G.R. No.

107356 March 31, 1995

SINGAPORE AIRLINES LIMITED, petitioner,

vs.
THE COURT OF APPEALS and PHILIPPINE AIRLINES, respondents.

ROMERO, J.:

Sancho Rayos was an overseas contract worker who had a renewed contract with the Arabian
American Oil Company (Aramco) for the period covering April 16, 1980, to April 15, 1981. As
part of Aramco's policy, its employees returning to Dhahran, Saudi Arabia from Manila are
allowed to claim reimbursement for amounts paid for excess baggage of up to 50 kilograms, as
long as it is properly supported by receipt. On April 1980, Rayos took a Singapore Airlines (SIA)
flight to report for his new assignment, with a 50-kilogram excess baggage for which he paid
P4,147.50. Aramco reimbursed said. amount upon presentation of the excess baggage ticket.

In December 1980, Rayos learned that he was one of several employees being investigated by
Aramco for fraudulent claims. He immediately asked his wife Beatriz in Manila to seek a written
confirmation from SIA that he indeed paid for an excess baggage of 50 kilograms. On December
10, 1980, SIA's manager, Johnny Khoo, notified Beatriz of their inability to issue the
certification requested because their records showed that only three kilograms were entered as
excess and accordingly charged. SIA issued the certification requested by the spouses Rayos
only on April 8, 1981, after its investigation of the anomaly and after Beatriz, assisted by a
lawyer, threatened it with a lawsuit. On April 14, 1981, Aramco gave Rayos his travel
documents without a return visa. His employment contract was not renewed.

On August 5, 1981, the spouses Rayos, convinced that SIA was responsible for the non-renewal
of Rayos' employment contract with Aramco, sued it for damages. SIA claimed that it was not
liable to the Rayoses because the tampering was committed by its handling agent, Philippine
Airlines (PAL). It then filed a third-party complaint against PAL. PAL, in turn, countered that its
personnel did not collect any charges for excess baggage; that it had no participation in the
tampering of any excess baggage ticket; and that if any tampering was made, it was done by
SIA's personnel.

Judge Jesus O. Ibay of the Regional Trial Court of Manila, Branch 30, rendered judgment on
September 9, 1988, in favor of the plaintiffs, the dispositive portion of which reads thus:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against

the defendant Singapore Airlines Limited, sentencing the latter to pay the former
the following:

1. The sum of Four Hundred Thirty Thousand Nine Hundred Pesos and Eighty
Centavos (P430,900.80) as actual damages, with interest at the legal rate from the
date of the filing of the complaint until fully paid.
 2. The sum of Four Thousand One Hundred Forty-Seven Pesos and Fifty
Centavos (P4,147.50) as reimbursement for the amount deducted from Mr. Rayos'
salary, also with legal rate of interest from the filing of the complaint until paid in
full;

3. The sum of Fifty Thousand Pesos (P50,000.00) as moral damages;

4. The sum equivalent to ten Per Cent (10th) of the total amount due as and for
attorney's fees; and

5. The cost of suit.

The defendant's counterclaim is hereby dismissed.

ON THE THIRD PARTY COMPLAINT, the third-party defendant PAL is

ordered to pay defendant and third-party plaintiff SIA whatever the latter has paid
the plaintiffs.

SO ORDERED.

In so ruling, the court a quo concluded that the excess baggage ticket of Rayos was tampered
with by the employees of PAL and that the fraud was the direct and proximate cause of the non-
renewal of Rayos' contract with Aramco.

All parties appealed to the Court of Appeals. SIA's appeal was dismissed for non-payment of
docket fees, which dismissal was eventually sustained by this Court. The Rayos spouses
withdrew their appeal when SIA satisfied the judgment totaling P802,435.34.

In its appeal, PAL claimed that the spouses Rayos had no valid claim against SIA because it was
the inefficiency of Rayos which led to the non-renewal of his contract with Aramco, and not the
alleged tampering of his excess bagged ticket On the other hand, SIA argued that the only issue
in the said appeal is whether or not it was entitled to reimbursement from PAL, citing
the case of Firestone Tire and Rubber Company of the Philippines v. Tempongko.1

The appellate court disagreed with SIA's contention that PAL could no longer raise the issue of
SIA's liability to the Rayoses and opined "that SIA's answer to the complaint should inure to the
benefit of PAL, and the latter may challenge the lower court's findings against SIA in favor of
plaintiffs-appellees (the Rayos spouses) for the purpose of defeating SIA's claim against it, and
not for the purpose of altering in any way the executed judgment against SIA." In its answer to
the main complaint, SIA set up the defense that the excess baggage ticket was indeed tampered
with but it was committed by PAL's personnel. On September 21, 1992, the appellate court
granted PAL's appeal and absolved it from any liability to SIA.

In this petition for review, SIA argues that PAL cannot validly assail for the first time on appeal
the trial court's decision sustaining the validity of plaintiff's complaint against SIA if PAL did not
raise this issue in the lower court. It added that the appellate court should have restricted its
ruling on the right of SIA to seek reimbursement from PAL, as this was the only issue raised by
SIA in its third-party complaint against PAL.

The instant appeal is impressed with merit.

The petitioner correctly pointed out that the case of Firestone squarely applies to the case at
bench. In said case, the Court expounded on the nature of a third-party complaint and the effect
of a judgment in favor of the plaintiff against the defendant and in favor of such defendant as
third-party plaintiff against, ultimately, the third-party defendant. Speaking through then Justice
and later Chief Justice Claudio Teehankee, the Court stated:

The third-party complaint is, therefore, a procedural device whereby a "third

party" who is neither a party nor privy to the act or deed complained of by the
plaintiff, may be brought into the case with leave of court, by the defendant, who
acts as third-party plaintiff to enforce against such third-party defendant a right
for contribution, indemnity, subrogation or any other relief, in respect of the
plaintiff's claim. The third-party complaint is actually independent of and separate
and distinct from the plaintiff's complaint. . . . When leave to file the third-party
complaint is properly granted, the Court renders in effect two judgments in the
same case, one on the plaintiff's complaint and the other on the third-party
complaint. When he finds favorably on both complaints, as in this case, he renders
judgment on the principal complaint in favor of plaintiff against defendant and
renders another judgment on the third-party complaint in favor of defendant as
third-party plaintiff, ordering the third-party defendant to reimburse the defendant
whatever amount said defendant is ordered to pay plaintiff in the case. Failure of
any of said parties in such a case to appeal the judgment as against him makes
such judgment final and executory. By the same token, an appeal by one party
from such judgment does not inure to the benefit of the other party who has not
appealed nor can it be deemed to be an appeal of such other party from the
judgment against him.

It must be noted that in the proceedings below, PAL disclaimed any liability to the Rayoses and
imputed the alleged tampering to SIA's personnel. On appeal, however, PAL changed its theory
and averred that the spouses Rayos had no valid claim against SIA on the around that the non-
renewal of Sancho's contract with Aramco was his unsatisfactory performance rather than the
alleged tampering of his excess baggage ticket. In response to PAL's appeal, SIA argued that it
was improper for PAL to question SIA's liability to the plaintiff, since this was no longer an
issue on account of the finality and, in fact, satisfaction of the judgment.

Surprisingly, the appellate court ignored the Court's pronouncements in Firestone and declared:

[T]here is nothing in the citation which would suggest that the appellant cannot
avail of the defenses which would have been available to the non-appealing party
against the prevailing party which would be beneficial to the appellant. After all,
PAL's liability here is premised on the liability of SIA to plaintiffs-appellees, In
its own defense, it should have the right to avail of defenses of SIA against
 plaintiffs-appellees which would redound to its benefit. This is especially true
here where SIA lost the capability to defend itself on the technicality of failure to
pay docket fee, rather than on the merits of its appeal. To hold otherwise would be
to open the door to a possible collusion between the plaintiff and defendant which
would leave the third-party defendant holding the bag.

There is no question that a third-party defendant is allowed to set up in his answer the defenses
which the third-party plaintiff (original defendant) has or may have to the plaintiff's claim. There
are, however, special circumstances present in this case which preclude third-party defendant
PAL from benefiting from the said principle.

One of the defenses available to SIA was that the plaintiffs had no cause of action, that is, it had
no valid claim against SIA. SIA investigated the matter and discovered that tampering was,
indeed, committed, not by its personnel but by PAL's. This became its defense as well as its main
cause of action in the third-party complaint it filed against PAL. For its part, PAL could have
used the defense that the plaintiffs had no valid claim against it or against SIA. This could be
done indirectly by adopting such a defense in its answer to the third-party complaint if only SIA
had raised the same in its answer to the main complaint, or directly by so stating in unequivocal
terms in its answer to SIA's complaint that SIA and PAL were both blameless. Yet, PAL opted to
deny any liability which it imputed to SIA's personnel. It was only on appeal — in a complete
turn around of theory — that PAL raised the issue of no valid claim by the plaintiff against SIA.
This simply cannot be allowed.

While the third-party defendant; would benefit from a victory by the third-party plaintiff against
the plaintiff, this is true only when the third-party plaintiff and third-party defendant have non-
contradictory defenses. Here, the defendant and third-party defendant had no common defense
against the plaintiffs' complaint, and they were even blaming each other for the fiasco.

Fear of collusion between the third-party plaintiff and the plaintiffs aired by the appellate court is
misplaced if not totally unfounded. The stand of SIA as against the plaintiffs' claim was
transparent from the beginning. PAL was aware of SIA's defense, and if it was convinced that
SIA should have raised the defense of no valid claim by the plaintiffs, it should have so stated in
its answer as one of its defenses, instead of waiting for an adverse judgment and raising it for the
first time on appeal.

The judgment, therefore, as far as the Rayoses and SIA are concerned, has already gained
finality. What remains to be resolved, as correctly pointed out by petitioner, is whether it is
entitled to reimbursement from PAL, considering that PAL appealed that part of the decision to
the appellate court. This is where the rule laid down in Firestone becomes applicable.

The trial court's decision, although adverse to SIA as defendant, made PAL ultimately
answerable for the judgment by ordering the latter to reimburse the former for the entire
monetary award. On appeal, PAL tried to exonerate itself by arguing that the Rayoses had no
valid claim against SIA. From PAL's viewpoint, this seemed to be the only way to extricate itself
from a mess which the court a quo ascribed to it. This cannot, however, be allowed because it
was neither raised by SIA in its answer to the main complaint nor by PAL in its answer to the
third-party complaint. The prudent thing that PAL should have done was to state in its answer to
the third-party complaint filed by SIA against it everything that it may conceivably interpose by
way of its defense, including specific denials of allegations in the main complaint which
implicated it along with SIA.

The appellate court was in error when it opined that SIA's answer inured to the benefit of PAL
for the simple reason that the complaint and the third-party complaint are actually two separate
cases involving the same set of facts which is allowed by the court to be resolved in a single
proceeding only to avoid a multiplicity of actions. Such a proceeding obviates the need of trying
two cases, receiving the same or similar evidence for both, and enforcing separate judgments
therefor. This situation is not, as claimed by the appellate court, analogous to a case where there
are several defendants against whom a complaint is filed stating a common cause of action,
where the answer of some of the defendants inures to the benefit of those who did not file an
answer. While such a complaint speaks of a single suit, a third-party complaint involves an
action separate and distinct from, although related to the main complaint. A third-party defendant
who feels aggrieved by some allegations in the main complaint should, aside from answering the
third-party complaint, also answer the main complaint.

We do not, however, agree with the petitioner that PAL is solely liable for the satisfaction of the
judgment. While the trial court found, and this has not been adequately rebutted by PAL, that the
proximate cause of the non-renewal of Rayos' employment contract with Aramco was the
tampering of his excess baggage ticket by PAL's personnel, it failed to consider that the
immediate cause of such non-renewal was SIA's delayed transmittal of the certification needed
by Rayos to prove his innocence to his employer.

SIA was informed of the anomaly in December 1980 but only issued the certification four
months later or, more specifically, on April 8, 1981, a few days before the expiration of Rayos'
contract. Surely, the investigation conducted by SIA could not have lasted for four months as the
information needed by the Rayoses could easily be verified by comparing the duplicate excess
baggage tickets which they and their handling agent, PAL, kept the record purposes. The fact
that the Rayos spouses had to be assisted by counsel who threatened to file a damage suit against
SIA if the certification they urgently needed was not immediately issued only strengthens the
suspicion that SIA was not dealing with them in utmost good faith. The effect of SIA's
mishandling of Beatriz Rayos' request became instantly apparent when her husband's contract
was not renewed in spite of his performance which was constantly "highly regarded" by the
manager of Aramco's equipment services department.

Former Chief Justice and noted remedial law expert Manuel V. Moran opined that "in an action
upon a tort, the defendant may file a third-party complaint against a joint tort-feasor for
contribution."2

The non-renewal of Rayos employment contract was the natural and probable consequence of
the separate tortious acts of SIA and PAL. Under mandate of Article 2176 of the Civil Code,
Rayos is entitled to be compensated for such damages. Inasmuch as the responsibility of two or
more persons, or tort-feasors, liable for a quasi-delict is joint and several,3 and the sharing as
between such solidary debtors is pro-rata,4 it is but logical, fair, and equitable to require PAL to
contribute to the amount awarded to the Rayos spouses and already paid by SIA, instead of
totally indemnifying the latter.

WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R. CV No. 20488
dated September 21, 1992, is hereby REVERSED and a new one is entered ordering private
respondent Philippine Airlines to pay, by way of contribution, petitioner Singapore Airlines one-
half (1/2) of the amount it actually paid to Sancho and Beatriz Rayos in satisfaction of the
judgment in Civil Case No. 142252, dated September 9, 1988.

SO ORDERED.

[G.R. No. 130068. October 1, 1998]

FAR EASTERN SHIPPING COMPANY, petitioner, vs. COURT OF APPELAS and

PHILIPPINE PORTS AUTHORITY, respondents.

[G.R. No. 130150. October 1, 1998]

MANILA PILOTS ASSOCIATION, petitioner, vs. PHILIPPINE PORTS AUTHORITY and
FAR EASTERN SHIPPING COMPANY, respondents.

DECISION
REGALADO, J.:

These consolidated petitions for review on certiorari seek in unison to annul and set aside the
decision[1] of respondent Court of Appeals of November 15, 1996 and its resolution[2] dated July
31, 1997 in CA-G.R. CV No. 24072, entitled Philippine Ports Authority, Plaintiff-Appellee vs. Far
Eastern Shipping Company, Senen C. Gavino and Manila Pilots Association. Defendants-
Appellants, which affirmed with modification the judgment of the trial court holding the
defendants-appellants therein solidarily liable for damages in favor of herein private respondent.
There is no dispute about the facts as found by the appellate court, thus --

x x x On June 20, 1980, the M/V PAVLODAR, flying under the flagship of the USSR, owned
and operated by the Far Eastern Shipping Company (FESC for brevitys sake), arrived at the Port
of Manila from Vancouver, British Columbia at about 7:00 oclock in the morning. The vessel
was assigned Berth 4 of the Manila International Port, as its berthing space. Captain Roberto
Abellana was tasked by the Philippine Port Authority to supervise the berthing of the
vessel. Appellant Senen Gavino was assigned by the appellant Manila Pilots Association (MPA
for brevitys sake) to conduct docking maneuvers for the safe berthing of the vessel to Berth No.
4.

Gavino boarded the vessel at the quarantine anchorage and stationed himself in the bridge, with
the master of the vessel, Victor Kavankov, beside him. After a briefing of Gavino by Kavankov
of the particulars of the vessel and its cargo, the vessel lifted anchor from the quarantine
anchorage and proceeded to the Manila International Port. The sea was calm and the wind was
ideal for docking maneuvers.

When the vessel reached the landmark (the big church by the Tondo North Harbor) one-half mile
from the pier, Gavino ordered the engine stopped. When the vessel was already about 2,000 feet
from the pier, Gavino ordered the anchor dropped. Kavankov relayed the orders to the crew of
the vessel on the bow. The left anchor, with two (2) shackles were dropped. However, the anchor
did not take hold as expected. The speed of the vessel did not slacken. A commotion ensued
between the crew members. A brief conference ensued between Kavankov and the crew
members. When Gavino inquired what was all the commotion about, Kavankov assured Gavino
that there was nothing of it.

After Gavino noticed that the anchor did not take hold, he ordered the engines half-
astern. Abellana, who was then on the pier apron, noticed that the vessel was approaching the
pier fast. Kavankov likewise noticed that the anchor did not take hold. Gavino thereafter gave the
full-astern code. Before the right anchor and additional shackles could be dropped, the bow of
the vessel rammed into the apron of the pier causing considerable damage to the pier. The vessel
sustained damage too. (Exhibit 7-Far Eastern Shipping).Kavankov filed his sea protest
(Exhibit 1-Vessel). Gavino submitted his report to the Chief Pilot (Exhibit 1-Pilot) who referred
the report to the Philippine Ports Authority (Exhibit 2-Pilot) Abellana likewise submitted his
report of the incident (Exhibit B).

Per contract and supplemental contract of the Philippine Ports Authority and the contractor for
the rehabilitation of the damaged pier, the same cost the Philippine Ports Authority the amount
of P1,126,132.25 (Exhibits D and E).[3]

On January 10, 1983, the Philippine Ports Authority (PPA, for brevity), through the Solicitor
General, filed before the Regional Trial Court of Manila, Branch 39, a complaint for a sum of
money against Far Eastern Shipping Co., Capt. Senen C. Gavino and the Manila Pilots Association,
docketed as Civil Case No. 83-14958,[4] praying that the defendants therein be held jointly and
severally liable to pay the plaintiff actual and exemplary damages plus costs of suit. In a decision
dated August 1, 1985, the trial court ordered the defendants therein jointly and severally to pay the
PPA the amount of P1,053,300.00 representing actual damages and the cost of suit.[5]
The defendants appealed to the Court of Appeals and raised the following issues: (1) Is the
pilot of a commercial vessel, under compulsory pilotage, solely liable for the damage caused by
the vessel to the pier, at the port of destination, for his negligence? And (2) Would the owner of
the vessel be liable likewise if the damage is caused by the concurrent negligence of the master of
vessel and the pilot under a compulsory pilotage?
As stated at the outset, respondent appellate court affirmed the findings of the court a
quo except that it found no employer-employee relationship existing between herein private
respondents Manila Pilots Association (MPA, for short) and Capt. Gavino.[6] This being so, it ruled
instead that the liability of MPA is anchored, not on Article 2180 of the Civil Code, but on the
provisions of Customs Administrative Order No. 15-65,[7] and accordingly modified said decision
of the trial court by holding MPA, along with its co-defendants therein, still solidarily liable to
PPA but entitled MPA to reimbursement from Capt. Gavino for such amount of the adjudged
pecuniary liability in excess of the amount equivalent to seventy-five percent (75%) of its
prescribed reserve fund.[8]
Neither Far Eastern Shipping Co. (briefly, FESC) nor MPA was happy with the decision of
the Court of Appeals and both of them elevated their respective plaints to us via separate petitions
for review on certiorari.
In G.R. No. 130068, which was assigned to the Second Division of this Court, FESC imputed
that the Court of Appeals seriously erred:

1. in not holding Senen C. Gavino and the Manila Pilots Association as the parties solely
responsible for the resulting damages sustained by the pier deliberately ignoring the established
jurisprudence on the matter.

2. in holding that the master had not exercised the required diligence demanded from him by the
circumstances at the time the incident happened;

3. in affirming the amount of damages sustained by the respondent Philippine Ports Authority
despite a strong and convincing evidence that the amount is clearly exorbitant and unreasonable;
4. in not awarding any amount of counterclaim prayed for by the petitioner in its answer; and

5. in not granting herein petitioner's claim against pilot Senen C. Gavino and Manila Pilots'
Association in the event that it be held liable.[9]

Petitioner asserts that since the MV PAVLODAR was under compulsory pilotage at the time
of the incident, it was a compulsory pilot, Capt. Gavino, who was in command and had complete
control in the navigation and docking of the vessel. It is the pilot who supersedes the master for
the time being in the command and navigation of a ship and his orders must be obeyed in all
respects connected with her navigation. Consequently, he was solely responsible for the damage
caused upon the pier apron, and not the owners of the vessel. It claims that the master of the boat
did not commit any act of negligence when he failed to countermand or overrule the orders of the
pilot because he did not see any justifiable reason to do so. In other words, the master cannot be
faulted for relying absolutely on the competence of the compulsory pilot. If the master does not
observe that a compulsory pilot is incompetent or physically incapacitated, the master is justified
in relying on the pilot.[10]
Respondent PPA, in its comment, predictably in full agreement with the ruling of respondent
court on the solidary liability of FESC, MPA and Capt. Gavino, stresses the concurrent negligence
of Capt. Gavino, the harbor pilot, and Capt. Viktor Kabankov,*shipmaster of MV Pavlodar, as the
basis of their solidary liability for damages sustained by PPA. It posits that the vessel was being
piloted by Capt. Gavino with Capt. Kabankov beside him all the while on the bridge of the vessel,
as the former took over the helm of MV Pavlodar when it rammed and damaged the apron of the
pier of Berth No. 4 of the Manila International Port. Their concurrent negligence was the
immediate and proximate cause of the collision between the vessel and the pier - Capt. Gavino, for
his negligence in the conduct of docking maneuvers for the safe berthing of the vessel; and Capt.
Kabankov, for failing to countermand the orders of the harbor pilot and to take over and steer the
vessel himself in the face of imminent danger, as well as for merely relying on Capt. Gavino during
the berthing procedure.[11]
On the other hand, in G.R. No. 130150, originally assigned to the Court's First Division and
later transferred to the Third Division, MPA, now as petitioner in this case, avers the respondent
court's errors consisted in disregarding and misinterpreting Customs Administrative Order No. 15-
65 which limits the liability of MPA. Said pilots' association asseverates that it should not be held
solidarily liable with Capt. Gavino who, as held by respondent court, is only a member, not an
employee, thereof. There being no employer-employee relationship, neither can MPA be held
liable for any vicarious liability for the respective exercise of profession by its members nor be
considered a joint tortfeasor as to be held jointly and severally liable.[12] It further argues that there
was erroneous reliance on Customs Administrative Order No. 15-65 and the constitution and by-
laws of MPA, instead of the provisions of the Civil Code on damages which, being a substantive
law, is higher in category than the aforesaid constitution and by-laws of a professional organization
or an administrative order which bears no provision classifying the nature of the liability of MPA
for the negligence its member pilots.[13]
As for Capt. Gavino, counsel for MPA states that the former had retired from active pilotage
services since July 28, 1994 and has ceased to be a member of petitioner pilots' association. He is
not joined as a petitioner in this case since his whereabouts are unknown.[14]
 FESC's comment thereto relied on the competence of the Court of Appeals in construing
provisions of law or administrative orders as basis for ascertaining the liability of MPA, and
expressed full accord with the appellate court's holding of solidary liability among itself, MPA and
Capt. Gavino. It further avers that the disputed provisions of Customs Administrative Order No.
15-65 clearly established MPA's solidary liability.[15]
On the other hand, public respondent PPA, likewise through representations by the Solicitor
General, assumes the same supportive stance it took in G.R. No. 130068 in declaring its total
accord with the ruling of the Court of Appeals that MPA is solidarily liable with Capt. Gavino and
FESC for damages, and in its application to the fullest extent of the provisions of Customs
Administrative Order No. 15-65 in relation to MPA's constitution and by-laws which spell out the
conditions of and govern their respective liabilities. These provisions are clear and ambiguous as
regards MPA's liability without need for interpretation or construction. Although Customs
Administrative Order No. 15-65 is a mere regulation issued by an administrative agency pursuant
to delegated legislative authority to fix details to implement the law, it is legally binding and has
the same statutory force as any valid statute.[16]
Upon motion[17] by FESC dated April 24, 1998 in G.R. No. 130150, said case was
consolidated with G.R. No. 130068.[18]
Prefatorily, on matters of compliance with procedural requirements, it must be mentioned that
the conduct of the respective counsel for FESC and PPA leaves much to be desired, to the
displeasure and disappointment of this Court.
Section 2, Rule 42 of the 1997 Rules of Civil Procedure[19] incorporates the former Circular
No. 28-91 which provided for what has come to be known as the certification against forum
shopping as an additional requisite for petitions filed with the Supreme Court and the Court of
Appeals, aside from the other requirements contained in pertinent provisions of the Rules of Court
therefor, with the end in view of preventing the filing of multiple complaints involving the same
issues in the Supreme Court, Court of Appeals or different divisions thereof or any other tribunal
or agency.
More particularly, the second paragraph of Section 2, Rule 42 provides:
xxxxxxxxx

The petitioner shall also submit together with the petition a certification under oath that he has
not therefore commenced any other action involving the same issues in the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such
other action or proceeding, he must state the status of the same; and if he should thereafter learn
that a similar action or proceeding has been filed or is pending before the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal or agency, he undertakes to
promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days
therefrom. (Italics supplied.)

For petitions for review filed before the Supreme Court, Section 4(e), Rule 45 specifically requires
that such petition shall contain a sworn certification against forum shopping as provided in the last
paragraph of Section 2, Rule 42.
 The records show that the law firm of Del Rosario and Del Rosario through its associate, Atty.
Herbert A. Tria, is the counsel of record for FESC in both G.R. No. 130068 and G.R. No. 130150.
G.R. No. 130068, which is assigned to the Court's Second Division, commenced with the
filing by FESC through counsel on August 22, 1997 of a verified motion for extension of time to
file its petition for thirty (30) days from August 28, 1997 or until September 27, 1997.[20] Said
motion contained the following certification against forum shopping[21] signed by Atty. Herbert A.
Tria as affiant:
CERTIFICATION
AGAINST FORUM SHOPPING

I/we hereby certify that I/we have not commenced any other action or proceeding involving the
same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; that to
the best of my own knowledge, no such action or proceeding is pending in the Supreme Court,
the Court of Appeals, or any other tribunal or agency; that if I/we should thereafter learn that a
similar action or proceeding has been filed or is pending before the Supreme Court, the Court of
Appeals, or any other tribunal or agency, I/we undertake to report that fact within five (5) days
therefrom to this Honorable Court.

This motion having been granted, FESC subsequently filed its petition on September 26, 1997,
this time bearing a "verification and certification against forum-shopping" executed by one
Teodoro P. Lopez on September 24, 1997,[22] to wit:
VERIFICATION AND CERTIFICATION
AGAINST FORUM SHOPPING

in compliance with Section 4(e), Rule 45 in relation to Section 2, Rule 42 of the Revised Rules of
Civil Procedure

I, Teodoro P. Lopez, of legal age, after being duly sworn, depose and state:

1. That I am the Manager, Claims Department of Filsov Shipping Company, the local agent of
petitioner in this case.

2. That I have caused the preparation of this Petition for Review on Certiorari.

3. That I have read the same and the allegations therein contained are true and correct based on
the records of this case.

4. That I certify that petitioner has not commenced any other action or proceeding involving the
same issues in the Supreme Court or Court of Appeals, or any other tribunal or agency, that to
the best of my own knowledge, no such action or proceeding is pending in the Supreme Court,
the Court of Appeals or any other tribunal or agency, that I should thereafter learn that a similar
action or proceeding has been filed or is pending before the Supreme Court, the Court of
Appeals, or any other tribunal or agency, I undertake to report the fact within five (5) days
therefrom to this Honorable Court. (Italics supplied for emphasis.)
 Reviewing the records, we find that the petition filed by MPA in G.R. No. 130150 then
pending with the Third Division was duly filed on August 29, 1997 with a copy thereof furnished
on the same date by registered mail to counsel for FESC.[23] Counsel of record for MPA, Atty.
Jesus P. Amparo, in his verification accompanying said petition dutifully revealed to the Court
that--
xxxxxxxxx

3. Petitioner has not commenced any other action or proceeding involving the same issues in his
Honorable Court, the Court of Appeals or different Divisions thereof, or any other tribunal or
agency, but to the best of his knowledge, there is an action or proceeding pending in this
Honorable Court, entitled Far Eastern Shipping Co., Petitioner, vs. Philippine Ports Authority
and Court of Appeals with a Motion for Extension of time to file Petition for Review by
Certiorari filed sometime on August 18, 1997. If undersigned counsel will come to know of any
other pending action or claim filed or pending he undertakes to report such fact within five (5)
days to this Honorable Court.[24] (Italics supplied.)
Inasmuch as MPA's petition in G.R. No. 130150 was posted by registered mail on August 29,
1997 and taking judicial notice of the average period of time it takes local mail to reach its
destination, by reasonable estimation it would be fair to conclude that when FESC filed its petition
in G.R. No. 130068 on September 26, 1997, it would already have received a copy of the former
and would then have knowledge of the pendency of the other petition initially filed with the First
Division. It was therefore incumbent upon FESC to inform the Court of that fact through its
certification against forum shopping. For failure to make such disclosure, it would appear that the
aforequoted certification accompanying the petition in G.R. No. 130068 is defective and could
have been a ground for dismissal thereof.
Even assuming that FESC has not yet received its copy of MPA's petition at the time it filed
its own petition and executed said certification, its signatory did state "that if I should thereafter
learn that a similar action or proceeding has been filed or is pending before the Supreme Court,
the Court of Appeals or any other tribunal or agency, I undertake to report the fact within five (5)
days therefrom in this Honorable Court."[25] Scouring the records page by page in this case, we
find that no manifestation concordant with such undertaking was then or at any other time
thereafter ever filed by FESC nor was there any attempt to bring such matter to the attention of the
Court. Moreover, it cannot feign non-knowledge of the existence of such other petition because
FESC itself filed the motion for consolidation in G.R. No. 130150 of these two cases on April 24,
1998.
It is disturbing to note that counsel for FESC, the law firm of Del Rosario and Del Rosario,
displays an unprofessional tendency of taking the Rules for granted, in this instance exemplified
by its pro forma compliance therewith but apparently without full comprehension of and with less
than faithful commitment to its undertakings to this Court in the interest of just, speedy and orderly
administration of court proceedings.
As between the lawyer and the courts, a lawyer owes candor, fairness and good faith to the
court.[26] He is an officer of the court exercising a privilege which is indispensable in the
administration of justice.[27] Candidness, especially towards the courts, is essential for the
expeditious administration of justice. Courts are entitled to expect only complete honesty from
lawyers appearing and pleading before them.[28] Candor in all dealings is the very essence of
honorable membership in the legal profession.[29] More specifically, a lawyer is obliged to observe
the rules of procedure and not to misuse them to defeat the ends of justice.[30] It behooves a lawyer,
therefore, to exert every effort and consider it his duty to assist in the speedy and efficient
administration of justice.[31] Being an officer of the court, a lawyer has a responsibility in the proper
administration of justice. Like the court itself, he is an instrument to advance its ends -- the speedy,
efficient, impartial, correct and inexpensive adjudication of cases and the prompt satisfaction of
final judgments. A lawyer should not only help attain these objectives but should likewise avoid
any unethical or improper practices that impede, obstruct or prevent their realization, charged as
he is with the primary task of assisting in the speedy and efficient administration of justice.[32]
Sad to say, the members of said law firm sorely failed to observe their duties as responsible
members of the Bar. Their actuations are indicative of their predisposition to take lightly the
avowed duties of officers of the Court to promote respect for law and for legal processes. [33] We
cannot allow this state of things to pass judicial muster.
In view of the fact that at around the time these petitions were commenced, the 1997 Rules of
Civil Procedure had just taken effect, the Court treated infractions of the new Rules then with
relative liberality in evaluating full compliance therewith. Nevertheless, it would do well to remind
all concerned that the penal provisions of Circular No. 28-91 which remain operative
provides, inter alia:

3. Penalties.-
xxxxxxxxx

(c) The submission of a false certification under Par. 2 of the Circular shall likewise constitute
contempt of court, without prejudice to the filing of criminal action against the guilty party. The
lawyer may also be subjected to disciplinary proceedings.
It must be stressed that the certification against forum shopping ordained under the Rules is
to be executed by the petitioner, and not by counsel. Obviously it is the petitioner, and not always
the counsel whose professional services have been retained for a particular case, who is in the best
position to know whether he or it actually filed or caused the filing of a petition in that case. Hence,
a certification against forum shopping by counsel is a defective certification. It is clearly equivalent
to non-compliance with the requirement under Section 2, Rule 42 in relation to Section 4, Rule 45,
and constitutes a valid cause for dismissal of the petition.
Hence, the initial certification appended to the motion for extension of time to file petition n
G.R. No. 130068 executed in behalf of FESC by Atty. Tria is procedurally deficient. But
considering that it was a superfluity at that stage of the proceeding, it being unnecessary to file
such a certification with a mere motion for extension, we shall disregard such error. Besides, the
certification subsequently executed by Teodoro P. Lopez in behalf of FESC cures that defect to a
certain extent, despite the inaccuracies earlier pointed out. In the same vein, we shall consider the
verification signed in behalf of MPA by its counsel, Atty. Amparo, in G.R. No. 130150 as
substantial compliance inasmuch as it served the purpose of the Rules of informing the Court of
the pendency of another action or proceeding involving the same issues.
It bears stressing that procedural rules are instruments in the speedy and efficient
administration of justice. They should be used to achieve such end and not to derail it.[34]
 Counsel for PPA did not make matters any better. Despite the fact that, save for the Solicitor
General at the time, the same legal team of the Office of the Solicitor General (OSG, for short)
composed of Assistant Solicitor General Roman G. Del Rosario and Solicitor Luis F. Simon, with
the addition of Assistant Solicitor General Pio C. Guerrero very much later in the proceedings,
represented PPA throughout the appellate proceedings in both G.R. No. 130068 and G.R. No.
130150 and was presumably fully acquainted with the facts and issues of the case, it took the OSG
an inordinately and almost unreasonably long period of time to file its comment, thus unduly
delaying the resolution of these cases. It took several changes of leadership in the OSG -- from
Silvestre H. Bello III to Romeo C. dela Cruz and, finally, Ricardo P. Galvez -- before the comment
in behalf of PPA was finally filed.
In G.R. No. 130068, it took eight (8) motions for extension of time totaling 210 days, a
warning that no further extensions shall be granted, and personal service on the Solicitor General
himself of the resolution requiring the filing of such comment before the OSG indulged the Court
with the long required comment on July 10, 1998.[35] This, despite the fact that said office was
required to file its comment way back on November 12, 1997.[36] A closer scrutiny of the records
likewise indicates that petitioner FESC was not even furnished a copy of said comment as required
by Section 5, Rule 42. Instead, a copy thereof was inadvertently furnished to MPA which, from
the point of view of G.R. No. 130068, was a non-party.[37] The OSG fared slightly better in G.R.
No. 130150 in that it took only six (6) extensions, or a total of 180 days, before the comment was
finally filed.[38] And while it properly furnished petitioner MPA with a copy of its comment, it
would have been more desirable and expedient in this case to have furnished its therein co-
respondent FESC with a copy thereof, if only as a matter of professional courtesy.[39]
This undeniably dilatory disinclination of the OSG to seasonably file required pleadings
constitutes deplorable disservice to the tax-paying public and can only be categorized as censurable
inefficiency on the part of the government law office. This is most certainly professionally
unbecoming of the OSG.
Another thing that baffles the Court is why the OSG did not take the initiative of filing a
motion for consolidation in either G.R. No. 130068 or G.R. No. 130150, considering its familiarity
with the background of the case and if only to make its job easier by having to prepare and file
only one comment. It could not have been unaware of the pendency of one or the other petition
because, being counsel for respondent in both cases, petitioner is required to furnish it with a copy
of the petition under pain of dismissal of the petition for failure otherwise.[40]
Besides, in G.R. 130068, it prefaces its discussions thus --

Incidentally, the Manila Pilots' Association (MPA), one of the defendants-appellants in the case
before the respondent Court of Appeals, has taken a separate appeal from the said decision to this
Honorable Court, which was docketed as G.R. No. 130150 and entitled "Manila Pilots'
Association, Petitioner, versus Philippine Ports Authority and Far Eastern Shipping Co.,
Respondents.[41]
Similarly, in G.R. No. 130150, it states -
Incidentally, respondent Far Eastern Shipping Co. (FESC) had also taken an appeal from the said
decision to this Honorable Court, docketed as G.R. No. 130068, entitled "Far Eastern Shipping
Co. vs. Court of Appeals and Philippine Ports Authority."[42]
 We find here a lackadaisical attitude and complacency on the part of the OSG in the handling
of its cases and an almost reflexive propensity to move for countless extensions, as if to test the
patience of the Court, before favoring it with the timely submission of required pleadings.
It must be emphasized that the Court can resolve cases only as fast as the respective parties in
a case file the necessary pleadings. The OSG, be needlessly extending the pendency of these cases
through its numerous motions for extension, came very close to exhausting this Court's forbearance
and has regrettably fallen short of its duties as the People's Tribune.
The OSG is reminded that just like other members of the Bar, the canons under the Code of
Professional Responsibility apply with equal force on lawyers in government service in the
discharge of their official tasks.[43] These ethical duties are rendered even more exacting as to them
because, as government counsel, they have the added duty to abide by the policy of the State to
promote a high standard of ethics in public service.[44] Furthermore, it is incumbent upon the OSG,
as part of the government bureaucracy, to perform and discharge its duties with the highest degree
of professionalism, intelligence and skill[45] and to extend prompt, courteous and adequate service
to the public.[46]
Now, on the merits of the case. After a judicious examination of the records of this case, the
pleadings filed, and the evidence presented by the parties in the two petitions, we find no cogent
reason to reverse and set aside the questioned decision. While not entirely a case of first
impression, we shall discuss the issues seriatim and, correlatively by way of a judicial once-over,
inasmuch as the matters raised in both petitions beg for validation and updating of well worn
maritime jurisprudence. Thereby, we shall write finis to the endless finger-pointing in this
shipping mishap which has been stretched beyond the limits of judicial tolerance.
The Port of Manila is within the Manila Pilotage District which is under compulsory
pilotage pursuant to Section 8, Article III of Philippine Ports Authority Administrative Order No.
03-85,[47] which provides that:

SEC. 8. Compulsory Pilotage Service.- For entering a harbor and anchoring thereat, or passing
through rivers or straits within a pilotage district, as well as docking and undocking at any
pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign
trade shall be under compulsory pilotage. x x x

In case of compulsory pilotage, the respective duties and responsibilities of the compulsory
pilot and the master have been specified by the same regulation in this wise:

SEC. 11. Control of vessels and liability for damage. - On compulsory pilotage grounds, the
Harbor Pilot, providing the service to a vessel shall be responsible for the damage caused to a
vessel or to life and property at ports due to his negligence or fault. He can only be absolved
from liability if the accident is caused by force majeure or natural calamities provided he has
exercised prudence and extra diligence to prevent or minimize damage.

