (1) the accident was of the kind that does not ordinarily occur unless
someone is negligent; (2) the instrumentality or agency that caused the injury was under the exclusive
control of the person charged; and (3) the injury suffered must not have been due to any voluntary action
or contribution of the person injured. Elements 2 and 3 were present in the case at bar. However, the first
element was undeniably wanting.

29.
MARIANO C. MENDOZA and ELVIRA LIM, Petitiones, vs. SPOUSES LEONORA J. GOMEZ and
GABRIEL V. GOMEZ, Respondents.
 GR No. 160110
Facts:
On 7 March 1997, the Isuzu truck owned by the respondents was hit by a Mayamy bus registered under
the name of petitioner Elvira Lim and driven by petitioner Mariano C. Mendoza. An information for
reckless imprudence resulting in damage to property and multiple injuries was filed against Mendoza. A
separate complaint for damages also filed against Mendoza and Lim.
According to the investigation, it was found out that the Isuzu truck was in its rightful lane and the
Mayamy bus, while traversing the opposite lane, intruded on the lane occupied by the former.
The petitioners contended that although Lim was the registered owner, the actual owner of the bus was
Enriquez, who had the bus attached with Mayamy Transport under the so-called “kabit system.”
Thus, the RTC found Mendoza liable for direct personal negligence under Article 2176 of the Civil Code,
and it also found Lim vicariously liable under Article 2180 of the same Code. The CA affirmed the
decision.
Issue:
 Whether or not Mendoza was negligent.
 Whether or not Lim be held liable.
Held:
 Mendoza was negligent.
Article 2185 of the Civil Code provides that 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. In the case at bar, Mendoza’s violation of traffic laws was the proximate cause of the
harm. The evidence on record shows that before the collision, the Isuzu truck was in its rightful lane, and
was even at a stop, having been flagged down by a security guard of St. Ignatius Village. The mishap
occurred when the Mayamy bus, travelling at a fast speed as shown by the impact of the collision, and
going in the opposite direction as that of the Isuzu truck, encroached on the lane rightfully occupied by
said Isuzu truck, and caused the latter to spin, injuring Perez, Anla, Banca, and Repisada,
and considerably damaging the Isuzu truck.
 Lim is vicariously liable with Mendoza.
In several cases of transportation law, the court held that the registered owner is deemed the employer of
the negligent driver, and is thus vicariously liable under Article 2176, in relation to Article 2180, of the
Civil Code. Further, 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. 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.

30.
ALANO VS. MAGUD-LOGMAO
GR. NO. 175540, April 17, 2014
FACTS: Amelito Logmao was brought to the East Avenue Medical Center (EAMC) by sidewalk vendors
who allegedly saw him fall from the overpass in Cubao, Quezon City. There, his patient’s data sheet
identified him as Angelito Lugmoso. Considering that his deterioration progressively deteriorated, and no
vacancy was available at the ICU of EAMC, Logmao/Lugmoso was transferred to NKI. His name was
recorded as Angelito Lugmose at the NKI. There being no relatives around, Jennifer, the transplant
coordinator, was instructed to locate his family by enlisting the assistance of the police and the media. Dr.
Ona, the chairman of the Department of Surgery, observing the severity of the brain injury of Angelito
Lugmoso/Logmao, requested the Laboratory Section to conduct cross-matching and tissue typing, so that
if Angelito expires despite the necessary medical care and management, and found a suitable organ donor,
provided his family would consent to it, his organs could be detached and transplanted promptly to a
compatible beneficiary. Jennifer secured the patient data of Agelito from EAMC, where he was identified
as Angelito Lugmoso of Boni Avenue, Mandaluyong and contacted several television and radio stations
for the purpose of locating the family of Lugmoso. She sought the assistance of the PNP to locate the
whereabouts of Angelito’s family. As proof, the radio and tv stations she contacted, as well as the
pertinent police station, issued Certifications attesting to her effort to locate Angelito’s family.

Angelito was eventually pronounced dead, hence Dr. Ona set in motion the removal of organs of Angelito
for organ transplantation. He sought permission from the Executive Director, Dr. Filoteo Alano, who
issued a Memorandum approving the transplant as long as all the requisite requirements had been
complied with and the NBI had been informed of the planned transplant.

On March 11, 1988, the NKI issued a press release announcing the successful organ transplant. A cousin
of Angelito heard on the radio that the donor was a certain Angelitlo Lugmoso who is now at Funeraria
Oro. Sensing a vague resemblance to Angelito Logmao’s name, she reported it to his mother, Zenaida
Logmao. When they went to the Furearia Oro to see the remains, it was there that they discovered the
remains of Angelito in a cheap casket. Previously, Arnelito’s sister Arlen reported on March 3, 1988 that
her brother, Arnelito did not return home after seeing a movie in Cubao.

Because of this discovery, Zenaida filed a complaint for damages. Only Dr. Filoteo Albano was held
liable for damages by the RTC. On appeal, the Court of Appeals affirmed the decision with modification,
by reducing the award of moral and exemplary damages, as well as attorney’s fees.

ISSUE: Whether respondent's sufferings were brought about by petitioner's alleged negligence in
granting authorization for the removal or retrieval of the internal organs of respondent's son who had been
declared brain dead.

HELD: WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals, dated March
31, 2006, is REVERSED and SET ASIDE. The complaint against petitioner is hereby DISMISSED.
Petitioner Doctor is not negligent. Petitioner gave authorization for the removal of some of the internal
organs to be transplanted to other patients, he did so in accordance with the letter of the law, Republic Act
(R.A.) No. 349, as amended by Presidential Decree (P.D.) 856, i.e., giving his subordinates instructions to
exert all reasonable efforts to locate the relatives or next of kin of respondent's son. Announcements were
made through radio and television, the assistance of police authorities was sought, and the NBI Medico-
Legal Section was notified. There can be no cavil that petitioner employed reasonable means to
disseminate notifications intended to reach the relatives of the deceased.

It is not petitioner’s fault if respondent failed to immediately receive notice of her son's death because the
notices did not properly state the name or identity of the deceased. The lower courts found that it was the
EAMC, who had the opportunity to ascertain the name of the deceased, who recorded the wrong
information regarding the deceased's identity to NKI. The NKI could not have obtained the information
about his name from the patient, because as found by the lower courts, the deceased was already
unconscious by the time he was brought to the NKI.

Finding petitioner liable for damages is improper. It should be emphasized that the internal organs of the
deceased were removed only after he had been declared brain dead; thus, the emotional pain suffered by
respondent due to the death of her son cannot in any way be attributed to petitioner.

31.
R TRANSPORT CORPORATION vs. LUISITO G. YU
GR NO. 174161, February 18, 2015
FACTS:
Loreta, after having alighted from a passenger bus, was hit and run over by a bus driven by
Gimena, who was then employed by petitioner R Transport Corporation. Loreta was immediately rushed
to the hospital where she was pronounced dead on arrival. As testified by the police officer on duty at the
time of the incident and indicated in the Autopsy Report, the deceased’s clothes were ripped off from her
body; her brain even spewed out from her skull and spilled over the road. The bus driven by Gimena
bumped the deceased in a loading and unloading area of a commercial center.

The husband of the deceased, respondent Luisito, filed a Complaint for damages before the RTC
against petitioner R Transport, Gimena, and Metro Manila Transport Corporation (MMTC) for the death
of his wife.

MMTC denied its liability reasoning that it is merely the registered owner of the bus involved in
the incident, the actual owner, being petitioner R Transport. Since it was not actually operating the bus
which killed respondent’s wife, nor was it the employer of the driver thereof, MMTC alleged that the
complaint against it should be dismissed. For its part, petitioner R Transport alleged that respondent had
no cause of action against it for it had exercised due diligence in the selection and supervision of its
employees and drivers and that its buses are in good condition. Meanwhile, the driver Gimena was
declared in default for his failure to file an answer to the complaint.