The Master shall retain overall command of the vessel even on pilotage grounds whereby he can
countermand or overrule the order or command of the Harbor Pilot on board. In such event, any
damage caused to a vessel or to life and property at ports by reason of the fault or negligence of
the Master shall be the responsibility and liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.

Such liability of the owner or Master of the vessel or its pilots shall be determined by competent
authority in appropriate proceedings in the light of the facts and circumstances of each particular
case.

SEC. 32. Duties and responsibilities of the Pilot or Pilots' Association. - The duties and
responsibilities of the Harbor Pilot shall be as follows:

xxxxxxxxx

f) a pilot shall be held responsible for the direction of a vessel from the time he assumes his work
as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his
responsibility shall cease at the moment the Master neglects or refuses to carry out his order.

Customs Administrative Order No. 15-65 issued twenty years earlier likewise provided in
Chapter I thereof for the responsibilities of pilots:

Par. XXXIX. - A Pilot shall be held responsible for the direction of a vessel from the time he
assumes control thereof until he leaves it anchored free from shoal; Provided, That his
responsibility shall cease at the moment the master neglects or refuses to carry out his
instructions.

xxxxxxxxx

Par. XLIV. - Pilots shall properly and safely secure or anchor vessels under their control when
requested to do so by the master of such vessels.

I. G.R. No. 130068

Petitioner FESC faults the respondent court with serious error in not holding MPA and Capt.
Gavino solely responsible for the damages caused to the pier. It avers that since the vessel was
under compulsory pilotage at the time with Capt. Gavino in command and having exclusive control
of the vessel during the docking maneuvers, then the latter should be responsible for damages
caused to the pier.[48] It likewise holds the appellate court in error for holding that the master of
the ship, Capt. Kabankov, did not exercise the required diligence demanded by the
circumstances.[49]
We start our discussion of the successive issues bearing in mind the evidentiary rule in
American jurisprudence that there is a presumption of fault against a moving vessel that strikes a
stationary object such as a dock or navigational aid. In admiralty, this presumption does more than
merely require the ship to go forward and produce some evidence on the presumptive matter. The
moving vessel must show that it was without fault or that the collision was occasioned by the fault
of the stationary object or was the result of inevitable accident. It has been held that such vessel
must exhaust every reasonable possibility which the circumstances admit and show that in each,
they did all that reasonable care required.[50] In the absence of sufficient proof in rebuttal, the
presumption of fault attaches to a moving vessel which collides with a fixed object and makes
a prima facie case of fault against the vessel.[51] Logic and experience support this presumption:

The common sense behind the rule makes the burden a heavy one. Such accidents simply do not
occur in the ordinary course of things unless the vessel has been mismanaged in some way. It is
not sufficient for the respondent to produce witnesses who testify that as soon as the danger
became apparent everything possible was done to avoid an accident. The question remains, How
then did the collision occur? The answer must be either that, in spite of the testimony of the
witnesses, what was done was too little or too late or, if not, then the vessel was at fault for being
in a position in which an unavoidable collision would occur.[52]

The task, therefore, in these cases is to pinpoint who was negligent - the master of the ship, the
harbor pilot or both.
A pilot, in maritime law, is a person duly qualified, and licensed, to conduct a vessel into or
out of ports, or in certain waters. In a broad sense, the term "pilot" includes both (1) those whose
duty it is to guide vessels into or out of ports, or in particular waters and (2) those entrusted with
the navigation of vessels on the high seas.[53] However, the term "pilot" is more generally
understood as a person taken on board at a particular place for the purpose of conducting a ship
through a river, road or channel, or from a port.[54]
Under English and American authorities, generally speaking, the pilot supersedes the master
for the time being in the command and navigation of the ship, and his orders must be obeyed in all
matters connected with her navigation. He becomes the master pro hac vice and should give all
directions as to speed, course, stopping and reversing, anchoring, towing and the like. And when
a licensed pilot is employed in a place where pilotage is compulsory, it is his duty to insist on
having effective control of the vessel, or to decline to act as pilot. Under certain systems of foreign
law, the pilot does not take entire charge of the vessel, but is deemed merely the adviser of the
master, who retains command and control of the navigation even on localities where pilotage is
compulsory.[55]
It is quite common for states and localities to provide for compulsory pilotage, and safety laws
have been enacted requiring vessels approaching their ports, with certain exceptions, to take on
board pilots duly licensed under local law. The purpose of these laws is to create a body of seamen
thoroughly acquainted with the harbor, to pilot vessels seeking to enter or depart, and thus protect
life and property from the dangers of navigation.[56]
In line with such established doctrines, Chapter II of Customs Administrative Order No. 15-
65 prescribes the rules of compulsory pilotage in the covered pilotage districts, among which is
the Manila Pilotage District, viz. --

PARAGRAPH I. - Pilotage for entering a harbor and anchoring thereat, as well as docking
and undocking in any pier or shifting from one berth to another shall be compulsory, except
Government vessels and vessels of foreign governments entitled to courtesy, and other vessels
engaged solely in river or harbor work, or in a daily ferry service between ports which shall be
exempt from compulsory pilotage provisions of these regulations: provided, however, that
compulsory pilotage shall not apply in pilotage districts whose optional pilotage is allowed under
these regulations.
 Pursuant thereto, Capt. Gavino was assigned to pilot MV Pavlodar into Berth 4 of the Manila
International Port. Upon assuming such office as compulsory pilot, Capt. Gavino is held to the
universally accepted high standards of care and diligence required of a pilot, whereby he assumes
to have skill and knowledge in respect to navigation in the particular waters over which his license
extends superior to and more to be trusted than that of the master.[57] A pilot should have a thorough
knowledge of general and local regulations and physical conditions affecting the vessel in his
charge and the waters for which he is licensed, such as a particular harbor or river. He is not held
to the highest possible degree of skill and care, but must have and exercise the ordinary skill and
care demanded by the circumstances, and usually shown by an expert in his profession. Under
extraordinary circumstances, a pilot must exercise extraordinary care.[58]
In Atlee vs. The Northwestern Union Packet Company,[59] Mr. Justice Miller spelled out in
great detail the duties of a pilot:

x x x (T)he pilot of a river steamer, like the harbor pilot, is selected for his personal
knowledge of the topography through which he steers his vessel. In the long course of a thousand
miles in one of these rivers, he must be familiar with the appearance of the shore on each side of
the river as he goes along. Its banks, towns, its landings, its houses and trees, are all landmarks
by which he steers his vessel. The compass is of little use to him. He must know where the
navigable channel is, in its relation to all these external objects, especially in the night. He must
also be familiar with all dangers that are permanently located in the course of the river, as sand-
bars, snags, sunken rocks or trees or abandoned vessels or barges. All this he must know and
remember and avoid. To do this, he must be constantly informed of the changes in the current of
the river, of the sand-bars newly made, of logs or snags, or other objects newly presented, against
which his vessel might be injured.

xxxxxxxxx

It may be said that this is exacting a very high order of ability in a pilot. But when we
consider the value of the lives and property committed to their control, for in this they are
absolute masters, the high compensation they receive, the care which Congress has taken to
secure by rigid and frequent examinations and renewal of licenses, this very class of skill, we do
not think we fix the standard too high.

Tested thereby, we affirm respondent court's finding that Capt. Gavino failed to measure up
to such strict standard of care and diligence required of pilots in the performance of their
duties. Witness this testimony of Capt. Gavino:
Court:
You have testified before that the reason why the vessel bumped the pier was because the
anchor was not released immediately or as soon as you have given the order. Do you
remember having stated that?
A Yes, your Honor.
Q And you gave this order to the captain of the vessel?
A Yes, your Honor.
 Q By that testimony, you are leading the Court to understand that is that anchor was released
immediately at the time you gave the order, the incident would not have happened. Is that
correct?
A Yes, sir, but actually it was only a presumption on my part because there was a commotion
between the officers who are in charge of the dropping of the anchor and the captain. I
could not understand their language, it was in Russian, so I presumed the anchor was not
dropped on time.
Q So, you are not sure whether it was really dropped on time or not?
A I am not sure, your Honor.
xxxxxxxxx
Q You are not even sure what could have caused the incident. What factor could have caused
the incident?
A Well, in this case now, because either the anchor was not dropped on time or the anchor did
not hold, that was the cause of the incident, your Honor.[60]
It is disconcertingly riddled with too much incertitude and manifests a seeming indifference
for the possibly injurious consequences his commands as pilot may have. Prudence required that
he, as pilot, should have made sure that his directions were promptly and strictly followed. As
correctly noted by the trial court -

Moreover, assuming that he did indeed give the command to drop the anchor on time, as
pilot he should have seen to it that the order was carried out, and he could have done this in a
number of ways, one of which was to inspect the bow of the vessel where the anchor mechanism
was installed. Of course, Captain Gavino makes reference to a commotion among the crew
members which supposedly caused the delay in the execution of the command. This account was
reflected in the pilot's report prepared four hours later, but Capt. Kavankov, while not admitting
whether or not such a commotion occurred, maintained that the command to drop anchor was
followed "immediately and precisely." Hence, the Court cannot give much weight or
consideration to this portion of Gavino's testimony."[61]

An act may be negligent if it is done without the competence that a reasonable person in the
position of the actor would recognize as necessary to prevent it from creating an unreasonable risk
of harm to another.[62] Those who undertake any work calling for special skills are required not
only to exercise reasonable care in what they do but also possess a standard minimum of special
knowledge and ability.[63]
Every man who offers his services to another, and is employed, assumes to exercise in the
employment such skills he possesses, with a reasonable degree of diligence. In all these
employments where peculiar skill is requisite, if one offers his services he is understood as holding
himself out to the public as possessing the degree of skill commonly possessed by others in the
same employment, and if his pretensions are unfounded he commits a species of fraud on every
man who employs him in reliance on his public profession.[64]
Furthermore, there is an obligation on all persons to take the care which, under ordinary
circumstances of the case, a reasonable and prudent man would take, and the omission of that care
constitutes negligence.[65] Generally, the degree of care required is graduated according to the
danger a person or property attendant upon the activity which the actor pursues or the
instrumentality which he uses. The greater the danger the greater the degree of care required. What
is ordinary under extraordinary of conditions is dictated by those conditions; extraordinary risk
demands extraordinary care. Similarly, the more imminent the danger, the higher the degree of
care.[66]
We give our imprimatur to the bases for the conclusion of the Court of Appeals that Capt.
Gavino was indeed negligent in the performance of his duties:
xxxxxxxxx

x x x As can be gleaned from the logbook, Gavino ordered the left anchor and two (2)
shackles dropped at 8:30 o'clock in the morning. He ordered the engines of the vessel stopped at
8:31 o'clock. By then, Gavino must have realized that the anchor did not hit a hard object and
was not clawed so as to reduce the momentum of the vessel. In point of fact, the vessel continued
travelling towards the pier at the same speed. Gavino failed to react. At 8:32 o'clock, the two (2)
tugboats began to push the stern part of the vessel from the port side but the momentum of the
vessel was not contained. Still, Gavino did not react. He did not even order the other anchor and
two (2) more shackles dropped to arrest the momentum of the vessel. Neither did he order full-
astern. It was only at 8:34 o'clock, or four (4) minutes, after the anchor was dropped that Gavino
reacted. But his reaction was even (haphazard) because instead of arresting fully the momentum
of the vessel with the help of the tugboats, Gavino ordered merely "half-astern". It took Gavino
another minute to order a "full-astern". By then, it was too late. The vessel's momentum could no
longer be arrested and, barely a minute thereafter, the bow of the vessel hit the apron of the
pier. Patently, Gavino miscalculated. He failed to react and undertake adequate measures to
arrest fully the momentum of the vessel after the anchor failed to claw to the seabed. When he
reacted, the same was even (haphazard). Gavino failed to reckon the bulk of the vessel, its size
and its cargo. He erroneously believed that only one (1) anchor would suffice and even when the
anchor failed to claw into the seabed or against a hard object in the seabed, Gavino failed to
order the other anchor dropped immediately. His claim that the anchor was dropped when the
vessel was only 1,000 feet from the pier is but a belated attempt to extricate himself from the
quagmire of his own insouciance and negligence. In sum, then, Appellants' claim that the
incident was caused by "force majeure" is barren of factual basis.

xxxxxxxxx

The harbor pilots are especially trained for this job. In the Philippines, one may not be a
harbor pilot unless he passed the required examination and training conducted then by the
Bureau of Custom, under Customs Administrative Order No. 15-65, now under the Philippine
Ports Authority under PPA Administrative Order 63-85. Paragraph XXXIX of the Customs
Administrative Order No. 15-65 provides that "the pilot shall be held responsible for the
direction of the vessel from the time he assumes control thereof, until he leaves it anchored free
from shoal: Provided, that his responsibility shall cease at the moment the master neglects or
refuse(s) to carry out his instructions." The overall direction regarding the procedure for docking
and undocking the vessel emanates from the harbor pilot. In the present recourse, Gavino failed
to live up to his responsibilities and exercise reasonable care or that degree of care required by
the exigencies of the occasion. Failure on his part to exercise the degree of care demanded by the
circumstances is negligence (Reese versus Philadelphia & RR Co. 239 US 463, 60 L ed. 384, 57
Am Jur. 2d 12age 418).[67]

This affirms the findings of the trial court regarding Capt. Gavino's negligence:

This discussion should not however, divert the court from the fact that negligence in
manuevering the vessel must be attributed to Capt. Senen Gavino. He was an experienced pilot
and by this time should have long familiarized himself with the depth of the port and the distance
he could keep between the vessel and port in order to berth safely.[68]

The negligence on the part of Capt. Gavino is evident; but Capt. Kabankov is no less
responsible for the allision. His unconcerned lethargy as master of the ship in the face of troublous
exigence constitutes negligence.
While it is indubitable that in exercising his functions a pilot-is in sole command of the
[69]
ship and supersedes the master for the time being in the command and navigation of a ship and
that he becomes master pro hac vice of a vessel piloted by him,[70] there is overwhelming authority
to the effect that the master does not surrender his vessel to the pilot and the pilot is not the master.
The master is still in command of the vessel notwithstanding the presence of a pilot. There are
occasions when the master may and should interfere and even displace the pilot, as when the pilot
is obviously incompetent or intoxicated and the circumstances may require the master to displace
a compulsory pilot because of incompetency or physical incapacity. If, however, the master does
not observe that a compulsory pilot is incompetent or physically incapacitated, the master is
justified in relying on the pilot, but not blindly.[71]
The master is not wholly absolved from his duties while a pilot is on board his vessel, and
may advise with or offer suggestions to him. He is still in command of the vessel, except so far as
her navigation is concerned, and must cause the ordinary work of the vessel to be properly carried
on and the usual precaution taken. Thus, in particular, he is bound to see that there is sufficient
watch on deck, and that the men are attentive to their duties, also that engines are stopped, towlines
cast off, and the anchors clear and ready to go at the pilot's order.[72]
A perusal of Capt. Kabankov's testimony makes it apparent that he was remiss in the discharge
of his duties as master of the ship, leaving the entire docking procedure up to the pilot, instead of
maintaining watchful vigilance over this risky maneuver:
Q Will you please tell us whether you have the right to intervene in docking of your ship in the
harbor?
A No sir, I have no right to intervene in time of docking, only in case there is imminent danger
to the vessel and to the pier.
Q Did you ever intervene during the time that your ship was being docked by Capt. Gavino?
A No sir, I did not intervene at the time when the pilot was docking my ship.
Q Up to the time it was actually docked at the pier, is that correct'?
A No sir, I did not intervene up to the very moment when the vessel was docked.
 xxxxxxxxx
Atty. Del Rosario (to the witness)
Q Mr. Witness, what happened, if any, or was there anything unusual that happened during the
docking?
A Yes sir, our ship touched the pier and the pier was damaged.
Court (to the witness)
Q When you said touched the pier, are you leading the court to understand that your ship
bumped the pier?
A I believe that my vessel only touched the pier but the impact was very weak.
Q Do you know whether the pier was damaged as a result of that slight or weak impact?
A Yes sir, after the pier was damaged.
xxxxxxxxx
Q Being most concerned with the safety of your vessel, in the maneuvering of your vessel, to
the port, did you observe anything irregular in the maneuvering by Capt. Gavino at the time
he was trying to cause the vessel to be docked at the pier?
A You mean the action of Capt. Gavino or his condition?
Court:
Q Not the actuation that conform to the safety maneuver of the ship to the harbor?
A No sir, it was a usual docking.
Q By that statement of yours, you are leading the court to understand that there was nothing
irregular in the docking of the ship?
A Yes sir, during the initial period, of the docking, there was nothing unusual that happened.
Q What about in the last portion of the docking of the ship, was there anything unusual or
abnormal that happened?
A None Your Honor, I believe that Capt. Gavino thought that the anchor could keep or hold the
vessel.
Q You want us to understand, Mr. Witness, that the dropping of the anchor of the vessel was
not timely?
A I don't know the depth of this port but I think, if the anchor was dropped earlier and with
more shackles, there could not have been an incident.
Q So you could not precisely tell the court that the dropping of the anchor was timely because
you are not well aware of the seabed, is that correct?
A Yes sir, that, is right.
xxxxxxxxx
Q Alright, Capt. Kavankov, did you come to know later whether the anchor held its ground so
much so that the vessel could not travel?
A It is difficult for me to say definitely. I believe that the anchor did not hold the ship.
Q You mean you don't know whether the anchor blades stuck to the ground to stop the ship
from further moving?
A Yes sir, it is possible.
Q What is possible?
A I think, the 2 shackles were not enough to hold the vessel.
Q Did you know that the 2 shackles were dropped?
A Yes sir, I knew that.
Q If you knew that the shackles were not enough to hold the ship, did you not make any protest
to the pilot?
A No sir, after the incident, that was my assumption.
Q Did you come to know later whether that presumption is correct?
A I still don't know the ground in the harbor or the depths.
Q So from the beginning, you were not competent whether the 2 shackles were also dropped to
hold the ship?
A No sir, at the beginning, I did not doubt it because I believe Capt. Gavino to be an experienced
pilot and he should be more aware as to the depths of the harbor and the ground and I was
confident in his actions.
xxxxxxxxx
Solicitor Abad (to the witness)
Q Now, you were standing with the pilot on the bridge of the vessel before the incident
happened, were you not?
A Yes sir, all the time, I was standing with the pilot.
Q And so whatever the pilot saw, you could also see from that point of view?
A That is right.
Q Whatever the pilot can read from the panel of the bridge, you also could read, is that correct?
A What is the meaning of panel'?
Q All indications necessary for men on the bridge to be informed of the movements of the ship?
A That is right.
Q And whatever sound the captain... Capt. Gavino would hear from the bridge, you could also
hear?
A That is right.
Q Now, you said that when the command to lower the anchor was given, it was obeyed, is that
right?
A This command was executed by the third mate and boatswain.
Court (to the witness)
Q Mr. Witness, earlier in today's hearing, you said that you did not intervene with the duties of
the pilot and that, in your opinion, you can only intervene if the ship is placed in imminent
danger, is that correct?
A That is right, I did say that.
Q In your observation before the incident actually happened, did you observe whether or not
the ship, before the actual incident, the ship was placed in imminent danger?.
A No sir, I did not observe.
Q By that answer, are you leading the court to understand that because you did not intervene
and because you believed that it was your duty to intervene when the vessel is placed in
imminent danger to which you did not observe any imminent danger thereof, you have not
intervened in any manner to the command of the pilot?
A That is right, sir.
xxxxxxxxx
Q Assuming that you disagreed with the pilot regarding the step being taken by the pilot in
maneuvering the vessel. whose command will prevail, in case of imminent danger to the
vessel?
A I did not consider the situation as having an imminent danger. I believed that the vessel will
dock alongside the pier.
Q You want us to understand that you did not see an imminent danger to your ship, is that what
you mean?
A Yes sir, up to the very last moment, I believed that there was no imminent danger.
Q Because of that, did you ever intervene in the command of the pilot?
A Yes sir, I did not intervene because I believed that the command of the pilot to be correct.
Solicitor Abad (to the witness)
Q As a captain of M/V Pavlodar, you consider docking maneuvers a serious matter, is it not?
A Yes sir, that is right.
Q Since it affects not only the safety of the port or pier, but also the safety of the vessel and the
cargo, is it not?
A That is right.
Q So that, I assume that you were watching Capt. Gavino very closely at the time he was making
his commands?
A I was close to him, I was hearing his command and being executed.
Q And that you were also alert for any possible mistakes he might commit in the maneuvering
of the vessel?
A Yes sir, that is right.
Q But at no time during the maneuver did you issue order contrary to the orders Capt. Gavino
made?
A No sir.
Q So that you were in full accord with all of Capt. Gavino's orders?
A Yes sir.
Q Because, otherwise, you would have issued order that would supersede his own order?
A In that case, I should take him away from his command or remove the command from him.
Court (to the witness)
Q You were in full accord with the steps being taken by Capt. Gavino because you relied on
his knowledge, on his familiarity of the seabed and shoals and other surroundings or
conditions under the sea, is that correct?
A Yes sir, that is right.
xxxxxxxxx
Solicitor Abad (to the witness)
Q And so after the anchors were ordered dropped and they did not take hold of the seabed, you
were alerted that there was danger already on hand?
A No sir, there was no imminent danger to the vessel.
Q Do you mean to tell us that even if the anchor was supposed to take hold of the bottom and
it did not, there was no danger to the ship?
A Yes sir, because the anchor dragged on the ground later.
Q And after a few moments when the anchor should have taken hold the seabed but not done
(sic), as you expected, you already were alerted that there was danger to the ship, is that
correct?
A Yes sir, I was alerted but there was no danger.
Q And you were alerted that somebody was wrong?
A Yes sir, I was alerted.
Q And this alert you assumed was the ordinary alertness that you have for normal docking?
A Yes sir, I mean that it was usual condition of any man in time of docking to be alert.
 Q And that is the same alertness when the anchor did not hold onto the ground, is that correct?
A Yes sir, me and Capt. Gavino (thought) that the anchor will hold the ground.
Q Since, as you said that you agreed all the while with the orders of Capt. Gavino, you also
therefore agreed with him in his failure to take necessary precaution against the eventuality
that the anchor will not hold as expected?
Atty. Del Rosario:
May I ask that the question ...
Solicitor Abad:
Never mind, I will reform the question.
xxxxxxxxx
Solicitor Abad (to the witness)
Q Is it not a fact that the vessel bumped the pier?
A That is right, it bumped the pier.
Q For the main reason that the anchor of the vessel did not hold the ground as expected?
A Yes sir, that is my opinion.[73]
Further, on redirect examination, Capt. Kabankov fortified his apathetic assessment of the
situation:
Q Now, after the anchor was dropped, was there any point in time that you felt that the vessel
was in imminent danger.
A No, at that time, the vessel was not in imminent danger, sir."[74]
This cavalier appraisal of the event by Capt. Kabankov is disturbingly antipodal to
Capt. Gavino's anxious assessment of the situation:
Q When a pilot is on board a vessel, it is the pilot's command which should be followed-at that
moment until the vessel is, or goes to port or reaches port?
A Yes, your Honor, but it does not take away from the Captain his prerogative to countermand
the pilot.
Q In what way?
A In any case, which he thinks the pilot is not maneuvering correctly, the Captain always has
the prerogative to countermand the pilot's order.
Q But insofar as competence, efficiency and functional knowledge of the seabed which are vital
or decisive in the safety (sic) bringing of a vessel to the port, he is not competent?
A Yes, your Honor. That is why they hire a pilot in an advisory capacity, but still, the safety of
the vessel rest(s) upon the Captain, the Master of the vessel.
 Q In this case, there was not a disagreement between you and the Captain of the vessel in the
bringing of the vessel to port?
A No, your Honor.
Court:
May proceed.
Atty. Catris:
In fact, the Master of the vessel testified here that he was all along in conformity with the
orders you gave to him, and, as matter of fact, as he said, he obeyed all your orders. Can
you tell, if in the course of giving such normal orders for the saf(e) docking of the MV
Pavlodar, do you remember of any instance that the Master of the vessel did not obey your
command for the safety docking of the MV Pavlodar?
Atty. del Rosario:
Already answered, he already said yes sir.
Court:
Yes, he has just answered yes sir to the Court that there was no disagreement insofar as the
bringing of the vessel safely to the port.
Atty. Catris:
But in this instance of docking of the MV Pavlodar, do you remember of a time during the
course of the docking that the MV Pavlodar was in imminent danger of bumping the pier?
A When we were about more than one thousand meters from the pier. I think, the anchor was
not holding, so I immediately ordered to push the bow at a fourth quarter, at the back of
the vessel in order to swing the bow away from the pier and at the same time, I ordered for
a full astern of the engine."[75]
These conflicting reactions can only imply, at the very least, unmindful disregard or, worse,
neglectful relinquishment of duty by the shipmaster, tantamount to negligence.
The findings of the trial court on this aspect is noteworthy:

For, while the pilot Gavino may indeed have been charged with the task of docking the
vessel in the berthing space, it is undisputed that the master of the vessel had the corresponding
duty to countermand any of the orders made by the pilot, aid even maneuver the vessel himself,
in case of imminent danger to the vessel and the port.

In fact, in his testimony, Capt. Kavankov admitted that all throughout the man(eu)vering
procedures he did not notice anything was going wrong, and even observed that the order given
to drop the anchor, was done at the proper time. He even ventured the opinion that the accident
occurred because the anchor failed to take hold but that this did not alarm him because there was
still time to drop a second anchor.
 Under normal circumstances, the above-mentioned facts would have caused the master of a
vessel to take charge of the situation and see to the man(eu)vering of the vessel himself. Instead,
Capt. Kavankov chose to rely blindly upon his pilot, who by this time was proven ill-equipped to
cope with the situation.

xxxxxxxxx

It is apparent that Gavino was negligent but Far Eastern's employee Capt. Kavankov was no
less responsible for as master of the vessel he stood by the pilot during the man(eu)vering
procedures and was privy to every move the latter made, as well as the vessel's response to each
of the commands. His choice to rely blindly upon the pilot's skills, to the point that despite being
appraised of a notice of alert he continued to relinquish control of the vessel to Gavino, shows
indubitably that he was not performing his duties with the diligence required of him and
therefore may be charged with negligence along with defendant Gavino.[76]

As correctly affirmed by the Court of Appeals -

We are in full accord with the findings and disquisitions of the Court a quo.

In the present recourse, Captain Viktor Kavankov had been a mariner for thirty-two years
before the incident. When Gavino was (in) the command of the vessel, Kavankov was beside
Gavino, relaying the commands or orders of Gavino to the crewmembers-officers of the vessel
concerned. He was thus fully aware of the docking maneuvers and procedure Gavino undertook
to dock the vessel. Irrefragably, Kavankov was fully aware of the bulk and size of the vessel and
its cargo as well as the weight of the vessel.Kavankov categorically admitted that, when the
anchor and two (2) shackles were dropped to the sea floor, the claws of the anchor did not hitch
on to any hard object in the seabed. The momentum of the vessel was not arrested. The use of the
two (2) tugboats was insufficient. The momentum of the vessel, although a little bit arrested,
continued (sic) the vessel going straightforward with its bow towards the port (Exhibit "A-
1"). There was thus a need for the vessel to move "full-astern" and to drop the other anchor with
another shackle or two '(2), for the vessel to avoid hitting the pier. Kavankov refused to act even
as Gavino failed to act. Even as Gavino gave mere "half-astern" order, Kavankov supinely stood
by. The vessel was already about twenty (20) meters away from the pier when Gavino gave the
'full-astern" order. Even then, Kavankov did nothing to prevent the vessel from hitting the pier
simply because he relied on the competence and plan of Gavino. While the "full-astern"
maneuver momentarily arrested the momentum of the vessel, it was, by then, too late. All along,
Kavankov stood supinely beside Gavino, doing nothing but relay the commands of
Gavino. Inscrutably, then, Kavankov was negligent.

xxxxxxxxx

The stark incompetence of Kavankov is competent evidence to prove the unseaworthiness of the
vessel. It has been held that the incompetence of the navigator, the master of the vessel or its
crew makes the vessel unseaworthy (Tug Ocean Prince versus United States of America, 584 F.
2nd, page 1151). Hence, the Appellant FESC is likewise liable for the damage sustained by the
Appellee."[77]
 We find strong and well-reasoned support in time-tested American maritime jurisprudence,
on which much of our laws and jurisprudence on the matter are based, for the conclusions of the
Court of Appeals adjudging both Capt. Gavino and Capt. Kabankov negligent.
As early as 1869, the U.S. Supreme Court declared, through Mr. Justice Swayne, in The
Steamship China vs. Walsh,[78] that it is the duty of the master to interfere in cases of the pilot's
intoxication or manifest incapacity, in cases of danger which he does not foresee, and in all cases
of great necessity. The master has the same power to displace the pilot that he has to remove any
subordinate officer of the vessel, at his discretion.
In 1895, the U.S. Supreme Court, this time through Mr. Justice Brown, emphatically ruled
that:

Nor are we satisfied with the conduct of the master in leaving the pilot in sole charge of the
vessel. While the pilot doubtless supersedes the master for the time being in the command and
navigation of the ship, and his orders must be obeyed in all matters connected with her
navigation, the master is not wholly absolved from his duties while the pilot is on board, and
may advise with him, and even displace him in case he is intoxicated or manifestly
incompetent. He is still in command of the vessel, except so far as her navigation is concerned,
and bound to see that there is a sufficient watch on deck, and that the men are attentive to their
duties.

xxx (N)otwithstanding the pilot has charge, it is the duty of the master to prevent accident,
and not to abandon the vessel entirely to the pilot; but that there are certain duties he has to
discharge (notwithstanding there is a pilot on board) for the benefit of the owners. x x x that in
well conducted ships the master does not regard the presence of a duly licensed pilot in
compulsory pilot waters as freeing him from every obligation to attend to the safety of the vessel;
but that, while the master sees that his officers and crew duly attend to the pilot's orders, he
himself is bound to keep a vigilant eye on the navigation of the vessel, and, when exceptional
circumstances exist, not only to urge upon the pilot to use every precaution, but to insist upon,
such being taken."[79] (Italics for emphasis.)

In Jure vs. United Fruit Co.,[80] which, like the present petitions, involved compulsory
pilotage, with a similar scenario where at and prior to the time of injury, the vessel was in the
charge of a pilot with the master on the bridge of the vessel beside said pilot, the court therein
ruled:

The authority of the master of a vessel is not in complete abeyance while a pilot, who is
required by law to be accepted, is in discharge of his functions. x x x It is the duty of the master
to interfere in cases of the pilot's intoxication or manifest incapacity, in cases of danger which he
does not foresee, and in all cases of great necessity . The master has the same power to displace
the pilot that he has to remove any subordinate officer of the vessel. He may exercise it, or not,
according to his discretion. There was evidence to support findings that plaintiff's injury was due
to the negligent operation of the Atenas, and that the master of that vessel was negligent in
failing to take action to avoid endangering a vessel situated as the City of Canton was and
persons or property thereon.
 A phase of the evidence furnished support for the inferences x x x that he negligently failed
to suggest to the pilot the danger which was disclosed, and means of avoiding such danger; and
that the master's negligence in failing to give timely admonition to the pilot proximately
contributed to the injury complained of. We are of opinion that the evidence mentioned tended to
prove conduct of the pilot, known to the master, giving rise to a case of danger or great necessity,
calling for the intervention of the master. A master of a vessel is not Without fault in acquiescing
in conduct of a pilot which involves apparent and avoidable danger, whether such danger is to
the vessel upon which the pilot is, or to another vessel, or persons or property thereon or on
shore. (Italics ours.)

Still in another case involving a nearly identical setting, the captain of a vessel alongside the
compulsory pilot was deemed to be negligent, since, in the words of the court, "he was in a position
to exercise his superior authority if he had deemed the speed excessive on the occasion in
question. I think it was clearly negligent of him not to have recognized the danger to any craft
moored at Gravell Dock and that he should have directed the pilot to reduce his speed as required
by the local governmental regulations. His failure amounted to negligence and renders the
respondent liable."[81] (Italics supplied.) Though a compulsory pilot might be regarded as an
independent contractor, he is at all times subject to the ultimate control of the ship's master.[82]
In sum, where a compulsory pilot is in charge of a ship, the master being required to permit
him to navigate it, if the master observes that the pilot is incompetent or physically incapable, then
it is the duty of the master to refuse to permit the pilot to act. But if no such reasons are present,
then the master is justified in relying upon the pilot, but not blindly. Under the circumstances of
this case, if a situation arose where the master, exercising that reasonable vigilance which the
master of a ship should exercise, observed, or should have observed, that the pilot was so
navigating the vessel that she was going, or was likely to go, into danger, and there was in the
exercise of reasonable care and vigilance an opportunity for the master to intervene so as to save
the ship from danger, the master should have acted accordingly.[83] The master of a vessel must
exercise a degree of vigilance commensurate with the circumstances.[84]
Inasmuch as the matter of negligence is a question of fact,[85] we defer to the findings of the
trial court, especially as this is affirmed by the Court of Appeals.[86] But even beyond that, our own
evaluation is that Capt. Kabankov's shared liability is due mainly to the fact that he failed to act
when the perilous situation should have spurred him into quick and decisive action as master of
the ship. In the face of imminent or actual danger, he did not have to wait for the happenstance to
occur before countermanding or overruling the pilot. By his own admission, Capt. Kabankov
concurred with Capt. Gavino's decisions, and this is precisely the reason why he decided not to
countermand any of the latter's orders. Inasmuch as both lower courts found Capt. Gavino
negligent, by expressing full agreement therewith Capt. Kabankov was just as negligent as
Capt. Gavino.
In general, a pilot is personally liable for damages caused by his own negligence or default to
the owners of the vessel, and to third parties for damages sustained in a collision. Such negligence
of the pilot in the performance of duty constitutes a maritime tort.[87]At common law, a shipowner
is not liable for injuries inflicted exclusively by the negligence of a pilot accepted by a vessel
compulsorily.[88] The exemption from liability for such negligence shall apply if the pilot is
actually in charge and solely in fault. Since, a pilot is responsible only for his own personal
negligence, he cannot be held accountable for damages proximately caused by the default of
others,[89] or, if there be anything which concurred with the fault of the pilot in producing the
accident, the vessel master and owners are liable.
Since the colliding vessel is prima facie responsible, the burden of proof is upon the party
claiming benefit of the exemption from liability. It must be shown affirmatively that the pilot was
at fault, and that there was no fault on the part of the officers or crew, which might have been
conducive to the damage. The fact that the law compelled the master to take the pilot does not
exonerate the vessel from liability. The parties who suffer are entitled to have their remedy against
the vessel that occasioned the damage, and are not under necessity to look to the pilot from whom
redress is not always had for compensation. The owners of the vessel are responsible to the injured
party for the acts of the pilot, and they must be left to recover the amount as well as they can
against him. It cannot be maintained that the circumstance of having a pilot on board, and acting
in conformity to his directions operate as a discharge of responsibility of the owners.[90] Except
insofar as their liability is limited or exempted by statute, the vessel or her owner are liable for all
damages caused by the negligence or other wrongs of the owners or those in charge of the
vessel. Where the pilot of a vessel is not a compulsory one in the sense that the owner or master
of the vessel are bound to accept him, but is employed voluntarily, the owners of the vessel are,
all the more, liable for his negligent act.[91]
In the United States, the owners of a vessel are not personally liable for the negligent acts of
a compulsory pilot, but by admiralty law, the fault or negligence of a compulsory pilot is imputable
to the vessel and it may be held liable therefor in rem. Where, however, by the provisions of the
statute the pilot is compulsory only in the sense that his fee must be paid, and is not in compulsory
charge of the vessel, there is no exemption from liability. Even though the pilot is compulsory, if
his negligence was not the sole cause of the injury, but the negligence of the master or crew
contributed thereto, the owners are liable.[92] But the liability of the ship in rem does not release
the pilot from the consequences of his own negligence.[93] The rationale for this rule is that the
master is not entirely absolved of responsibility with respect to navigation when a compulsory
pilot is in charge.[94]
By way of validation and in light of the aforecited guidepost rulings in American maritime
cases, we declare that our rulings during the early years of this century in City of Manila
vs. Gambe, [95] China Navigation Co., Ltd. vs. Vidal,[96] and Yap Tico & Co. vs. Anderson, et
al.[97] have withstood the proverbial test of time and remain good and relevant case law to this day.
City of Manila stands for the doctrine that the pilot who was in command and complete control
of a vessel, and not the owners, must be held responsible for an accident which was solely the
result of the mistake of the pilot in not giving proper orders, and which did not result from the
failure of the owners to equip the vessel with the most modern and improved machinery. In China
Navigation Co., the pilot deviated from the ordinary and safe course, without heeding the warnings
of the ship captain. It was this careless deviation that caused the vessel to collide with a pinnacle
rock which, though uncharted, was known to pilots and local navigators. Obviously, the captain
was blameless. It was the negligence of the pilot alone which was the proximate cause of the
collision. The Court could not but then rule that -

The pilot in the case at bar having deviated from the usual and ordinary course followed by
navigators in passing through the strait in question, without a substantial reason, was guilty of
negligence, and that negligence having been the proximate cause of the damages, he is liable for
such damages as usually and naturally flow therefrom. x x x.

x x x (T)he defendant should have known of the existence and location of the rock upon
which the vessel struck while under his control and management. x x x.

Consistent with the pronouncements in these two earlier cases, but on a slightly different tack,
the Court in Yap Tico & Co. exonerated the pilot from liability for the accident where the order's
of the pilot in the handling of the ship were disregarded by the officers and crew of the
ship. According to the Court, a pilot is "x x x responsible for a full knowledge of the channel and
the navigation only so far as he can accomplish it through the officers and crew of the ship, and I
don't see that he can be held responsible for damage when the evidence shows, as it does in this
case, that the officers and crew of the ship failed to obey his orders." Nonetheless, it is possible for
a compulsory pilot and the master of the vessel to be concurrently negligent and thus share the
blame for the resulting damage as Joint tortfeasors,[98] but only under the circumstances obtaining
in and demonstrated by the instant petitions.
It may be said, as a general rule, that negligence in order to render a person liable need not be
the sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient
causes other than plaintiff's, is the proximate cause of the injury.Accordingly, where several causes
combine to produce injuries, a person is not relieved from liability because he is responsible for
only one of them, it being sufficient that the negligence of the person charged with injury is an
efficient cause without which the injury would not have resulted to as great an extent, and that
such cause is not attributable to the person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from his negligence alone, without the
negligence or wrongful acts of the other concurrent tortfeasor.[99] Where several causes producing
an injury are concurrent and each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and recovery may be had against
any or all of the responsible persons although under the circumstances of the case, it may appear
that one of them was more culpable, and that the duty owed by them to the injured person was not
the same. No actor's negligence ceases to be a proximate cause merely because it does not exceed
the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as
though his acts were the sole cause of the injury.[100]
There is no contribution between joint tortfeasors whose liability is solidary since both of
them are liable for the total damage. 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. Where their concurring negligence resulted in injury or damage to a third party, they
become joint tortfeasors and are solidarity liable for the resulting damage under Article 2194[101] of
the Civil Code.[102]
As for the amount of damages awarded by the trial court, we find the same to be
reasonable. The testimony of Mr. Pascual Barral, witness for PPA, on cross and redirect
examination, appears to be grounded on practical considerations:
Q So that the cost of the two additional piles as well as the (two) square meters is already
included in this -P1,300,999.77.
A Yes sir, everything. It is (the) final cost already.
Q For the eight piles.
A Including the reduced areas and other reductions.
Q (A)nd the two square meters.
A Yes sir.
Q In other words, this P1,300,999.77 does not represent only for the six piles that was damaged
as well as the corresponding two piles.
A The area was corresponding, was increased by almost two in the actual payment. That was
why the contract was decreased, the real amount was P1,124,627.40 and the final one
is P1300,999.77.
Q Yes, but that P1,300,999.77 included the additional two new posts.
A It was increased.
Q Why was it increased?
A The original was 48 and the actual was 46.
Q Now, the damage was somewhere in 1980. It took place in 1980 and you started the repair
and reconstruction in 1982, that took almost two years?
A Yes sir.
Q May it not happen that by natural factors, the existing damage in 1980 was aggravated for
the 2 year period that the damage portion was not repaired?
A I don't think so because that area was at once marked and no vehicles can park, it was closed.
Q Even if or even natural elements cannot affect the damage?
A Cannot, sir.
xxxxxxxxx
Q You said in the cross-examination that there were six piles damaged by the accident, but that
in the reconstruction of the pier, PPA drove and constructed 8 piles. Will you explain to us
why there was change in the number of piles from the original number?
A In piers where the piles are withdrawn or pulled out, you cannot re-drive or drive piles at the
same point. You have to redesign the driving of the piles. We cannot drive the piles at the
same point where the piles are broken or damaged or pulled out. We have to redesign, and
you will note that in the reconstruction, we redesigned such that it necessitated 8 piles.
Q Why not, why could you not drive the same number of piles and on the same spot?
A The original location was already disturbed. We cannot get required bearing capacity. The
area is already disturbed.
 Q Nonetheless, if you drove the original number of piles, six, on different places, would not
that have sustained the same load?
A It will not suffice, sir."[103]
We quote the findings of the lower court with approval:

With regards to the amount of damages that is to be awarded to plaintiff, the Court finds that the
amount of P1,053,300.00 is justified. Firstly, the doctrine of res ipsa loquitur best expounded
upon in the landmark case of Republic vs. Luzon Stevedoring Corp. (21 SCRA 279) establishes
the presumption that in the ordinary course of events the ramming of the dock would not have
occurred if proper care was used.

Secondly, the various estimates and plans justify the cost of the port construction price. The new
structure constructed not only replaced the damaged one but was built of stronger materials to
forestall the possibility of any similar accidents in the future.

The Court inevitably finds that the plaintiff is entitled to an award of P1,053,300.00 which
represents actual damages caused by the damage to Berth 4 of the Manila International Port. Co-
defendants Far Eastern Shipping, Capt. Senen Gavino and Manila Pilots Association are
solidarity liable to pay this amount to plaintiff.[104]

The Solicitor General rightly commented that the adjudicated amount of damages represents the
proportional cost of repair and rehabilitation of the damaged section of the pier.[105]
Except insofar as their liability is limited or exempted by statute, the vessel or her owners are
liable for all damages caused by the negligence or other wrongs of the owners or those in charge
of the vessel. As a general rule, the owners or those in possession and control of a vessel and the
vessel are liable for all natural and proximate damages caused to persons or property by reason of
her negligent management or navigation.[106]
FESC's imputation of PPA's failure to provide a safe and reliable berthing place is obtuse, not
only because it appears to be a mere afterthought, being tardily raised only in this petition, but also
because there is no allegation or evidence on record about Berth No. 4 being unsafe and unreliable,
although perhaps it is a modest pier by international standards. There was, therefore, no error on
the part of the Court of Appeals in dismissing FESC's counterclaim.

II. G.R. No. 130150

This consolidated case treats on whether the Court of Appeals erred in holding MPA jointly
and solidarity liable with its member pilot, Capt. Gavino, in the absence of employer-employee
relationship and in applying Customs Administrative Order No. 15-65, as basis for the adjudged
solidary liability of MPA and Capt. Gavino.
The pertinent provisions in Chapter I of Customs Administrative Order No. 15-65 are:
"PAR. XXVII.-- In all pilotage districts where pilotage is compulsory, there shall be created and
maintained by the pilots or pilots' association, in the manner hereinafter prescribed, a reserve
fund equal to P1,000.00 for each pilot thereof for the purpose of paying claims for damages to
vessels or property caused through acts or omissions of its members while rendered in
compulsory pilotage service. In Manila, the reserve fund shall be P2,000.00 for each pilot.

PAR. XXVIII.-- A pilots' association shall not be liable under these regulations for damage to
any vessel, or other property, resulting from acts of a member of an association in the actual
performance of his duty for a greater amount than seventy-five per centum (75%) of its
prescribed reserve fund; it being understood that if the association is held liable for an amount
greater than the amount above-stated, the excess shall be paid by the personal funds of the
member concerned.

PAR. XXXI.-- If a payment is made from the reserve fund of an association on account of
damages caused by a member thereof, and he shall have been found at fault, such member shall
reimburse the association in the amount so paid as soon as practicable; and for this purpose, not
less than twenty-five per centum of his dividends shall be retained each month until the full
amount has been returned to the reserve fund.

PAR. XXXIV. - Nothing in these regulations shall relieve any pilots' association or members
thereof, individually or collectively, from civil responsibility for damages to life or property
resulting from the acts of members in the performance of their duties.

Correlatively, the relevant provisions of PPA Administrative Order No. 03-85, which timely
amended this applicable maritime regulation, state:

Article IV

SEC. 17. Pilots' Association -- The Pilots in a Pilotage District shall organize themselves into a
Pilots' Association or firm, the members of which shall promulgate their own By-Laws not in
conflict with the rules and regulations promulgated by the Authority. These By-Laws shall be
submitted not later than one (1) month after the organization of the Pilots' Association for
approval by the General Manager of the Authority. Subsequent amendments thereto shall
likewise be submitted for approval.

SEC. 25. Indemnity Insurance and Reserve Fund--

a) Each Pilots' Association shall collectively insure its membership at the rate
of P50,000.00 each member to cover in whole or in part any liability
arising from any accident resulting in damage to vessel(s), port facilities
and other properties and/or injury to persons or death which any member
may have caused in the course of his performance of pilotage duties. x x x.

b) The Pilotage Association shall likewise set up and maintain a reserve fund which
shall answer for any part of the liability referred to in the immediately
 preceding paragraph which is left unsatisfied by the insurance proceeds, in
the following manner:

1) Each pilot in the Association shall contribute from his own account an
amount of P4,000.00 (P6,000.00 in the Manila Pilotage District) to the
reserve fund. This fund shall not be considered part of the capital of the
Association nor charged as an expense thereof.

2) Seventy-five percent (75%) of the reserve fund shall be set aside for use, in
the payment of damages referred to above incurred in the actual
performance of pilots' duties and the excess shall be paid from the
personal funds of the member concerned.

xxxxxxxxx

5) If payment is made from the reserve fund of an Association on account of

damage caused by a member thereof who is found at fault, he shall
reimburse the Association in the amount so paid as soon as practicable;
and for this purpose, not less than twenty-five percentum (25%) of his
dividend shall be retained each month until the full amount has been
returned to the reserve fund. Thereafter, the pilot involved shall be
entitled to his full dividend.

6) When the reimbursement has been completed as prescribed in the preceding

paragraph, the ten percentum (10%) and the interest withheld from the
shares of the other pilots in accordance with paragraph (4) hereof shall be
returned to them.

c) Liability of Pilots' Association -- Nothing in these regulations shall relieve

any Pilots' Association or members thereof, individually or collectively,
from any civil, administrative and/or criminal responsibility for damages
to life or property resulting from the individual acts of its members as
well as those of the Association's employees and crew in the performance
of their duties.

The Court of Appeals, while affirming the trial court's finding of solidary liability on the part
of FESC, MPA and Capt. Gavino, correctly based MPA's liability not on the concept of employer-
employee relationship between Capt. Gavino and itself, but on the provisions of Customs
Administrative Order No. 15-65:

The Appellant MPA avers that, contrary to the findings and disquisitions of the Court a quo, the
Appellant Gavino was not and has never been an employee of the MPA but was only a member
thereof. The Court a quo, it is noteworthy,, did not state the factual basis on which it anchored its
finding that Gavino was the employee of MPA. We are in accord with MPA's pose. Case law
teaches Us that, for an employer-employee relationship to exist the confluence of the following
elements must be established: (1) selection and engagement of employees; (2) the payment of
wages; (3) the power of dismissal; (4) the employer's power to control the employees with
respect to the means and method by which the work is to be performed (Ruga versus NLRC,
181SCRA 266).

xxxxxxxxx

The liability of MPA for damages is not anchored on Article 2180 of the New Civil Code as
erroneously found and declared by the Court a quo but under the provisions of Customs
Administrative Order No. 15-65, supra, in tandem with the by-laws of the MPA."[107]

There being no employer-employee relationship, clearly Article 2180[108] of the Civil Code is
inapplicable since there is no vicarious liability of an employer to speak of. It is so stated in
American law, as follows:

The well-established rule is that pilot associations are immune to vicarious liability for the tort of
their members. They are not the employer of their members and exercise no control over them
once they take the helm of the vessel. They are also not partnerships because the members do not
function as agents for the association or for each other. Pilots' associations are also not liable for
negligently assuring, the competence of their members because as professional associations they
made no guarantee of the professional conduct of their members to the general public.[109]

Where under local statutes and regulations, pilot associations lack the necessary legal
incidents of responsibility, they have been held not liable for damages caused by the default of a
member pilot.[110] Whether or not the members of a pilots' association are in legal effect a
copartnership depends wholly on the powers and duties of the members in relation to one another
under the provisions of the governing statutes and regulations. The relation of a pilot to his
association is not that of a servant to the master, but of an associate assisting and participating in
a common purpose. Ultimately, the rights and liabilities between a pilots' association and an
individual member depend largely upon the constitution, articles or by-laws of the association,
subject to appropriate government regulations.[111]
No reliance can be placed by MPA on the cited American rulings as to immunity from liability
of a pilots' association in light of existing positive regulation under Philippine law. The Court of
Appeals properly applied the clear and unequivocal provisions of Customs Administrative Order
No. 15-65. In doing so, it was just being consistent with its finding of the non-existence of
employer-employee relationship between MPA and Capt. Gavino precludes the application of
Article 2180 of the Civil Code.
True, Customs Administrative Order No. 15-65 does not categorically characterize or label
MPA's liability as solidary in nature. Nevertheless, a careful reading and proper analysis of the
correlated provisions lead to the conclusion that MPA is solidarity liable for the negligence of its
member pilots, without prejudice to subsequent reimbursement from the pilot at fault.
Article 1207 of the Civil Code provides that there is solidary liability only when the obligation
expressly so states, or when the law or the nature of the obligation requires solidarity. Plainly,
Customs Administrative Order No. 15-65, which as an implementing rule has the force and effect
of law, can validly provide for solidary liability. We note the Solicitor General's comment hereon,
to wit:
x x x Customs Administrative Order No. 15-65 may be a mere rule and regulation issued by an
administrative agency pursuant to a delegated authority to fix "the details" in the execution or
enforcement of a policy set out in the law itself. Nonetheless, said administrative order, which
adds to the procedural or enforcing provisions of substantive law, is legally binding and receives
the same statutory force upon going into effect. In that sense, it has equal, not lower, statutory
force and effect as a regular statute passed by the legislature."[112]

MPA's prayer for modification of the appellate court's decision under review by exculpating
petitioner MPA "from liability beyond seventy-five percent (75%) of Reserve Fund" is
unnecessary because the liability of MPA under Par. XXVIII of Customs Administrative Order
No. 15-65 is in fact limited to seventy-five percent (75%) of its prescribed reserve fund, any
amount of liability beyond that being for the personal account of the erring pilot and subject to
reimbursement in case of a finding of fault by the member concerned. This is clarified by the
Solicitor General:

Moreover, contrary to petitioners pretensions, the provisions of Customs Administrative Order

No. 15-65 do not limit the liability of petitioner as a pilots' association to an absurdly small
amount of seventy-five per centum (75%) of the member pilots' contribution of P2,000.00 to the
reserve fund. The law speaks of the entire reserve fund required to be maintained by the pilots'
association to answer (for) whatever liability arising from the tortious act of its members. And
even if the association is held liable for an amount greater than the reserve fund, the association
may not resist the liability by claiming to be liable only up to seventy-five per centum (75%) of
the reserve fund because in such instance it has the right to be reimbursed by the offending
member pilot for the excess."[113]

WHEREFORE, in view of all of the foregoing, the consolidated petitions for review are
DENIED and the assailed decision of the Court of Appeals is AFFIRMED in toto.
Counsel for FESC, the law firm of Del Rosario and Del Rosario, specifically its associate,
Atty. Herbert A. Tria, is REPRIMANDED and WARNED that a repetition of the same or similar
acts of heedless disregard of its undertakings under the Rules shall be dealt with more severely.
The original members of the legal team of the Office of the Solicitor General assigned to this
case, namely, Assistant Solicitor General Roman G. Del Rosario and Solicitor Luis F. Simon, are
ADMONISHED and WARNED that a repetition of the same or similar acts of unduly delaying
proceedings due to delayed filing of required pleadings shall also be dealt with more stringently.
The Solicitor General is DIRECTED to look into the circumstances of this case and to adopt
provident measures to avoid a repetition of this incident and which would ensure prompt
compliance with orders of this Court regarding the timely filing of requisite pleadings, in the
interest of just, speedy and orderly administration of justice.
Let copies of this decision be spread upon the personal records of the lawyers named herein
in the Office of the Bar Confidant.
SO ORDERED.
 [G.R. No. 141538. March 23, 2004]

Hermana R. Cerezo, petitioner, vs. David Tuazon, respondent.

 DECISION
CARPIO, J.:

The Case

This is a petition for review on certiorari[1] to annul the Resolution[2] dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January
2000 denying the motion for reconsideration. The Court of Appeals denied the petition for
annulment of the Decision[3] dated 30 May 1995 rendered by
the Regional Trial Court of Angeles City, Branch 56 (trial court), in Civil Case No. 7415. The trial
court ordered petitioner Hermana R. Cerezo (Mrs. Cerezo) to pay respondent David Tuazon
(Tuazon) actual damages, loss of earnings, moral damages, and costs of suit.

Antecedent Facts

Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number
NYA 241 collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo Street,
Sta. Ines, Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a complaint for
damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo (Atty.
Cerezo), and bus driver Danilo A. Foronda (Foronda). The complaint alleged that:

7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named
defendant [Foronda], being then the driver and person in charge of the Country Bus with plate
number NYA 241, did then and there willfully, unlawfully, and feloniously operate the said
motor vehicle in a negligent, careless, and imprudent manner without due regard to traffic rules
and regulations, there being a Slow Down sign near the scene of the incident, and without taking
the necessary precaution to prevent loss of lives or injuries, his negligence, carelessness and
imprudence resulted to severe damage to the tricycle and serious physical injuries to plaintiff
thus making him unable to walk and becoming disabled, with his thumb and middle finger on the
left hand being cut[.][4]

On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial court
issued summons against Atty. Cerezo and Mrs. Cerezo (the Cerezo spouses) at the Makati address
stated in the complaint. However, the summons was returned unserved on 10 November 1993 as
the Cerezo spouses no longer held office nor resided in Makati. On 18 April 1994, the trial court
issued alias summons against the Cerezo spouses at their address in Barangay Sta. Maria,
Camiling, Tarlac. The alias summons and a copy of the complaint were finally served on 20 April
1994 at the office of Atty. Cerezo, who was then working as Tarlac Provincial Prosecutor. Atty.
Cerezo reacted angrily on learning of the service of summons upon his person. Atty. Cerezo
allegedly told Sheriff William Canlas: Punyeta, ano ang gusto mong mangyari? Gusto mong hindi
ka makalabas ng buhay dito? Teritoryo ko ito. Wala ka sa teritoryo mo.[5]
 The records show that the Cerezo spouses participated in the proceedings before the trial
court. The Cerezo spouses filed a comment with motion for bill of particulars dated 29 April
1994 and a reply to opposition to comment with motion dated 13 June 1994.[6]On 1 August 1994,
the trial court issued an order directing the Cerezo spouses to file a comment to the opposition to
the bill of particulars. Atty. Elpidio B. Valera (Atty. Valera) of Valera and Valera Law Offices
appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty. Valera filed an urgent ex-
parte motion praying for the resolution of Tuazons motion to litigate as a pauper and for the
issuance of new summons on the Cerezo spouses to satisfy proper service in accordance with the
Rules of Court.[7]
On 30 August 1994, the trial court issued an order resolving Tuazons motion to litigate as a
pauper and the Cerezo spouses urgent ex-parte motion. The order reads:

At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless;
that at the time of the filing of this case, his son who is working in Malaysia helps him and sends
him once in a while P300.00 a month, and that he does not have any real property. Attached to
the Motion to Litigate as Pauper are his Affidavit that he is unemployed; a Certification by the
Barangay Captain of his poblacion that his income is not enough for his familys subsistence; and
a Certification by the Office of the Municipal Assessor that he has no landholding in
the Municipality of Mabalacat, Province of Pampanga.

The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to
prosecute his complaint in this case as a pauper under existing rules.

On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion
requiring new summons to be served to the defendants. The Court is of the opinion that any
infirmity in the service of the summons to the defendant before plaintiff was allowed to
prosecute his complaint in this case as a pauper has been cured by this Order.

If within 15 days from receipt of this Order, the defendants do not question on appeal this Order
of this Court, the Court shall proceed to resolve the Motion for Bill of Particulars.[8]

On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for
reconsideration. The trial court denied the motion for reconsideration.
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file their
answer within fifteen days from receipt of the order. The Cerezo spouses did not file an
answer. On 27 January 1995, Tuazon filed a motion to declare the Cerezo spouses in default. On 6
February 1995, the trial court issued an order declaring the Cerezo spouses in default and
authorizing Tuazon to present his evidence. [9]
On 30 May 1995, after considering Tuazons testimonial and documentary evidence, the trial
court ruled in Tuazons favor. The trial court made no pronouncement on Forondas liability because
there was no service of summons on him. The trial court did not hold Atty. Cerezo liable as Tuazon
failed to show that Mrs. Cerezos business benefited the family, pursuant to Article 121(3) of the
Family Code. The trial court held Mrs. Cerezo solely liable for the damages sustained by Tuazon
arising from the negligence of Mrs. Cerezos employee, pursuant to Article 2180 of the Civil
Code. The dispositive portion of the trial courts decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay the
plaintiff:

a) For Actual Damages

1) Expenses for operation and medical
Treatment - P69,485.35
2) Cost of repair of the tricycle - 39,921.00
b) For loss of earnings - 43,300.00
c) For moral damages - 20,000.00
d) And to pay the cost of the suit.

The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment
may be rendered in favor of the plaintiff.

SO ORDERED.[10]

Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo
filed before the trial court a petition for relief from judgment on the grounds of fraud, mistake or
excusable negligence. Testifying before the trial court, both Mrs. Cerezo and Atty. Valera denied
receipt of notices of hearings and of orders of the court. Atty. Valera added that he received no
notice before or during the 8 May 1995 elections, when he was a senatorial candidate for the KBL
Party, and very busy, using his office and residence as Party National Headquarters. Atty. Valera
claimed that he was able to read the decision of the trial court only after Mrs. Cerezo sent him a
copy.[11]
Tuazon did not testify but presented documentary evidence to prove the participation of the
Cerezo spouses in the case. Tuazon presented the following exhibits:
Exhibit 1 - Sheriffs return and summons;
Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendants counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendants counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Courts return slip addressed to Atty. Elpidio
Valera;
Exhibit 7-B - Courts return slip addressed to Spouses Juan
and Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Courts return slip addressed to defendant Hermana
Cerezo;
Exhibit 8-B - Courts return slip addressed to defendants counsel,
 Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Courts return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Courts return slip addressed to plaintiffs counsel,
Atty. Norman Dick de Guzman.[12]

On 4 March 1998, the trial court issued an order[13] denying the petition for relief from
judgment. The trial court stated that having received the decision on 25 June 1995, the Cerezo
spouses should have filed a notice of appeal instead of resorting to a petition for relief from
judgment. The trial court refused to grant relief from judgment because the Cerezo spouses could
have availed of the remedy of appeal. Moreover, the Cerezo spouses not only failed to prove fraud,
accident, mistake or excusable negligence by conclusive evidence, they also failed to prove that
they had a good and substantial defense. The trial court noted that the Cerezo spouses failed to
appeal because they relied on an expected settlement of the case.
The Cerezo spouses subsequently filed before the Court of Appeals a petition
for certiorari under Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No.
48132.[14] The petition questioned whether the trial court acquired jurisdiction over the case
considering there was no service of summons on Foronda, whom the Cerezo spouses claimed was
an indispensable party. In a resolution[15] dated 21 January 1999, the Court of Appeals denied the
petition for certiorari and affirmed the trial courts order denying the petition for relief from
judgment. The Court of Appeals declared that the Cerezo spouses failure to file an answer was due
to their own negligence, considering that they continued to participate in the proceedings without
filing an answer. There was also nothing in the records to show that the Cerezo spouses actually
offered a reasonable settlement to Tuazon. The Court of Appeals also denied Cerezo spouses
motion for reconsideration for lack of merit.
The Cerezo spouses filed before this Court a petition for review on certiorari under Rule
45. Atty. Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999, this
Court rendered a resolution denying the petition for review on certiorari for failure to attach an
affidavit of service of copies of the petition to the Court of Appeals and to the adverse parties. Even
if the petition complied with this requirement, the Court would still have denied the petition as the
Cerezo spouses failed to show that the Court of Appeals committed a reversible error. The Courts
resolution was entered in the Book of Entries and Judgments when it became final and executory
on 28 June 1999.[16]
Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition for
annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera and Atty.
Dionisio S. Daga (Atty. Daga) represented Mrs. Cerezo in the petition, docketed as CA-G.R. SP
No. 53572.[17] The petition prayed for the annulment of the 30 May 1995 decision of the trial court
and for the issuance of a writ of preliminary injunction enjoining execution of the trial courts
decision pending resolution of the petition.
The Court of Appeals denied the petition for annulment of judgment in a resolution dated 21
October 1999. The resolution reads in part:
In this case, records show that the petitioner previously filed with the lower court a Petition for
Relief from Judgment on the ground that they were wrongfully declared in default while waiting
for an amicable settlement of the complaint for damages. The court a quo correctly ruled that
such petition is without merit. The defendant spouses admit that during the initial hearing they
appeared before the court and even mentioned the need for an amicable settlement. Thus, the
lower court acquired jurisdiction over the defendant spouses.

Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of
judgment is no longer available. The proper action for the petitioner is to appeal the order of the
lower court denying the petition for relief.

Wherefore, the instant petition could not be given due course and should accordingly be
dismissed.

SO ORDERED.[18]

On 20 January 2000, the Court of Appeals denied the Cerezo spouses motion for
reconsideration.[19] The Court of Appeals stated:

A distinction should be made between a courts jurisdiction over a person and its jurisdiction over
the subject matter of a case. The former is acquired by the proper service of summons or by the
parties voluntary appearance; while the latter is conferred by law.

Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas] P[ambansa]
129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction in all civil
actions in which the subject of the litigation is incapable of pecuniary estimation. Thus it was
proper for the lower court to decide the instant case for damages.

Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law; any
defects [sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil
complaint or improper service of summons) may be waived by the voluntary appearance of
parties.

The lower court admits the fact that no summons was served on defendant Foronda. Thus,
jurisdiction over the person of defendant Foronda was not acquired, for which reason he was not
held liable in this case. However, it has been proven that jurisdiction over the other defendants
was validly acquired by the court a quo.

The defendant spouses admit to having appeared in the initial hearings and in the hearing for
plaintiffs motion to litigate as a pauper. They even mentioned conferences where attempts were
made to reach an amicable settlement with plaintiff. However, the possibility of amicable
settlement is not a good and substantial defense which will warrant the granting of said petition.

xxx
Assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and question
the lower courts jurisdiction because petitioner and her husband have waived such right by
voluntarily appearing in the civil case for damages. Therefore, the findings and the decision of
the lower court may bind them.

Records show that the petitioner previously filed with the lower court a Petition for Relief from
Judgment on the ground that they were wrongfully declared in default while waiting for an
amicable settlement of the complaint for damages. The court a quo correctly ruled that such
petition is without merit, jurisdiction having been acquired by the voluntary appearance of
defendant spouses.

Once again, it bears stressing that having availed of a petition for relief, the remedy of annulment
of judgment is no longer available.

Based on the foregoing, the motion for reconsideration could not be given due course and is
hereby DENIED.

SO ORDERED.[20]

The Issues

On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed the
present petition for review on certiorari before this Court. Mrs. Cerezo claims that:
1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes
that the issues raised in the petition for annulment is based on extrinsic fraud related
to the denied petition for relief notwithstanding that the grounds relied upon involves
questions of lack of jurisdiction.
2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the
allegation that the lower court[s] findings of negligence against defendant-driver
Danilo Foronda [whom] the lower court did not summon is null and void for want of
due process and consequently, such findings of negligence which is [sic] null and void
cannot become the basis of the lower court to adjudge petitioner-employer liable for
civil damages.
3. In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation
that defendant-driver Danilo A. Foronda whose negligence is the main issue is an
indispensable party whose presence is compulsory but [whom] the lower court did not
summon.
4. In dismissing the Petition for Annulment, the Court of Appeals ruled that
assuming arguendo that private respondent failed to reserve his right to institute a
separate action for damages in the criminal action, the petitioner cannot now raise such
issue and question the lower courts jurisdiction because petitioner [has] waived such
 right by voluntarily appearing in the civil case for damages notwithstanding that lack
of jurisdiction cannot be waived.[21]

The Courts Ruling

The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available
to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and
signed pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty.
Cerezo. Despite their number, Mrs. Cerezos counsels failed to avail of the proper remedies. It is
either by sheer ignorance or by malicious manipulation of legal technicalities that they have
managed to delay the disposition of the present case, to the detriment of pauper litigant Tuazon.
Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses in
default. Mrs. Cerezo asserts that she only came to know of the default order on 25 June 1995, when
she received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before the trial court a
petition for relief from judgment under Rule 38, alleging fraud, mistake, or excusable negligence
as grounds. On 4 March 1998, the trial court denied Mrs. Cerezos petition for relief from
judgment. The trial court stated that Mrs. Cerezo could have availed of appeal as a remedy and
that she failed to prove that the judgment was entered through fraud, accident, mistake, or
excusable negligence. Mrs. Cerezo then filed before the Court of Appeals a petition
for certiorari under Section 1 of Rule 65 assailing the denial of the petition for relief from
judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezos petition. On 24
February 1999, the appellate court denied Mrs. Cerezos motion for reconsideration. On 11 March
1999, Mrs. Cerezo filed before this Court a petition for review on certiorari under Rule 45,
questioning the denial of the petition for relief from judgment. We denied the petition and our
resolution became final and executory on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs.
Cerezo filed before the Court of Appeals a petition for annulment of the judgment of the trial court
under Rule 47. Meanwhile, on 25 August 1999, the trial court issued over the objection of Mrs.
Cerezo an order of execution of the judgment in Civil Case No. 7415. On 21 October 1999, the
Court of Appeals dismissed the petition for annulment of judgment. On 20 January 2000, the Court
of Appeals denied Mrs. Cerezos motion for reconsideration. On 7 February 2000, Mrs. Cerezo
filed the present petition for review on certiorari under Rule 45 challenging the dismissal of her
petition for annulment of judgment.
Lina v. Court of Appeals[22] enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before judgment,
file a motion under oath to set aside the order of default on the ground that his
failure to answer was due to fraud, accident, mistake or excusable negligence, and that
he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
 b) If the judgment has already been rendered when the defendant discovered the default,
but before the same has become final and executory, he may file a motion for new
trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 [now Section 1] of Rule
38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been
presented by him (Sec. 2, Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or even if the trial court properly
declared a party in default, if grave abuse of discretion attended such declaration.[23]
Mrs. Cerezo admitted that she received a copy of the trial courts decision on 25 June
1995. Based on this admission, Mrs. Cerezo had at least three remedies at her disposal: an appeal,
a motion for new trial, or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 41[24] from the default judgment within 15 days
from notice of the judgment. She could have availed of the power of the Court of Appeals to try
cases and conduct hearings, receive evidence, and perform all acts necessary to resolve factual
issues raised in cases falling within its appellate jurisdiction.[25]
Mrs. Cerezo also had the option to file under Rule 37[26] a motion for new trial within the
period for taking an appeal. If the trial court grants a new trial, the original judgment is vacated,
and the action will stand for trial de novo. The recorded evidence taken in the former trial, as far
as the same is material and competent to establish the issues, shall be used at the new trial without
retaking the same.[27]
Mrs. Cerezo also had the alternative of filing under Rule 65[28] a petition
for certiorari assailing the order of default within 60 days from notice of the judgment. An order
of default is interlocutory, and an aggrieved party may file an appropriate special civil action under
Rule 65.[29] In a petition for certiorari, the appellate court may declare void both the order of
default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary
periods provided under the Rules of Court. However, Mrs. Cerezo opted to file a petition for relief
from judgment, which is available only in exceptional cases. A petition for relief from judgment
should be filed within the reglementary period of 60 days from knowledge of judgment and six
months from entry of judgment, pursuant to
Rule 38 of the Rules of Civil Procedure.[30] Tuason v. Court of Appeals[31] explained the
nature of a petition for relief from judgment:

When a party has another remedy available to him, which may either be a motion for new trial or
appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident,
mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail
himself of this petition. Indeed, relief will not be granted to a party who seeks avoidance from
the effects of the judgment when the loss of the remedy at law was due to his own negligence;
otherwise the petition for relief can be used to revive the right to appeal which has been lost thru
inexcusable negligence.

Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented Mrs.
Cerezo from filing an appeal, a motion for new trial or a petition for certiorari. It was error for her
to avail of a petition for relief from judgment.
After our resolution denying Mrs. Cerezos petition for relief became final and executory, Mrs.
Cerezo, in her last ditch attempt to evade liability, filed before the Court of Appeals a petition for
annulment of the judgment of the trial court. Annulment is available only on the grounds of
extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, a party must file the petition
within four years from its discovery, and if based on lack of jurisdiction, before laches or estoppel
bars the petition. Extrinsic fraud is not a valid ground if such fraud was used as a ground, or could
have been used as a ground, in a motion for new trial or petition for relief from judgment.[32]
Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the
petition for annulment of judgment. However, a party may avail of the remedy of annulment of
judgment under Rule 47 only if the ordinary remedies of new trial, appeal, petition for relief from
judgment, or other appropriate remedies are no longer available through no fault of the
party.[33] Mrs. Cerezo could have availed of a new trial or appeal but through her own fault she
erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus,
Mrs. Cerezo may no longer avail of the remedy of annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezos person. Mrs.
Cerezo actively participated in the proceedings before the trial court, submitting herself to the
jurisdiction of the trial court. The defense of lack of jurisdiction fails in light of her active
participation in the trial court proceedings. Estoppel or laches may also bar lack of jurisdiction as
a ground for nullity especially if raised for the first time on appeal by a party who participated in
the proceedings before the trial court, as what happened in this case.[34]
For these reasons, the present petition should be dismissed for utter lack of merit. The
extraordinary action to annul a final judgment is restricted to the grounds specified in the rules. The
reason for the restriction is to prevent this extraordinary action from being used by a losing party
to make a complete farce of a duly promulgated decision that has long become final and
executory. There would be no end to litigation if parties who have unsuccessfully availed of any
of the appropriate remedies or lost them through their fault could still bring an action for annulment
of judgment.[35] Nevertheless, we shall discuss the issues raised in the present petition to clear any
doubt about the correctness of the decision of the trial court.
Mrs. Cerezos Liability and the
Trial Courts Acquisition of Jurisdiction

Mrs. Cerezo contends that the basis of the present petition for annulment is lack of
jurisdiction. Mrs. Cerezo asserts that the trial court could not validly render judgment since it failed
to acquire jurisdiction over Foronda. Mrs. Cerezo points out that there was no service of summons
on Foronda. Moreover, Tuazon failed to reserve his right to institute a separate civil action for
damages in the criminal action. Such contention betrays a faulty foundation. Mrs. Cerezos
contention proceeds from the point of view of criminal law and not of civil law, while the basis of
the present action of Tuazon is quasi-delict under the Civil Code, not delict under the Revised
Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of
the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the
Civil Code. An aggrieved party may choose between the two remedies. An action based on a quasi-
delict may proceed independently from the criminal action.[36] There is, however, a distinction
between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice
of remedy, whether to sue for a delict or a quasi-delict, affects the procedural and jurisdictional
issues of the action.[37]
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon
alleged that Mrs. Cerezo, without exercising due care and diligence in the supervision and
management of her employees and buses, hired Foronda as her driver.Tuazon became disabled
because of Forondas recklessness, gross negligence and imprudence, aggravated by Mrs. Cerezos
lack of due care and diligence in the selection and supervision of her employees, particularly
Foronda.[38]
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article
2180 states in part:

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

Contrary to Mrs. Cerezos assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the courts action in the litigation, and
without whom no final resolution of the case is possible.[39] However, Mrs. Cerezos liability as an
employer in an action for a quasi-delict is not only solidary, it is also primary and direct. Foronda
is not an indispensable party to the final resolution of Tuazons action for damages against Mrs.
Cerezo.
The responsibility of two or more persons who are liable for a quasi-delict is
solidary.[40] Where there is a solidary obligation on the part of debtors, as in this case, each debtor
is liable for the entire obligation. Hence, each debtor is liable to pay for the entire obligation in
full. There is no merger or renunciation of rights, but only mutual representation.[41] Where the
obligation of the parties is solidary, either of the parties is indispensable, and the other is not even
a necessary party because complete relief is available from either.[42] Therefore, jurisdiction over
Foronda is not even necessary as Tuazon may collect damages from Mrs. Cerezo alone.
Moreover, an employers liability based on a quasi-delict is primary and direct, while the
employers liability based on a delict is merely subsidiary.[43] The words primary and direct, as
contrasted with subsidiary, refer to the remedy provided by law for enforcing the obligation rather
than to the character and limits of the obligation.[44] Although liability under Article 2180
originates from the negligent act of the employee, the aggrieved party may sue the employer
directly. When an employee causes damage, the law presumes that the employer has himself
committed an act of negligence in not preventing or avoiding the damage. This is the fault that the
law condemns. While the employer is civilly liable in a subsidiary capacity for the employees
criminal negligence, the employer is also civilly liable directly and separately for his own civil
negligence in failing to exercise due diligence in selecting and supervising his employee. The idea
that the employers liability is solely subsidiary is wrong.[45]

The action can be brought directly against the person responsible (for another), without including
the author of the act. The action against the principal is accessory in the sense that it implies the
existence of a prejudicial act committed by the employee, but it is not subsidiary in the sense that
it can not be instituted till after the judgment against the author of the act or at least, that it is
subsidiary to the principal action; the action for responsibility (of the employer) is in itself a
principal action.[46]

Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The
trial courts acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case
on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the employer
for the criminal negligence of the employee as provided in Article 103 of the Revised Penal
Code. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved party must
initiate a criminal action where the employees delict and corresponding primary liability are
established.[47] If the present action proceeds from a delict, then the trial courts jurisdiction over
Foronda is necessary. However, the present action is clearly for the quasi-delict of Mrs. Cerezo
and not for the delict of Foronda.
The Cerezo spouses contention that summons be served anew on them is untenable in light of
their participation in the trial court proceedings. To uphold the Cerezo spouses contention would
make a fetish of a technicality.[48] Moreover, any irregularity in the service of summons that might
have vitiated the trial courts jurisdiction over the persons of the Cerezo spouses was deemed
waived when the Cerezo spouses filed a petition for relief from judgment.[49]
We hold that the trial court had jurisdiction and was competent to decide the case in favor of
Tuazon and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezos
contention, Foronda is not an indispensable party to the present case. It is not even necessary for
Tuazon to reserve the filing of a separate civil action because he opted to file a civil action for
damages against Mrs. Cerezo who is primarily and directly liable for her own civil negligence. The
words of Justice Jorge Bocobo in Barredo v. Garciastill hold true today as much as it did in 1942:

x x x [T]o hold that there is only one way to make defendants liability effective, and that is, to
sue the driver and exhaust his (the latters) property first, would be tantamount to compelling the
plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such a
remedy under our laws, but there is also a more expeditious way, which is based on the primary
and direct responsibility of the defendant under article [2180] of the Civil Code. Our view of the
law is more likely to facilitate remedy for civil wrongs, because the procedure indicated by the
defendant is wasteful and productive of delay, it being a matter of common knowledge that
professional drivers of taxis and other similar public conveyances do not have sufficient means
with which to pay damages. Why, then, should the plaintiff be required in all cases to go through
this roundabout, unnecessary, and probably useless procedure? In construing the laws, courts
have endeavored to shorten and facilitate the pathways of right and justice.[50]
 Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial
court.[51] The 6% per annum interest shall commence from 30 May 1995, the date of the decision
of the trial court. Upon finality of this decision, interest at 12% per annum, in lieu of 6% per
annum, is due on the amount of damages adjudged by the trial court until full payment.
WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October
1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January
2000 denying the motion for reconsideration, is AFFIRMED with the MODIFICATION that the
amount due shall earn legal interest at 6% per annum computed from 30 May 1995, the date of the
trial courts decision. Upon finality of this decision, the amount due shall earn interest at 12% per
annum, in lieu of 6% per annum, until full payment.
SO ORDERED.
 EN BANC

[G.R. No. 70890. September 18, 1992.]