After trial on the merits, the trial court rendered judgment in favor of respondent Luisito ruling
that petitioner R Transport failed to prove that it exercised the diligence required of a good father of a
family in the selection and supervision of its driver. The RTC ordered defendants R Transport and Metro
Manila Transport Corporation (MMTC) to be primarily and solidarily liable and defendant Gimena
subsidiarily liable to plaintiff Luisito. The CA affirmed the Decision of the RTC with modification that
defendant Antonio Gimena is made solidarily liable for the damages caused to respondent.

ISSUE:

Is the petitioner liable for the damages caused by its employee?

RULING:

Yes. The petitioner is liable for the damages caused by its employee. Negligence has been defined
as "the failure to observe for the protection of the interests of another person that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other person suffers
injury." Verily, foresee ability is the fundamental test of negligence. It is the omission to do something
which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and reasonable man would not do.

Under Article 2180 of the New Civil Code, employers are liable for the damages caused by their
employees acting within the scope of their assigned tasks. Once negligence on the part of the employee is
established, a presumption instantly arises that the employer was remiss in the selection and/or
supervision of the negligent employee. To avoid liability for the quasi-delict committed by its employee,
it is incumbent upon the employer to rebut this presumption by presenting adequate and convincing proof
that it exercised the care and diligence of a good father of a family in the selection and supervision of its
employees.

Unfortunately, however, the records of this case are bereft of any proof showing the exercise by
petitioner of the required diligence. As aptly observed by the CA, no evidence of whatever nature was
ever presented depicting petitioner’s due diligence in the selection and supervision of its driver, Gimena,
despite several opportunities to do so. In fact, in its petition, apart from denying the negligence of its
employee and imputing the same to the bus from which the victim alighted, petitioner merely reiterates its
argument that since it is not the registered owner of the bus which bumped the victim, it cannot be held
liable for the damage caused by the same. Nowhere was it even remotely alleged that petitioner had
exercised the required diligence in the selection and supervision of its employee. Because of this failure,
petitioner cannot now avoid liability for the quasi-delict committed by its negligent employee.

32.
EMMA ADRIANO BUSTAMANTE, et al VS COURT OF APPEALS
1991-02-06 | G.R. No. 89880

FACTS:
A collision between a gravel and sand truck, driven by Montesiano and owned by Del Pilar and a Mazda
passenger bus, driven by Susulin, took place in Tanza, Cavite. Due to the impact several passengers of the
bus were injured some died.

The driver of the bus noticed that the wheels of the said truck was wiggling and that the latter was
occupying his lane. In thinking that the driver of the truck was only joking, he accelerated and tried to
overtake a hand tractor, the collision took place.

Trial Court rendered the decision that both drivers shall be soidarily liable. Court of Appeals, reversed and
set aside the judgment in favor of Del Pilar and Montesiano, opined that "the bus driver had the last clear
chance to avoid the collision and his reckless negligence in proceeding to overtake the hand tractor was
the proximate cause of the collision."

ISSUE: WON the last clear chance can apply making the bus negligent in failing to avoid the collision
and his act in proceeding to overtake the hand tractor was the proximate cause of the collision making
him solely liable

HELD:

The respondent court adopted the doctrine of "last clear chance." The doctrine is that the negligence of the
plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the
defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the
plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last clear chance means
that even though a person's own acts may have placed him in a position of peril, and an injury results, the
injured person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear
chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that
of a third person imputed to the opponent is considered in law solely responsible for the consequences of
the accident.

All premises considered, the Court is convinced that the respondent Court committed an error of law in
applying the doctrine of last clear chance as between the defendants, since the case at bar is not a suit
between the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased
passengers against both owners and drivers of the colliding vehicles. Therefore, the respondent court
erred in absolving the owner and driver of the cargo truck from liability.

33.
G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,vs.COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and

FRANCISCO SALVA, respondents.
 Facts:

Eliza Jujeurche G. Sunga, a college freshman at the Siliman University, took a passenger jeepney owned
and operated by petitioner Vicente Calalas. Sunga was given by the conductor an "extension seat," at the
rear end of the vehicle. Sunga gave way to the outgoing passenger.Just as she was doing so, an Isuzu
truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the
jeepney. As a result, Sunga was injured and confinement in the hospital. Her attending physician certified
she would remain on a cast for a period of three months and would have to ambulate in crutches during
said period.Sunga filed a complaint for damages against Calalas, alleging violation of the contract
of carriage. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of
the Isuzu truck. The lower court rendered judgment against Salva as third-party defendant and absolved
Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident.
It took cognizance of another case, filed by Calalas against Salva and Verena, for quasi-delict, the same
court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney. On appeal to
the Court of Appeals, the ruling of the lower court was reversed and dismissed the third-party complaint
against Salva and adjudged Calalas liable for damages to Sunga. Hence this petition.

Issues:

(1)Whether or not the negligence of Verena was the proximate cause of the accident negates the liability
and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers.
(2) Whether or not the award of moral damages to Sunga is supported evidence.

Held:

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

(2) In this case, there is no legal basis for awarding moral damages since there was no factual finding by the
appellate court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga's
contention that petitioner's admission in open court that the driver of the jeepney failed to assist her in
going to a nearby hospital cannot be construed as an admission of bad faith. The fact that it was the driver
of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to the
plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at
fault for the accident.
34.

THE ILOCOS NORTE ELECTRIC COMPANY vs. HONORABLE COURT OF APPEALS, (First
Division) LILIAN JUAN LUIS, JANE JUAN YABES, VIRGINIA JUAN CID, GLORIA JUAN
CARAG, and PURISIMA JUAN
 G.R. No. L-53401 November 6, 1989

FACTS:

A strong typhoon engulfed the province of Ilocos Norte, bringing heavy rains and flooding in its wake.
The deceased Isabel Lao Juan, fondly called Nana Belen, ventured out of the house towards the direction
of Five Sisters Emporium, to see to it that the goods were not flooded in her grocery store. While wading
in waist-deep flood, Nana Belen, in an unfortunate accident, had suffered and died in a circulatory shock
electrocution. An action for damages was instituted by the heirs of the deceased against the Ilocos Norte
Electric Company (petitioner). Petitioner contended that the deceased could have died either by drowning
or by electrocution due to negligence attributable only to herself and not to the electric company. That the
deceased installed an electric wire enclosing the iron gate and fence to deter the area from burglars. It
prayed that the company be exonerated from liability since typhoons and floods are fortuitous events and
that the acts of the private respondents falls within the sphere of the maxim of "volenti non fit injuria".

ISSUE:

Whether or not petitioner be exonerated from liability on the contention that typhoons and floods are
fortuitous event and that the acts of the deceased falls within the sphere of volenti non fit injuria?

RULING:

In times of calamities, extraordinary diligence requires a supplier of electricity to be in constant vigil to

prevent or avoid any probable incident that might imperil life or limb. The evidence discloses that there
were no men policing the area, nor even manning its office. Petitioner was negligent in seeing to it that no
harm is done to the general public considering that electricity is an agency, subtle and deadly, the measure
of care required of electric companies must be commensurate with or proportionate to the danger. The
duty of exercising this high degree of diligence and care extends to every place where persons have a
right to be. The negligence of petitioner having been shown, it may not now absolve itself from liability
by arguing that the victim's death was solely due to a fortuitous event. When an act of God combines or
concurs with the negligence of the defendant to produce an injury, the defendant is liable if the injury
would not have resulted but for his own negligent conduct or omission.

The maxim "volenti non fit injuria" finds no application in the case at bar. The deceased was on her way
to the her grocery store "to see to it that the goods were not flooded." As such, she shall not be punished
for exercising her right to protect her property from the floods by imputing upon her the unfavourable
presumption that she assumed the risk of personal injury. For it has been held that a person is excused
from the force of the rule, that when he voluntarily assents to a known danger he must abide by the
consequences, if an emergency is found to exist or if the life or property of another is in peril, or when he
seeks to rescue his endangered property. Clearly, an emergency was at hand as the deceased's property, a
source of her livelihood, was faced with an impending loss. Furthermore, the deceased, at the time the
fatal incident occurred, was at a place where she had a right to be without regard to petitioner's consent as
she was on her way to protect her merchandise.
35.