CRESENCIO LIBI * and AMELIA YAP LIBI, Petitioners, v. HON. INTERMEDIATE

APPELLATE COURT, FELIPE GOTIONG and SHIRLEY GOTIONG, Respondents.

Alex Y. Tan, for Petitioners.

Mario D. Ortiz and Danilo V. Ortiz for Private Respondents.

SYLLABUS

1. CIVIL LAW; QUASI DELICT; LIABILITY OF PARENTS FOR CIVIL LIABILITY

ARISING FROM CRIMINAL OFFENSES COMMITTED BY THEIR MINOR CHILDREN;
RULE. — The parents are and should be held primarily liable for the civil liability arising from
criminal offenses committed by their minor children under their legal authority or control, or
who live in their company, unless it is proven that the former acted with the diligence of a good
father of a family to prevent such damages. That primary liability is premised on the provisions
of Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their
children 9 years of age or under, or over 9 but under 15 years of age who acted without
discernment; and, with regard to their children over 9 but under 15 years of age who acted with
discernment, or 15 years or over but under 21 years of age, such primary liability shall be
imposed pursuant to Article 2180 of the Civil Code. Under said Article 2180, the enforcement of
such liability shall be effected against the father and, in case of his death or incapacity, the
mother. This was amplified by the Child and Youth Welfare Code which provides that the same
shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case
of her death or incapacity, upon the guardian, but the liability may also be voluntarily assumed
by a relative or family friend of the youthful offender. However, under the Family Code, this
civil liability is now, without such alternative qualification, the responsibility of the parents and
those who exercise parental authority over the minor offender. For civil liability arising from
quasi-delicts committed by minors, the same rules shall apply in accordance with Articles 2180
and 2182 of the Civil Code, as so modified.

DECISION
 REGALADO, J.:

One of the ironic verities of life, it has been said, is that sorrow is sometimes a touchstone of
love. A tragic illustration is provided by the instant case, wherein two lovers died while still in
the prime of their years, a bitter episode for those whose lives they have touched. While we
cannot expect to award complete assuagement to their families through seemingly prosaic legal
verbiage, this disposition should at least terminate the acrimony and rancor of an extended
judicial contest resulting from the unfortunate occurrence.

In this final denouement of the judicial recourse the stages whereof were alternately initiated by
the parties, petitioners are now before us seeking the reversal of the judgment of respondent
court promulgated on January 2, 1985 in AC-G.R. CV No. 69060 with the following decretal
portion:jgc:chanrobles.com.ph

"WHEREFORE, the decision of the lower court dismissing plaintiff’s complaint is hereby
reversed; and instead, judgment is hereby rendered sentencing defendants, jointly and solidarily,
to pay to plaintiffs the following amounts:chanrobles.com : virtual law library

1. Moral damages, P30,000.000;

2. Exemplary damages, P10,000.00;

3. Attorney’s fees, P20,000.00, and costs.

However, denial of defendants-appellees’ counterclaims is affirmed." 1

Synthesized from the findings of the lower courts, it appears that respondent spouses are the
legitimate parents of Julie Ann Gotiong who, at the time of the deplorable incident which took
place and from which she died on January 14, 1979, was an 18-year old first year commerce
student of the University of San Carlos, Cebu City; while petitioners are the parents of Wendell
Libi, then a minor between 18 and 19 years of age living with his aforesaid parents, and who also
died in the same event on the same date.

For more than two (2) years before their deaths, Julie Ann Gotiong and Wendell Libi were
sweethearts until December, 1978 when Julie Ann broke up her relationship with Wendell after
she supposedly found him to be sadistic and irresponsible. During the first and second weeks of
January, 1979, Wendell kept pestering Julie Ann with demands for reconciliation but the latter
persisted in her refusal, prompting the former to resort to threats against her. In order to avoid
him, Julie Ann stayed in the house of her best friend, Malou Alfonso, at the corner of Maria
Cristina and Juana Osmeña Streets, Cebu City, from January 7 to 13, 1978.

On January 14, 1979, Julie Ann and Wendell died, each from a single gunshot wound inflicted
with the same firearm, a Smith and Wesson revolver licensed in the name of petitioner Cresencio
Libi, which was recovered from the scene of the crime inside the residence of private
respondents at the corner of General Maxilom and D. Jakosalem streets of the same city.
Due to the absence of an eyewitness account of the circumstances surrounding the death of both
minors, their parents, who are the contending parties herein, posited their respective theories
drawn from their interpretation of circumstantial evidence, available reports, documents and
evidence of physical facts.

Private respondents, bereaved over the death of their daughter, submitted that Wendell caused
her death by shooting her with the aforesaid firearm and, thereafter, turning the gun on himself to
commit suicide. On the other hand, Petitioners, puzzled and likewise distressed over the death of
their son, rejected the imputation and contended that an unknown third party, whom Wendell
may have displeased or antagonized by reason of his work as a narcotics informer of the
Constabulary Anti-Narcotics Unit (CANU), must have caused Wendell’s death and then shot
Julie Ann to eliminate any witness and thereby avoid identification.chanrobles.com:cralaw:red

As a result of the tragedy, the parents of Julie Ann filed Civil Case No. R-17774 in the then
Court of First Instance of Cebu against the parents of Wendell to recover damages arising from
the latter’s vicarious liability under Article 2180 of the Civil Code. After trial, the court below
rendered judgment on October 20, 1980 as follows:jgc:chanrobles.com.ph

"WHEREFORE, premises duly considered, judgment is hereby rendered dismissing plaintiffs’

complaint for insufficiency of the evidence. Defendants’ counterclaim is likewise denied for lack
of sufficient merit." 2

On appeal to respondent court, said judgment of the lower court dismissing the complaint of
therein plaintiffs-appellants was set aside and another judgment was rendered against
defendants-appellees who, as petitioners in the present appeal by certiorari, now submit for
resolution the following issues in this case:chanrob1es virtual 1aw library

1. Whether or not respondent court correctly reversed the trial court in accordance with
established decisional laws; and

2. Whether or not Article 2180 of the Civil Code was correctly interpreted by respondent court to
make petitioners liable for vicarious liability. 3

In the proceedings before the trial court, Dr. Jesus P. Cerna, Police Medico-Legal Officer of
Cebu, submitted his findings and opinions on some postulates for determining whether or not the
gunshot wound was inflicted on Wendell Libi by his own suicidal act. However, undue emphasis
was placed by the lower court on the absence of gunpowder or tattooing around the wound at the
point of entry of the bullet. It should be emphasized, however, that this is not the only
circumstance to be taken into account in the determination of whether it was suicide or not.

It is true that said witness declared that he found no evidence of contact or close-contact of an
explosive discharge in the entrance wound. However, as pointed out by private respondents, the
body of deceased Wendell Libi must have been washed at the funeral parlor, considering the
hasty interment thereof a little after eight (8) hours from the occurrence wherein he died. Dr.
Cerna himself could not categorically state that the body of Wendell Libi was left untouched at
the funeral parlor before he was able to conduct his autopsy. It will also be noted that Dr. Cerna
was negligent in not conducting a paraffin test on Wendell Libi, hence possible evidence of
gunpowder residue on Wendell’s hands was forever lost when Wendell was hastily
buried.cralawnad

More specifically, Dr. Cerna testified that he conducted an autopsy on the body of Wendell Libi
about eight (8) hours after the incident or, to be exact, eight (8) hours and twenty (20) minutes
based on the record of death; that when he arrived at the Cosmopolitan Funeral Homes, the body
of the deceased was already on the autopsy table and in the stage of rigor mortis; and that said
body was not washed, but it was dried. 4 However, on redirect examination, he admitted that
during the 8-hour interval, he never saw the body nor did he see whether said body was wiped or
washed in the area of the wound on the head which he examined because the deceased was
inside the morgue. 5 In fact, on cross-examination, he had earlier admitted that as far as the
entrance of the wound, the trajectory of the bullet and the exit of the wound are concerned, it is
possible that Wendell Libi shot himself. 6

He further testified that the muzzle of the gun was not pressed on the head of the victim and that
he found no burning or singeing of the hair or extensive laceration on the gunshot wound of
entrance which are general characteristics of contact or near-contact fire. On direct examination,
Dr. Cerna nonetheless made these clarification:jgc:chanrobles.com.ph

"Q Is it not a fact that there are certain guns which are so made that there would be no black
residue or tattooing that could result from these guns because they are what we call clean?

A Yes, sir. I know that there are what we call smokeless powder.

ATTY. ORTIZ:chanrob1es virtual 1aw library

Q Yes. So, in cases, therefore, of guns where the powder is smokeless, those indications that you
said may not rule out the possibility that the gun was closer than 24 inches, is that correct?

A If the . . . assuming that the gun used was .. the bullet used was a smokeless powder.

Q At any rate, doctor, from . . . disregarding those other matters that you have noticed, the
singeing, etc., from the trajectory, based on the trajectory of the bullet as shown in your own
sketch, is it not a fact that the gun could have been fired by the person himself, the victim
himself, Wendell Libi, because it shows a point of entry a little above the right ear and point of
exit a little above that, to be very fair and on your oath?

A As far as the point of entrance is concerned and as far as the trajectory of the bullet is
concerned and as far as the angle or the manner of fire is concerned, it could have been fired by
the victim." 7

As shown by the evidence, there were only two used bullets 8 found at the scene of the crime,
each of which were the bullets that hit Julie Ann Gotiong and Wendell Libi, respectively. Also,
the sketch prepared by the Medico-Legal Division of the National Bureau of Investigation, 9
shows that there is only one gunshot wound of entrance located at the right temple of Wendell
Libi. The necropsy report prepared by Dr. Cerna states:chanrob1es virtual 1aw library

x x x

"Gunshot wound, ENTRANCE, ovaloid, 0.5 x 0.4 cm., with contusion collar widest inferiorly by
0.2 cm., edges inverted, oriented upward, located at the head, temporal region, right, 2.8 cms.
behind and 5.5 cms. above right external auditory meatus, directed slightly forward, upward and
to the left, involving skin and soft tissues, making a punch-in fracture on the temporal bone,
right, penetrating cranial cavity, lacerating extensively along its course the brain tissues,
fracturing parietal bone, left, and finally making an EXIT wound, irregular, 2.0 x 1.8 cms., edges
(e)verted, parietal region, left, 2.0 cms. behind and 12.9 cms. above left external auditory
meatus.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

x x x

"Evidence of contact or close-contact fire, such as burning around the gunshot wound of
entrance, gunpowder tatooing (sic), smudging, singeing of hair, extensive laceration or bursting
of the gunshot wound of entrance, or separation of the skin from the underlying tissue, are
absent." 10

On cross-examination, Dr. Cerna demonstrated his theory which was made of record,
thus:jgc:chanrobles.com.ph

"Q Now, will you please use yourself as Wendell Libi, and following the entrance of the wound,
the trajectory of the bullet and the exit of the wound, and measuring yourself 24 inches, will you
please indicate to the Honorable Court how would it have been possible for Wendell Libi to kill
himself? Will you please indicate the 24 inches?

WITNESS:chanrob1es virtual 1aw library

A Actually, sir, the 24 inches is approximately one arm’s length.

ATTY. SENINING:chanrob1es virtual 1aw library

I would like to make of record that the witness has demonstrated by extending his right arm
almost straight towards his head." 11

Private respondents assail the fact that the trial court gave credence to the testimonies of
defendants’ witnesses Lydia Ang and James Enrique Tan, the first being a resident of an
apartment across the street from the Gotiongs and the second, a resident of the house adjacent to
the Gotiong residence, who declared having seen a "shadow" of a person at the gate of the
Gotiong house after hearing shots therefrom.

On cross-examination, Lydia Ang testified that the apartment where she was staying faces the
gas station; that it is the second apartment; that from her window she can see directly the gate of
the Gotiongs and, that there is a firewall between her apartment and the gas station. 12 After
seeing a man jump from the gate of the Gotiongs to the rooftop of the Tans, she called the police
station but the telephone lines were busy. Later on, she talked with James Enrique Tan and told
him that she saw a man leap from the gate towards his rooftop. 13

However, James Enrique Tan testified that he saw a "shadow" on top of the gate of the Gotiongs,
but denied having talked with anyone regarding what he saw. He explained that he lives in a
duplex house with a garden in front of it; that his house is next to Felipe Gotiong’s house; and he
further gave the following answers to these questions:chanrobles.com : virtual law library

"ATTY. ORTIZ: (TO WITNESS).

Q What is the height of the wall of the Gotiong’s in relation to your house?

WITNESS:chanrob1es virtual 1aw library

A It is about 8 feet.

ATTY. ORTIZ: (TO WITNESS)

Q And where were you looking from?

WITNESS:chanrob1es virtual 1aw library

A From upstairs in my living room.

ATTY. ORTIZ (TO WITNESS)

Q From Your living room window, is that correct?

WITNESS:chanrob1es virtual 1aw library

A Yes, but not very clear because the wall is high." 14

Analyzing the foregoing testimonies, we agree with respondent court that the same do not inspire
credence as to the reliability and accuracy of the witnesses’ observations, since the visual
perceptions of both were obstructed by high walls in their respective houses in relation to the
house of herein private respondents. On the other hand, witness Manolo Alfonso, testifying on
rebuttal, attested without contradiction that he and his sister, Malou Alfonso, were waiting for
Julie Ann Gotiong when they heard her scream; that when Manolo climbed the fence to see what
was going on inside the Gotiong house, he heard the first shot; and, not more than five (5)
seconds later, he heard another shot. Consequently, he went down from the fence and drove to
the police station to report the incident. 15 Manolo’s direct and candid testimony establishes and
explains the fact that it was he whom Lydia Ang and James Enrique Tan saw as the "shadow" of
a man at the gate of the Gotiong house.
We have perforce to reject petitioners’ effete and unsubstantiated pretension that it was another
man who shot Wendell and Julie Ann. It is significant that the Libi family did not even point to
or present any suspect in the crime nor did they file any case against any alleged "John Doe."
Nor can we sustain the trial court’s dubious theory that Wendell Libi did not die by his own hand
because of the overwhelming evidence — testimonial, documentary and pictorial — the
confluence of which point to Wendell as the assailant of Julie Ann, his motive being revenge for
her rejection of his persistent pleas for a reconciliation.chanrobles.com:cralaw:red

Petitioners’ defense that they had exercised the due diligence of a good father of a family, hence
they should not be civilly liable for the crime committed by their minor son, is not borne out by
the evidence on record either.

Petitioner Amelita Yap Libi, mother of Wendell, testified that her husband, Cresencio Libi, owns
a gun which he kept in a safety deposit box inside a drawer in their bedroom. Each of these
petitioners holds a key to the safety deposit box and Amelita’s key is always in her bag, all of
which facts were known to Wendell. They have never seen their son Wendell taking or using the
gun. She admitted, however, that on that fateful night the gun was no longer in the safety deposit
box. 16 We, accordingly, cannot but entertain serious doubts that petitioner spouses had really
been exercising the diligence of a good father of a family by safely locking the fatal gun away.
Wendell could not have gotten hold thereof unless one of the keys to the safety deposit box was
negligently left lying around or he had free access to the bag of his mother where the other key
was.

The diligence of a good father of a family required by law in a parent and child relationship
consists, to a large extent, of the instruction and supervision of the child. Petitioners were gravely
remiss in their duties as parents in not diligently supervising the activities of their son, despite his
minority and immaturity, so much so that it was only at the time of Wendell’s death that they
allegedly discovered that he was a CANU agent and that Cresencio’s gun was missing from the
safety deposit box. Both parents were sadly wanting in their duty and responsibility in
monitoring and knowing the activities of their children who, for all they know, may be engaged
in dangerous work such as being drug informers, 17 or even drug users. Neither was a plausible
explanation given for the photograph of Wendell, with a handwritten dedication to Julie Ann at
the back thereof, 18 holding upright what clearly appears as a revolver and on how or why he
was in possession of that firearm.

In setting aside the judgment of the court a quo and holding petitioners civilly liable, as
explained at the start of this opinion, respondent court waved aside the protestations of diligence
on the part of petitioners and had this to say:jgc:chanrobles.com.ph

". . . It is still the duty of parents to know the activity of their children who may be engaged in
this dangerous activity involving the menace of drugs. Had the defendants-appellees been
diligent in supervising the activities of their son, Wendell, and in keeping said gun from his
reach, they could have prevented Wendell from killing Julie Ann Gotiong. Therefore, appellants
are liable under Article 2180 of the Civil Code which provides:chanrob1es virtual 1aw library
‘The father, and in case of his death or incapacity, the mother, are responsible for the damages
caused by their minor children who live in their company.’

"Having been grossly negligent in preventing Wendell Libi from having access to said gun
which was allegedly kept in a safety deposit box, defendants-appellees are subsidiarily liable for
the natural consequence of the criminal act of said minor who was living in their company. This
vicarious liability of herein defendants-appellees has been reiterated by the Supreme Court in
many cases, prominent of which is the case of Fuellas v. Cadano, et. al. (L-14409, Oct. 31, 1961,
3 SCRA 361-367), which held that:chanrob1es virtual 1aw library

‘The subsidiary liability of parents for damages caused by their minor children imposed by
Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and
criminal offenses.’

‘The subsidiary liability of parent’s arising from the criminal acts of their minor children who
acted with discernment is determined under the provisions of Article 2180, N.C.C. and under
Article 101 of the Revised Penal Code, because to hold that the former only covers obligations
which arise from quasi-delicts and not obligations which arise from criminal offenses, would
result in the absurdity that while for an act where mere negligence intervenes the father or
mother may stand subsidiarily liable for the damages caused by his or her son, no liability would
attach if the damage is caused with criminal intent.’ (3 SCRA 361-362).

". . . In the instant case, minor son of herein defendants-appellees, Wendell Libi somehow got
hold of the key to the drawer where said gun was kept under lock without defendant-spouses
ever knowing that said gun had been missing from that safety box since 1978 when Wendell Libi
had) a picture taken wherein he proudly displayed said gun and dedicated this picture to his
sweetheart, Julie Ann Gotiong; also since then, Wendell Libi was said to have kept said gun in
his car, in keeping up with his supposed role of a CANU agent . . ." chanrobles lawlibrary :
rednad

x x x

"Based on the foregoing discussions of the assigned errors, this Court holds that the lower court
was not correct in dismissing herein plaintiffs-appellants’ complaint because as preponderantly
shown by evidence, defendants-appellees utterly failed to exercise all the diligence of a good
father of the family in preventing their minor son from committing this crime by means of the
gun of defendants-appellees which was freely accessible to Wendell Libi for they have not
regularly checked whether said gun was still under lock, but learned that it was missing from the
safety deposit box only after the crime had been committed." (Emphases ours.) 19

We agree with the conclusion of respondent court that petitioners should be held liable for the
civil liability based on what appears from all indications was a crime committed by their minor
son. We take this opportunity, however, to digress and discuss its ratiocination therefor on
jurisprudential dicta which we feel require clarification.

In imposing sanctions for the so-called vicarious liability of petitioners, respondent court cites
Fuellas v. Cadano, Et. Al. 20 which supposedly holds that" (t)he subsidiary liability of parents
for damages caused by their minor children imposed by Article 2180 of the New Civil Code
covers obligations arising from both quasi-delicts and criminal offenses," followed by an
extended quotation ostensibly from the same case explaining why under Article 2180 of the Civil
Code and Article 101 of the Revised Penal Code parents should assume subsidiary liability for
damages caused by their minor children. The quoted passages are set out two paragraphs back,
with pertinent underscoring for purposes of the discussion hereunder.chanrobles law library

Now, we do not have any objection to the doctrinal rule holding, the parents liable, but the
categorization of their liability as being subsidiary, and not primary, in nature requires a hard
second look considering previous decisions of this court on the matter which warrant
comparative analyses. Our concern stems from our readings that if the liability of the parents for
crimes or quasi-delicts of their minor children is subsidiary, then the parents can neither invoke
nor be absolved of civil liability on the defense that they acted with the diligence of a good father
of a family to prevent damages. On the other hand, if such liability imputed to the parents is
considered direct and primary, that diligence would constitute a valid and substantial defense.

We believe that the civil liability of parents for quasi-delicts of their minor children, as
contemplated in Article 2180 of the Civil Code, is primary and not subsidiary. In fact, if we
apply Article 2194 of said code which provides for solidary liability of joint tortfeasors, the
persons responsible for the act or omission, in this case the minor and the father and, in case of
his death of incapacity, the mother, are solidarily liable. Accordingly, such parental liability is
primary and not subsidiary, hence the last paragraph of Article 2180 provides that" (t)he
responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damages."cralaw
virtua1aw library

We are also persuaded that the liability of the parents for felonies committed by their minor
children is likewise primary, not subsidiary. Article 101 of the Revised Penal Code
provides:jgc:chanrobles.com.ph

"ARTICLE 101. Rules regarding civil liability in certain cases. —

x x x

First. In cases of subdivisions . . . 2, and 3 of Article 12, the civil liability for acts committed by .
. . a person under nine years of age, or by one over nine but under fifteen years of age, who has
acted without discernment, shall devolve upon those having such person under their legal
authority or control, unless it appears that there was no fault or negligence on their part."
(Emphasis supplied.) 21

Accordingly, just like the rule in Article 2180 of the Civil Code, under the foregoing provision
the civil liability of the parents for crimes committed by their minor children is likewise direct
and primary, and also subject to the defense of lack of fault or negligence on their part, that is,
the exercise of the diligence of a good father of a family.
That in both quasi-delicts and crimes the parents primarily respond for such damages is
buttressed by the corresponding provisions in both codes that the minor transgressor shall be
answerable or shall respond with his own property only in the absence or in case of insolvency of
the former. Thus, for civil liability ex quasi delicto of minors, Article 2182 of the Civil Code
states that" (i)f the minor causing damage has no parents or guardian, the minor . . . shall be
answerable with his own property in an action against him where a guardian ad litem shall be
appointed." For civil liability ex delicto of minors, an equivalent provision is found in the third
paragraph of Article 101 of the Revised Penal Code, to wit:jgc:chanrobles.com.ph

"Should there be no person having such . . . minor under his authority, legal guardianship or
control, or if such person be insolvent, said . . . minor shall respond with (his) own property,
excepting property exempt from execution, in accordance with civil law."cralaw virtua1aw
library

The civil liability of parents for felonies committed by their minor children contemplated in the
aforesaid rule in Article 101 of the Revised Penal Code in relation to Article 2180 of the Civil
Code has, aside from the aforecited case of Fuellas, been the subject of a number of cases
adjudicated by this Court, viz.: Exconde v. Capuno, Et Al., 22 Araneta v. Arreglado, 23 Salen,
Et. Al. v. Balce, 24 Paleyan, etc., Et. Al. v. Bangkili, Et Al., 25 and Elcano, et al, v. Hill, Et. Al.
26 Parenthetically, the aforesaid cases were basically on the issue of the civil liability of parents
for crimes committed by their minor children over 9 but under 15 years of age, who acted with
discernment, and also of minors 15 years of aye or over, since these situations are not covered by
Article 101, Revised Penal Code. In both instances, this Court held that the issue of parental civil
liability should be resolved in accordance with the provisions of Article 2180 of the Civil Code
for the reasons well expressed in Salen and adopted in the cases hereinbefore enumerated that to
hold that the civil liability under Article 2180 would apply only to quasi-delicts and not to
criminal offenses would result in the absurdity that in an act involving mere negligence the
parents would be liable but not where the damage is caused with criminal intent. In said cases,
however, there are unfortunate variances resulting in a regrettable inconsistency in the Court’s
determination of whether the liability of the parents, in cases involving either crimes or quasi-
delicts of their minor children, is primary or subsidiary.

In Exconde, where the 15-year old minor was convicted of double homicide through reckless
imprudence, in a separate civil action arising from the crime the minor and his father were held
jointly and severally liable for failure of the latter to prove the diligence of a good father of a
family. The same liability in solidum and, therefore, primary liability was imposed in a separate
civil action in Araneta on the parents and their 14-year old son who was found guilty of
frustrated homicide, but on the authority of Article 2194 of the Civil Code providing for solidary
responsibility of two or more persons who are liable for a quasi-delict.

However, in Salen, the father was declared subsidiarily liable for damages arising from the
conviction of his son, who was over 15 but less than 18 years of age, by applying Article 2180
but, this time, disregarding Article 2194 of the Civil Code. In the present case, as already
explained, the petitioners herein were also held liable but supposedly in line with Fuellas which
purportedly declared the parents subsidiarily liable for the civil liability for serious physical
injuries committed by their 13-year old son. On the other hand, in Paleyan, the mother and her
19-year old son were adjudged solidarily liable for damages arising from his conviction for
homicide by the application of Article 2180 of the Civil Code since this is likewise not covered
by Article 101 of the Revised Penal Code. Finally, in Elcano, although the son was acquitted in a
homicide charge due to "lack of intent, coupled with mistake," it was ruled that while under
Article 2180 of the Civil Code there should be solidary liability for damages, since the son,
"although married, was living with his father and getting subsistence from him at the time of the
occurrence," but "is now of age, as a matter of equity" the father was only held subsidiarily
liable.

It bears stressing, however, that the Revised Penal Code provides for subsidiary liability only for
persons causing damages under the compulsion of irresistible force or under the impulse of an
uncontrollable fear; 27 innkeepers, tavernkeepers and proprietors of establishments; 28
employers, teachers, persons and corporations engaged in industry; 29 and principals,
accomplices and accessories for the unpaid civil liability of their co-accused in the other classes.
30

Also, coming back to respondent court’s reliance on Fuellas in its decision in the present case, it
is not exactly accurate to say that Fuellas provided for subsidiary liability of the parents therein.
A careful scrutiny shows that what respondent court quoted verbatim in its decision now on
appeal in the present case, and which it attributed to Fuellas, was the syllabus on the law report
of said case which spoke of "subsidiary" liability. However, such categorization does not
specifically appear in the text of the decision in Fuellas. In fact, after reviewing therein the cases
of Exconde, Araneta and Salen and the discussions in said cases of Article 101 of the Revised
Penal Code in relation to Article 2180 of the Civil Code, this Court concluded its decision in this
wise:jgc:chanrobles.com.ph

"Moreover, the case at bar was decided by the Court of Appeals on the basis of evidence
submitted therein by both parties, independent of the criminal case. And responsibility for fault
or negligence under Article 2176 upon which the present action was instituted, is entirely
separate and distinct from the civil liability arising from fault or negligence under the Penal Code
(Art. 2177), and having in mind the reasons behind the law as heretofore stated, any discussion
as to the minor’s criminal responsibility is of no moment."cralaw virtua1aw library

Under the foregoing considerations, therefore, we hereby rule that the parents are and should be
held primarily liable for the civil liability arising from criminal offenses committed by their
minor children under their legal authority or control, or who live in their company, unless it is
proven that the former acted with the diligence of a good father of a family to prevent such
damages. That primary liability is premised on the provisions of Article 101 of the Revised Penal
Code with respect to damages ex delicto caused by their children 9 years of age or under, or over
9 but under 15 years of age who acted without discernment; and, with regard to their children
over 9 but under 15 years of age who acted with discernment, or 15 years or over but under 21
years of age, such primary liability shall be imposed pursuant to Article 2180 of the Civil Code.
31

Under said Article 2180, the enforcement of such liability shall be effected against the father
and, in case of his death or incapacity, the mother. This was amplified by the Child and Youth
Welfare Code which provides that the same shall devolve upon the father and, in case of his
death or incapacity, upon the mother or, in case of her death or incapacity, upon the guardian, but
the liability may also be voluntarily assumed by a relative or family friend of the youthful
offender. 32 However, under the Family Code, this civil liability is now, without such alternative
qualification, the responsibility of the parents and those who exercise parental authority over the
minor offender. 33 For civil liability arising from quasi-delicts committed by minors, the same
rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as so modified.

In the case at bar, whether the death of the hapless Julie Ann Gotiong was caused by a felony or
a quasi-delict committed by Wendell Libi, respondent court did not err in holding petitioners
liable for damages arising therefrom. Subject to the preceding modifications of the premises
relied upon by it therefor and on the bases of the legal imperatives herein explained, we conjoin
in its findings that said petitioners failed to duly exercise the requisite diligentissimi patris
familias to prevent such damages.

ACCORDINGLY, the instant Petition is DENIED and the assailed judgment of respondent
Court of Appeals is hereby AFFIRMED, with costs against petitioners.

SO ORDERED.

G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN

P. PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M.
SORIANO, petitioners,
vs.
COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in her capacity as
Presiding Judge of Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA
and ARSENIA D. BAUTISTA, respondents.

Balgos and Perez for petitioners.

Collantes, Ramirez & Associates for private respondents.

PADILLA, J.:

A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the
second-floor premises of the Philippine School of Business Administration (PSBA) prompted the
parents of the deceased to file suit in the Regional Trial Court of Manila (Branch 47) presided
over by Judge (now Court of Appeals justice) Regina Ordoñez-Benitez, for damages against the
said PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the third
year commerce course at the PSBA. It was established that his assailants were not members of
the school's academic community but were elements from outside the school.

Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim
(President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier),
Col. Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant Chief of Security).
Substantially, the plaintiffs (now private respondents) sought to adjudge them liable for the
victim's untimely demise due to their alleged negligence, recklessness and lack of security
precautions, means and methods before, during and after the attack on the victim. During the
proceedings a quo, Lt. M. Soriano terminated his relationship with the other petitioners by
resigning from his position in the school.

Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they are
presumably sued under Article 2180 of the Civil Code, the complaint states no cause of action
against them, as jurisprudence on the subject is to the effect that academic institutions, such as
the PSBA, are beyond the ambit of the rule in the afore-stated article.

The respondent trial court, however, overruled petitioners' contention and thru an order dated 8
December 1987, denied their motion to dismiss. A subsequent motion for reconsideration was
similarly dealt with by an order dated 25 January 1988. Petitioners then assailed the trial court's
disposition before the respondent appellate court which, in a decision * promulgated on 10 June
1988, affirmed the trial court's orders. On 22 August 1988, the respondent appellate court
resolved to deny the petitioners' motion for reconsideration. Hence, this petition.

At the outset, it is to be observed that the respondent appellate court primarily anchored its
decision on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil
Code. 1 Pertinent portions of the appellate court's now assailed ruling state:

Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old
Spanish Civil Code. The comments of Manresa and learned authorities on its
meaning should give way to present day changes. The law is not fixed and
flexible (sic); it must be dynamic. In fact, the greatest value and significance of
law as a rule of conduct in (sic) its flexibility to adopt to changing social
conditions and its capacity to meet the new challenges of progress.
 Construed in the light of modern day educational system, Article 2180 cannot be
construed in its narrow concept as held in the old case of Exconde
vs. Capuno 2 and Mercado vs. Court of Appeals; 3hence, the ruling in
the Palisoc 4 case that it should apply to all kinds of educational institutions,
academic or vocational.

At any rate, the law holds the teachers and heads of the school staff liable unless
they relieve themselves of such liability pursuant to the last paragraph of Article
2180 by "proving that they observed all the diligence to prevent damage." This
can only be done at a trial on the merits of the case. 5

While we agree with the respondent appellate court that the motion to dismiss the complaint was
correctly denied and the complaint should be tried on the merits, we do not however agree with
the premises of the appellate court's ruling.

Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco
parentis. This Court discussed this doctrine in the afore-cited cases of Exconde, Mendoza,
Palisoc and, more recently, in Amadora vs.Court of Appeals. 6 In all such cases, it had been
stressed that the law (Article 2180) plainly provides that the damage should have been caused or
inflicted by pupils or students of he educational institution sought to be held liable for the acts of
its pupils or students while in its custody. However, this material situation does not exist in the
present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for
whose acts the school could be made liable.

However, does the appellate court's failure to consider such material facts mean the exculpation
of the petitioners from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established

a contract between them, resulting in bilateral obligations which both parties are bound to
comply with. 7 For its part, the school undertakes to provide the student with an education that
would presumably suffice to equip him with the necessary tools and skills to pursue higher
education or a profession. On the other hand, the student covenants to abide by the school's
academic requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing their
students with an atmosphere that promotes or assists in attaining its primary undertaking of
imparting knowledge. Certainly, no student can absorb the intricacies of physics or higher
mathematics or explore the realm of the arts and other sciences when bullets are flying or
grenades exploding in the air or where there looms around the school premises a constant threat
to life and limb. Necessarily, the school must ensure that adequate steps are taken to maintain
peace and order within the campus premises and to prevent the breakdown thereof.

Because the circumstances of the present case evince a contractual relation between the PSBA
and Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of Article 2176
shows that obligations arising from quasi-delicts or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound by contract, whether express or
implied. However, this impression has not prevented this Court from determining the existence
of a tort even when there obtains a contract. In Air France vs. Carrascoso (124 Phil. 722), the
private respondent was awarded damages for his unwarranted expulsion from a first-class seat
aboard the petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's
liability as one arising from tort, not one arising from a contract of carriage. In effect, Air
France is authority for the view that liability from tort may exist even if there is a contract, for
the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248
Fed. 231).

This view was not all that revolutionary, for even as early as 1918, this Court was already of a
similar mind. In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:

The field of non-contractual obligation is much broader than that of contractual

obligation, comprising, as it does, the whole extent of juridical human relations.
These two fields, figuratively speaking, concentric; that is to say, the mere fact
that a person is bound to another by contract does not relieve him from extra-
contractual liability to such person. When such a contractual relation exists the
obligor may break the contract under such conditions that the same act which
constitutes a breach of the contract would have constituted the source of an extra-
contractual obligation had no contract existed between the parties.

Immediately what comes to mind is the chapter of the Civil Code on Human Relations,
particularly Article 21, which provides:

Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good custom or public policy shall compensate the latter for
the damage. (emphasis supplied).

Air France penalized the racist policy of the airline which emboldened the petitioner's employee
to forcibly oust the private respondent to cater to the comfort of a white man who allegedly "had
a better right to the seat." In Austro-American, supra, the public embarrassment caused to the
passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to award
damages to the latter. From the foregoing, it can be concluded that should the act which breaches
a contract be done in bad faith and be violative of Article 21, then there is a cause to view the act
as constituting a quasi-delict.

In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the
contract between the school and Bautista had been breached thru the former's negligence in
providing proper security measures. This would be for the trial court to determine. And, even if
there be a finding of negligence, the same could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the negligence of the school would not be
relevant absent a contract. In fact, that negligence becomes material only because of the
contractual relation between PSBA and Bautista. In other words, a contractual relation is a
condition sine qua non to the school's liability. The negligence of the school cannot exist
independently of the contract, unless the negligence occurs under the circumstances set out in
Article 21 of the Civil Code.
This Court is not unmindful of the attendant difficulties posed by the obligation of schools,
above-mentioned, for conceptually a school, like a common carrier, cannot be an insurer of its
students against all risks. This is specially true in the populous student communities of the so-
called "university belt" in Manila where there have been reported several incidents ranging from
gang wars to other forms of hooliganism. It would not be equitable to expect of schools to
anticipate all types of violent trespass upon their premises, for notwithstanding the security
measures installed, the same may still fail against an individual or group determined to carry out
a nefarious deed inside school premises and environs. Should this be the case, the school may
still avoid liability by proving that the breach of its contractual obligation to the students was not
due to its negligence, here statutorily defined to be the omission of that degree of diligence
which is required by the nature of the obligation and corresponding to the circumstances of
persons, time and place. 9

As the proceedings a quo have yet to commence on the substance of the private respondents'
complaint, the record is bereft of all the material facts. Obviously, at this stage, only the trial
court can make such a determination from the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin
(RTC, Manila, Br. 47) is hereby ordered to continue proceedings consistent with this ruling of
the Court. Costs against the petitioners.

SO ORDERED.
G.R. No. L-12191 October 14, 1918

JOSE CANGCO, plaintiff-appellant,

vs.
MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.

Kincaid & Hartigan for appellee.

FISHER, J.:

At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in
the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of
P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line
of the defendant railroad company; and in coming daily by train to the company's office in the
city of Manila where he worked, he used a pass, supplied by the company, which entitled him to
ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915,
the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit
through the door, took his position upon the steps of the coach, seizing the upright guardrail with
his right hand for support.

On the side of the train where passengers alight at the San Mateo station there is a cement
platform which begins to rise with a moderate gradient some distance away from the company's
office and extends along in front of said office for a distance sufficient to cover the length of
several coaches. As the train slowed down another passenger, named Emilio Zuñiga, also an
employee of the railroad company, got off the same car, alighting safely at the point where the
platform begins to rise from the level of the ground. When the train had proceeded a little farther
the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack
of watermelons with the result that his feet slipped from under him and he fell violently on the
platform. His body at once rolled from the platform and was drawn under the moving car, where
his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the
train the car moved forward possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was
lighted dimly by a single light located some distance away, objects on the platform where the
accident occurred were difficult to discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted
is found in the fact that it was the customary season for harvesting these melons and a large lot
had been brought to the station for the shipment to the market. They were contained in numerous
sacks which has been piled on the platform in a row one upon another. The testimony shows that
this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of
the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he
stepped upon the platform. His statement that he failed to see these objects in the darkness is
readily to be credited.

The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the
injuries which he had received were very serious. He was therefore brought at once to a certain
hospital in the city of Manila where an examination was made and his arm was amputated. The
result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital
where a second operation was performed and the member was again amputated higher up near
the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of
Manila to recover damages of the defendant company, founding his action upon the negligence
of the servants and employees of the defendant in placing the sacks of melons upon the platform
and leaving them so placed as to be a menace to the security of passenger alighting from the
company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found
the facts substantially as above stated, and drew therefrom his conclusion to the effect that,
although negligence was attributable to the defendant by reason of the fact that the sacks of
melons were so placed as to obstruct passengers passing to and from the cars, nevertheless, the
plaintiff himself had failed to use due caution in alighting from the coach and was therefore
precluded form recovering. Judgment was accordingly entered in favor of the defendant
company, and the plaintiff appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in
piling these sacks on the platform in the manner above stated; that their presence caused the
plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal
cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company
is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own
contributory negligence. In resolving this problem it is necessary that each of these conceptions
of liability, to-wit, the primary responsibility of the defendant company and the contributory
negligence of the plaintiff should be separately examined.
It is important to note that the foundation of the legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if
at all, from the breach of that contract by reason of the failure of defendant to exercise due care
in its performance. That is to say, its liability is direct and immediate, differing essentially, in
legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed
by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in
their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations
arising ex contractu, but only to extra-contractual obligations — or to use the technical form of
expression, that article relates only to culpa aquiliana and not to culpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code,
clearly points out this distinction, which was also recognized by this Court in its decision in the
case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article
1093 Manresa clearly points out the difference between "culpa, substantive and independent,
which of itself constitutes the source of an obligation between persons not formerly connected by
any legal tie" and culpa considered as an accident in the performance of an obligation already
existing . . . ."

In the Rakes case (supra) the decision of this court was made to rest squarely upon the
proposition that article 1903 of the Civil Code is not applicable to acts of negligence which
constitute the breach of a contract.

Upon this point the Court said:

The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are
understood to be those not growing out of pre-existing duties of the parties to one
another. But where relations already formed give rise to duties, whether springing from
contract or quasi-contract, then breaches of those duties are subject to article 1101, 1103,
and 1104 of the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at
365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in
certain cases imposed upon employers with respect to damages occasioned by the negligence of
their employees to persons to whom they are not bound by contract, is not based, as in the
English Common Law, upon the principle of respondeat superior — if it were, the master would
be liable in every case and unconditionally — but upon the principle announced in article 1902
of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to
another, the obligation of making good the damage caused. One who places a powerful
automobile in the hands of a servant whom he knows to be ignorant of the method of managing
such a vehicle, is himself guilty of an act of negligence which makes him liable for all the
consequences of his imprudence. The obligation to make good the damage arises at the very
instant that the unskillful servant, while acting within the scope of his employment causes the
injury. The liability of the master is personal and direct. But, if the master has not been guilty of
any negligence whatever in the selection and direction of the servant, he is not liable for the acts
of the latter, whatever done within the scope of his employment or not, if the damage done by the
servant does not amount to a breach of the contract between the master and the person injured.
It is not accurate to say that proof of diligence and care in the selection and control of the servant
relieves the master from liability for the latter's acts — on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-
contractual culpa is always based upon a voluntary act or omission which, without willful intent,
but by mere negligence or inattention, has caused damage to another. A master who exercises all
possible care in the selection of his servant, taking into consideration the qualifications they
should possess for the discharge of the duties which it is his purpose to confide to them, and
directs them with equal diligence, thereby performs his duty to third persons to whom he is
bound by no contractual ties, and he incurs no liability whatever if, by reason of the negligence
of his servants, even within the scope of their employment, such third person suffer damage.
True it is that under article 1903 of the Civil Code the law creates a presumption that he has been
negligent in the selection or direction of his servant, but the presumption is rebuttable and yield
to proof of due care and diligence in this respect.

The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico
Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)

This distinction was again made patent by this Court in its decision in the case of
Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory
of the extra-contractual liability of the defendant to respond for the damage caused by the
carelessness of his employee while acting within the scope of his employment. The Court, after
citing the last paragraph of article 1903 of the Civil Code, said:

From this article two things are apparent: (1) That when an injury is caused by the
negligence of a servant or employee there instantly arises a presumption of law that there
was negligence on the part of the master or employer either in selection of the servant or
employee, or in supervision over him after the selection, or both; and (2) that that
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It
follows necessarily that if the employer shows to the satisfaction of the court that in
selection and supervision he has exercised the care and diligence of a good father of a
family, the presumption is overcome and he is relieved from liability.

This theory bases the responsibility of the master ultimately on his own negligence and
not on that of his servant. This is the notable peculiarity of the Spanish law of negligence.
It is, of course, in striking contrast to the American doctrine that, in relations with
strangers, the negligence of the servant in conclusively the negligence of the master.

The opinion there expressed by this Court, to the effect that in case of extra-
contractual culpa based upon negligence, it is necessary that there shall have been some fault
attributable to the defendant personally, and that the last paragraph of article 1903 merely
establishes a rebuttable presumption, is in complete accord with the authoritative opinion of
Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 is imposed by reason
of the breach of the duties inherent in the special relations of authority or superiority existing
between the person called upon to repair the damage and the one who, by his act or omission,
was the cause of it.
On the other hand, the liability of masters and employers for the negligent acts or omissions of
their servants or agents, when such acts or omissions cause damages which amount to the breach
of a contact, is not based upon a mere presumption of the master's negligence in their selection or
control, and proof of exercise of the utmost diligence and care in this regard does not relieve the
master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual

obligation has its source in the breach or omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations, other than contractual, of certain
members of society to others, generally embraced in the concept of status. The legal rights of
each member of society constitute the measure of the corresponding legal duties, mainly negative
in character, which the existence of those rights imposes upon all other members of society. The
breach of these general duties whether due to willful intent or to mere inattention, if productive
of injury, give rise to an obligation to indemnify the injured party. The fundamental distinction
between obligations of this character and those which arise from contract, rests upon the fact that
in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which
creates the vinculum juris, whereas in contractual relations the vinculum exists independently of
the breach of the voluntary duty assumed by the parties when entering into the contractual
relation.

With respect to extra-contractual obligation arising from negligence, whether of act or omission,
it is competent for the legislature to elect — and our Legislature has so elected — whom such an
obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to
extend that liability, without regard to the lack of moral culpability, so as to include
responsibility for the negligence of those person who acts or mission are imputable, by a legal
fiction, to others who are in a position to exercise an absolute or limited control over them. The
legislature which adopted our Civil Code has elected to limit extra-contractual liability — with
certain well-defined exceptions — to cases in which moral culpability can be directly imputed to
the persons to be charged. This moral responsibility may consist in having failed to exercise due
care in the selection and control of one's agents or servants, or in the control of persons who, by
reason of their status, occupy a position of dependency with respect to the person made liable for
their conduct.

The position of a natural or juridical person who has undertaken by contract to render service to
another, is wholly different from that to which article 1903 relates. When the sources of the
obligation upon which plaintiff's cause of action depends is a negligent act or omission, the
burden of proof rests upon plaintiff to prove the negligence — if he does not his action fails. But
when the facts averred show a contractual undertaking by defendant for the benefit of plaintiff,
and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for
plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to
negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of
its nonperformance is sufficient prima facie to warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor

should assume the burden of proof of its existence, as the only fact upon which his action
is based; while on the contrary, in a case of negligence which presupposes the existence
 of a contractual obligation, if the creditor shows that it exists and that it has been broken,
it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).

As it is not necessary for the plaintiff in an action for the breach of a contract to show that the
breach was due to the negligent conduct of defendant or of his servants, even though such be in
fact the actual cause of the breach, it is obvious that proof on the part of defendant that the
negligence or omission of his servants or agents caused the breach of the contract would not
constitute a defense to the action. If the negligence of servants or agents could be invoked as a
means of discharging the liability arising from contract, the anomalous result would be that
person acting through the medium of agents or servants in the performance of their contracts,
would be in a better position than those acting in person. If one delivers a valuable watch to
watchmaker who contract to repair it, and the bailee, by a personal negligent act causes its
destruction, he is unquestionably liable. Would it be logical to free him from his liability for the
breach of his contract, which involves the duty to exercise due care in the preservation of the
watch, if he shows that it was his servant whose negligence caused the injury? If such a theory
could be accepted, juridical persons would enjoy practically complete immunity from damages
arising from the breach of their contracts if caused by negligent acts as such juridical persons can
of necessity only act through agents or servants, and it would no doubt be true in most instances
that reasonable care had been taken in selection and direction of such servants. If one delivers
securities to a banking corporation as collateral, and they are lost by reason of the negligence of
some clerk employed by the bank, would it be just and reasonable to permit the bank to relieve
itself of liability for the breach of its contract to return the collateral upon the payment of the
debt by proving that due care had been exercised in the selection and direction of the clerk?

This distinction between culpa aquiliana, as the source of an obligation, and culpa
contractual as a mere incident to the performance of a contract has frequently been recognized
by the supreme court of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December
13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's action arose ex
contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil
Code as a defense. The Spanish Supreme Court rejected defendant's contention, saying:

These are not cases of injury caused, without any pre-existing obligation, by fault or
negligence, such as those to which article 1902 of the Civil Code relates, but of damages
caused by the defendant's failure to carry out the undertakings imposed by the contracts .
...

A brief review of the earlier decision of this court involving the liability of employers for
damage done by the negligent acts of their servants will show that in no case has the court ever
decided that the negligence of the defendant's servants has been held to constitute a defense to an
action for damages for breach of contract.

In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage
was not liable for the damages caused by the negligence of his driver. In that case the court
commented on the fact that no evidence had been adduced in the trial court that the defendant
had been negligent in the employment of the driver, or that he had any knowledge of his lack of
skill or carefulness.
In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the
plaintiff sued the defendant for damages caused by the loss of a barge belonging to plaintiff
which was allowed to get adrift by the negligence of defendant's servants in the course of the
performance of a contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if
the "obligation of the defendant grew out of a contract made between it and the plaintiff . . . we
do not think that the provisions of articles 1902 and 1903 are applicable to the case."

In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to
recover damages for the personal injuries caused by the negligence of defendant's chauffeur
while driving defendant's automobile in which defendant was riding at the time. The court found
that the damages were caused by the negligence of the driver of the automobile, but held that the
master was not liable, although he was present at the time, saying:

. . . unless the negligent acts of the driver are continued for a length of time as to give the
owner a reasonable opportunity to observe them and to direct the driver to desist
therefrom. . . . The act complained of must be continued in the presence of the owner for
such length of time that the owner by his acquiescence, makes the driver's acts his own.

In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil.
Rep., 8), it is true that the court rested its conclusion as to the liability of the defendant upon
article 1903, although the facts disclosed that the injury complaint of by plaintiff constituted a
breach of the duty to him arising out of the contract of transportation. The express ground of the
decision in this case was that article 1903, in dealing with the liability of a master for the
negligent acts of his servants "makes the distinction between private individuals and public
enterprise;" that as to the latter the law creates a rebuttable presumption of negligence in the
selection or direction of servants; and that in the particular case the presumption of negligence
had not been overcome.

It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as
though founded in tort rather than as based upon the breach of the contract of carriage, and an
examination of the pleadings and of the briefs shows that the questions of law were in fact
discussed upon this theory. Viewed from the standpoint of the defendant the practical result must
have been the same in any event. The proof disclosed beyond doubt that the defendant's servant
was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also
affirmatively appeared that defendant had been guilty of negligence in its failure to exercise
proper discretion in the direction of the servant. Defendant was, therefore, liable for the injury
suffered by plaintiff, whether the breach of the duty were to be regarded as constituting culpa
aquiliana or culpa contractual. As Manresa points out (vol. 8, pp. 29 and 69) whether negligence
occurs an incident in the course of the performance of a contractual undertaking or its itself the
source of an extra-contractual undertaking obligation, its essential characteristics are identical.
There is always an act or omission productive of damage due to carelessness or inattention on the
part of the defendant. Consequently, when the court holds that a defendant is liable in damages
for having failed to exercise due care, either directly, or in failing to exercise proper care in the
selection and direction of his servants, the practical result is identical in either case. Therefore, it
follows that it is not to be inferred, because the court held in the Yamada case that defendant was
liable for the damages negligently caused by its servants to a person to whom it was bound by
contract, and made reference to the fact that the defendant was negligent in the selection and
control of its servants, that in such a case the court would have held that it would have been a
good defense to the action, if presented squarely upon the theory of the breach of the contract,
for defendant to have proved that it did in fact exercise care in the selection and control of the
servant.

The true explanation of such cases is to be found by directing the attention to the relative spheres
of contractual and extra-contractual obligations. The field of non- contractual obligation is much
more broader than that of contractual obligations, comprising, as it does, the whole extent of
juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the
mere fact that a person is bound to another by contract does not relieve him from extra-
contractual liability to such person. When such a contractual relation exists the obligor may
break the contract under such conditions that the same act which constitutes the source of an
extra-contractual obligation had no contract existed between the parties.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry
him in safety and to provide safe means of entering and leaving its trains (civil code, article
1258). That duty, being contractual, was direct and immediate, and its non-performance could
not be excused by proof that the fault was morally imputable to defendant's servants.

The railroad company's defense involves the assumption that even granting that the negligent
conduct of its servants in placing an obstruction upon the platform was a breach of its contractual
obligation to maintain safe means of approaching and leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait
until the train had come to a complete stop before alighting. Under the doctrine of comparative
negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own
negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely
contributed to his injury, the damages should be apportioned. It is, therefore, important to
ascertain if defendant was in fact guilty of negligence.

It may be admitted that had plaintiff waited until the train had come to a full stop before
alighting, the particular injury suffered by him could not have occurred. Defendant contends, and
cites many authorities in support of the contention, that it is negligence per se for a passenger to
alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form.
We are of the opinion that this proposition is too badly stated and is at variance with the
experience of every-day life. In this particular instance, that the train was barely moving when
plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the
place where he stepped from it. Thousands of person alight from trains under these conditions
every day of the year, and sustain no injury where the company has kept its platform free from
dangerous obstructions. There is no reason to believe that plaintiff would have suffered any
injury whatever in alighting as he did had it not been for defendant's negligent failure to perform
its duty to provide a safe alighting place.

We are of the opinion that the correct doctrine relating to this subject is that expressed in
Thompson's work on Negligence (vol. 3, sec. 3010) as follows:
 The test by which to determine whether the passenger has been guilty of negligence in
attempting to alight from a moving railway train, is that of ordinary or reasonable care. It
is to be considered whether an ordinarily prudent person, of the age, sex and condition of
the passenger, would have acted as the passenger acted under the circumstances disclosed
by the evidence. This care has been defined to be, not the care which may or should be
used by the prudent man generally, but the care which a man of ordinary prudence would
use under similar circumstances, to avoid injury." (Thompson, Commentaries on
Negligence, vol. 3, sec. 3010.)

Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil.
rep., 809), we may say that the test is this; Was there anything in the circumstances surrounding
the plaintiff at the time he alighted from the train which would have admonished a person of
average prudence that to get off the train under the conditions then existing was dangerous? If so,
the plaintiff should have desisted from alighting; and his failure so to desist was contributory
negligence.1awph!l.net

As the case now before us presents itself, the only fact from which a conclusion can be drawn to
the effect that plaintiff was guilty of contributory negligence is that he stepped off the car
without being able to discern clearly the condition of the platform and while the train was yet
slowly moving. In considering the situation thus presented, it should not be overlooked that the
plaintiff was, as we find, ignorant of the fact that the obstruction which was caused by the sacks
of melons piled on the platform existed; and as the defendant was bound by reason of its duty as
a public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff
had a right to assume, in the absence of some circumstance to warn him to the contrary, that the
platform was clear. The place, as we have already stated, was dark, or dimly lighted, and this
also is proof of a failure upon the part of the defendant in the performance of a duty owing by it
to the plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the
path of alighting passengers, the placing of them adequately so that their presence would be
revealed.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the
following circumstances are to be noted: The company's platform was constructed upon a level
higher than that of the roadbed and the surrounding ground. The distance from the steps of the
car to the spot where the alighting passenger would place his feet on the platform was thus
reduced, thereby decreasing the risk incident to stepping off. The nature of the platform,
constructed as it was of cement material, also assured to the passenger a stable and even surface
on which to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young
manhood, and it was by no means so risky for him to get off while the train was yet moving as
the same act would have been in an aged or feeble person. In determining the question of
contributory negligence in performing such act — that is to say, whether the passenger acted
prudently or recklessly — the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should be considered.
Women, it has been observed, as a general rule are less capable than men of alighting with safety
under such conditions, as the nature of their wearing apparel obstructs the free movement of the
limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his
daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in
his mind with regard either to the length of the step which he was required to take or the
character of the platform where he was alighting. Our conclusion is that the conduct of the
plaintiff in undertaking to alight while the train was yet slightly under way was not characterized
by imprudence and that therefore he was not guilty of contributory negligence.

The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a
copyist clerk, and that the injuries he has suffered have permanently disabled him from
continuing that employment. Defendant has not shown that any other gainful occupation is open
to plaintiff. His expectancy of life, according to the standard mortality tables, is approximately
thirty-three years. We are of the opinion that a fair compensation for the damage suffered by him
for his permanent disability is the sum of P2,500, and that he is also entitled to recover of
defendant the additional sum of P790.25 for medical attention, hospital services, and other
incidental expenditures connected with the treatment of his injuries.

The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of
P3,290.25, and for the costs of both instances. So ordered.

Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

[G.R. No. 115024. February 7, 1996]

MA. LOURDES VALENZUELA, petitioner, vs. COURT OF APPEALS, RICHARD LI and

ALEXANDER COMMERCIAL, INC., respondents.

[G.R. No. 117944. February 7, 1996]

RICHARD LI, petitioner, vs. COURT OF APPEALS and MA. LOURDES

VALENZUELA, respondents.

DECISION
KAPUNAN, J.:

These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem
from an action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court
of Quezon City for injuries sustained by her in a vehicular accident in the early morning of June
24, 1990. The facts found by the trial court are succinctly summarized by the Court of Appeals
below:

This is an action to recover damages based on quasi-delict, for serious physical injuries sustained
in a vehicular accident.

Plaintiffs version of the accident is as follows: At around 2:00 in the morning of June 24, 1990,
plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No.
FFU 542 from her restaurant at Marcos highway to her home at Palanza Street, Araneta Avenue.
She was travelling along Aurora Blvd. with a companion, Cecilia Ramon, heading towards the
direction of Manila. Before reaching A. Lake Street, she noticed something wrong with her tires;
she stopped at a lighted place where there were people, to verify whether she had a flat tire and
to solicit help if needed. Having been told by the people present that her rear right tire was flat
and that she cannot reach her home in that cars condition, she parked along the sidewalk, about
1 feet away, put on her emergency lights, alighted from the car, and went to the rear to open the
trunk. She was standing at the left side of the rear of her car pointing to the tools to a man who
will help her fix the tire when she was suddenly bumped by a 1987 Mitsubishi Lancer driven by
defendant Richard Li and registered in the name of defendant Alexander Commercial, Inc.
Because of the impact plaintiff was thrown against the windshield of the car of the defendant,
which was destroyed, and then fell to the ground. She was pulled out from under defendants car.
Plaintiffs left leg was severed up to the middle of her thigh, with only some skin and sucle
connected to the rest of the body. She was brought to
the UERM Medical Memorial Center where she was found to have a traumatic amputation, leg,
left up to distal thigh (above knee). She was confined in the hospital for twenty (20) days and
was eventually fitted with an artificial leg. The expenses for the hospital confinement (P
120,000.00) and the cost of the artificial leg (P27,000.00) were paid by defendants from the car
insurance.

In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary
damages in the amount of P100,000.00 and other medical and related expenses amounting to a
total of P180,000.00, including loss of expected earnings.

Defendant Richard Li denied that he was negligent. He was on his way home, travelling
at 55 kph; considering that it was raining, visibility was affected and the road was wet. Traffic
was light. He testified that he was driving along the inner portion of the right lane of Aurora
Blvd. towards the direction of Araneta Avenue, when he was suddenly confronted, in the vicinity
of A. Lake Street, San Juan, with a car coming from the opposite direction, travelling at 80 kph,
with full bright lights. Temporarily blinded, he instinctively swerved to the right to avoid
colliding with the oncoming vehicle, and bumped plaintiffs car, which he did not see because it
was midnight blue in color, with no parking lights or early warning device, and the area was
poorly lighted. He alleged in his defense that the left rear portion of plaintiffs car was protruding
as it was then at a standstill diagonally on the outer portion of the right lane towards Araneta
Avenue (par. 18, Answer). He confirmed the testimony of plaintiffs witness that after being
bumped the car of the plaintiff swerved to the right and hit another car parked on the sidewalk.
Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she
was not a licensed driver.

The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the
sketch of the three cars involved in the accident, testified that the plaintiffs car was near the
sidewalk; this witness did not remember whether the hazard lights of plaintiffs car were on, and
did not notice if there was an early warning device; there was a street light at the corner of
Aurora Blvd. and F. Roman, about 100 meters away. It was not mostly dark, i.e. things can be
seen (p. 16, tsn, Oct. 28, 1991).

A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car
and opened the trunk compartment, defendants car came approaching very fast ten meters from
the scene; the car was zigzagging. The rear left side of plaintiffs car was bumped by the front
right portion of defendants car; as a consequence, the plaintiffs car swerved to the right and hit
the parked car on the sidewalk. Plaintiff was thrown to the windshield of defendants car, which
was destroyed, and landed under the car. He stated that defendant was under the influence of
liquor as he could smell it very well (pp. 43, 79, tsn., June 17, 1991).

After trial, the lower court sustained the plaintiffs submissions and found defendant Richard
Li guilty of gross negligence and liable for damages under Article 2176 of the Civil Code. The
trial court likewise held Alexander Commercial, Inc., Lis employer, jointly and severally liable for
damages pursuant to Article 2180. It ordered the defendants to jointly and severally pay the
following amounts:

1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a

result of her severed left leg;

2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiffs
Bistro La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a
month, as unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990
until the date of this judgment; and (c) P30,000.00, a month, for unrealized profits in plaintiffs
two (2) beauty salons from July, 1990 until the date of this decision;

3. P1,000,000.00, in moral damages;

4. P50,000.00, as exemplary damages,

5. P60,000.00, as reasonable attorneys fees; and

6. Costs.

As a result of the trial courts decision, defendants filed an Omnibus Motion for New Trial and
for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li),
tending to show that the point of impact, as depicted by the pieces of glass/debris from the parties
cars, appeared to be at the center of the right lane of Aurora Blvd. The trial court denied the motion.
Defendants forthwith filed an appeal with the respondent Court of Appeals. In a Decision
rendered March 30, 1994, the Court of Appeals found that there was ample basis from the evidence
of record for the trial courts finding that the plaintiffs car was properly parked at the right, beside
the sidewalk when it was bumped by defendants car.[1] Dismissing the defendants argument that
the plaintiffs car was improperly parked, almost at the center of the road, the respondent court
noted that evidence which was supposed to prove that the car was at or near center of the right lane
was never presented during the trial of the case.[2] The respondent court furthermore observed that:

Defendant Lis testimony that he was driving at a safe speed of 55 km./hour is self serving; it was
not corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was
outside his beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of
June 24, 1990 when his attention was caught by a beautiful lady (referring to the plaintiff)
alighting from her car and opening the trunk compartment; he noticed the car of Richard Li
approaching very fast ten (10) meters away from the scene; defendants car was zigzagging,
although there were no holes and hazards on the street, and bumped the leg of the plaintiff who
was thrown against the windshield of defendants car, causing its destruction. He came to the
rescue of the plaintiff, who was pulled out from under defendants car and was able to say hurting
words to Richard Li because he noticed that the latter was under the influence of liquor, because
he could smell it very well (p. 36, et. seq., tsn, June 17, 1991). He knew that plaintiff owned a
beerhouse in Sta. Mesa in the 1970s, but did not know either plaintiff or defendant Li before the
accident.

In agreeing with the trial court that the defendant Li was liable for the injuries sustained by
the plaintiff, the Court of Appeals, in its decision, however, absolved the Lis employer, Alexander
Commercial, Inc. from any liability towards petitioner Lourdes Valenzuela and reduced the
amount of moral damages to P500,000.00. Finding justification for exemplary damages, the
respondent court allowed an award of P50,000.00 for the same, in addition to costs, attorneys fees
and the other damages. The Court of Appeals, likewise, dismissed the defendants counterclaims.[3]
Consequently, both parties assail the respondent courts decision by filing two separate
petitions before this Court. Richard Li, in G.R. No. 117944, contends that he should not be held
liable for damages because the proximate cause of the accident was Ma. Lourdes Valenzuelas own
negligence. Alternatively, he argues that in the event that this Court finds him negligent, such
negligence ought to be mitigated by the contributory negligence of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent courts
decision insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car
driven by Richard Li and insofar as it reduces the amount of the actual and moral damages awarded
by the trial court.[4]
As the issues are intimately related, both petitions are hereby consolidated. It is plainly evident
that the petition for review in G.R. No. 117944 raises no substantial questions of law. What it, in
effect, attempts to have this Court review are factual findings of the trial court, as sustained by the
Court of Appeals finding Richard Li grossly negligent in driving the Mitsubishi Lancer provided
by his company in the early morning hours of June 24, 1990. This we will not do. As a general
rule, findings of fact of the Court of Appeals are binding and conclusive upon us, and this Court
will not normally disturb such factual findings unless the findings of fact of the said court are
palpably unsupported by the evidence on record or unless the judgment itself is based on a
misapprehension of facts.[5]
 In the first place, Valenzuelas version of the incident was fully corroborated by an uninterested
witness, Rogelio Rodriguez, the owner-operator of an establishment located just across the scene
of the accident. On trial, he testified that he observed a car being driven at a very fast speed, racing
towards the general direction of Araneta Avenue.[6] Rodriguez further added that he was standing
in front of his establishment, just ten to twenty feet away from the scene of the accident, when he
saw the car hit Valenzuela, hurtling her against the windshield of the defendants Mitsubishi
Lancer, from where she eventually fell under the defendants car. Spontaneously reacting to the
incident, he crossed the street, noting that a man reeking with the smell of liquor had alighted from
the offending vehicle in order to survey the incident.[7] Equally important, Rodriguez declared that
he observed Valenzuelas car parked parallel and very near the sidewalk,[8] contrary to Lis
allegation that Valenzuelas car was close to the center of the right lane. We agree that as between
Lis self-serving asseverations and the observations of a witness who did not even know the
accident victim personally and who immediately gave a statement of the incident similar to his
testimony to the investigator immediately after the incident, the latters testimony deserves greater
weight. As the court emphasized:

The issue is one of credibility and from Our own examination of the transcript, We are not
prepared to set aside the trial courts reliance on the testimony of Rodriguez negating defendants
assertion that he was driving at a safe speed. While Rodriguez drives only a motorcycle, his
perception of speed is not necessarily impaired. He was subjected to cross-examination and no
attempt was made to question his competence or the accuracy of his statement that defendant
was driving very fast. This was the same statement he gave to the police investigator after the
incident, as told to a newspaper report (Exh. P). We see no compelling basis for disregarding his
testimony.

The alleged inconsistencies in Rodriguez testimony are not borne out by an examination of the
testimony. Rodriguez testified that the scene of the accident was across the street where his
beerhouse is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not
state that the accident transpired immediately in front of his establishment. The ownership of the
Lambingan sa Kambingan is not material; the business is registered in the name of his mother,
but he explained that he owns the establishment (p. 5, tsn., June 20, 1991).

Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on the night
the accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that
there was a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn., Oct. 20,
1991).

With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a
heavy rain and the rain has stopped and he was outside his establishment at the time the accident
transpired (pp. 64-65, tsn., June 17, 1991). This was consistent with plaintiffs testimony that it
was no longer raining when she left Bistro La Conga (pp. 10-11, tsn., April 29, 1991). It was
defendant Li who stated that it was raining all the way in an attempt to explain why he was
travelling at only 50-55 kph. (p. 11, tsn., Oct. 14, 1991). As to the testimony of Pfc. Ramos that it
was raining, he arrived at the scene only in response to a telephone call after the accident had
transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial inconsistencies in Rodriguezs
testimony that would impair the essential integrity of his testimony or reflect on his honesty. We
are compelled to affirm the trial courts acceptance of the testimony of said eyewitness.

Against the unassailable testimony of witness Rodriguez we note that Lis testimony was
peppered with so many inconsistencies leading us to conclude that his version of the accident was
merely adroitly crafted to provide a version, obviously self-serving, which would exculpate him
from any and all liability in the incident. Against Valenzuelas corroborated claims, his allegations
were neither backed up by other witnesses nor by the circumstances proven in the course of trial.
He claimed that he was driving merely at a speed of 55 kph. when out of nowhere he saw a dark
maroon lancer right in front of him, which was (the) plaintiffs car. He alleged that upon seeing this
sudden apparition he put on his brakes to no avail as the road was slippery.[9]
One will have to suspend disbelief in order to give credence to Lis disingenuous and patently
self-serving asseverations. The average motorist alert to road conditions will have no difficulty
applying the brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility
of the street, and the road conditions on a principal metropolitan thoroughfare like Aurora
Boulevard, Li would have had ample time to react to the changing conditions of the road if he were
alert - as every driver should be - to those conditions. Driving exacts a more than usual toll on the
senses. Physiological fight or flight[10] mechanisms are at work, provided such mechanisms were
not dulled by drugs, alcohol, exhaustion, drowsiness, etc.[11] Lis failure to react in a manner which
would have avoided the accident could therefore have been only due to either or both of the two
factors: 1) that he was driving at a very fast speed as testified by Rodriquez; and 2) that he was
under the influence of alcohol.[12] Either factor working independently would have diminished his
responsiveness to road conditions, since normally he would have slowed down prior to reaching
Valenzuelas car, rather than be in a situation forcing him to suddenly apply his brakes. As the trial
court noted (quoted with approval by respondent court):

Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the
incident, he said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon
lancer right in front of him, which was plaintiffs car, indicating, again, thereby that, indeed, he
was driving very fast, oblivious of his surroundings and the road ahead of him, because if he was
not, then he could not have missed noticing at a still far distance the parked car of the plaintiff at
the right side near the sidewalk which had its emergency lights on, thereby avoiding forcefully
bumping at the plaintiff who was then standing at the left rear edge of her car.

Since, according to him, in his narration to the San Juan Police, he put on his brakes when he
saw the plaintiffs car in front of him, but that it failed as the road was wet and slippery, this goes
to show again, that, contrary to his claim, he was, indeed, running very fast. For, were it
otherwise, he could have easily completely stopped his car, thereby avoiding the bumping of the
plaintiff, notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he was
running slow, as he claimed, at only about 55 kilometers per hour, then, inspite of the wet and
slippery road, he could have avoided hitting the plaintiff by the mere expedient or applying his
brakes at the proper time and distance.

It could not be true, therefore, as he now claims during his testimony, which is contrary to what
he told the police immediately after the accident and is, therefore, more believable, that he did
not actually step on his brakes, but simply swerved a little to the right when he saw the on-
coming car with glaring headlights, from the opposite direction, in order to avoid it.

For, had this been what he did, he would not have bumped the car of the plaintiff which was
properly parked at the right beside the sidewalk. And, it was not even necessary for him to
swerve a little to the right in order to safely avoid a collision with the on-coming car, considering
that Aurora Blvd. is a double lane avenue separated at the center by a dotted white paint, and
there is plenty of space for both cars, since her car was running at the right lane going towards
Manila and the on-coming car was also on its right lane going to Cubao.[13]

Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi
Lancer, the next question for us to determine is whether or not Valenzuela was likewise guilty of
contributory negligence in parking her car alongside Aurora Boulevard, which entire area Li points
out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory negligence.
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 his own protection. [14] Based on the foregoing definition, the standard or act to which,
according to petitioner Li, Valenzuela ought to have conformed for her own protection was not to
park at all at any point of Aurora Boulevard, a no parking zone. We cannot agree.
Courts have traditionally been compelled to recognize that an actor who is confronted with an
emergency is not to be held up to the standard of conduct normally applied to an individual who
is in no such situation. The law takes stock of impulses of humanity when placed in threatening or
dangerous situations and does not require the same standard of thoughtful and reflective care from
persons confronted by unusual and oftentimes threatening conditions.[15] Under the emergency rule
adopted by this Court in Gan vs Court of Appeals,[16] 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.[17]
Applying this principle to a case in which the victims in a vehicular accident swerved to the
wrong lane to avoid hitting two children suddenly darting into the street, we held, in Mc Kee vs.
Intermediate Appellate Court,[18] that the driver therein, Jose Koh, adopted the best means possible
in the given situation to avoid hitting the children. Using the emergency rule the court concluded
that Koh, in spite of the fact that he was in the wrong lane when the collision with an oncoming
truck occurred, was not guilty of negligence.[19]
While the emergency rule applies to those cases in which reflective thought, or the opportunity
to adequately weigh a threatening situation is absent, the conduct which is required of an individual
in such cases is dictated not exclusively by the suddenness of the event which absolutely negates
thoughtful care, but by the over-all nature of the circumstances. A woman driving a vehicle
suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is
both convenient for her to do so and which is not a hazard to other motorists. She is not expected
to run the entire boulevard in search for a parking zone or turn on a dark Street or alley where she
would likely find no one to help her. It would be hazardous for her not to stop and assess the
emergency (simply because the entire length of Aurora Boulevard is a no-parking zone) because
the hobbling vehicle would be both a threat to her safety and to other motorists. In the instant case,
Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St., noticed that she
had a flat tire. To avoid putting herself and other motorists in danger, she did what was best under
the situation. As narrated by respondent court:

She stopped at a lighted place where there were people, to verify whether she had a flat tire and
to solicit help if needed. Having been told by the people present that her rear right tire was flat
and that she cannot reach her home she parked along the sidewalk, about 1 feet away, behind a
Toyota Corona Car.[20] In fact, respondent court noted, Pfc. Felix Ramos, the investigator on the
scene of the accident confirmed that Valenzuelas car was parked very close to the
sidewalk.[21] The sketch which he prepared after the incident showed Valenzuelas car partly
straddling the sidewalk, clear and at a convenient distance from motorists passing the right lane
of Aurora Boulevard. This fact was itself corroborated by the testimony of witness Rodriguez.[22]

Under the circumstances described, Valenzuela did exercise the standard reasonably dictated
by the emergency and could not be considered to have contributed to the unfortunate circumstances
which eventually led to the amputation of one of her lower extremities. The emergency which led
her to park her car on a sidewalk in Aurora Boulevard was not of her own making, and it was
evident that she had taken all reasonable precautions.
Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the
night of the accident. Negligence, as it is commonly understood is conduct which creates an undue
risk of harm to others.[23] It is the failure to observe that degree of care, precaution, and vigilance
which the circumstances justly demand, whereby such other person suffers injury.[24] We stressed,
in Corliss vs. Manila Railroad Company,[25] that negligence is the want of care required by the
circumstances.
The circumstances established by the evidence adduced in the court below plainly demonstrate
that Li was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was
driving at a fast speed at about 2:00 A.M. after a heavy downpour had settled into a drizzle
rendering the street slippery. There is ample testimonial evidence on record to show that he was
under the influence of liquor. Under these conditions, his chances of effectively dealing with
changing conditions on the road were significantly lessened. As Prosser and Keaton emphasize:

[U]nder present day traffic conditions, any driver of an automobile must be prepared for the
sudden appearance of obstacles and persons on the highway, and of other vehicles at
intersections, such as one who sees a child on the curb may be required to anticipate its sudden
dash into the street, and his failure to act properly when they appear may be found to amount to
negligence. [26]

Lis obvious unpreparedness to cope with the situation confronting him on the night of the
accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc. Lis employer. In
denying liability on the part of Alexander Commercial, the respondent court held that:
There is no evidence, not even defendant Lis testimony, that the visit was in connection with
official matters. His functions as assistant manager sometimes required him to perform work
outside the office as he has to visit buyers and company clients, but he admitted that on the night
of the accident he came from BF Homes Paraaque he did not have business from the company
(pp. 25-26, tsn, Sept. 23, 1991). The use ofthe company car was partly required by the nature of
his work, but the privilege of using it for non-official business is a benefit, apparently referring to
the fringe benefits attaching to his position.