Avelino Casupanan and Roberto Capitulo v. Maria Llavore Laruya

August 26, 1992
G.R No. 145391
Facts:

Two vehicles driven by Laruya and the other owned by Capitulo and driven by Casupanan figured in an
accident. As a result, two cases were filed with the MTC of Capas, Tarlac. Laruya filed a criminal case of
reckless imprudence resulting in damage to property. On the other hand, Casupanan and Capitulo filed a
civil case for quasi-delict.

The criminal cases is in the preliminary stage when the civil case was filed. Hence Laruya filed a motion
to dimiss the civil case on the ground of forum shopping. MTC granted the motion and dismissed the civil
case. Casupanan and Capitulo then filed a motion for reconsideration which was then dismiss.
Consequently, they filed a petition for certiorari with the RTC which was again eventually dismissed
hence this petition.

Issue:

Whether or not, an accused in a criminal case of reckless imprudence can validly file, simulationeously
and independently, a separate civil action for quasi-delict against the respondent in the criminal case.

Ruling:

The Supreme Court held that ,indeed, an accused may file a separate civil action for quasi-delict against
the respondent 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.

36.

Samsung Construction Company Philippines, Inc. vs. Far East Bank and Trust Company and CA
G.R. No. 129015, August 13, 2004
Facts:
Samsung Construction Company Philippines, Inc. (Samsung Construction) had a deposit account
with Far East Bank and Trust Company (FEBTC). A certain Robert Gonzaga presented a check for
payment before the FEBTC branch in Makati. The check was payable to Cash and drawn against
Samsung Construction's current account in the amount of P999,500.00. The bank teller then compared the
signature appearing on the check with the specimen signature of Jong as contained in the specimen
signature card with the bank. The teller was satisfied that it was Jong’s signature on the check. She then
asked Gonzaga to submit proof of his identity, which the latter did through three identification cards. At
the same time, she forwarded the check to branch Senior Assistant Cashier Gemma Velez who counter
checked the signature on the check with the specimen. She then forwarded the check to Shirley Syfu,
another bank branch officer, for approval. Syfu noticed that Jose Sempio III, the assistant accountant of
Samsung Construction, was also in the bank. Syfu showed the check to Sempio, who verified Jong’s
signature and vouched for the identity of Gonzaga. Syfu then authorized the bank's encashment of the
check to Gonzaga.

The following day, accountant Kyu examined the balance of the bank account of Samsung
Construction and discovered that a check worth P999,500 had been encashed. Aware that he had not
prepared such check he reported the matter to Jong, who learned of the encashment of the check, and
realized that his signature had been forged. Samsung Construction sued FEBTC before the Regional Trial
Court (RTC) for violation of Section 23 of the Negotiable Instruments Law to which the court granted in
Samsung Construction’s favor.On appeal, the Court of Appeals (CA) reversed the RTC decision and
absolved FEBTC from any liability. Hence, the present petition.

Issue: Whether or not the bank was negligent when it encashed the forged check.

Ruling: Yes, the bank is negligent in encashing the forged check. The Court rules that while it is true that
the bank complied with its internal rules prior to paying out the questionable check, there are several
troubling circumstances that led the Court to believe that the bank itself was remiss in its duty. The
Supreme Court reiterates that the highest degree of care and diligence is required of banks. Banks are
engaged in a business impressed with public interest, and it is their duty to protect their many clients and
depositors who transact business with them. They have the obligation to treat their client's account
meticulously and with the highest degree of care, considering the fiduciary nature of their relationship.
The diligence required of banks, therefore, is more than that of a good father of a family. Given the
circumstances, extraordinary diligence dictates that FEBTC should have ascertained from Jong personally
that the signature in the questionable check was his.