Under the civil law, an employer is liable for the negligence of his employees in the discharge of
their respective duties, the basis of which liability is not respondeat superior, but the relationship
of pater familias, which theory bases the liability of the master ultimately on his own negligence
and not on that of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an
employer may be held liable for the negligence of his employee, the act or omission which
caused damage must have occurred while an employee was in the actual performance of his
assigned tasks or duties (Francis High School vs. Court of Appeals, 194 SCRA 341). In defining
an employers liability for the acts done within the scope of the employees assigned tasks, the
Supreme Court has held that this includes any act done by an employee, in furtherance of the
interests of the employer or for the account of the employer at the time of the infliction of the
injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA 637).
An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer (at p. 645).

In light of the foregoing, We are unable to sustain the trial courts finding that since defendant Li
was authorized by the company to use the company car either officially or socially or even bring
it home, he can be considered as using the company car in the service of his employer or on the
occasion of his functions. Driving the company car was not among his functions as assistant
manager; using it for non-official purposes would appear to be a fringe benefit, one of the perks
attached to his position. But to impose liability upon the employer under Article 2180 of the
Civil Code, earlier quoted, there must be a showing that the damage was caused by their
employees in the service of the employer or on the occasion of their functions. There is no
evidence that Richard Li was at the time of the accident performing any act in furtherance of the
companys business or its interests, or at least for its benefit. The imposition of solidary liability
against defendant Alexander Commercial Corporation must therefore fail.[27]

We agree with the respondent court that the relationship in question is not based on the
principle of respondeat superior, which holds the master liable for acts of the servant, but that
of pater familias, in which the liability ultimately falls upon the employer, for his failure to
exercise the diligence of a good father of the family in the selection and supervision of his
employees. It is up to this point, however, that our agreement with the respondent court ends.
Utilizing the bonus pater familias standard expressed in Article 2180 of the Civil Code,[28] we are
of the opinion that Lis employer, Alexander Commercial, Inc. is jointly and solidarily liable for
the damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals[29] upon which respondent court
has placed undue reliance, dealt with the subject of a school and its teachers supervision of students
during an extracurricular activity. These cases now fall under the provision on special parental
authority found in Art. 218 of the Family Code which generally encompasses all authorized school
activities, whether inside or outside school premises.
Second, the employers primary liability under the concept of pater familias embodied by Art.
2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His
liability is relieved on a showing that he exercised the diligence of a good father of the family in
the selection and supervision of its employees. Once evidence is introduced showing that the
employer exercised the required amount of care in selecting its employees, half of the employers
burden is overcome. The question of diligent supervision, however, depends on the circumstances
of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its
employee during the performance of the latters assigned tasks would be enough to relieve him of
the liability imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer
is not expected to exercise supervision over either the employees private activities or during the
performance of tasks either unsanctioned by the former or unrelated to the employees tasks. The
case at bench presents a situation of a different character, involving a practice utilized by large
companies with either their employees of managerial rank or their representatives.
It is customary for large companies to provide certain classes of their employees with courtesy
vehicles. These company cars are either wholly owned and maintained by the company itself or
are subject to various plans through which employees eventually acquire their vehicles after a
given period of service, or after paying a token amount. Many companies provide liberal car plans
to enable their managerial or other employees of rank to purchase cars, which, given the cost of
vehicles these days, they would not otherwise be able to purchase on their own.
Under the first example, the company actually owns and maintains the car up to the point of
turnover of ownership to the employee; in the second example, the car is really owned and
maintained by the employee himself. In furnishing vehicles to such employees, are companies
totally absolved of responsibility when an accident involving a company-issued car occurs during
private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the first plan, require
rigorous tests of road worthiness from their agents prior to turning over the car (subject of company
maintenance) to their representatives. In other words, like a good father of a family, they entrust
the company vehicle only after they are satisfied that the employee to whom the car has been given
full use of the said company car for company or private purposes will not be a threat or menace to
himself, the company or to others. When a company gives full use and enjoyment of a company
car to its employee, it in effect guarantees that it is, like every good father, satisfied that its
employee will use the privilege reasonably and responsively.
In the ordinary course of business, not all company employees are given the privilege of using
a company-issued car. For large companies other than those cited in the example of the preceding
paragraph, the privilege serves important business purposes either related to the image of success
an entity intends to present to its clients and to the public in general, or for practical and utilitarian
reasons - to enable its managerial and other employees of rank or its sales agents to reach clients
conveniently. In most cases, providing a company car serves both purposes. Since important
business transactions and decisions may occur at all hours in all sorts of situations and under all
kinds of guises, the provision for the unlimited use of a company car therefore principally serves
the business and goodwill of a company and only incidentally the private purposes of the
individual who actually uses the car, the managerial employee or company sales agent. As such,
in providing for a company car for business use and/or for the purpose of furthering the companys
image, a company owes a responsibility to the public to see to it that the managerial or other
employees to whom it entrusts virtually unlimited use of a company issued car are able to use the
company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did not require
him to scrupulously keep normal office hours as he was required quite often to perform work
outside the office, visiting prospective buyers and contacting and meeting with company
clients.[30] These meetings, clearly, were not strictly confined to routine hours because, as a
managerial employee tasked with the job of representing his company with its clients, meetings
with clients were both social as well as work-related functions. The service car assigned to Li by
Alexander Commercial, Inc. therefore enabled both Li - as well as the corporation - to put up the
front of a highly successful entity, increasing the latters goodwill before its clientele. It also
facilitated meeting between Li and its clients by providing the former with a convenient mode of
travel.
Moreover, Lis claim that he happened to be on the road on the night of the accident because
he was coming from a social visit with an officemate in Paraaque was a bare allegation which was
never corroborated in the court below. It was obviously self-serving. Assuming he really came
from his officemates place, the same could give rise to speculation that he and his officemate had
just been from a work-related function, or they were together to discuss sales and other work
related strategies.
In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it exercised
the care and diligence of a good father of the family in entrusting its company car to Li. No
allegations were made as to whether or not the company took the steps necessary to determine or
ascertain the driving proficiency and history of Li, to whom it gave full and unlimited use of a
company car.[31] Not having been able to overcome the burden of demonstrating that it should be
absolved of liability for entrusting its company car to Li, said company, based on the principle
of bonus pater familias, ought to be jointly and severally liable with the former for the injuries
sustained by Ma. Lourdes Valenzuela during the accident.
Finally, we find no reason to overturn the amount of damages awarded by the respondent
court, except as to the amount of moral damages. In the case of moral damages, while the said
damages are not intended to enrich the plaintiff at the expense of a defendant, the award should
nonetheless be commensurate to the suffering inflicted. In the instant case we are of the opinion
that the reduction in moral damages from an amount of P 1,000,000.00 to P500,000.00 by the
Court of Appeals was not justified considering the nature of the resulting damage and the
predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her
left lower extremity at the distal left thigh just above the knee. Because of this, Valenzuela will
forever be deprived of the full ambulatory functions of her left extremity, even with the use of state
of the art prosthetic technology. Well beyond the period of hospitalization (which was paid for by
Li), she will be required to undergo adjustments in her prosthetic devise due to the shrinkage of
the stump from the process of healing.
 These adjustments entail costs, prosthetic replacements and months of physical and
occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be
replaced and re-adjusted to changes in the size of her lower limb effected by the biological changes
of middle-age, menopause and aging. Assuming she reaches menopause, for example, the
prosthetic will have to be adjusted to respond to the changes in bone resulting from a precipitate
decrease in calcium levels observed in the bones of all post-menopausal women. In other words,
the damage done to her would not only be permanent and lasting, it would also be permanently
changing and adjusting to the physiologic changes which her body would normally undergo
through the years. The replacements, changes, and adjustments will require corresponding
adjustive physical and occupational therapy. All of these adjustments, it has been documented, are
painful.
The foregoing discussion does not even scratch the surface of the nature of the resulting
damage because it would be highly speculative to estimate the amount of psychological pain,
damage and injury which goes with the sudden severing of a vital portion of the human body. A
prosthetic device, however technologically advanced, will only allow a reasonable amount of
functional restoration of the motor functions of the lower limb. The sensory functions are forever
lost. The resultant anxiety, sleeplessness, psychological injury, mental and physical pain are
inestimable.
As the amount of moral damages are subject to this Courts discretion, we are of the opinion
that the amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and
nature of the injury -. physical and psychological - suffered by Valenzuela as a result of Lis grossly
negligent driving of his Mitsubishi Lancer in the early morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the court of Appeals is
modified with the effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.
G.R. No. 85044 June 3, 1992

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,

vs.
HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20,
Vigan, Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents.

FELICIANO, J.:

On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo
with an air rifle causing injuries which resulted in her death. Accordingly, a civil complaint for
damages was filed with the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as
Civil Case No. 3457-V, by petitioner Macario Tamargo, Jennifer's adopting parent, and
petitioner spouses Celso and Aurelia Tamargo, Jennifer's natural parents against respondent
spouses Victor and Clara Bundoc, Adelberto's natural parents with whom he was living at the
time of the tragic incident. In addition to this case for damages, a criminal information or
Homicide through Reckless Imprudence was filed [Criminal Case No. 1722-V] against
Adelberto Bundoc. Adelberto, however, was acquitted and exempted from criminal liability on
the ground that he bad acted without discernment.

Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a
petition to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then
Court of First Instance of Ilocos Sur. This petition for adoption was grunted on, 18 November
1982, that is, after Adelberto had shot and killed Jennifer.

In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of
the foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely
the spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition for
adoption was filed.

Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with
his natural parents, parental authority had not ceased nor been relinquished by the mere filing
and granting of a petition for adoption.

The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent
natural parents of Adelberto indeed were not indispensable parties to the action.

Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day
reglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration
followed by a supplemental motion for reconsideration on 15 January 1988. It appearing,
however, that the motions failed to comply with Sections 4 and 5 of Rule 15 of the Revised
Rules of Court — that notice of the motion shall be given to all parties concerned at least three
(3) days before the hearing of said motion; and that said notice shall state the time and place of
hearing — both motions were denied by the trial court in an Order dated 18 April 1988. On 28
April 1988, petitioners filed a notice of appeal. In its Order dated 6 June 1988, the trial court
dismissed the notice at appeal, this time ruling that the notice had been filed beyond the 15-day
reglementary period ending 22 December 1987.

Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning
the trial court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June
1988, The Court of Appeals dismissed the petition, ruling that petitioners had lost their right to
appeal.

In the present Petition for Review, petitioners once again contend that respondent spouses
Bundoc are the indispensable parties to the action for damages caused by the acts of their minor
child, Adelberto Bundoc. Resolution of this Petition hinges on the following issues: (1) whether
or not petitioners, notwithstanding loss of their right to appeal, may still file the instant Petition;
conversely, whether the Court may still take cognizance of the case even through petitioners'
appeal had been filed out of time; and (2) whether or not the effects of adoption, insofar as
parental authority is concerned may be given retroactive effect so as to make the adopting
parents the indispensable parties in a damage case filed against their adopted child, for acts
committed by the latter, when actual custody was yet lodged with the biological parents.

1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration filed
before the trial court, not having complied with the requirements of Section 13, Rule 41, and
Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not
interrupt and suspend the reglementary period to appeal: the trial court held that the motions, not
having contained a notice of time and place of hearing, had become useless pieces of paper
which did not interrupt the reglementary period. 1 As in fact repeatedly held by this Court, what
is mandatory is the service of the motion on the opposing counsel indicating the time and place
of hearing. 2

In view, however, of the nature of the issue raised in the instant. Petition, and in order that
substantial justice may be served, the Court, invoking its right to suspend the application of
technical rules to prevent manifest injustice, elects to treat the notice of appeal as having been
seasonably filed before the trial court, and the motion (and supplemental motion) for
reconsideration filed by petitioner in the trial court as having interrupted the reglementary period
for appeal. As the Court held in Gregorio v. Court of Appeals: 3

Dismissal of appeal; purely on technical grounds is frowned upon where the

policy of the courts is to encourage hearings of appeal on their merits. The rules
of procedure ought not be applied in a very rigid technical sense, rules of
procedure are used only to help secure not override, substantial justice. if d
technical and rigid enforcement of the rules is made their aim would be
defeated. 4

2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an
air rifle gave rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil
Code provides:

Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his death or
incapacity, the mother, for any damages that may be caused by a minor child who lives with
them. Article 2180 of the Civil Code reads:

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

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

xxx xxx xxx

The responsibility treated of in this Article shall cease when the person herein
mentioned prove that they observed all the diligence of a good father of a family
to prevent damage. (Emphasis supplied)

This principle of parental liability is a species of what is frequently designated as vicarious

liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a person
is not only liable for torts committed by himself, but also for torts committed by others with
whom he has a certain relationship and for whom he is responsible. Thus, parental liability is
made a natural or logical consequence of the duties and responsibilities of parents — their
parental authority — which includes the instructing, controlling and disciplining of the
child. 5 The basis for the doctrine of vicarious liability was explained by the Court in Cangco v.
Manila Railroad Co. 6 in the following terms:

With respect to extra-contractual obligation arising from negligence, whether of

act or omission, it is competent for the legislature to elect — and our Legislature
has so elected — to limit such liability to cases in which the person upon whom
such an obligation is imposed is morally culpable or, on the contrary, for reasons
of public policy. to extend that liability, without regard to the lack of moral
culpability, so as to include responsibility for the negligence of those persons
whose acts or omissions are imputable, by a legal fiction, to others who are in a
position to exercise an absolute or limited control over them. The legislature
which adopted our Civil Code has elected to limit extra-contractual liability —
with certain well-defined exceptions — to cases in which moral culpability can be
directly imputed to the persons to be charged. This moral responsibility may
consist in having failed to exercise due care in one's own acts, or in having failed
to exercise due care in the selection and control of one's agent or servants, or in
the control of persons who, by reasons of their status, occupy a position of
dependency with respect to the person made liable for their conduct. 7 (Emphasis
Supplied)

The civil liability imposed upon parents for the torts of their minor children living with
them, may be seen to be based upon the parental authority vested by the Civil Code upon
such parents. The civil law assumes that when an unemancipated child living with its
parents commits a tortious acts, the parents were negligent in the performance of their
legal and natural duty closely to supervise the child who is in their custody and control.
Parental liability is, in other words, anchored upon parental authority coupled with
presumed parental dereliction in the discharge of the duties accompanying such authority.
The parental dereliction is, of course, only presumed and the presumption can be
overtuned under Article 2180 of the Civil Code by proof that the parents had exercised all
the diligence of a good father of a family to prevent the damage.

In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental
authority was still lodged in respondent Bundoc spouses, the natural parents of the minor
Adelberto. It would thus follow that the natural parents who had then actual custody of the minor
Adelberto, are the indispensable parties to the suit for damages.

The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption
was issued by the adoption court in favor of the Rapisura spouses, parental authority was vested
in the latter as adopting parents as of the time of the filing of the petition for adoption that
is, before Adelberto had shot Jennifer which an air rifle. The Bundoc spouses contend that they
were therefore free of any parental responsibility for Adelberto's allegedly tortious conduct.
Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which
reads as follows:

Art. 36. Decree of Adoption. — If, after considering the report of the Department
of Social Welfare or duly licensed child placement agency and the evidence
submitted before it, the court is satisfied that the petitioner is qualified to
maintain, care for, and educate the child, that the trial custody period has been
completed, and that the best interests of the child will be promoted by the
adoption, a decree of adoption shall be entered, which shall be effective he date
the original petition was filed. The decree shall state the name by which the child
is thenceforth to be known. (Emphasis supplied)

The Bundoc spouses further argue that the above Article 36 should be read in relation to
Article 39 of the same Code:

Art. 39. Effect of Adoption. — The adoption shall:

xxx xxx xxx

(2) Dissolve the authority vested in the natural parents, except where the adopter
is the spouse of the surviving natural parent;

xxx xxx xxx

(Emphasis supplied)

and urge that their Parental authority must be deemed to have been dissolved as of the time the
Petition for adoption was filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability
for the torts of a minor child is the relationship existing between the parents and the minor child
living with them and over whom, the law presumes, the parents exercise supervision and control.
Article 58 of the Child and Youth Welfare Code, re-enacted this rule:

Article 58 Torts — Parents and guardians are responsible for the damage caused
by the child under their parental authority in accordance with the civil
Code. (Emphasis supplied)

Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that
the child, doer of the tortious act, shall have beer in the actual custody of the parents sought to be
held liable for the ensuing damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly
liable for the injuries and damages caused by the acts or omissions of their
unemancipated children living in their companyand under their parental authority
subject to the appropriate defenses provided by law. (Emphasis supplied)
We do not believe that parental authority is properly regarded as having been retroactively
transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle
shooting happened. We do not consider that retroactive effect may be giver to the decree of
adoption so as to impose a liability upon the adopting parents accruing at a time when adopting
parents had no actual or physically custody over the adopted child. Retroactive affect may
perhaps be given to the granting of the petition for adoption where such is essential to permit the
accrual of some benefit or advantage in favor of the adopted child. In the instant case, however,
to hold that parental authority had been retroactively lodged in the Rapisura spouses so as to
burden them with liability for a tortious act that they could not have foreseen and which they
could not have prevented (since they were at the time in the United States and had no physical
custody over the child Adelberto) would be unfair and unconscionable. Such a result, moreover,
would be inconsistent with the philosophical and policy basis underlying the doctrine of
vicarious liability. Put a little differently, no presumption of parental dereliction on the part of
the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact
subject to their control at the time the tort was committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article
35 provides as follows:

Art. 35. Trial Custody. — No petition for adoption shall be finally granted unless
and until the adopting parents are given by the courts a supervised trial custody
period of at least six months to assess their adjustment and emotional readiness
for the legal union. During the period of trial custody, parental authority shall be
vested in the adopting parents. (Emphasis supplied)

Under the above Article 35, parental authority is provisionally vested in the adopting parents
during the period of trial custody, i.e., before the issuance of a decree of adoption, precisely
because the adopting parents are given actual custody of the child during such trial period. In
the instant case, the trial custody period either had not yet begun or bad already been completed
at the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his
natural parents, not the adopting parents.

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were
indispensable parties to the suit for damages brought by petitioners, and that the dismissal by the
trial court of petitioners' complaint, the indispensable parties being already before the court,
constituted grave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE
COURSE and the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No.
SP-15016 is hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the trial
court is hereby REINSTATED and this case is REMANDED to that court for further
proceedings consistent with this Decision. Costs against respondent Bundoc spouses. This
Decision is immediately executory.

SO ORDERED.
 [G.R. No. 132266. December 21, 1999]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and

LUISA SO VASQUEZ, and CEBU DOCTORS HOSPITAL, INC., respondents.

DECISION
DAVIDE, JR., C.J.:

The pivotal issue in this petition is whether an employer may be held vicariously liable
for the death resulting from the negligent operation by a managerial employee of a company-
issued vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was
driving a Honda motorcycle around Fuente Osmea Rotunda. He was traveling counter-
clockwise, (the normal flow of traffic in a rotunda) but without any protective helmet or
goggles. He was also only carrying a Students Permit to Drive at the time. Upon the other
hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial Corporation,
registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date
and time, Abad drove the said company car out of a parking lot but instead of going around
the Osmea rotunda he made a short cut against [the] flow of the traffic in proceeding to his
route to General Maxilom St. or to Belvic St.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other
causing severe injuries to the former. Abad stopped his vehicle and brought Vasquez to the
Southern Islands Hospital and later to the Cebu Doctors Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital. It was there that Abad
signed an acknowledgment of Responsible Party (Exhibit K) wherein he agreed to pay
whatever hospital bills, professional fees and other incidental charges Vasquez may incur.
After the police authorities had conducted the investigation of the accident, a Criminal Case
was filed against Abad but which was subsequently dismissed for failure to prosecute. So,
the present action for damages was commenced by Vicente Vasquez, Jr. and Luisa So
Vasquez, parents of the deceased Romeo So Vasquez, against Jose Benjamin Abad and
Castilex Industrial Corporation. In the same action, Cebu Doctors Hospital intervened to
collect unpaid balance for the medical expense given to Romeo So Vasquez.[1]

The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and
ordered Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial
Corporation (hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the
amounts of P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as
attorneys fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctors Hospital,
the sum of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27
July 1989 until fully paid, plus the costs of litigation.[2]
CASTILEX and ABAD separately appealed the decision.
In its decision[3] of 21 May 1997, the Court of Appeals affirmed the ruling of the trial
court holding ABAD and CASTILEX liable but held that the liability of the latter is only
vicarious and not solidary with the former. It reduced the award of damages representing loss
of earning capacity from P778,752.00 to P214,156.80; and the interest on the hospital and
medical bills, from 3% per month to 12% per annum from 5 September 1988 until fully paid.
Upon CASTILEXs motion for reconsideration, the Court of Appeals modified its
decision by (1) reducing the award of moral damages from P50,000 to P30,000 in view of
the deceaseds contributory negligence; (b) deleting the award of attorneys fees for lack of
evidence; and (c) reducing the interest on hospital and medical bills to 6% per annum from 5
September 1988 until fully paid.[4]
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred
in (1) applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of
the fourth paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have
been always acting within the scope of his assigned task even outside office hours because
he was using a vehicle issued to him by petitioner; and (3) ruling that petitioner had the
burden to prove that the employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds
fast on the theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their sons death was caused
by the negligence of petitioners employee who was driving a vehicle issued by petitioner and
who was on his way home from overtime work for petitioner; and that petitioner is thus liable
for the resulting injury and subsequent death of their son on the basis of the fifth paragraph
of Article 2180. Even if the fourth paragraph of Article 2180 were applied, petitioner cannot
escape liability therefor. They moreover argue that the Court of Appeals erred in reducing
the amount of compensatory damages when the award made by the trial court was borne both
by evidence adduced during the trial regarding deceaseds wages and by jurisprudence on life
expectancy. Moreover, they point out that the petition is procedurally not acceptable on the
following grounds: (1) lack of an explanation for serving the petition upon the Court of
Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil
Procedure; and (2) lack of a statement of the dates of the expiration of the original
reglementary period and of the filing of the motion for extension of time to file a petition for
review.
For its part, respondent Cebu Doctors Hospital maintains that petitioner CASTILEX is
indeed vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by
ABAD, who was on his way home from taking snacks after doing overtime work for
petitioner.Although the incident occurred when ABAD was not working anymore the
inescapable fact remains that said employee would not have been situated at such time and
place had he not been required by petitioner to do overtime work. Moreover, since petitioner
adopted the evidence adduced by ABAD, it cannot, as the latters employer, inveigle itself
from the ambit of liability, and is thus estopped by the records of the case, which it failed to
refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondents contention of petitioners violation of Section 11 of Rule 13 and
Section 4 of Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Section 11 of Rule 13 provides:

SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the service and
filing of pleadings and other papers shall be done personally. Except with respect to papers
emanating from the court, a resort to other modes must be accompanied by a written
explanation why the service or filing was not done personally. A violation of this Rule may
be cause to consider the paper as not filed.

The explanation why service of a copy of the petition upon the Court of Appeals was
done by registered mail is found on Page 28 of the petition. Thus, there has been compliance
with the aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule
45, the same is unfounded. The material dates required to be stated in the petition are the
following: (1) the date of receipt of the judgment or final order or resolution subject of the
petition; (2) the date of filing of a motion for new trial or reconsideration, if any; and (3) the
date of receipt of the notice of the denial of the motion. Contrary to private respondents claim,
the petition need not indicate the dates of the expiration of the original reglementary period
and the filing of a motion for extension of time to file the petition. At any rate, aside from the
material dates required under Section 4 of Rule 45, petitioner CASTILEX also stated in the
first page of the petition the date it filed the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX
presumes said negligence but claims that it is not vicariously liable for the injuries and
subsequent death caused by ABAD.
 Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only
apply to instances where the employer is not engaged in business or industry. Since it
is engaged in the business of manufacturing and selling furniture it is therefore not covered
by said provision. Instead, the fourth paragraph should apply.
Petitioners interpretation of the fifth paragraph is not accurate. The phrase even though
the former are not engaged in any business or industry found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.[5]
A distinction must be made between the two provisions to determine what is
applicable. Both provisions apply to employers: the fourth paragraph, to owners and
managers of an establishment or enterprise; and the fifth paragraph, to employers in general,
whether or not engaged in any business or industry. The fourth paragraph covers negligent
acts of employees committed either in the service of the branches or on the occasion of their
functions, while the fifth paragraph encompasses negligent acts of employees acting within
the scope of their assigned task. The latter is an expansion of the former in both employer
coverage and acts included. Negligent acts of employees, whether or not the employer is
engaged in a business or industry, are covered so long as they were acting within the scope
of their assigned task, even though committed neither in the service of the branches nor on
the occasion of their functions. For, admittedly, employees oftentimes wear different
hats. They perform functions which are beyond their office, title or designation but which,
nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators[6] and banks.[7] The Court of Appeals cannot,
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this
case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or
industry, an employer is liable for the torts committed by employees within the scope of his
assigned tasks. But it is necessary to establish the employer-employee relationship; once this
is done, the plaintiff must show, to hold the employer liable, that the employee was acting
within the scope of his assigned task when the tort complained of was committed. It is only
then that the employer may find it necessary to interpose the defense of due diligence in the
selection and supervision of the employee.[8]
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the
time of the tort occurrence. As to whether he was acting within the scope of his assigned task
is a question of fact, which the court a quo and the Court of Appeals resolved in the
affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however, subject
to exceptions such as when the conclusion is grounded on speculations, surmises, or
conjectures.[9]Such exception obtain in the present case to warrant review by this Court of the
finding of the Court of Appeals that since ABAD was driving petitioners vehicle he was
acting within the scope of his duties as a manager.
 Before we pass upon the issue of whether ABAD was performing acts within the range
of his employment, we shall first take up the other reason invoked by the Court of Appeals
in holding petitioner CASTILEX vicariously liable for ABADs negligence, i.e., that the
petitioner did not present evidence that ABAD was not acting within the scope of his assigned
tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court of Appeals,
it was not incumbent upon the petitioner to prove the same. It was enough for petitioner
CASTILEX to deny that ABAD was acting within the scope of his duties; petitioner was not
under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui
negat (He who asserts, not he who denies, must prove). The Court has consistently applied
the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action,
fails to show in a satisfactory manner facts which he bases his claim, the defendant is under
no obligation to prove his exception or defense.[10]
Now on the issue of whether the private respondents have sufficiently established that
ABAD was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident,
he was driving a company-issued vehicle, registered under the name of petitioner. He was
then leaving the restaurant where he had some snacks and had a chat with his friends after
having done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to
the problem of whether at a given moment, an employee is engaged in his employers business
in the operation of a motor vehicle, so as to fix liability upon the employer because of the
employees action or inaction; but rather, the result varies with each state of facts.[11]
In Filamer Christian Institute v. Intermediate Appellate Court,[12] this Court had the
occasion to hold that acts done within the scope of the employees assigned tasks includes any
act done by an employee in furtherance of the interests of the employer or for the account of
the employer at the time of the infliction of the injury or damages.
The court a quo and the Court of Appeals were one in holding that the driving by a
manager of a company-issued vehicle is within the scope of his assigned tasks regardless of
the time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of
the injurious incident is not of itself sufficient to charge petitioner with liability for the
negligent operation of said vehicle unless it appears that he was operating the vehicle within
the course or scope of his employment.
The following are principles in American Jurisprudence on the employers liability for
the injuries inflicted by the negligence of an employee in the use of an employers motor
vehicle:

I. Operation of Employers Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employers vehicle in going from his work
to a place where he intends to eat or in returning to work from a meal is not ordinarily acting
within the scope of his employment in the absence of evidence of some special business
benefit to the employer. Evidence that by using the employers vehicle to go to and from
meals, an employee is enabled to reduce his time-off and so devote more time to the
performance of his duties supports the finding that an employee is acting within the scope of
his employment while so driving the vehicle.[13]

II. Operation of Employers Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem
or concern of the employee, and not a part of his services to his employer. Hence, in the
absence of some special benefit to the employer other than the mere performance of the
services available at the place where he is needed, the employee is not acting within the scope
of his employment even though he uses his employers motor vehicle.[14]
The employer may, however, be liable where he derives some special benefit from
having the employee drive home in the employers vehicle as when the employer benefits
from having the employee at work earlier and, presumably, spending more time at his actual
duties. Where the employees duties require him to circulate in a general area with no fixed
place or hours of work, or to go to and from his home to various outside places of work, and
his employer furnishes him with a vehicle to use in his work, the courts have frequently
applied what has been called the special errand or roving commission rule, under which it
can be found that the employee continues in the service of his employer until he actually
reaches home. However, even if the employee be deemed to be acting within the scope of his
employment in going to or from work in his employers vehicle, the employer is not liable for
his negligence where at the time of the accident, the employee has left the direct route to his
work or back home and is pursuing a personal errand of his own.

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latters personal use
outside of regular working hours is generally not liable for the employees negligent operation
of the vehicle during the period of permissive use, even where the employer contemplates
that a regularly assigned motor vehicle will be used by the employee for personal as well as
business purposes and there is some incidental benefit to the employer. Even where the
employees personal purpose in using the vehicle has been accomplished and he has started
the return trip to his house where the vehicle is normally kept, it has been held that he has not
resumed his employment, and the employer is not liable for the employees negligent
operation of the vehicle during the return trip.[15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based
on the doctrine of respondeat superior, not on the principle of bonus pater familias as in
ours. Whether the fault or negligence of the employee is conclusive on his employer as in
American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was
acting in his employers business or within the scope of his assigned task.[16]
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioners
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldies
Restaurant in Fuente Osmea, Cebu City, which is about seven kilometers away from
petitioners place of business.[17] A witness for the private respondents, a sidewalk vendor,
testified that Fuente Osmea is a lively place even at dawn because Goldies Restaurant and
Back Street were still open and people were drinking thereat. Moreover, prostitutes, pimps,
and drug addicts littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It was
when ABAD was leaving the restaurant that the incident in question occurred. That same
witness for the private respondents testified that at the time of the vehicular accident, ABAD
was with a woman in his car, who then shouted: Daddy, Daddy![19] This woman could not
have been ABADs daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out
a personal purpose not in line with his duties at the time he figured in a vehicular accident. It
was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABADs
working day had ended; his overtime work had already been completed. His being at a place
which, as petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers and
addicts, had no connection to petitioners business; neither had it any relation to his duties as
a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe
benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the
functions entrusted to him, petitioner CASTILEX had no duty to show that it exercised the
diligence of a good father of a family in providing ABAD with a service vehicle. Thus, justice
and equity require that petitioner be relieved of vicarious liability for the consequences of the
negligence of ABAD in driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of
the Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial
Corporation be absolved of any liability for the damages caused by its employee, Jose
Benjamin Abad.
SO ORDERED.

G.R. No. 116617 November 16, 1998

METRO MANILA TRANSIT CORPORATION (MMTC), PEDRO A. MUSA,
CONRADO TOLENTINO, FELICIANA CELEBRADO and THE GOVERNMENT
SERVICE INSURANCE SYSTEM, petitioners,
vs.
COURT OF APPEALS, SPS. RODOLFO V. ROSALES and LILY R.
ROSALES, respondents.

G.R. No. 126395 November 16, 1998

RODOLFO V. ROSALES, and LILY R. ROSALES, petitioners,

vs.
THE COURT OF APPEALS, METRO MANILA TRANSIT CORPORATION, (MMTC)
PEDRO A. MUSA, CONRADO TOLENTINO, FELICIANA CELEBRADO and THE
GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.

MENDOZA, J.:

These are appeals brought, on the one hand, by the Metro Manila Transit Corporation (MMTC)
and Pedro Musa and, on the other, by the spouses Rodolfo V. Rosales and Lily R. Rosales from
the decision,1 dated August 5, 1994, of the Court of Appeals, which affirmed with
modification the judgment of the Regional Trial Court of Quezon City holding MMTC and
Musa liable to the spouses Rosales for actual, moral, and exemplary damages, attorney's
fees, and the costs of suit for the death of the latter's daughter. MMTC and Musa in G.R.
No. 116617 appeal insofar as they are held liable for damages, while the spouses Rosales in
G.R. No. 126395 appeal insofar as the amounts awarded are concerned.

The facts are as follows:

MMTC is the operator of a fleet of passenger buses within the Metro Manila area. Musa
was its driver assigned to MMTC Bus No. 27. The spouses Rosales were parents of Liza
Rosalie, a third-year high school student at the University of the Philippines Integrated
School.

At around a quarter past one in the afternoon of August 9, 1986, MMTC Bus No. 27, which
was driven by Musa, hit Liza Rosalie who was then crossing Katipunan Avenue in Quezon
City. An eye witness said the girl was already near the center of the street when the bus,
then bound for the south, hit her.2 She fell to the ground upon impact, rolled between the
two front wheels of the bus, and was run over by the left rear tires thereof.3 Her body was
dragged several meters away from the point of impact. Liza Rosalie was taken to the
Philippine Heart Center,4 but efforts to revive her proved futile.

Pedro Musa was found guilty of reckless imprudence resulting in homicide and sentenced
to imprisonment for a term of 2 years and 4 months, as minimum, to 6 years, as maximum,
by the Regional Trial Court of Quezon
City.5 The trial court found:

All told, this Court, therefore, holds that the accused, who was then, the
driver of MMTC Bus No. 027, is criminally responsible for the death of the
girl victim in violation of Article 365 (2) of the Revised Penal Code. For, in
the light of the evidence that the girl victim was already at the center of the
Katipunan Road when she was bumped, and, therefore, already past the
right lane when the MMTC Bus No. 027 was supposed to have passed; and,
since the said bus was then running at a speed of about 25 kilometers per
hour which is inappropriate since Katipunan road is a busy street, there is,
consequently, sufficient proof to show that the accused was careless, reckless
and imprudent in the operation of his MMTC Bus No. 027, which is made
more evident by the circumstance that the accused did not blow his horn at
the time of the accident, and he did not even know that he had bumped the
girl victim and had ran over her, demonstrating thereby that he did not
exercise diligence and take the necessary precaution to avoid injury to
persons in the operation of his vehicle, as, in fact, he ran over the girl victim
who died as a result thereof. 6

The spouses Rosales filed an independent civil action for damages against MMTC, Musa,
MMTC Acting General Manager Conrado Tolentino, and the Government Service
Insurance System (GSIS). They subsequently amended their complaint to include Feliciana
Celebrado, a dispatcher of the MMTC, as a defendant therein. The counsel of MMTC and
Musa attempted to introduce testimony that Musa was not negligent in driving Bus No. 27
but was told by the trial judge:

COURT:

That is it. You can now limit your question to the other defendant here but to
re-try again the actual facts of the accident, this Court would not be in the
position. It would be improper for this Court to make any findings with
respect to the negligence of herein driver. You ask questions only regarding
the civil aspect as to the other defendant but not as to the
accused. 7

The counsel submitted to the ruling of the court. 8

In a decision rendered on March 6, 1990, the Regional Trial Court of Quezon City found
MMTC and Musa guilty of negligence and ordered them to pay damages and attorney's
fees, as follows:

WHEREFORE, foregoing premises considered, judgment is hereby rendered

ordering defendant Metro Manila Transit Corporation primarily and
defendant Pedro Musa subsidiarily liable to plaintiffs-spouses Rodolfo V.
Rosales and Lily R. Rosales as follows:
 1. Actual damages in the amount of P150,000.00;

2. Moral damages in the amount of P500,000.00;

3. Exemplary damages in the amount of P100,000.00;

4. Attorney's fees in the amount of P50,000.00; and

5. Costs of suit.9

Both parties appealed to the Court of Appeals. On August 5, 1994, the Court of Appeals
affirmed the decision of the trial court with the following modification:

WHEREFORE, except for the modification deleting the award of

P150,000.00 as actual damages and awarding in lieu thereof the amount of
P30,000.00 as death indemnity, the decision appealed from is, in all other
aspects, hereby AFFIRMED. 10

The spouses Rosales filed a motion for reconsideration, which the appellate court, in a
resolution, dated September 12, 1996, partly granted by increasing the indemnity for the
death of Liza Rosalie from P30,000.00 to P50,000.00. Hence, these appeals.

In G.R. No. 116617, MMTC and Musa assail the decision of the Court of Appeals on the
following grounds:

PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING

THE COURT A QUO'SDECISION PARTICULARLY IN NOT HOLDING
THAT APPELLANT MMTC EXERCISED THE DILIGENCE OF A
GOOD FATHER OF A FAMILY IN THE SELECTION AND
SUPERVISION OF ITS DRIVERS. THIS BEING THE CASE,
APPELLANT MMTC IS ENTITLED TO BE ABSOLVED FROM ANY
LIABILITY OR AT LEAST TO A REDUCTION OF THE
RECOVERABLE DAMAGES.

THE PUBLIC RESPONDENT COURT OF APPEALS, JUST LIKE THE

COURT A QUO, OVERLOOKED THE FACT THAT PETITIONER
MMTC, A GOVERNMENT-OWNED CORPORATION, COMMITTED NO
FRAUD, MALICE, BAD FAITH, NOR WANTON, FRAUDULENT,
OPPRESSIVE AND MALEVOLENT ACTUATIONS AGAINST HEREIN
RESPONDENTS-APPELLEES.

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN

AFFIRMING THE COURT A QUO'SDECISION TO HOLD PETITIONER-
APPELLANT MMTC PRIMARILY LIABLE TO PRIVATE
RESPONDENTS-APPELLEES IN THE AMOUNT OF P500,000 AS
 MORAL DAMAGES, P100,000 AS EXEMPLARY DAMAGES AND
P30,000 BY WAY OF DEATH INDEMNITY.

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN

AFFIRMING THE COURT A QUO'S DECISION IN RENDERING
JUDGMENT FOR ATTORNEY'S FEES IN THE AMOUNT OF P50,000.00
IN FAVOR OF PRIVATE RESPONDENTS-APPELLEES.

On the other hand, in G.R. No. 126395, the spouses Rosales contend:

The Court of Appeals erred in:

First, considering that death indemnity which this Honorable Court set at
P50,000.00 is akin to actual damages;

Second, not increasing the amount of damages awarded;

Third, refusing to hold all the defendants, now private respondents, solidarily
liable.

MMTC and Musa do not specifically question the findings of the Court of Appeals and the
Regional Trial Court of Quezon City that Liza Rosalie was hit by MMTC Bus No. 27.
Nonetheless, their petition contains discussions which cast doubts on this point. 11 Not only
can they not do this as the rule is that an appellant may not be heard on a question not
specifically assigned as error, but the rule giving great weight, and even finality, to the
factual conclusions of the Court of Appeals which affirm those of the trial court bars a
reversal of the finding of liability against petitioners MMTC and Musa. Only where it is
shown that such findings are whimsical, capricious, and arbitrary can they be overturned.
To the contrary, the findings of both the Court of Appeals and the Regional Trial Court
are solidly anchored on the evidence submitted by the parties. We, therefore, regard them
as conclusive in resolving the petitions at bar. 12 Indeed, as already stated, petitioners'
counsel submitted to the ruling of the court that the finding of the trial court in the
criminal case was conclusive on them with regard to the questions of whether Liza Rosalie
was hit by MMTC Bus No. 27 and whether its driver was negligent. Rather, the issue in
this case turns on Art. 2180 of the Civil Code, which provides that "employers shall be
liable for the damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even though the former are not engaged in any business or
industry." The responsibility of employers for the negligence of their employees in the
performance of their duties is primary, that is, the injured party may recover from the
employers directly, regardless of the solvency of their employees. 13 The rationale for the
rule on vicarious liability has been adumbrated thus:

What has emerged as the modern justification for vicarious liability is a rule
of policy, a deliberate allocation of a risk. The losses caused by the torts of
employees, which as a practical matter are sure to occur in the conduct of the
employer's enterprise, are placed upon that enterprise itself, as a required
 cost of doing business. They are placed upon the employer because, having
engaged in an enterprise, which will on the basis of all past experience
involve harm to others through the tort of employees, and sought to profit by
it, it is just that he, rather than the innocent injured plaintiff, should bear
them; and because he is better able to absorb them, and to distribute them,
through prides, rates or liability insurance, to the public, and so to shift them
to society, to the community at large. Added to this is the makeweight
argument that an employer who is held strictly liable is under the greatest
incentive to be careful in the selection, instruction and supervision of his
servants, and to take every precaution to see that the enterprise is conducted
safely. 14

In Campo v. Camarote, 15 we explained the basis of the presumption of negligence in this

wise:

The reason for the law is obvious. It is indeed difficult for any person injured
by the carelessness of a driver to prove the negligence or lack of due diligence
of the owner of the vehicle in the choice of the driver. Were we to require the
injured party to prove the owner's lack of diligence, the right will in many
cases prove illusory, as seldom does a person in the community, especially in
the cities, have the opportunity to observe the conduct of all possible car
owners therein. So the law imposes the burden of proof of innocence on the
vehicle owner. If the driver is negligent and causes damage, the law presumes
that the owner was negligent and imposes upon him the burden of proving
the contrary.

Employers may be relieved of responsibility for the negligent acts of their employees within
the scope of their assigned tasks only if they can show that "they observed all the diligence
of a good father of a family to prevent
damage."16 For this purpose, they have the burden of proving that they have indeed
exercised such diligence, both in the selection of the employee who committed the quasi-
delict and in the supervision of the performance of his duties.

In the selection of prospective employees, employers are required to examine them as to

their qualifications, experience, and service records. 17 On the other hand, with respect to
the supervision of employees, employers should formulate standard operating, procedures,
monitor their implementation, and impose disciplinary measures for breaches
thereof. 18 To establish these factors in a trial involving the issue of vicarious liability,
employers must submit concrete proof, including documentary evidence. 19

In this case, MMTC sought to prove that it exercised the diligence of a good father of a
family with respect to the selection of employees by presenting mainly testimonial evidence
on its hiring procedure. According to MMTC, applicants are required to submit
professional driving licenses, certifications of work experience, and clearances from the
National Bureau of Investigation; to undergo tests of their driving skills, concentration,
reflexes, and vision; and, to complete training programs on traffic rules, vehicle
maintenance, and standard operating procedures during emergency cases. 20

MMTC's evidence consists entirely of testimonial evidence (1) that transport supervisors
are assigned to oversee field operations in designated areas; (2) that the maintenance
department daily inspects the engines of the vehicles; and, (3) that for infraction of
company rules there are corresponding penalties. 21Although testimonies were offered that
in the case of Pedro Musa all these precautions were followed, 22 the records of his
interview, of the results of his examinations, and of his service were not presented.

MMTC submitted brochures and programs of seminars for prospective employees on

vehicle maintenance, traffic regulations, and driving skills and claimed that applicants are
given tests to determine driving skills, concentration, reflexes, and vision, 23 but there is no
record that Musa attended such training programs and passed the said examinations
before he was employed. No proof was presented that Musa did not have any record of
traffic violations. Nor were records of daily inspections, allegedly conducted by supervisors,
ever presented.

Normally, employers' keep files concerning the qualifications, work experience, training
evaluation, and discipline of their employees. The failure of MMTC to present such
documentary proof puts in doubt the credibility of its witnesses. What was said in Central
Taxicab Corporation v. Ex-Meralco Employees Transportation Corporation 24 applies to this
case:

This witness spoke of an affidavit of experience which a driver-applicant

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

....

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

The failure of the defendant company to produce in court any record or

other documentary proof tending to establish that it had exercised all the
diligence of a good father of a family in the selection and supervision of its
drivers and buses, notwithstanding the calls therefor by both the trial court
and the opposing counsel, argues strongly against its pretensions.
It is noteworthy that, in another case involving MMTC, testimonial evidence of identical
content, which MMTC presented to show that it exercised the diligence of a good father of
a family in the selection and supervision of employees and thus avoid vicarious liability for
the negligent acts of its employees, was held to be insufficient to overcome the presumption
of negligence against it. In Metro Manila Transit Corp. v. Court of Appeals, 25 this Court
said:

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

Having found both MMTC and its driver Pedro Musa liable for negligence for the death of
Liza Rosalie on August 9, 1986; we now consider the question of damages which her
parents, the spouses Rosales, are entitled to recover, which is the subject of the appeal in
G.R. No. 126395.

Indemnity for Death. Art. 2206 provides for the payment of indemnity for death caused by a
crime or quasi-delict. Initially fixed in said article of the Civil Code at P3,000.00, the
amount of the indemnity has through the years been gradually increased based on the
value of the peso. At present, it is fixed at P50,000.00. 26 To conform to this new ruling, the
Court of Appeals correctly increased the indemnity it had originally ordered the spouses
Rosales to be paid from P30,000.00 to P50,000.00 in its resolution, dated September 12,
1996.

Actual Damages. Art. 2199 provides that "except as provided by law or by stipulation, one is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he
has duly proved." The spouses Rosales are claiming actual damages in the amount of
P239,245.40. However, during the trial, they submitted receipts showing that expenses for
the funeral, wake, and interment of Liza Rosalie amounted only to P60,226.65 itemized as
follows: 27

Medical Attendance P 739.65

Funeral Services 5,100.00

Wreaths 2,500.00

Embalment 1,000.00
 Obituaries 7,125.00

Interment fees 2,350.00

Expenses during wake 14,935.00

Mourning clothes 5,000.00

Photography 3,500.00

Video Coverage 10,000.00

Printing of invitation cards 7,977.00

TOTAL 60,226.65

Hence, apart from the indemnity for death, the spouses Rosales are entitled to recover the
above amount as actual damages.

Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental anguish by reason of
the death of the deceased." The reason for the grant of moral damages has been explained
thus:

. . . the award of moral damages is aimed at a restoration, within the limits of

the possible, of the spiritual status quo ante; and therefore, it must be
proportionate to the suffering inflicted. The intensity of the pain experienced
by the relatives of the victim is proportionate to the intensity of affection for
him and bears no relation whatsoever with the wealth or means of the
offender. 28

In the instant case, the spouses Rosales presented evidence of the intense moral suffering
they had gone through as a result of the loss of Liza Rosalie who was their youngest child.
Rodolfo Rosales recounted the place of Liza Rosalie in the family and their relationship
with her in the following words:

Q: Mr. Rosales, how was Liza to you as a daughter?

A: Well, Liza as a daughter was the greatest joy of the family;

she was our pride, and everybody loved her — all her brothers
and sisters — because she was sweet and unspoiled. . . . She
was soft-spoken to all of us; and she still slept with us at night
although she had her own room. Sometimes in the middle of
the night she would open our door and ask if she could sleep
with us. So we let her sleep with us, as she was the youngest. 29
The death of Liza Rosalie left a void in their lives. Rodolfo Rosales testified on the
devastating effect of the death of Liza Rosalie:

Q: And after she died, what changes, if any, did you feel in
your family?

A: Well, there is something hollow in our family, something is

missing. She used to greet me when I came home and smell if I
was drunk and would tell me to dress up and take a shower
before her mommy could see me. She would call me up at the
office and say: "Daddy, come home, please help me with my
homework." Now, all these things, I am missing, you know. . . I
do not feel like going home early. Sometimes my wife would
complain and ask: "Where did you go?" But I cannot explain
to her how I feel. 30

Lily Rosales described life without Liza Rosalie thus:

Q: Now, your life without Liza, how would you describe it, Dr.
Rosales?

A: You know it is very hard to describe. The family was

broken apart. We could not go together because we remember
Liza. Every time we go to the cemetery we try as much as
possible not to go together. So, we go to the cemetery one at a
time, sometimes, my husband and I, or my son and another
one, but we never go together because we remember Liza. But
before her death we would always be together, the whole
family on weekends and on our days off. My husband works
very hard, I also work very hard and my children go to school.
They study very hard. Now we cannot go together on outings
because of the absence of Liza. 31

The spouses Rosales claim moral damages in the amount of P5,000,000.00. In People v.
Teehankee, Jr.,32this Court awarded P1 million as moral damages to the heirs of a
seventeen-year-old girl who was murdered. This amount seems reasonable to us as moral
damages for the loss of a minor child, whether he or she was a victim of a crime or a quasi-
delict. Hence, we hold that the MMTC and Musa are solidarily liable to the spouses Rosales
in the amount of P1,000,000.00 as moral damages for the death of Liza Rosalie.

Exemplary Damages. Art. 2231 provides that exemplary damages may be recovered in cases
involving quasi-delicts if "the defendant acted with gross negligence." This circumstance
obtains in the instant case. The records indicate that at the time of the mishap, there was a
pending criminal case against Musa for reckless imprudence resulting in slight physical
injuries with another branch of the Regional Trial Court, Quezon City. 33 The evidence also
shows that he failed to stop his vehicle at once even after eye witnesses shouted at him. The
spouses Rosales claim exemplary damages in the amount of P5,000,000.00. Under the
circumstances, we deem it reasonable to award the spouses Rosales exemplary damages in
the amount of five hundred thousand pesos (P500,000.00).

Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in the
instant case, exemplary damages are awarded. In the recent case of Sulpicio Lines, Inc. v.
Court of Appeals, 34 which involved the death of a minor child in the sinking of a vessel, we
held an award of P50,000.00 as attorney's fees to be reasonable. Hence, we affirm the
award of attorney's fees made by the Court of Appeals to the spouses Rosales in that
amount.

Compensation for Loss of Earning Capacity. Art. 2206 of the Civil Code provides that in
addition to the indemnity for death caused by a crime or quasi delict, the "defendant shall
be liable for the loss of the earning capacity of the deceased, and the indemnity shall be
paid to the heirs of the latter; . . ." Compensation of this nature is awarded not for loss of
earnings but for loss of capacity to earn money. 35Evidence must be presented that the
victim, if not yet employed at the time of death, was reasonably certain to complete training
for a specific profession. 36 In People v. Teehankee 37 no award of compensation for loss of
earning capacity was granted to the heirs of a college freshman because there was no
sufficient evidence on record to show that the victim would eventually become a
professional pilot. 38 But compensation should be allowed for loss of earning capacity
resulting from the death of a minor who has not yet commenced employment or training
for a specific profession if sufficient evidence is presented to establish the amount thereof.
In the United States it has been observed:

This raises the broader question of the proper measure of damages in death
cases involving children, housewives, the old, and others who do not have
market income so that there is no pecuniary loss to survivors or to the estate
of the decedent. The traditional approach was to award no or merely
nominal damages in such cases. . . . Increasingly, however, courts allow
expert testimony to be used to project those lost earnings. 39

Thus, in Haumersen v. Ford Motor Co., 40 the court allowed the heirs of a seven-year-old
boy who was killed in a car accident to recover compensation for loss of earning capacity:

Considerable evidence was presented by plaintiffs in an effort to give the jury

a foundation on which to make an award. Briefly stated, this evidence
showed Charles Haumersen was a seven-year-old of above average
characteristics. He was described as "very intelligent" and "all-American."
He received high marks in school. He was active in church affairs and
participated in recreational and athletic events, often with, children older
than himself. In addition, he had an unusual talent for creating numerous
cartoons and other drawings, some of which plaintiffs introduced at trial.

The record does not disclose passion and prejudice. The key question is
whether the verdict of $100,000 has support in the evidence.
 Upon analysis of the record, we conclude that we should not disturb the
award.

The argument for allowing compensation for loss of earning capacity of a minor is even
stronger if he or she was a student, whether already training for a specific profession or
still engaged in general studies. InKrohmer v. Dahl, 41 the court, in affirming the award by
the jury of $85,000.00 to the heirs of an eighteen-year-old college freshman who died of
carbon monoxide poisoning, stated as follows:

There are numerous cases that have held admissible evidence of prospective
earnings of a student or trainee. . . . The appellants contend that such
evidence is not admissible unless the course under study relates to a given
occupation or profession and it is shown that the student is reasonably
certain to follow that occupation or profession. It is true that the majority of
these decisions deal with students who are studying for a specific occupation
or profession. However, not one of these cases indicate that evidence of one's
education as a guide to future earnings is not admissible where the student is
engaged in general studies or whose education does not relate to a specific
occupation.

In sharp contrast with the situation obtaining in People v. Teehankee, where the
prosecution merely presented evidence to show the fact of the victim's graduation from
high school and the fact of his enrollment in a flying school, spouses Rosales did not content
themselves with simply establishing Liza Rosalie's enrollment at UP Integrated School.
They presented evidence to show that Liza Rosalie was a good student, promising artist,
and obedient child. She consistently performed well in her studies since grade school. 42 A
survey taken in 1984 when Liza Rosalie was twelve years old showed that she had good
study habits and attitudes. 43 Cleofe Chi, guidance counselor of the University of the
Philippines Integrated School, described Liza Rosalie as personable, well-liked, and with a
balanced personality. 44 Professor Alfredo Rebillon, a faculty member of the University of
the Philippines College of Fine Arts, who organized workshops which Liza Rosalie
attended in 1982 and 1983, testified that Liza Rosalie had the potential of eventually
becoming an artist. 45 Professor Rebillon's testimony is more than sufficiently established
by the 51 samples of Liza Rosalie's watercolor, charcoal, and pencil drawings submitted as
exhibits by the spouses Rosales. 46 Neither MMTC nor Pedro Musa controverted this
evidence.

Considering her good academic record, extra-curricular activities, and varied interests, it is
reasonable to assume that Liza Rosalie would have enjoyed a successful professional career
had it not been for her untimely death. Hence, it is proper that compensation for loss of
earning capacity should be awarded to her heirs in accordance with the formula
established in decided cases 47 for computing net earning capacity, to wit:

Net Earning = Life [Gross Necessary

Capacity Expectancy x [Annual — Living

 [Income Expenses

Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80)
and the age of the deceased.48 Since Liza Rosalie was 16 at the time of her death, her life
expectancy was 44 more years. 49 Her projected gross annual income, computed based on
the minimum wage for workers in the non-agricultural sector in effect at the time of her
death, 50 then fixed at P37.00, 51 is P14,630.46. 52 Allowing for necessary living expenses of
fifty percent (50%) of her projected gross annual income, 53 her total net earning capacity
amounts to P321,870.12. 54

Finally, the spouses Rosales argue that the Court of Appeals erred in absolving Conrado
Tolentino, Feliciana Celebrado, and the GSIS of liability. The Spouses Rosales alleged that
Tolentino, as Acting General Manager of the MMTC, and Celebrado, as a dispatcher
thereof, were charged with the supervision of Musa and should, therefore, be held
vicariously liable under Art. 2180 of the Civil Code. With respect to the GSIS, they contend
that it was the insurer in a contract for third party liability it had with the MMTC.

Although the fourth paragraph of Art. 2180 mentions "managers" among those made
responsible for the negligent acts of others, it is settled that this term is used in the said
provision in the sense of "employers." 55 Thus, Tolentino and Celebrado cannot be held
liable for the tort of Pedro Musa.

In Vda. de Maglana v. Consolacion, 56 it was ruled that an insurer in an indemnity contract

for third party liability is directly liable to the injured party up to the extent specified in
the agreement, but it cannot be held solidarily liable beyond that amount. The GSIS
admitted in its answer that it was the insurer of the MMTC for third party liability with
respect to MMTC Bus No. 27 to the extent of P50,000.00. 57 Hence, the spouses Rosales
have the option either to claim the said amount from the GSIS and the balance of the
award from MMTC and Musa or to enforce the entire judgment against the latter, subject
to reimbursement from the former to the extent of the insurance coverage. 58

One last word. The Regional Trial Court of Quezon City erred in holding MMTC
primarily and Musa secondarily liable for damages arising from the death of Liza Rosalie.
It was error for the appellate court to affirm this aspect of the trial court's decision.

As already stated, MMTC is primarily liable for damages for the negligence of its employee
in view of Art. 2180. Pursuant to Art. 2181, it can recover from its employee what it may
pay. This does not make the employee's liability subsidiary. It only means that if the
judgment for damages is satisfied by the common carrier, the latter has a right to recover
what it has paid from its employee who committed the fault or negligence which gave rise
to the action based on quasi-delict. 59 Hence, the spouses Rosales have the option of
enforcing the judgment against either MMTC or Musa.

From another point of view, Art. 2194 provides that "the responsibility of two or more
persons who are liable for a quasi-delict is solidary." We ruled in Gelisan v. Alday 60 that
"the registered owner/operator of a public service vehicle is jointly and severally liable
with the driver for damages incurred by passengers or third persons as a consequence of
injuries sustained in the operation of said vehicle." In Baliwag Transit Inc. v. Court of
Appeals 61 it was held that "to escape solidary liability for a quasi-delict committed by an
employee, the employer must adduce sufficient proof that it exercised such degree of care."
Finally, we held in the recent case of Philtranco Service Enterprises, Inc. v. Court of
Appeals 62 that "the liability of the registered owner of a public service vehicle . . . for
damages arising from the tortious acts of the driver is primary, direct, and joint and
several or solidary with the driver."

WHEREFORE, the decision of the Court of Appeals is SET ASIDE and another one is
RENDERED holding the Metro Manila Transit Corporation and Pedro Musa jointly and
severally liable for the death of Liza Rosalie R. Rosales and ORDERING them as such to
pay to the spouses Rodolfo V. Rosales and Lily R. Rosales the following amounts:

1) death indemnity in the amount of fifty-thousand pesos (P50,000,00);

2) actual damages in the amount of sixty thousand two hundred twenty six pesos and sixty
five centavos (P60,226.65);

3) moral damages in the amount of one million pesos (P1,000,000.00);

4) exemplary damages in the amount of five hundred thousand pesos (P500,000.00);

5) attorney's fees in the amount of fifty thousand pesos (P50,000.00);

6) compensation for loss of earning capacity in the amount of three hundred twenty-one
thousand eight hundred seventy pesos and twelve centavos (P321,870.12); and

7) the costs of suit.

SO ORDERED.

G.R. No. L-24471 August 30, 1968

SILVERIO MARCHAN and PHILIPPINE RABBIT BUS CO., INC., petitioners,

vs.
ARSENIO MENDOZA, LEONARDA ILAYA, and ZENAIDA MENDOZA, respondents.

Angel A. Sison for petitioners.

Manuel M. Crudo for respondents.

FERNANDO, J.:

Petitioners, the driver of the passenger bus responsible for the injuries sustained by respondent
for which he was duly prosecuted and thereafter convicted for serious, less serious, and slight
physical injuries, and the bus firm, the Philippine Rabbit Bus Lines, seek the reversal of a Court
of Appeals decision of December 14, 1964 and a resolution of March 31, 1965, holding them
liable both for compensatory and exemplary damages as well as attorney's fees. It is the
contention of petitioners that errors of law were committed when, in the aforesaid decision, it
was held that there was an implied contract of carriage between the petitioner bus firm and
respondents, the breach of which was the occasion for their liability for compensatory and
exemplary damages as well as attorneys fees.

The facts as found by the Court of Appeals follow: "In the evening of February 22, 1954,
between 9:00 and 9:30 o'clock, a passenger bus No. 141 of the Philippine Rabbit Bus Lines,
bearing Plate No. TPU-708 which was then driven by Silverio Marchan fell into a ditch
somewhere in Barrio Malanday, Polo, Bulacan, while travelling on its way to Manila; as a result
of which plaintiffs-appellees Arsenio Mendoza, his wife and child, [respondents in this
proceeding], who were then inside the bus as passengers were thrown out to the ground resulting
in their multiple injuries. Plaintiff Arsenio Mendoza suffered the most serious injuries which
damaged his vertebrae causing the paralysis of his lower extremities which up to the time when
this case was tried he continued to suffer. The physician who attended and treated plaintiff
Arsenio Mendoza opined that he may never walk again. Consequently the driver of said bus
Silverio Marchan [now petitioner] was prosecuted for serious, less serious and slight physical
injuries through reckless imprudence before the Justice of the Peace Court of Polo Bulacan, and
thereafter convicted as charged on June 29, 1956 ..., which judgment of conviction was
subsequently affirmed by the Court of First Instance of same province ... In this present action
before us, plaintiffs-appellees Arsenio Mendoza, his wife and child sought to recover damages
against defendant-appellant Arsenio Marchan, then the driver of bus No. 141 of the Philippine
Rabbit Bus Lines, and from defendants-appellants Bienvenido P. Buan and Natividad Paras in
their capacity as administrator and administratix, respectively of the estate of the late Florencio
P. Buan, doing business under the style name of the Philippine Rabbit Bus Lines, predicated not
only on a breach of contract of carriage for failure of defendants operator as well as the
defendant driver to safely convey them to their destination, but also on account of a criminal
negligence on the part of defendant Silverio Marchan resulting to plaintiff-appellee's multiple
physical damages."1

The Court of Appeals in the decision under review found that there was a preponderance of
evidence to the effect that while respondents Arsenio Mendoza, his wife, Leonarda Ilaya, and
child, Zenaida Mendoza "were waiting for a passenger bus on January 22, 1954 at about 9:00 in
the evening at Malanday, they boarded defendants-appellants' bus bearing No. 141 of the
Philippine Rabbit Bus Lines with Plate No. TPU-708 bound for Manila. And they were treated as
passengers thereto, for they paid their corresponding fares. As they travelled along the highway
bound for Manila, said bus was traveling at a high rate of speed without due regard to the safety
of the passengers. So much so that one of the passengers had to call the attention of Silverio
Marchan who was then at the steering wheel of said bus to lessen the speed or to slow down, but
then defendant Silverio Marchan did not heed the request of said passenger; neither did he
slacken his speed. On the contrary, defendant Silverio Marchan even increased his speed while
approaching a six-by-six truck which was then parked ahead, apparently for the purpose of
passing the said parked truck and to avoid collision with the incoming vehicle from the opposite
direction. But, when appellant Silverio Marchan veered his truck to resume position over the
right lane, the rear tires of said truck skidded because of his high rate of speed, thereby causing
said truck to fall into a ditch. Substantially, the happening of the accident' resulting to the
multiple injuries of plaintiffs-appellees, was explained by defendant Silverio Marchan who
declared that while he was driving his bus from Barrio Malanday bound towards Manila on a
road test, he suddenly noticed an oncoming vehicle. He thus shifted his light from dim to bright.
Just then, he noticed a six-by-six truck parked on the right lane of the road where he was driving.
Confronted with such situation that if he would apply his brake he would bump his bus against
the parked truck he then increased his speed with the view of passing the said parked truck, and
thereafter he veered to negotiate for the proper position on the right lane, but in so doing he
swerved to the right in order to avoid collision from the oncoming vehicle the rear portion of the
bus skidded and fell into the ditch."2

Hence the finding of negligence in the decision under review. Thus: "From the facts as
established preponderantly by the plaintiff and substantially corroborated by the defendant
Silverio Marchan, it is clear that the cause of the accident was the gross negligence of the
defendant Silverio Marchan who when driving his vehicle on the night in question was expected
to have employed the highest degree of care; and should have been assiduously prudent in
handling his vehicle to insure the safety of his passengers. There is no reason why he could not
have stopped his vehicle when noticing a parked truck ahead of him if he was not driving at a
high speed. His admission to the effect that if he would apply his brake he would bump or hit the
parked truck ahead of him, since there was no time for him to stop the bus he was driving, is a
patent indication that he was travelling at a high rate of speed without taking the necessary
precaution under the circumstance, considering that it was then nighttime. It is our considered
view that under the situation as pictured before us by the driver of said bus, he should not have
increased his speed and by-passed the parked truck obviously with the view of preventing a
collision with the incoming vehicle. Any prudent person placed under the situation of the
appellant would not have assumed the risk as what appellant did. The most natural reaction that
could be expected from one under the circumstance was for him to have slackened and reduced
his speed. But this was not done simply because defendant-appellant could not possibly do so
under the circumstance because he was then travelling at a high rate of speed. In fact, he had
increased his speed in order to avoid ramming the parked truck without, however, taking the
necessary precaution to insure the safety of his passengers."3

On the above facts, the Court of Appeals, in its decision of December 14, 1964, affirmed the
amount of P40,000.00 awarded by the court below as compensatory damages modifying the
appealed lower court decision by holding petitioners to pay the amount of P30,000.00 as
exemplary damages and sustaining the award of attorney's fees in the amount of P5,000.00. Then
came the resolution of March 31, 1965 by the Court of Appeals, where the motion for
reconsideration of petitioners was denied for lack of merit.

In their brief as petitioners, the first error assigned is the alleged absence of an implied contract
of carriage by the petitioner bus firm and respondent. On this point, it was the holding of the
Court of Appeals: "Since it is undisputed by the evidence on record that appellant Silverio
Marchan was then at the steering wheel of the vehicle of the defendant transportation company at
that moment, the riding public is not expected to inquire from time to time before they board the
passenger bus whether or not the driver who is at the steering wheel of said bus was authorized
to drive said vehicle or that said driver is acting within the scope of his authority and observing
the existing rules and regulations required of him by the management. To hold otherwise would
in effect render the aforequoted provision of law (Article 1759) ineffective."4 It is clear from the
above Civil Code provision that common carriers cannot escape liability "for the death of or
injuries to passengers through the negligence and willful acts of the former's employees,
although such employees may have acted beyond the scope of their authority or in violation of
the orders..." 5 From Vda. de Medina v. Cresencia,6 where this Court, through Justice J.B.L.
Reyes, stressed the "direct and immediate" liability of the carrier under the above legal provision,
"not merely subsidiary or secondary," toMaranan v. Perez,7 a 1967 decision, the invariable
holding has been the responsibility for breach of the contract of carriage on the part of the
carrier. According to the facts as above disclosed, which this Court cannot disturb, the
applicability of Article 1759 is indisputable. Hence, the total absence of merit of the first
assignment of error.

The next two errors assigned would dispute the holding of the Court of Appeals in imposing
liability in the respective amounts of P40,000.00 for compensatory damages and P30,000.00 for
exemplary damages. Again, such assignments of error cannot be looked upon with favor. What
the Court of Appeals did deserves not reprobation but approval by this Court.

As to why the amount in compensatory damages should be fixed in the sum of P40,000.00 is
explained in the appealed decision thus: "Likewise, it is our considered view that the amount of
P40,000.00 awarded by the court below as compensatory damages is quite reasonable and fair,
considering that plaintiff Arsenio Mendoza had suffered paralysis on the lower extremities,
which will incapacitate him to engage in his customary occupation throughout the remaining
years of his life, especially so if we take into account that plaintiff Arsenio Mendoza was only 26
years old when he met an accident on January 22, 1954; and taking the average span of life of a
Filipino, he may be expected to live for 30 years more; and bearing in mind the earning capacity
of Arsenio Mendoza who before the happening of this accident derived an income of almost
P100.00 a month from the business of his father-in-law as Assistant Supervisor of the small
[fairs] and his income of P100.00 a month which he derived as a professional
boxer."8 Considering that respondent Arsenio Mendoza was only in his middle twenties when,
thru the negligence of petitioners, he lost the use of his limbs, being condemned for the
remainder of his life to be a paralytic, in effect leading a maimed, well-nigh useless existence,
the fixing of such liability in the amount of P40,000.00 as compensatory damages was well
within the discretion of the Court of Appeals. 1äwphï1.ñët

As to the finding of liability for exemplary damages, the Court of Appeals, in its resolution of
March 31, 1965, stated the following: "We now come to the imposition of exemplary damages
upon defendants-appellants' carrier. It is argued that this Court is without jurisdiction to
adjudicate this exemplary damages since there was no allegation nor prayer, nor proof, nor
counterclaim of error for the same by the appellees. It is to be observed however, that in the
complaint, plaintiffs "prayed for such other and further relief as this Court may deem just and
equitable." Now, since the body of the complaint sought to recover damages against the
defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as
a result of the negligence of said Silverio Marchan who is appellant's employee; and since
exemplary damages is intimately connected with general damages, plaintiffs may not be
expected to single out by express term the kind of damages they are trying to recover against the
defendant's carrier. Suffice it to state that when plaintiffs prayed in their complaint for such other
relief and remedies that may be availed of under the premises, in effect, therefore, the court is
called upon the exercise and use its discretion whether the imposition of punitive or exemplary
damages even though not expressly prayed or pleaded in the plaintiffs' complaint."9

In support of the above view, Singson v. Aragon was cited by the Court of Appeals. 10 As was
there held by this Court: "From the above legal provisions it appears that exemplary damages
may be imposed by way of example or correction only in addition, among others, to
compensatory damages, but that they cannot be recovered as a matter of right, their
determination depending upon the discretion of the court. It further appears that the amount of
exemplary damages need not be proved, because its determination depends upon the amount of
compensatory damages that may be awarded to the claimant. If the amount of exemplary
damages need not be proved, it need not also be alleged, and the reason is obvious because it is
merely incidental or dependent upon what the court may award as compensatory damages.
Unless and until this premise is determined and established, what may be claimed as exemplary
damages would amount to a mere surmise or speculation. It follows as a necessary consequence
that the amount of exemplary damages need not be pleaded in the complaint because the same
cannot be predetermined. One can merely ask that it be determined by the court if in the use of
its discretion the same is warranted by the evidence, and this is just what appellee has done.".

Such a principle has been repeatedly upheld. 11 In Corpuz v. Cuaderno, 12 this Court, again
through Justice J.B.L. Reyes, made clear that the amount "lies within the province of the court a
quo, ..." It must be admitted, of course, that where it could be shown that a tribunal acted "with
vindictiveness or wantonness and not in the exercise of honest judgment," then there is room for
the interposition of the corrective power of this Tribunal.

No such reproach can be hurled at the decision and resolution now under review. No such
indictment would be justified. As noted earlier, both the second and the third assignments of
error are devoid of merit.

Nor is there any occasion to consider further the fourth assigned error, petitioner being
dissatisfied with the award of P5,000.00 as attorney's fees to respondents. On its face, such an
assignment of an alleged error is conspicuously futile. 1äwphï1.ñët

The judgment, however, must be modified in accordance with the ruling of this Court in
Soberano v. Manila Railroad Co. 13 Respondents are entitled to interest for the amount of
compensatory damages from the date of the decision of the lower court and legal interest on the
exemplary damages from the date of the decision of the Court of Appeals.

WHEREFORE, as thus modified, the decision is affirmed, petitioners being liable for the sum of
P40,000.00 in the concept of compensatory damages with interest at the legal rate from and after
January 26, 1960, and the sum of P30,000.00 as exemplary damages with interest at the legal rate
from and after December 14, 1964, as well as for the sum of P5,000.00 as attorney's fees,
likewise earning a legal rate of interest from and after January 26, 1960. Costs against
petitioners.
 [G.R. No. 116110. May 15,1996]

BALIWAG TRANSIT, INC., petitioner, vs. COURT OF APPEALS, SPOUSES ANTONIO

GARCIA & LETICIA GARCIA, A & J TRADING, AND JULIO
RECONTIQUE, respondents.
SYLLABUS
1. CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS; COMMON CARRIERS;
LIABILITY FOR DAMAGES; ESTABLISHED IN CASE AT BAR. As a common
carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers,
Leticia and Allan Garcia to their destination safe and sound. A common carrier is bound to
carry its passengers safely as far as human care and foresight can provide, using the utmost
diligence of a very cautious person, with due regard for all the circumstances. In a contract of
carriage, it is presumed that the common carrier was at fault or was negligent when a passenger
dies or is injured. Unless the presumption is rebutted, the court need not even make an express
finding of fault or negligence on the part of the common carrier. This statutory presumption
may only be overcome by evidence that the carrier exercised extraordinary diligence as
prescribed in Articles 1733 and 1755 of the Civil Code. The records are bereft of any proof to
show that Baliwag exercised extraordinary diligence. On the contrary, the evidence
demonstrates its driver's recklessness. Leticia Garcia testified that the bus was running at a
very high speed despite the drizzle and the darkness of the highway. The passengers pleaded
for its driver to slow down, but their plea was ignored. Leticia also revealed that the driver
was smelling of liquor. She could smell him as she was seated right behind the driver. Another
passenger, Felix Cruz testified that immediately before the collision, the bus driver was
conversing with a co-employee. All these prove the bus driver's wanton disregard for the
 physical safety of his passengers, which make Baliwag as a common carrier liable for damages
under Article 1759 of the Civil Code.
2. ID.; ID.; ID.; ID.; LAND TRANSPORTATION AND TRAFFIC CODE; SECTION 34(g)
THEREOF; SUBSTANTIALLY COMPLIED WITH IN CASE AT BAR. Baliwag
cannot evade its liability by insisting that the accident was caused solely by the negligence of
A & J Trading and Julio Recontique. It harps on their alleged non use of early warning device
as testified to by Col. Demetrio dela Cruz, the station commander of Gapan, Nueva Ecija who
investigated the incident, and Francisco Romano, the bus conductor. The records do not bear
out Baliwag's contention. Col. dela Cruz and Romano testified that they did not see any early
warning device at the scene of the accident. They were referring to the triangular reflectorized
plates in red and yellow issued by the Land Transportation Office. However, the evidence
shows that Recontique and Ecala placed a kerosene lamp or torch at the edge of the road, near
the rear portion of the truck to serve as an early warning device. This substantially complies
with Section 34 (g) of the Land Transportation and Traffic Code, to wit: "(g) lights and
reflector when parked or disabled. Appropriate parking lights or flares visible one hundred
meters away shall be displayed at the corner of the vehicle whenever such vehicle is parked
on highways or in places that are not well-lighted or, is placed in such manner as to endanger
passing traffic. Furthermore, every motor vehicle shall be provided at all times with built-in
reflectors or other similar warning devices either pasted, painted or attached at its front and
back which shall likewise be visible at night at least one hundred meters away. No vehicle not
provided with any of the requirements mentioned in this subsection shall be registered."
Baliwag's argument that the kerosene lamp or torch does not substantially comply with the
law is untenable. The aforequoted law clearly allows the use not only of an early warning
device of the triangular reflectorized plates variety but also parking lights or flares visible one
hundred meters away. Indeed, Col. dela Cruz himself admitted that a kerosene lamp is an
acceptable substitute for the reflectorized plates. No negligence, therefore, may be imputed to
A & J Trading and its driver, Recontique.
3. ID.; DAMAGES; To PROVE ACTUAL DAMAGES, THE BEST EVIDENCE
AVAILABLE TO THE PARTIES MUST BE PRESENTED. The propriety of the amount
awarded as hospitalization and medical fees. The award of P25,000.00 is not supported by the
evidence on record. The Garcias presented receipts marked as Exhibits "B-1 " to "B-42" but
their total amounted only to P5,017.74. To be sure, Leticia testified as to the extra amount
spent for her medical needs but without more reliable evidence, her lone testimony cannot
justify the award of P25,000.00. To prove actual damages, the best evidence available to the
injured party must be presented. The court cannot rely on uncorroborated testimony whose
truth is suspect, but must depend upon competent proof that damages have been actually
suffered. Thus, we reduce the actual damages for medical and hospitalization expenses to
P5,017.74.
4. ID.; ID.; MORAL DAMAGES; RECOVERABLE IF THE CARRIER THROUGH ITS
AGENT, ACTED FRAUDULENTLY OR IN BAD FAITH. The award of moral damages
is in accord with law. In a breach of contract of carriage, moral damages are recoverable if the
carrier, through its agent, acted fraudulently or in bad faith. The evidence shows the gross
negligence of the driver of Baliwag bus which amounted to bad faith. Without doubt, Leticia
and Allan experienced physical suffering, mental anguish and serious anxiety by reason of the
accident.
 APPEARANCES OF COUNSEL
Leopoldo C. Sta. Maria for Baliwag Transit, Inc.
Arturo D. Vallar for Sps. Antonio & Leticia Garcia.
Allan A. Leynes for A & J Trading, and Julio Recontique.

DECISION
PUNO, J.:

This is a petition for certiorari to review the Decision[1] of the Court of Appeals in CA-G.R.
CV-31246 awarding damages in favor of the spouses Antonio and Leticia Garcia for breach of
contract of carriage.[2] filed by the spouses Garcia questioning the same Court of Appeals' Decision
which reduced their award of damages. On November 13, 1995, we denied their petition for
review.
The records show that on July 31, 1980, Leticia Garcia, and her five-year old son, Allan
Garcia, boarded Baliwag Transit Bus No. 2036 bound for Cabanatuan City driven by Jaime
Santiago. They took the seat behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo
truck parked at the shoulder of the national highway. Its left rear portion jutted to the outer lane,
the shoulder of the road was too narrow to accommodate the whole truck. A kerosene lamp
appeared at the edge of the road obviously to serve as a warning device. The truck driver, Julio
Recontique, and his helper, Arturo Escala, were then replacing a flat tire. The truck is owned by
respondent A & J Trading.
Bus driver Santiago was driving at an inordinately fast speed and failed to notice the truck and
the kerosene lamp at the edge of the road. Santiago's passengers urged him to slow down but he
paid them no heed. Santiago even carried animated conversations with his co-employees while
driving. When the danger of collision became imminent, the bus passengers shouted "Babangga
tayo!". Santiago stepped on the brake, but it was too late. His bus rammed into the stalled cargo
truck. It caused the instant death of Santiago and Escala, and injury to several others. Leticia and
Allan Garcia were among the injured passengers.
Leticia suffered a fracture in her pelvis and right leg. They rushed her to the provincial hospital
in Cabanatuan City where she was given emergency treatment. After three days, she was
transferred to the National Orthopedic Hospital where she was confined for more than a
month.[3] She underwent an operation for partial hip prosthesis.[4]
Allan, on the other hand, broke a leg. He was also given emergency treatment at the provincial
hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit, Inc., A & J Trading and Julio
Recontique for damages in the Regional Trial Court of Bulacan.[5] Leticia sued as an injured
passenger of Baliwag and as mother of Allan. At the time of the complaint, Allan was a minor,
hence, the suit initiated by his parents in his favor.
Baliwag, A & J Trading and Recontique disclaimed responsibility for the mishap. Baliwag
alleged that the accident was caused solely by the fault and negligence of A & J Trading and its
driver, Recontique. Baliwag charged that Recontigue failed to place an early warning device at the
corner of the disabled cargo truck to warn oncoming vehicles.[6] On the other hand, A & J Trading
and Recontique alleged that the accident was the result of the negligence and reckless driving of
Santiago, bus driver of Baliwag.[7]
After hearing, the trial court found all the defendants liable, thus:

xxxxxxxxx

"In view thereof, the Court holds that both defendants should be held liable; the defendant
Baliwag Transit, Inc. for having failed to deliver the plaintiff and her son to their point of
destination safely in violation of plaintiff's and defendant Baliwag Transit's contractual relation.

The defendant A & J and Julio Recontique for failure to provide its cargo truck with an early
warning device in violation of the Motor Vehicle Law."[8]

The trial court ordered Baliwag, A & J Trading and Recontique to pay jointly and severally
the Garcia spouses the following: (1) P25,000.00 hospitalization and medication fee, (2)
P450,000.00 loss of earnings in eight (8) years, (3) P2,000.00 for the hospitalization of their son
Allan Garcia, (4) P50,000.00 moral damages, and (5) P30,000.00 attorney's fee.[9]
On appeal, the Court of Appeals modified the trial court's Decision by absolving A & J
Trading from liability and by reducing the award of attorney's fees to P10,000.00 and loss of
earnings to P300,000.00, respectively.[10]
Baliwag filed the present petition for review raising the following issues:

1. Did the Court of Appeals err in absolving A & J Trading from liability and holding Baliwag
solely liable for the injuries suffered by Leticia and Allan Garcia in the accident?

2. Is the amount of damages awarded by the Court of Appeals to the Garcia spouses correct?

We affirm the factual findings of the Court of Appeals.

I
As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its
passengers, Leticia and Allan Garcia to their destination safe and sound. A common carrier is
bound to carry its passengers safely as far as human care and foresight can provide, using the
utmost diligence of a very cautious person, with due regard for all the circumstances. [11] In a
contract of carriage, it is presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need not even make an
express finding of fault or negligence on the part of the common carrier. This statutory
presumption may only be overcome by evidence that the carrier exercised extraordinary diligence
as prescribed in Articles 1733 and 1755 of the Civil Code.[12]
The records are bereft of any proof to show that Baliwag exercised extraordinary
diligence. On the contrary, the evidence demonstrates its driver's recklessness. Leticia Garcia
testified that the bus was running at a very high speed despite the drizzle and the darkness of the
highway. The passengers pleaded for its driver to slow down, but their plea was ignored.[13] Leticia
also revealed that the driver was smelling of liquor.[14] She could smell him as she was seated right
behind the driver. Another passenger, Felix Cruz testified that immediately before the collision,
the bus driver was conversing with a co-employee.[15] All these prove the bus driver's wanton
disregard for the physical safety of his passengers, which makes Baliwag as a common carrier
liable for damages under Article 1759 of the Civil Code:

Art. 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willfull acts of the former's employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers do not cease upon proof that they exercised all the diligence
of a good father of a family in the selection or supervision of their employees.

Baliwag cannot evade its liability by insisting that the accident was caused solely by the
negligence of A & J Trading and Julio Recontique. It harps on their alleged non use of an early
warning device as testified to by Col. Demetrio dela Cruz, the station commander of Gapan, Nueva
Ecija who investigated the incident, and Francisco Romano, the bus conductor.
The records do not bear out Baliwag's contention. Col. dela Cruz and Romano testified that
they did not see any early warning device at the scene of the accident.[16] They were referring to
the triangular reflectorized plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and Ecala placed a kerosene lamp or torch
at the edge of the road, near the rear portion of the truck to serve as an early warning device.[17] This
substantially complies with Section 34 (g) of the Land Transportation and Traffic Code, to wit:

(g) Lights and reflector when parked or disabled. Appropriate parking lights or flares visible
one hundred meters away shall be displayed at the corner of the vehicle whenever such vehicle
is parked on highways or in places that are not well-lighted or, is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle shall be provided at all times with
built-in reflectors or other similar warning devices either pasted, painted or attached at its front
and back which shall likewise be visible at night at least one hundred meters away. No vehicle
not provided with any of the requirements mentioned in this subsection shall be
registered. (Italics supplied)

Baliwag's argument that the kerosene lamp or torch does not substantially comply with the
law is untenable. The aforequoted law clearly allows the use not only of an early warning device
of the triangular reflectorized plates variety but also parking lights or flares visible one hundred
meters away. Indeed, Col. dela Cruz himself admitted that a kerosene lamp is an acceptable
substitute for the reflectorized plates.[18] No negligence, therefore, may be imputed to A & J
Trading and its driver, Recontique.
Anent this factual issue, the analysis of evidence made by the Court of Appeals deserves our
concurrence, viz:
xxx xxx xxx

In the case at bar, both the injured passengers of the Baliwag involved in the accident testified
that they saw some sort of kerosene or a torch on the rear portion of the truck before the
accident. Baliwag Transit's conductor attempted to defeat such testimony by declaring that he
noticed no early warning device in front of the truck.

Among the testimonies offered by the witnesses who were present at the scene of the accident,
we rule to uphold the affirmative testimonies given by the two injured passengers and give less
credence to the testimony of the bus conductor who solely testified that no such early warning
device exists.
The testimonies of injured passengers who may well be considered as disinterested witness
appear to be natural and more probable than the testimony given by Francisco Romano who is
undoubtedly interested in the outcome of the case, being the conductor of the defendant-appellant
Baliwag Transit Inc.
It must be borne in mind that the situation then prevailing at the time of the accident was
admittedly drizzly and all dark. This being so, it would be improbable and perhaps impossible on
the part of the truck helper without the torch nor the kerosene to remove the flat tires of the truck.
Moreover, witness including the bits conductor himself admitted that the passengers shouted, that
they are going to bump before the collision which consequently caused the bus driver to apply the
brake 3 to 4 meters away from the truck. Again, without the kerosene nor the torch in front of the
truck, it would be improbable for the driver, more so the passengers to notice the truck to be
bumped by the bus considering the darkness of the place at the time of the accident.
xxxxxxxxx
While it is true that the investigating officer testified that he found no early warning device at
the time of his investigation, We rule to give less credence to such testimony insofar as he himself
admitted on cross examination that he did not notice the presence of any kerosene lamp at the back
of the truck because when he arrived at the scene of the accident, there were already many people
surrounding the place (TSN, Aug, 22, 1989, p. 13). He further admitted that there exists a
probability that the lights of the truck may have been smashed by the bus at the time of the accident
considering the location of the truck where its rear portion was connected with the front portion
of the bus (TSN, March 29, 1985, pp. 11-13). Investigator's testimony therefore did not confirm
nor deny the existence of such warning device, making his testimony of little probative value.[19]
II
We now review the amount of damages awarded to the Garcia spouses.
First, the propriety of the amount awarded as hospitalization and medical fees. The award of
P25,000.00 is not supported by the evidence on record. The Garcias presented receipts marked as
Exhibits B-1 to B 42 but their total amounted only to P5,017.74. To be sure, Leticia testified as to
the extra amount spent for her medical needs but without more reliable evidence, her lone
testimony cannot justify the award of P25,000.00. To prove actual damages, the best evidence
available to the injured party must be presented. The court cannot rely on uncorroborated
testimony whose truth is suspect, but must depend upon competent proof that damages have been
actually suffered[20] Thus, we reduce the actual damages for medical and hospitalization expenses
to P5,017.74.
Second, we find as reasonable the award of P300,000.00 representing Leticia's lost
earnings. Before the accident, Leticia was engaged in embroidery, earning P5,000.00 per
month.[21] Her injuries forced her to stop working. Considering the nature and extent of her injuries
and the length of time it would take her to recover,[22] we find it proper that Baliwag should
compensate her lost income for five (5) years.[23]
Third, the award of moral damages is in accord with law. In a breach of contract of carriage,
moral damages are recoverable if the carrier, through its agent, acted fraudulently or in bad
faith.[24] The evidence shows the gross negligence of the driver of Baliwag bus which amounted
to bad faith. Without doubt, Leticia and Allan experienced physical suffering, mental anguish and
serious anxiety by reason of the accident. Leticia underwent an operation to replace her broken hip
bone with a metal plate. She was confined at the National Orthopedic Hospital for 45 days. The
young Allan was also confined in the hospital for his foot injury. Contrary to the contention of
Baliwag, the decision of the trial court as affirmed by the Court of Appeals awarded moral damages
to Antonio and Leticia Garcia not in their capacity as parents of Allan. Leticia was given moral
damages as an injured party. Allan was also granted moral damages as an injured party but because
of his minority, the award in his favor has to be given to his father who represented him in the suit.
Finally, we find the award of attorney's fees justified. The complaint for damages was
instituted by the Garcia spouses on December 15, 1982, following the unjustified refusal of
Baliwag to settle their claim. The Decision was promulgated by the trial court only on January 29,
1991 or about nine years later. Numerous pleadings were filed before the trial court, the appellate
court and to this Court. Given the complexity of the case and the amount of damages
involved,[25] the award of attorney's fee for P10,000.00 is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent Court of Appeals in CA-G.R. CV-
31246 is AFFIRMED with the MODIFICATION reducing the actual damages for hospitalization
and medical fees to P5,017.74. No costs.
SO ORDERED.
G.R. No. 82465 February 25, 1991

ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND

ROSARIO LACANDULA, BENJAMIN ILUMIN, TIRSO DE CHAVEZ, LUISITO
VINAS, CONNIE ARQUIO AND PATRIA CADIZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and DR. ROMULO
CASTILLO and LILIA CADIZ, respondents.

Jose C. Flores, Jr. for petitioners.

Jovito E. Talabong for private respondents.

PARAS, J.:

This is a petition for review of the decision * of the Court of Appeals, the dispositive portion of
which reads:

WHEREFORE, the decision under appeal is hereby affirmed, with the following
modifications: (1) Exemplary damages in the amount of P20,000.00 are hereby awarded
to plaintiffs, in addition to the actual damages of P30,000.00, moral damages of
P20,000.00 and attorney's fees in the amount of P15,000.00 awarded to plaintiffs in the
 decision under appeal; (2) St. Francis High School, represented by the Spouses Fernando
Nantes and Rosario Lacandula, and Benjamin Illumin, are hereby held jointly and
severally liable with defendants Connie Arquio, Tirso de Chaves, Luisito Vinas and
Patria Cadis for the payment to plaintiffs of the abovementioned actual damages, moral
damages, exemplary damages and attorney's fees, and for costs; and (3) Defendants Yoly
Jaro and Nida Aragones are hereby absolved from liability, and the case against them,
together with their respective counterclaims, is hereby ordered dismissed.

SO ORDERED. (p. 60, Rollo)

The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the St.
Francis High School, wanted to join a school picnic undertaken by Class I-B and Class I-C at
Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. Romulo Castillo
and Lilia Cadiz Castillo, because of short notice, did not allow their son to join but merely
allowed him to bring food to the teachers for the picnic, with the directive that he should go back
home after doing so. However, because of persuasion of the teachers, Ferdinand went on with
them to the beach.

During the picnic and while the students, including Ferdinand, were in the water, one of the
female teachers was apparently drowning. Some of the students, including Ferdinand, came to
her rescue, but in the process, it was Ferdinand himself who drowned. His body was recovered
but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna in Sariaya,
Quezon and later to the Mt. Cannel General Hospital where he was pronounced dead on arrival.

Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the
Regional Trial Court, Branch LVIII of Lucena City, against the St. Francis High School,
represented by the spouses Fernando Nantes and Rosario Lacandula, Benjamin Illumin (its
principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio, Nida Aragones,
Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the death
of their 13-year old son, Ferdinand Castillo. Contending that the death of their son was due to the
failure of the petitioners to exercise the proper diligence of a good father of the family in
preventing their son's drowning, respondents prayed of actual, moral and exemplary damages,
attorney's fees and expenses for litigation.

The trial court found in favor of the respondents and against petitioners-teachers Arquio, de
Chaves, Vinas, Aragones, Jaro and Cadiz, ordering all of them jointly and severally to pay
respondents the sum of P30,000.00 as actual damages, P20,000.00 as moral damages,
P15,000.00 as attorney's fees, and to pay the costs. The court a quo reasoned:

Taking into consideration the evidence presented, this Court believes that the defendant
teachers namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro, Nida
Aragones and Patria Cadiz had failed to exercise the diligence required of them by law
under the circumstances to guard against the harm they had foreseen. (pp. 2930, Rollo)

xxx xxx xxx

 While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the
picnic site, the drowning incident had already occurred, such fact does not and cannot
excuse them from their liability. In fact, it could be said that by coming late, they were
remiss in their duty to safeguard the students. (p. 30, Rollo)

The students, young as they were then (12 to 13 years old), were easily attracted to the
sea without aforethought of the dangers it offers. Yet, the precautions and reminders
allegedly performed by the defendants-teachers definitely fell short of the standard
required by law under the circumstances. While the defendants-teachers admitted that
some parts of the sea where the picnic was held are deep, the supposed lifeguards of the
children did not even actually go to the water to test the depth of the particular area where
the children would swim. And indeed the fears of the plaintiffs that the picnic area was
dangerous was confirmed by the fact that three persons during the picnic got drowned at
the same time. Had the defendant teachers made an actual and physical observation of the
water before they allowed the students to swim, they could have found out that the area
where the children were swimming was indeed dangerous. And not only that, the male
teachers who according to the female teachers were there to supervise the children to
ensure their safety were not even at the area where the children were swimming. They
were somewhere and as testified to by plaintiffs' witness they were having a drinking
spree. (pp. 55-56, Rollo)

On the other hand, the trial court dismissed the case against the St. Francis High School,
Benjamin Illumin and Aurora Cadorna. Said the court a quo:

As shown and adverted to above, this Court cannot find sufficient evidence showing that
the picnic was a school sanctioned one. Similarly no evidence has been shown to hold
defendants Benjamin Illumin and Aurora Cadorna responsible for the death of Ferdinand
Castillo together with the other defendant teachers. It has been sufficiently shown that
Benjamin Illumin had himself not consented to the picnic and in fact he did not join it.
On the other hand, defendant Aurora Cadorna had then her own class to supervise and in
fact she was not amongst those allegedly invited by defendant Connie Arquio to
supervise class I-C to which Ferdinand Castillo belongs. (p. 30, Rollo)

Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses

assigned the following errors committed by the trial court:

1. The lower court erred in not declaring the defendant St. Francis High School and its
administrator/principal Benjamin Illumin as equally liable not only for its approved co-
curricular activities but also for those which they unreasonably failed to exercise control
and supervision like the holding of picnic in the dangerous water of Talaan Beach,
Sariaya, Quezon.

2. The lower court erred in not declaring the St. Francis High School and principal
Benjamin Illumin as jointly and solidarily liable with their co-defendants-teachers
Rosario Lacandula, et als., for the tragic death of Ferdinand Castillo in a picnic at Talaan
Beach, Sariaya, Quezon, last March 20, 1982.
 3. The lower court erred in not declaring higher amount for actual and moral damages for
the untimely and tragic death of Ferdinand Castillo in favor of plaintiffs-appellants
against all the defendants. (pp. 56-57, Rollo)

The Court of Appeals ruled:

We find plaintiffs-appellants' submission well-taken.

Even were We to find that the picnic in question was not a school-sponsored activity,
nonetheless it cannot be gainsaid that the same was held under the supervision of the
teachers employed by the said school, particularly the teacher in charge of Class I-C to
whom the victim belonged, and those whom she invited to help her in supervising the
class during the picnic. Considering that the court a quo found negligence on the part of
the six defendants-teachers who, as such, were charged with the supervision of the
children during the picnic, the St. Francis High School and the school principal,
Benjamin Illumin, are liable under Article 2176 taken together with the 1st, 4th and 5th
paragraphs of Article 2180 of the Civil Code. They cannot escape liability on the mere
excuse that the picnic was not an "extra-curricular activity of the St. Francis High
School." We find from the evidence that, as claimed by plaintiffs-appellants, the school
principal had knowledge of the picnic even from its planning stage and had even been
invited to attend the affair; and yet he did not express any prohibition against undertaking
the picnic, nor did he prescribe any precautionary measures to be adopted during the
picnic. At the least, We must find that the school and the responsible school officials,
particularly the principal, Benjamin Illumin, had acquiesced to the holding of the picnic.

Under Article 2180, supra, the defendant school and defendant school principal must be
found jointly and severally liable with the defendants-teachers for the damages incurred
by the plaintiffs as a result of the death of their son. It is the rule that in cases where the
above-cited provisions find application, the negligence of the employees in causing the
injury or damage gives rise to a presumption of negligence on the part of the owner
and/or manager of the establishment (in the present case, St. Francis High School and its
principal); and while this presumption is not conclusive, it may be overthrown only by
clear and convincing proof that the owner and/or manager exercised the care and
diligence of a good father of a family in the selection and/or supervision of the employee
or employees causing the injury or damage (in this case, the defendants-teachers). The
record does not disclose such evidence as would serve to overcome the aforesaid
presumption and absolve the St. Francis High School and its principal from liability
under the above-cited provisions.

As to the third assigned error interposed by plaintiffs-appellants, while We cannot but

commiserate with the plaintiffs for the tragedy that befell them in the untimely death of
their son Ferdinand Castillo and understand their suffering as parents, especially the
victim's mother who, according to appellants, suffered a nervous breakdown as a result of
the tragedy, We find that the amounts fixed by the court a quo as actual damages and
moral damages (P30,000.00 and P20,000.00, respectively) are reasonable and are those
which are sustained by the evidence and the law.
 However, We believe that exemplary or corrective damages in the amount of P20,000.00
may and should be, as it is hereby, imposed in the present case by way of example of
correction for the public good, pursuant to Article 2229 of the Civil Code. (pp. 57-
59, Rollo)

On the other hand, petitioners-teachers assigned the following errors committed by the trial
court:

1. ". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida
Aragones, Yoly Jaro and Patria Cadiz guilty of negligence and jointly and severally liable
for damages such finding not being supported by facts and evidence.

2. ". . . in dismissing the counterclaim interposed by the defendants. (p. 59, Rollo)

On this score, respondent Court ruled:

The main thrust of defendants-appellants appeal is that plaintiffs, the parents of the victim
Ferdinand Castillo, were not able to prove by their evidence that they did not give their
son consent to join the picnic in question. However, We agree with the trial court in its
finding that whether or not the victim's parents had given such permission to their son
was immaterial to the determination of the existence of liability on the part of the
defendants for the damage incurred by the plaintiffs-appellants as a result of the death of
their son. What is material to such a determination is whether or not there was negligence
on the part of defendants vis-a-visthe supervision of the victim's group during the picnic;
and, as correctly found by the trial court, an affirmative reply to this question has been
satisfactorily established by the evidence, as already pointed out.

However, We sustain defendants-appellants insofar as two of the defendants-teachers,

Yoly Jaro and Nida Aragones, are concerned. As to them, the trial court found:

While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at
the picnic site, the drowning incident had already occurred, such fact does not and
cannot excuse them from their liability. In fact, it could be said that by coming
late, they were remiss in their duty to safeguard the students.

The evidence shows that these two defendants had satisfactorily explained why they were
late in going to the picnic site, namely, that they had to attend to the entrance examination
being conducted by the school which is part of their duty as teachers thereof. Since they
were not at the picnic site during the occurrence in question, it cannot be said that they
had any participation in the negligence attributable to the other defendants-teachers who
failed to exercise diligence in the supervision of the children during the picnic and which
failure resulted in the drowning of plaintiffs' son. Thus, We may not attribute any act or
omission to the two teachers, Yoly Jaro and Nida Aragones, as to make them liable for
the injury caused to the plaintiffs because of the death of their son resulting from his
drowning at the picnic. Accordingly, they must be absolved from any liability.
 As to the second assigned error raised by defendants-appellants, We agree with the
court a quo that the counterclaim must be dismissed for lack of merit. (pp. 59-60, Rollo)

Hence, this petition.

The issues presented by petitioners are:

A) Whether or not there was negligence attributable to the defendants which will warrant
the award of damages to the plaintiffs;

B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable
to the case at bar;

C) Whether or not the award of exemplary and moral damages is proper under the
circumstances surrounding the case at bar. (pp. 81-82, Rollo)

In the resolution of January 16, 1989, We gave due course to the petition and required the parties
to submit their respective memoranda.

The petition is impressed with merit.

If at all petitioners are liable for negligence, this is because of their own negligence or the
negligence of people under them. In the instant case however, as will be shown hereunder,
petitioners are neither guilty of their own negligence or guilty of the negligence of those under
them.

Hence, it cannot be said that they are guilty at all of any negligence. Consequently they cannot
be held liable for damages of any kind.

At the outset, it should be noted that respondent spouses, parents of the victim
Ferdinand, allowed their son to join the excursion.

Testimony of Dr. Castillo on cross exam. by Atty. Flores

Q Now, when your son asked you for money to buy food, did you not ask him
where he will bring this?

A I asked him where he was going, he answered, I am going to the picnic, and
when I asked him where, he did not answer, sir.

Q And after giving the money, you did not tell him anything more?

A No more, sir.

Q And after that you just learned that your son join the picnic?
 A Yes, sir.

Q And you came to know of it after the news that your son was drowned in the
picnic came to you, is that correct?

A Yes, sir.

Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982,
you did not know that your son join the picnic?

A No, sir, I did not know.

Q Did you not look for your son during that time?

A I am too busy with my profession, that is why I was not able, sir.

Q You did not ask your wife?

A I did not, sir.

Q And neither did your wife tell you that your son join the picnic?

A Later on after 12:00, sir.

Q And during that time you were too busy that you did not inquire whether your
son have joined that picnic?

A Yes, sir.

(TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo)

The fact that he gave money to his son to buy food for the picnic even without knowing where it
will be held, is a sign of consent for his son to join the same. Furthermore.

Testimony of Dr. Lazaro on cross examination:

Q How did you conduct this mental and physical examination?

A I have interviewed several persons and the patient herself She even felt guilty
about the death of her son because she cooked adobo for him so he could join the
excursion where her son died of drowning.

Q Why were you able to say she was feeling guilty because she was the one who
personally cooked the adobo for her son?
 A It was during the interview that I had gathered it from the patient herself. She
was very sorry had she not allowed her son to join the excursion her son would
have not drowned. I don't know if she actually permitted her son although
she said she cooked adobo so he could join. (Emphasis Supplied) (TSN, p. 19,
hearing of April 30, 1984, Dr. Lazaro — witness).

Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code in
rendering petitioner school liable for the death of respondent's son.

Article 2180, par. 4 states that:

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

xxx xxx xxx

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

Under this paragraph, it is clear that before an employer may be held liable for the negligence of
his employee, the act or omission which caused damage or prejudice must have occurred while
an employee was in the performance of his assigned tasks.

In the case at bar, the teachers/petitioners were not in the actual performance of their assigned
tasks. The incident happened not within the school premises, not on a school day and most
importantly while the teachers and students were holding a purely private affair, a picnic. It is
clear from the beginning that the incident happened while some members of the I-C class of St.
Francis High School were having a picnic at Talaan Beach. This picnic had no permit from the
school head or its principal, Benjamin Illumin because this picnic is not a school sanctioned
activity neither is it considered as an extra-curricular activity.

As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of the
planning of the picnic by the students and their teachers does not in any way or in any manner
show acquiescence or consent to the holding of the same. The application therefore of Article
2180 has no basis in law and neither is it supported by any jurisprudence. If we were to affirm
the findings of respondent Court on this score, employers wig forever be exposed to the risk and
danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if
such act or omission he committed while they are not in the performance of their duties.

Finally, no negligence could be attributable to the petitioners-teachers to warrant the award of

damages to the respondents-spouses.

Petitioners Connie Arquio the class adviser of I-C, the section where Ferdinand belonged, did her
best and exercised diligence of a good father of a family to prevent any untoward incident or
damages to all the students who joined the picnic.
In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E.
instructors and scout masters who have knowledge in First Aid application and swimming.
Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants (petitioners
herein) had life savers especially brought by the defendants in case of emergency." (p. 85, Rollo)
The records also show that both petitioners Chavez and Vinas did all what is humanly possible to
save the child.

Testimony of Luisito Vinas on cross examination,

Q And when you saw the boy, Ferdinand Castillo, you approached the boy and
claim also having applied first aid on him?

A Yes, sir.

Q And while you were applying the so called first aid, the children were covering
you up or were surrounding you?

A Yes, sir.

Q You were rattled at that time, is it not?

A No, sir.

Q You mean you were in calm and peaceful condition?

A Yes, sir.

Q Despite the fact that the boy was no longer responding to your application of
first aid?

A Yes, sir.

Q You have never been disturbed, "nababahala" in the process of your application
of the first aid on the body of Ferdinand Castillo?

A No, sir, because we were attending to the application of first aid that we were
doing, sir.

Q After you have applied back to back pressure and which you claimed the boy
did not respond, were you not disturb anyway?

A I was disturbed during that time, sir.

Q For how many minutes have you applied the back to back pressure?

A From 9 to 11 times, sir.

 Q You mean 9 to 11 times of having applied the pressure of your body on the
body of Ferdinand Castillo?

A Yes, sir.

Q Will you please describe how you applied a single act of back to back pressure?

A This has been done by placing the boy lay first downwards, then the face was a
little bit facing right and doing it by massaging the back of the child, sir." (TSN,
pp. 32-35, hearing of July 30, 1984)

Testimony of Tirso de Chavez on direct examination

ATTY. FLORES:

Q Who actually applied the first aid or artificial respiration to the child?

A Myself, sir.

Q How did you apply the first aid to the guy?

A The first step that I took, with the help of Mr. Luisito Vinas, was I applied back
to back pressure and took notice of the condition of the child. We placed the feet
in a higher position, that of the head of the child, sir.

Q After you have placed the boy in that particular position, where the feet were on
a higher level than that of the head, what did you do next?

A The first thing that we did, particularly myself, was that after putting the child
in that position, I applied the back to back pressure and started to massage from
the waistline up, but I noticed that the boy was not responding, sir.

Q For how long did you apply this back to back pressure on the boy?

A About 10 seconds, sir.

Q What about Mr. Vinas?

A Almost the same a little longer, for 15 seconds, sir.

Q After you noticed that the boy was not responding, what did you do?

A When we noticed that the boy was not responding, we changed the position of
the boy by placing the child facing upwards laying on the sand then we applied
the mouth to mouth resuscitation, sir. (pp. 92-93, Rollo)
With these facts in mind, no moral nor exemplary damages may be awarded in favor of
respondents-spouses. The case at bar does not fall under any of the grounds to grant moral
damages.

Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of the defendant's wrongful act or omission.

Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or
negligence, hence, no moral damages can be assessed against them.

While it is true that respondents-spouses did give their consent to their son to join the picnic, this
does not mean that the petitioners were already relieved of their duty to observe the required
diligence of a good father of a family in ensuring the safety of the children. But in the case at bar,
petitioners were able to prove that they had exercised the required diligence. Hence, the claim for
moral or exemplary damages becomes baseless.

PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding
petitioners herein guilty of negligence and liable for the death of Ferdinand Castillo and
awarding the respondents damages, is hereby SET ASIDE insofar as the petitioners herein are
concerned, but the portion of the said decision dismissing their counterclaim, there being no
merit, is hereby AFFIRMED.

SO ORDERED.

G.R. No. 75112 August 17, 1992

FILAMER CHRISTIAN INSTITUTE, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his
capacity as Judge of the Regional Trial Court, Branch XIV, Roxas City and
POTENCIANO KAPUNAN, SR., respondents.

Bedona & Bedona Law Office for petitioner.

Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the
decision rendered by this Court on October 16, 1990 (Filamer Christian Institute v. Court of
Appeals, 190 SCRA 477) reviewing the appellate court's conclusion that there exists an
employer-employee relationship between the petitioner and its co-defendant Funtecha. The Court
ruled that the petitioner is not liable for the injuries caused by Funtecha on the grounds that the
latter was not an authorized driver for whose acts the petitioner shall be directly and primarily
answerable, and that Funtecha was merely a working scholar who, under Section 14, Rule X,
Book III of the Rules and Regulations Implementing the Labor Code is not considered an
employee of the petitioner.

The private respondents assert that the circumstances obtaining in the present case call for the
application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of the
petitioner. The private respondents maintain that under Article 2180 an injured party shall have
recourse against the servant as well as the petitioner for whom, at the time of the incident, the
servant was performing an act in furtherance of the interest and for the benefit of the petitioner.
Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of
the school authorities.

After a re-examination of the laws relevant to the facts found by the trial court and the appellate
court, the Court reconsiders its decision. We reinstate the Court of Appeals' decision penned by
the late Justice Desiderio Jurado and concurred in by Justices Jose C. Campos, Jr. and Serafin E.
Camilon. Applying Civil Code provisions, the appellate court affirmed the trial court decision
which ordered the payment of the P20,000.00 liability in the Zenith Insurance Corporation
policy, P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and P3,000.00
attorney's fees.

It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of
petitioner Filamer. He was, in relation to the school, an employee even if he was assigned to
clean the school premises for only two (2) hours in the morning of each school day.

Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to
take over the vehicle while the latter was on his way home one late afternoon. It is significant to
note that the place where Allan lives is also the house of his father, the school president, Agustin
Masa. Moreover, it is also the house where Funtecha was allowed free board while he was a
student of Filamer Christian Institute.

Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a
sharp dangerous curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79)
According to Allan's testimony, a fast moving truck with glaring lights nearly hit them so that
they had to swerve to the right to avoid a collision. Upon swerving, they heard a sound as if
something had bumped against the vehicle, but they did not stop to check. Actually, the Pinoy
jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise
to swerve to the right. (Ibid., p. 79) At the time of the incident (6:30 P.M.) in Roxas City, the
jeep had only one functioning headlight.

Allan testified that he was the driver and at the same time a security guard of the petitioner-
school. He further said that there was no specific time for him to be off-duty and that after
driving the students home at 5:00 in the afternoon, he still had to go back to school and then
drive home using the same vehicle.

Driving the vehicle to and from the house of the school president where both Allan and Funtecha
reside is an act in furtherance of the interest of the petitioner-school. Allan's job demands that he
drive home the school jeep so he can use it to fetch students in the morning of the next school
day.

It is indubitable under the circumstances that the school president had knowledge that the jeep
was routinely driven home for the said purpose. Moreover, it is not improbable that the school
president also had knowledge of Funtecha's possession of a student driver's license and his desire
to undergo driving lessons during the time that he was not in his classrooms.

In learning how to drive while taking the vehicle home in the direction of Allan's house,
Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose of his
enjoyment or for a "frolic of his own" but ultimately, for the service for which the jeep was
intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R. 577, 80
ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v. Fieldmen's
Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained to conclude that
the act of Funtecha in taking over the steering wheel was one done for and in behalf of his
employer for which act the petitioner-school cannot deny any responsibility by arguing that it
was done beyond the scope of his janitorial duties. The clause "within the scope of their assigned
tasks" for purposes of raising the presumption of liability of an employer, includes any act done
by an employee, in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59
SE 2d 47 [1950]) Even if somehow, the employee driving the vehicle derived some benefit from
the act, the existence of a presumptive liability of the employer is determined by answering the
question of whether or not the servant was at the time of the accident performing any act in
furtherance of his master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926];
Jameson v. Gavett, 71 P 2d 937 [1937])

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the manner by which the
powers of the Labor Secretary shall be exercised; on what records should be kept; maintained
and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of
resident physicians in the employment coverage as far as compliance with the substantive labor
provisions on working conditions, rest periods, and wages, is concerned.

In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is
not the decisive law in a civil suit for damages instituted by an injured person during a vehicular
accident against a working student of a school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for
injury caused by the patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to disregard the primary
liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule
on labor cannot be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code.

There is evidence to show that there exists in the present case an extra-contractual obligation
arising from the negligence or reckless imprudence of a person "whose acts or omissions are
imputable, by a legal fiction, to other(s) who are in a position to exercise an absolute or limited
control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])

Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a
driver's position in order that the petitioner may be held responsible for his grossly negligent act,
it being sufficient that the act of driving at the time of the incident was for the benefit of the
petitioner. Hence, the fact that Funtecha was not the school driver or was not acting within the
scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a servant
or employee, or in the supervision over him. The petitioner has failed to show proof of its having
exercised the required diligence of a good father of a family over its employees Funtecha and
Allan.

The Court reiterates that supervision includes the formulation of suitable rules and regulations
for the guidance of its employees and the issuance of proper instructions intended for the
protection of the public and persons with whom the employer has relations through his
employees. (Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix Construction, v.
Intermediate Appellate Court, 148 SCRA 353 [1987])

An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer.

In the present case, the petitioner has not shown that it has set forth such rules and guidelines as
would prohibit any one of its employees from taking control over its vehicles if one is not the
official driver or prohibiting the driver and son of the Filamer president from authorizing another
employee to drive the school vehicle. Furthermore, the petitioner has failed to prove that it had
imposed sanctions or warned its employees against the use of its vehicles by persons other than
the driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled
manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772
[1918]). In the absence of evidence that the petitioner had exercised the diligence of a good
father of a family in the supervision of its employees, the law imposes upon it the vicarious
liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete
v. Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989];
Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc. v.
Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under Article 2180, primary and
solidary. However, the employer shall have recourse against the negligent employee for
whatever damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party
defendant in the civil case for damages. This is quite understandable considering that as far as
the injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was Funtecha who was
the one driving the vehicle and presumably was one authorized by the school to drive. The
plaintiff and his heirs should not now be left to suffer without simultaneous recourse against the
petitioner for the consequent injury caused by a janitor doing a driving chore for the petitioner
even for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were able to
establish the existence of employer-employee relationship between Funtecha and petitioner
Filamer and the fact that Funtecha was engaged in an act not for an independent purpose of his
own but in furtherance of the business of his employer. A position of responsibility on the part of
the petitioner has thus been satisfactorily demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby
GRANTED. The decision of the respondent appellate court affirming the trial court decision is
REINSTATED.

SO ORDERED.